Document:

Exhibit 10.1

Exhibit 10.1 

     

     

AMENDED AND RESTATED 

MASTER LOAN AGREEMENT 

among 

MACK-CALI REALTY,
L.P., a Delaware limited partnership, and AFFILIATES OF 

MACK-CALI REALTY
CORPORATION, a Maryland corporation, and

 MACK-CALI REALTY, L.P., a Delaware
limited partnership, as listed on Exhibit A

hereto, collectively, as Borrowers 

and 

MACK-CALI REALTY CORPORATION, 
a Maryland corporation, and 

MACK-CALI REALTY, L.P., a Delaware limited partnership, as Guarantors 

and 

THE PRUDENTIAL
INSURANCE COMPANY OF AMERICA, as Lender  

Dated as of
November 12, 2004 

     

     

MASTER LOAN AGREEMENT 

        THIS
MASTER LOAN AGREEMENT is made as of November 12, 2004, by and among MACK-CALI
REALTY, L.P., a Delaware limited partnership, and AFFILIATES OF MACK-CALI REALTY
CORPORATION, a Maryland corporation, and MACK-CALI REALTY, L.P., a Delaware
limited partnership, as listed on Exhibit A hereto
(individually, a “Borrower” and collectively, “Borrowers”),
MACK-CALI REALTY CORPORATION, a Maryland corporation, and MACK-CALI REALTY,
L.P., a Delaware limited partnership (individually and collectively,
“Guarantor”), and THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New
Jersey corporation (“Lender”). 

RECITALS: 

        WHEREAS,
Lender and Guarantor, Borrowers and affiliates of Borrowers entered into that certain
Master Loan Agreement dated as of April 30, 1998 (as amended, the “Existing Loan
Agreement”) relating to certain cross-collateralized and cross-defaulted loans in the
aggregate original principal amount of $150,000,000.00 (as amended by payoffs of certain
of such loans to a current principal balance of $136,360,000.00 in the aggregate, the
“Existing 1998 Loans”); and 

        WHEREAS,
by that certain First Mortgage Loan Application Nos. 6 105 349 –
6 105 355, dated August 13, 2004 (the “Application”), Borrowers
and Guarantor collectively have applied for a loan consisting of seven (7) individual
loans (collectively, the “Loan”) in the aggregate loan amount of $150,000,000.00
(the “Aggregate Loan Amount”); and 

        WHEREAS,
Lender, by that certain Loan Commitment Letter dated October 25, 2004 (the
“Commitment”), has committed to make the Loan in accordance with the
Application, pursuant to Borrower and affiliates of Borrower are receiving supplemental
loans (the “Supplemental Loans”) to increase the aggregate principal amount to
$150,000,000.00; and 

        WHEREAS,
the Loan is, pursuant to the terms of the Application, divided into seven (7)
individual loans comprised of the Existing 1998 Loans as amended hereby together with, as
to certain of the loans, a Supplemental Loan (each, sometimes herein referred to as an
“Individual Loan and collectively as the “Individual Loans”), to be made by
Lender each in the amounts set forth on Exhibit B attached
hereto and made a part hereof; and 

        WHEREAS,
notwithstanding the division of the Loan into seven (7) Individual Loans, certain
terms, conditions and provisions of the Application and with respect to the Individual
Loans relate to all of the Individual Loans in the aggregate, and the relationship of all
of the Individual Loans to each other, including, but not limited to, provisions relating
to cross-default between the Loans, cross-collateral issues relating to certain of the
Loans, release provisions (including restrictions thereon and the requirement of repayment
of Loan amounts outstanding in excess of Individual Loan amounts in the event release of a
Property is permitted), guaranty provisions and loan administration provisions (such terms
are herein referred to as the “Master Loan Terms”); and 

        WHEREAS,
all of the Borrowers are Affiliates of each other and Guarantors are the sole
beneficial owners of each Borrower which is not also a Guarantor; and 

        WHEREAS,
the Loan is to be secured by the Properties (as hereinafter defined) listed on
Exhibit A attached hereto; and 

        WHEREAS,
notwithstanding that the Loan is divided into seven (7) Individual Loans, Borrowers and
Guarantor acknowledge that Lender would not make any of the Individual Loans, or less than
all of the Individual Loans, pursuant to the provisions in the Application relating to the
Individual Loans, without making all seven (7) Individual Loans in compliance with the
terms of the Application and except in accordance with all the provisions set forth in
this Agreement; and 

        WHEREAS,
Borrowers acknowledge that the provisions set forth in this Agreement and otherwise
set forth in the Loan Documents relating to cross-default, cross-collateralization and the
other Master Loan Terms have resulted in more favorable economic terms for each Individual
Loan to each individual Borrower, and that each Borrower would be unable to receive
financing in the amount, or at the interest rate provided in the Notes, or otherwise under
more favorable terms, than those set forth herein and, therefore, there exists direct and
valuable consideration for each Borrower’s consent and agreement to the terms and
provisions hereof; and 

        WHEREAS,
Borrowers, Guarantor and Lender hereby wish to set forth certain agreements with
respect to the Loan and the relationship between the Individual Loans, and to amend and
restate the Existing Loan Agreement in its entirety. 

AGREEMENTS 

        NOW,
THEREFORE, Borrowers and Guarantor, in consideration of the matters described in the
foregoing Recitals, which Recitals are incorporated herein and made a part hereof, and for
other good and valuable consideration, hereby agree as follows: 

      Section
1. DEFINITIONS AND RULES OF INTERPRETATION.

        The
following terms shall have the meanings set forth in this Section 1 or elsewhere in the
provisions of this Agreement referred to below: 

        “Affiliate”
means, with respect to any Person (as hereinafter defined), (1) any other Person (as
hereinafter defined) directly or indirectly controlling, controlled by or under common
control with another Person, (2) any officer, director, partner or trustee of such
Person, or in any joint venture or other business association with such Person, and
(3) if such other Person is an officer, director, partner, trustee, joint venturer or
business associate, any other Person for which such Person acts in any such capacity or
who directs or controls the actions of such Person in such capacity. The term
“control” as used in this definition shall include, as to any Person, the
ownership of ten percent (10%) or more of the legal or beneficial interest in such Person
or the power to direct the management and policies of such Person, whether through the
ownership of voting securities, by contract, or otherwise. 

3

        “Agreement”
means this Amended and Restated Master Loan Agreement, including the Exhibits hereto. 

        “Application”
is defined in the recitals hereto. 

        “Assignment
of Rents” or “Assignments of Rents” means the assignments of
rents and leases of even date herewith from Borrowers to Lender pursuant to which
Borrowers have assigned the Leases and Rents as described therein. 

        “Borrowers”
means the Borrowers listed on Exhibit A attached hereto and made
a part hereof (and “Borrower” means any one of the Borrowers listed
thereon). 

        “Business
Day” means any day which is not a Saturday, Sunday, or federal legal holiday, and
on which banking institutions in Newark, New Jersey are open for the transaction of
business. 

        “Collateral”
means all of the property, rights and interests of Borrower which are or are intended
to be subject to the security interests, liens and mortgages created by the Security
Documents. 

        “Commitment”
is defined in the recitals hereto. 

      “Credit
Agreement” is defined in Section 7.

        “Cross
Collateral Guaranties” means those certain Amended and Restated Irrevocable Cross
Collateral Guaranties of Payment of even date herewith executed by each Borrower. 

        “Debt
Service Coverage” means the ratio, as reasonably determined by Lender in its sole
discretion, calculated by dividing (i) NOI by (ii) TADS. 

        “Dollars
or $” means dollars in lawful currency of the United States of America. 

        “Event
of Default” is defined in Section 9. 

        “Existing
Loans” means the following loans from Lender to Affiliates of Borrowers and
Guarantor: (a) the Timeplex Loan (Loan No. 7 503 014) and (b) the
Short Hills Loan (Loan No. 6 100 978). 

        “Guarantor”
is defined in the preamble hereto. 

        “Guaranties”
means the Recourse Carveout Guaranty and the Cross Collateral Guaranties. 

4

        “Individual
Loans” is defined in the recitals hereto. 

        “Limited
Guaranties” means each of the Supplemental Guaranty Agreements executed and
delivered by the individuals and entities identified to Lender as of the date hereof, and
from time to time thereafter, by Mack-Cali Realty, L.P. (collectively the “Limited
Guarantors”), none of whom or which at any time shall be an owner or ground lessee of
any of the Properties (or of interests in any Borrower, except by virtue of ownership of
units of Mack-Cali Realty, L.P.), which Limited Guarantors shall severally guarantee such
portions of the Individual Loans as is set forth in each Limited Guaranty entered into as
of the Closing Date and from time to time thereafter by each Limited Guarantor in favor of
the Lender as any of such loans or the Loan shall be amended, supplemented, modified or
restated (collectively, the “Limited Guaranties”). Notwithstanding anything
herein to the contrary, the Limited Guaranties may be amended, supplemented, modified,
restated or terminated and the identity of the Limited Guarantors may be changed by
Mack-Cali Realty, L.P. upon written notice to Lender. 

        “Leases”
means, collectively, all present and future leases, licenses, and other agreements for the
occupancy of any spaces or areas within the buildings, structures and improvements located
in or on the Property which may be in effect from time to time, and all amendments,
modifications, extensions, renewals, and assignments of any of the foregoing. 

        “Loan”
means the aggregate $150,000,000.00 loan to Borrower made by Lender hereunder in the form
of the seven (7) Individual Loans to the applicable Borrowers and evidenced by the Loan
Documents. 

        “Loan
to Value Ratio” means the ratio, as determined by Lender in its sole discretion,
of (A) the aggregate principal balance of all encumbrances against the Property to
(B) the fair market value of the Property. 

        “Loan
Documents” means this Agreement, the Notes, the Security Documents, the
Guaranties, the Limited Guaranties and all other documents, instruments or agreements
executed or delivered by or on behalf of Borrower or the Guarantors in connection with the
Loan. 

        “Master
Loan Terms” is defined in the recitals hereto. 

      “Maturity Date”
means January 15, 2010.

        “Mortgage”
or “Mortgages” means the mortgages and deeds of trust from Borrowers to
Lender (or to trustees named therein acting on behalf of Lender) pursuant to which
Borrowers have conveyed the Properties as security for the Obligations. For each Property,
Borrower has conveyed to Lender two Mortgages: the first priority Mortgage which secures
the Note applicable to such Property, and the second priority Mortgage which secures the
Cross-Collateral Guaranty and the notes referenced therein and guaranteed thereby
(exclusive of the Note applicable to such Property). 

5

        “NOI”
means the gross annual income realized from operations of the Property for both the
preceding and subsequent twelve (12) month period after subtracting all necessary and
ordinary operating expenses (both fixed and variable) for both the preceding and
subsequent twelve (12) month period and applied to the applicable NOI covenants for each
period (assuming for expense purposes only that the Property is 95% leased and occupied if
actual leasing is less than 95%), including, without limitation, utilities,
administrative, cleaning, landscaping, security, repairs, and maintenance, ground rent
payments, management fee of no more than 4.00% of gross income, and a reserve for
replacement allowance of no less than $0.20 psf, real estate and other taxes,
assessments, insurance and ground lease payments, but excluding deduction for federal,
state and other income taxes, debt service expense, depreciation or amortization of
capital expenditures, and other similar non-cash items. Gross income shall not be
anticipated for any greater time period than that projected for leases in place and
ordinary operating expenses shall not be prepaid. Documentation of NOI and expenses shall
be certified by an officer of Borrower with detail satisfactory to Lender and shall be
subject to the approval of Lender. 

        “Notes”
means the Promissory Notes to be executed by applicable Borrowers in favor of Lender in
the amounts set forth on Exhibit B. 

        “Obligations”
means all indebtedness, obligations and liabilities of Borrowers to Lender, individually
or collectively, under this Agreement or any of the other Loan Documents or in respect of
the Loan or the Notes, or other instruments at any time evidencing any of the foregoing,
together with all renewals, extensions and modifications of the foregoing, whether
existing on the date of this Agreement or arising or incurred hereafter, direct or
indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract, operation of law or otherwise. 

      “Old
Security” is defined in Section 6.

        “Person”
or “person” means any individual, general partnership, limited
partnership, corporation, trust, limited liability company, joint venture, unincorporated
association, political subdivision or governmental or quasi-governmental agency, or any
other entity recognized as legally distinct for any purpose. 

        “Prepayment
Premium” means the Prepayment Premium as defined in each Note. 

        “Properties”
means, collectively, the office projects and all Collateral associated therewith as
described on Exhibit A, and “Property” means,
individually, any one of the such individual office projects. 

        “Real
Estate Security” means “Property” or “Properties”, as the
context may require. 

        “Release”
and “Releases” a release or releases of Properties from the applicable
Mortgage or Mortgages in the manner and upon compliance with the requirements, terms and
conditions set forth in Section 5. 

6

      “Release
Property” is defined in Section 5.

      “Release Price”
is defined in Section 5.

        “Rent
Roll” means a report prepared by Borrower which lists all leases affecting the
Premises which are in full force and effect, and all other matters described on the rent
roll attached hereto as Exhibit C. 

        “Security
Documents” means the Mortgages, the Assignments of Rents, and any other documents
securing the Loans, including, without limitation, UCC-1 financing statements executed and
delivered in connection therewith. 

        “State”
means a state of the United States of America. 

      “Substitute
Collateral” is defined in Section 6.

        “Substitution”
a substitution or substitutions of collateral in the manner and upon compliance with the
requirements, terms and conditions set forth in Section 5. 

        “TADS”
means the aggregate debt service payments for the given twelve (12) month period on the
Loan in which the calculation of NOI is being made. 

        “Tenants”
means, collectively, the persons (other than Borrower or its predecessors in interest) who
are parties to any one or more Leases. 

        “Recourse
Carveout Guaranty” means that certain Amended and Restated Irrevocable Guaranty
of Payment and Performance (Recourse Carveout Items) executed by Guarantor with respect to
all of the Loans. 

      Section
2. THE LOANS.

        Section
2.1. Notes. The Loan shall be evidenced by Notes, each dated as of the
date hereof, payable to the order of Lender, as set out on
Exhibit B attached hereto. 

Section 2.2.      Interest on Loan.  The Loan shall bear interest and be payable as set forth in the Notes. 

        Section
2.3. Parties Liable for Repayment. Each Borrower shall be liable for
repayment of each Note executed by such Borrower in accordance with the terms of each such
Note and subject to all of the conditions and limitations therein set forth. In addition,
Guarantor shall be liable for repayment of the Loan and the Notes as and to the extent set
forth in the Recourse Carveout Guaranty, subject to all of the conditions and limitations
therein set forth. 

        Section
2.4. Cross Collateral Provisions. Each Borrower and Guarantor shall also
be liable for repayment of each other Note executed by each other Borrower in accordance
with the terms of each Cross Collateral Guaranty executed by each Borrower, subject to all
of the conditions and limitations therein set forth. Each Mortgage secures each Note
executed by the Borrower executing such Mortgage, and, in addition, to evidence the
“cross-collateralization” of each Mortgage and each Individual Loan, each
Mortgage executed by a Borrower also secures the Cross Collateral Guaranty executed by
such Borrower. 

7

        Section
2.5. Cross Default. All of the Mortgages and other Loan Documents shall
be cross-defaulted between each other and between each Individual Loan, and between each
of the Existing Loans and each Individual Loan, so that an Event of Default under any
Existing Loan or Individual Loan shall constitute an Event of Default under all Existing
Loans and Individual Loans. 

        Section
2.6. Post Closing Undertakings.  Guarantor and each of the applicable
Borrowers shall commence and complete the Post Closing Undertakings listed on
Exhibit D attached hereto and made a part hereof, such
undertakings to be completed on or before such date as may be listed thereon. 

        Section
3. RECOURSE PROVISIONS. Borrowers’ and Guarantor’s liability
under the Loan and the Loan Documents shall be limited as set forth in Paragraph 8
and Paragraph 9 of the Notes (and the liability under the Cross Collateral Guaranties
shall be limited as therein set forth or incorporated by reference), all of which terms
and provisions of such documents are incorporated herein by this reference. 

        Section
4. COLLATERAL. Subject to Section 5, Section 6 and
Section 7 hereof, the Obligations shall be secured by (i) a perfected first
priority lien or security title to be held by Lender in the Properties, pursuant to the
terms of the Mortgages, (ii) a perfected first priority security interest to be held
by Lender in the Leases pursuant to the Assignments of Rents, (iii) an assignment of
agreements representing a first priority assignment to Lender of all agreements and other
documents relating to the ownership, development, operation, construction or use of the
Property, and (iv) the other Security Documents and Collateral. 

        Section
5. RELEASE OF PROPERTIES. Upon Borrower’s written request which
shall include all materials and information necessary to evaluate such request, to be
received with not less than thirty (30) days prior notice, Lender shall release not more
than two (2) Properties (not to exceed releases of property allocated to Loans
comprising $50,000,000.00 of the original principal balance of the Loan, except if the
only release is as set forth in subsection (i) below) from the lien of the Loan
Documents (“Release Property”), upon the following terms and conditions: 

          	 	(a) 	
               At the time of the request and the time of the Release, there shall be no Event
               of Default under the Loan Documents, and there shall exist no condition or state
               of facts which with the passage of time or the giving of notice or both, would
               constitute a default under the Loan Documents (except for any such default
               relating solely to the Release Property which, by its very nature, will be cured
               by the requested Release). 

               

8

          	 	(b) 	
               Any such request may be made beginning six (6) months after the date hereof and
               any such partial Release must occur prior to the last six (6) months prior to
               the Maturity Date. 

               

          	 	(c) 	
               Each Release Property released shall be the entire Property identified with the
               applicable Loan. 

               

          	 	(d) 	
               For each Release Property, Borrower shall have made the “Release
               Price” payment to Lender, in an amount equal to 110% of the principal
               balance of the Loan applicable to the Release Property, together with a
               prepayment premium (based on the Release Price). 

               

          	 	(e) 	
               The Release Price shall be applied to pay in full the principal balance due with
               respect to the Loan applicable to the Release Property and Borrower shall, in
               addition, pay all amounts due with respect to such Release Price with respect to
               interest, prepayment premium and reasonable costs and expenses. Lender shall
               apply the portion of any Release payment which is in excess of the balance of
               the Loan applicable to the Release Property to any Loan or Loans, in
               Lender’s sole discretion, and, upon Borrower’s written request, Lender
               shall provide Borrower with Lender’s allocation of such amounts thirty days
               prior to such Release or ten (10) days after such request, if later. 

               

          	 	(f) 	
               At the time of the Release, the Debt Service Coverage, calculated with respect
               to the remaining Property (excluding the Released Property) shall be equal to or
               greater than (i) the Debt Service Coverage with respect to all of the
               Property (including the Released Property) immediately prior to such Release,
               and, in any event, (ii) 4.00 to 1.00. In the event the Debt Service
               Coverage of the remaining Property (as determined by Lender in its sole
               discretion) falls below the required level, Borrower shall have the right,
               subject to payment of the Prepayment Premium calculated in accordance with the
               provisions set forth in the Notes, to pay Lender the amount necessary to
               increase the Debt Service Coverage of the remaining Property to the required
               level. 

               

          	 	(g) 	
               At the time of the Release, the Loan to Value Ratio, calculated with respect to
               the remaining Property (excluding the Released Property), does not exceed the
               lesser of (1) forty-two percent (42%) or (2) the Loan to Value
               Ratio of the entire Property (including the Released Property) immediately prior
               to such Release. In the event the Loan to Value Ratio of the remaining Property
               (as determined by Lender in its sole discretion) exceeds the required level,
               Borrower shall have the right, subject to payment of the Prepayment Premium
               calculated in accordance with the provisions set forth in the Notes, to pay
               Lender the amount necessary to reduce the loan to value ratio of the remaining
               Property to the required level. 

               

9

          	 	(h) 	
               In no event will Lender be required to release more than two (2) Properties in
               total during the term of the Loan (except as and only upon the conditions set
               forth in (i) below), and, in addition, such releases shall not exceed releases
               of property allocated to Loans comprising $50,000,000.00 of the original
               principal balance of the Loan. 

               

          	 	(i) 	
               Unless otherwise agreed to by Lender in its sole discretion, the Properties
               known as Mack Centre VII, Mack Centre III and Mack Centre II will
               not be eligible for partial releases (if at such time any of the leases in such
               Properties have any right to expand into, or rights of refusal or offer in, such
               other building, unless such rights been amended to terminate and eliminate such
               rights as a portion of the contractual rights of such Lease, and to provide that
               the Tenant’s recourse shall only be as a contractual right, of public
               record, with the owner of such expansion property), unless all of such
               Properties are released at the same time (or substituted as to some Properties
               and released as to some Properties at such time), and provided that the
               aggregate balance of all of the Loans is not less than $85,000,000.00 following
               such Release [under this provision Lender shall consent to the Release of all
               three Properties (Mack Centre VII, Mack Centre III and Mack Centre II), but will
               not consent to any additional Releases or Substitutions during the Loan term]. 

               

          	 	(j) 	
               For each Release Property requested to be released, Borrower shall pay to Lender
               a release fee of $15,000.00 which shall be non-refundable and payable to Lender
               at the time of request for Release. 

               

          	 	(k) 	
               Borrower shall pay to Lender all escrow, closing and recording costs including,
               but not limited to, the cost of preparing and delivering any reconveyance
               documentation and modification of the Loan Documents, including legal fees and
               costs, the cost of any title insurance endorsements that Lender may require, any
               expenses incurred by the Lender in connection with the partial release, and any
               sums then due and payable under the Loan Documents. 

               

          	 	(l) 	
               Such other terms and conditions as Lender shall reasonably require. 

               

Notwithstanding anything to the
contrary in this Section 5 and/or Section 6 regarding Substitution of
Collateral, Borrower shall only have the right to a combined cumulative total (during the
entire term of the Loan) of two (2) Releases and Substitutions, except if the Release is
in accordance with the conditions set forth in subsection (i) of this Section 5 or if
the Substitution is in accordance with the conditions set forth in subsection (o) of
Section 6. 

        Section
6. SUBSTITUTION OF COLLATERAL. Notwithstanding anything to the contrary
contained in the Loan Documents, Borrower shall have the right to request in writing that
Lender accept additional real estate and related personal property collateral
(“Substitute Collateral”) in substitution for one Property and the related
Personal Property Security (the “Old Security”) to be released from the lien of
the Loan Documents. Such request may be made on not more than two (2) Properties during
the Term of the Loan (except if the Release is in accordance with the conditions set forth
in subsection (o) below), and further, any such Substitution must occur after six (6)
months from the date hereof and prior to the last six (6) months prior to the Maturity
Date. Lender shall have the right to approve any such Substitution in Lender’s sole
discretion. Lender shall advise Borrower as soon as practicable of Lender’s approval
or disapproval of any such Substitution of collateral; if such Substitution is approved,
Lender shall also advise Borrower of the conditions for such approval, which shall
include, without limitation, the following: 

10

          	 	(a) 	
               The Substitute Collateral must consist of one or more legally separate parcels
               of land in the United States owned in fee simple. The Substitute Collateral
               shall be an office property and must be of similar or better quality than the
               Old Security and must be satisfactory to Lender in Lender’s sole
               discretion. 

               

          	 	(b) 	
               Lender must receive perfected first and exclusive liens, security interest
               and/or security title on the Substitute Collateral, and the Loan for the
               Substitute Collateral shall be cross collateralized and cross defaulted with all
               the other Loans pursuant to the Loan Documents. The beneficial ownership entity
               of the Substitute Collateral shall be identical to the beneficial ownership of
               the Old Security or acceptable to Lender in Lender’s sole discretion. 

               

          	 	(c) 	
               The Substitute Collateral must comply with Lender’s then current
               underwriting and other requirements in all respects, including, without
               limitation, loan documents, title, survey, compliance with zoning, building,
               environmental and land use laws, construction and engineering, insurance,
               leases, real estate taxes, legal opinions, estoppel certificates and all other
               terms and conditions. 

               

          	 	(d) 	
               The NOI from the Substitute Collateral shall equal or exceed the NOI from the
               Old Security, calculated as of the date of the Substitution, and Lender shall
               have no reason to reasonably believe that such NOI from the Substitute
               Collateral will not be continued for the next succeeding twenty-four (24)
               months, and the fair market value of the Substitute Collateral shall equal or
               exceed the fair market value of the Old Security (as of the Substitution date),
               as determined by Lender in its sole discretion, absent manifest error. In the
               event the NOI of the Substitute Collateral (as determined by Lender in its sole
               discretion) falls below the required level, Borrower shall have the right,
               subject to payment of the prepayment premium calculated in accordance with the
               provisions set forth in the Notes, to pay Lender the amount necessary to
               decrease the Debt Service of the remaining Property to meet the other conditions
               of this Section 6. 

               

          	 	(e) 	
               The location (including, without limitation, the character and demographics of
               the market area) of the Substitute Collateral shall be satisfactory to Lender in
               Lender’s sole discretion. The consent of Lender to the Substitution of
               Collateral is expressly made subject to Lender’s analyses and approval of
               the economic trends affecting the Substitute Collateral. 

               

11

          	 	(f) 	
               The credit of the tenants shall be acceptable in Lender’s sole discretion. 

               

          	 	(g) 	
               Lender shall have received a report in accordance with Lender’s
               then-current standards from an engineer or architect chosen by Lender regarding
               the physical structure of the Substitute Collateral, which report shall be
               satisfactory in all respects to Lender in Lender’s sole discretion. In
               addition, Lender shall have received an Environmental Report in accordance with
               Lender’s then-current environmental guidelines, which Environmental Report
               shall be satisfactory in all respects to Lender in Lender’s sole
               discretion. The cost of preparation of all such reports and all necessary
               inspections shall be paid by Borrower. 

               

          	 	(h) 	
               At the time of the Substitution, Debt Service Coverage, calculated with respect
               to the Real Estate Security including the Substitute Collateral but excluding
               the Old Security is equal to or greater than (i) the Debt Service Coverage
               with respect to all of the Property (including the substituted Property)
               immediately prior to such Substitution, and, in any event, (ii) 4.00 to
               1.00. In the event the Debt Service Coverage of the remaining Property (as
               determined by Lender in its sole discretion) falls below the required level,
               Borrower shall have the right, subject to payment of the prepayment premium
               calculated in accordance with the provisions set forth in the Notes, to pay
               Lender the amount necessary to increase the Debt Service Coverage of the
               remaining Property to the required level. 

               

          	 	(i) 	
               At the time of the Substitution, the Loan to Value Ratio, calculated with
               respect to the Real Estate Security including the Substitute Collateral but
               excluding the Old Security, does not exceed the lesser of (1) forty seven
               percent (47%), or (2) the Loan to Value Ratio of the entire Property
               (including the Old Security) immediately prior to such Release. In the event the
               Loan to Value Ratio of the remaining Property (as determined by Lender in its
               sole discretion) exceeds the required level, Borrower shall have the right,
               subject to payment of the prepayment premium calculated in accordance with the
               provisions set forth in the Notes, to pay Lender the amount necessary to reduce
               the loan to value ratio of the remaining Property to the required level. 

               

          	 	(j) 	
               Borrower shall pay all reasonable costs and expenses incurred by Lender in
               connection with the Substitution, including, but not limited to, all legal,
               accounting, title insurance and appraisal fees, recording costs, intangible
               taxes and documentary stamps, and a MAI appraisal (prepared by an appraiser
               selected by Lender) of the Substitute Property, whether or not such Substitution
               is actually consummated. 

               

          	 	(k) 	
               [Intentionally deleted] 

               

          	 	(l) 	
               At the time of the request and the time of the Substitution, there shall be no
               default under the Loan Documents, and there shall exist no condition or state of
               facts which with the passage of time or the giving of notice or both, would
               constitute a default under the Loan Documents (except for any such default
               relating solely to the Old Security which, by its very nature, will be cured by
               the requested Substitution). 

               

12

          	 	(m) 	
               Borrower shall pay Lender a $25,000.00 servicing fee (the “Substitution
               Servicing Fee”) for consideration by Lender of the request at the time
               Borrower makes such request, which shall be deemed fully earned by Lender even
               if such request is denied, and an additional fee (against which the Substitution
               Servicing Fee shall be credited) equal to one half percent (0.5%) of the
               allocated loan balance for the Old Security, which additional fee shall be paid
               at the time of closing. 

               

          	 	(n) 	
               The Substitute Collateral shall not consist of any partial interest in a
               property, including but not limited to partnership or joint venture interests. 

               

          	 	(o) 	
               Unless otherwise agreed to by Lender in its sole discretion, Mack
               Centre VII, Mack Centre III and Mack Centre II will not be
               eligible for Substitution (if at such time any of the leases in such Properties
               have any right to expand into, or rights of refusal or offer in, such other
               building, unless such rights have been amended to terminate and eliminate such
               rights as a portion of the contractual rights of such Lease, and to provide that
               the Tenant’s recourse shall only be as a contractual right, of public
               record, with the owner of such Property to be released in such Substitution),
               unless all of such Properties are substituted at the same time (or substituted
               as to some Properties and released as to some Properties at such time), and
               provided that the aggregate balance of all of the Loans is not less than
               $85,000,000.00 following any such Release [under this provision Lender shall
               consent to the Release of all three Properties (Mack Centre VII, Mack Centre III
               and Mack Centre II), but will not consent to any additional Releases or
               Substitutions during the Loan term) except in connection with the additional
               letter of credit which may be posted in the last 12 months of the Loan]. 

               

Cash and Letter of Credit General
Options. Subject to Borrower’s compliance with all of the above requirements,
Borrower shall be permitted to substitute cash (in an escrow account controlled by Lender)
or a letter of credit for an Old Security so long as such letter of credit shall be in
form and substance satisfactory to Lender, shall be issued by a bank satisfactory to
Lender, and shall have an initial term of at least twelve (12) months. The amount of the
cash escrow or letter of credit will be (i) 110% of the Loan amount allocated to the
Old Security, so long as the Loan to Value Ratio, calculated with respect to the Real
Estate Security, excluding the cash escrow or letter of credit and excluding the Old
Security, does not exceed forty-two percent (42%), otherwise, (ii) an amount such
that at the time of the Substitution, the Loan to Value Ratio, calculated with respect to
the Real Estate Security including the cash escrow or letter of credit but excluding the
Old Security, does not exceed forty-seven percent (47%). So long as such letter of credit
is providing security for such Loan, it shall be regularly renewed at least forty five
(45) days prior to its expiration date, with a renewal term of at least twelve (12)
months. Failure to so renew such letter of credit in accordance with the above provisions
shall constitute an Event of Default under the Loan Documents and shall entitle Lender to
(A) draw upon such letter of credit for application against the secured indebtedness
(including the Prepayment Premium) and (B) exercise any and all remedies Lender may
have under the Loan Documents, provided, however, that Lender may only exercise such
remedies if Lender shall first give written notice to Borrower of such failure, and
Borrower fails within five (5) days thereafter to renew such letter of credit or provide
to Lender a replacement letter of credit or cash escrow in the required amount. At all
times during the term of the Loan, only one (1) cash escrow or letter of credit shall be
permitted to be outstanding and providing security for the Loan (as replacement security
for only one Property being released as security pursuant to this Section 6, Substitution
of Collateral); provided however, during the last twelve (12) months of the Loan term,
Lender shall permit two (2) cash escrows or letters of credit to be outstanding and
providing security for the Loan (as replacement security for only two Properties being
released as security pursuant to this Section 6, Substitution of Collateral). The
Substitution Servicing Fee for a Substitution of a cash escrow or letter of credit for an
Old Security shall be $25,000 (reduced to $15,000 if the Substitution is initiated in the
last twelve (12) months of the Loan), but Borrower shall not be required to pay the 0.5%
additional fee (described in (m) above) in connection with the Substitution of a cash
escrow or letter of credit for an Old Security. If Borrower ever requests that a property
be substituted for an outstanding cash escrow or letter of credit, Borrower must comply
with all of the requirements set forth in Section 6(a) through Section 6(o)
above, but Borrower shall not be required to pay a new $25,000 Substitution Servicing Fee
and the previously paid Substitution Servicing Fee shall be credited against the
additional 0.5% fee; provided, however, if such Substitution of a property for the cash
escrow or letter of credit is not completed, then Borrower must pay a $25,000 Substitution
Servicing Fee for each subsequent requested Substitution of a property for such
outstanding cash escrow or letter of credit and such additional Substitution Servicing
Fee(s) shall not be credited against the additional 0.5% fee described in (m) above. 

13

Cash and Letter of Credit End of
Term Options. Notwithstanding anything to the contrary above, (i) even if
Borrower has completed a combined cumulative total of two Releases and Substitutions
(except if the Release is in accordance with the conditions set forth in subsection (i) of
Section 5 or if the Substitution is in accordance with the conditions set forth in
subsection (o) of this Exhibit C); and (ii) provided Borrower has no more than one
(1) other cash escrow or other letter of credit outstanding, then during the last twelve
(12) months of the Loan, Borrower can use a cash escrow or letter of credit to Release
another property, and, subject to Borrower’s compliance with all of the above
requirements, Borrower shall be permitted to substitute a cash escrow or letter of credit
for an Old Security so long as such letter of credit shall be in form and substance
satisfactory to Lender, shall be issued by a bank satisfactory to Lender, and shall have
an initial term of at least twelve (12) months. 

The amount of the cash escrow or
letter of credit will be (i) 110% of the Loan amount allocated to the Old Security,
so long as the Loan to Value Ratio, calculated with respect to the Real Estate Security,
excluding the cash escrow or letter of credit and excluding the Old Security, does not
exceed forty-two percent (42%), otherwise, (ii) an amount such that at the time of
the Substitution, the Loan to Value Ratio, calculated with respect to the Real Estate
Security including the cash escrow or letter of credit but excluding the Old Security,
does not exceed forty-seven percent (47%). 

14

Letter of Credit Renewal. So
long as such letter of credit is providing security for such Loan, it shall be regularly
renewed at least 45 days prior to its expiration date, with a renewal term of at least
twelve (12) months. Failure to so renew such letter of credit in accordance with the above
provisions shall constitute an Event of Default under the Loan Documents and shall entitle
Lender to (i) draw upon such letter of credit for application against the secured
indebtedness (including the Prepayment Premium) and (ii) exercise any and all remedies
Lender may have under the Loan Documents. 

Substitution Processing.
Lender shall have at least sixty (60) days in which to process any request to effect a
Substitution after receipt of (1) all materials and information necessary to evaluate such
request and (2) the Substitution Servicing Fee. 

     Limits.    
          Except for the additional cash escrow or letter of credit that may be posted
          during the twelve (12) months prior to maturity, notwithstanding anything to the
          contrary in this Section 6 and/or Section 5 (the Release of Properties
          Section), Borrower shall only have the right to a combined cumulative total
          (during the entire term of the Loan) of two (2) Substitutions and Releases,
          except if the Release is in accordance with the conditions set forth in
          subsection (i) of Section 5 or if the Substitution is in accordance with
          the conditions set forth in subsection (o) of this Section 6. Substituting
          a cash escrow or letter of credit for an Old Security shall count as one (1) of
          the two (2) permitted Substitutions and/or Releases; however, the subsequent
          Substitution of a property for an outstanding letter of credit shall not count
          as one (1) of the two (2) permitted Substitutions and/or Releases. 

Section 7.        Conversion Option.
 Intentionally Omitted.  Borrower shall no longer have the "Conversion Option" set forth
in the Prior Loan Agreement. 

      Section
8. LEASES.

Section 8.1.      Leasing Standards
Covenant.  Each Borrower shall comply with the leasing standards and covenants set forth
in each Assignment of Rents. 

        Section
8.2. Existing Leases. Each Borrower represents and warrants that
the Rent Roll attached hereto as Exhibit C shows all Leases of
the Properties as of the date hereof, and that such Rent Roll shows all information
required by the Application to be shown on the Rent Roll. All Leases (i) cover in the
aggregate not less than 1,930,000 rentable square feet, with each lease having an original
term of not less than 6 months, (ii) produce annualized base rent (but excluding
tenant payments for operating and fixed expenses, percentage rents, and any other
non-rental items) from tenants in occupancy, open for business, paying full rent, and not
otherwise in default of not less than $42,280,000, and (iii) include the following
tenants: Prentice Hall, Inc. Movado Group Inc., Yamanouchi Pharma America Inc., Cellular
Telephone Co, United Retail Incorporated, and Syncsort Inc. (the “Major
Tenants”), each of which is in occupancy, open for business, paying full rent, and
not in default. 

15

        Section
8.3. Rent Roll. The form and format of Rent Roll attached hereto
as Exhibit C shall be acceptable and permitted by Lender for the
purposes of the requirement of delivery of Rent Rolls under the Security Instrument during
the term of the Loan. 

        Section
8.4. SNDA Agreements. Lender agrees that, at the request of any
Tenant under a Lease arising after the date hereof and approved by Prudential (but not a
lease “deemed approved” by Prudential), Lender shall enter into subordination,
non-disturbance and attornment agreement substantially in the form attached hereto as
Exhibit E. 

        Section
8.5. Lease Form. The standard form of Lease now in use with
respect to each of the Properties is attached hereto as
Exhibit F. 

        Section
8.6 Cellular Offer Rights. Borrower and Guarantors acknowledge that
Cellular Telephone Company d/b/a AT&T Wireless Services (“Cellular
Telephone”), the Tenant in the Property known as Mack Centre VII, has rights of
offer to expand (the “Offer Rights”) into property (“Non-Collateral
Property”) which is not a Property which secures the Loan, but which Non-Collateral
Property is owned by Borrower or its affiliates. Accordingly, Borrower and Guarantors
hereby covenant and agree that they shall comply with all of the terms and conditions of
the Offer Rights and that the Offer Rights shall be provided by Borrower, Guarantors and
its affiliates, as applicable. In addition, Borrower and Guarantors hereby agree with
Lender that such obligation to provide the Offer Rights can be enforced by Cellular
Telephone and/or Lender against Borrower or any transferee of the Property. Borrower and
Guarantors further agree that if the Non-Collateral Property is sold or transferred to any
party other than Borrower or its affiliates without satisfactory amendment by Cellular
Telephone of its Lease (which amendment shall provide that Cellular Telephone shall have
no termination right, or other offsets, defenses, or other claims which may impair
Lender’s rights to the collateral or the income stream from such Cellular Telephone
upon violation of the Offer Rights by such new owner), the Loan Documents shall provide
that the Loans identified with Properties in which Cellular Telephone is leasing space
pursuant to such Offer Rights (the “Cellular Loans”) while the Loans are
outstanding (such Properties which may become subject to occupancy by Cellular Telephone
pursuant to such Offer Rights are known as Mack Centre II, Mack Centre III and
Mack Centre VII, although Cellular Telephone is currently only occupying Mack
Centre III and Mack Centre VII) shall be and become recourse to Borrower and the
Exculpated Parties (which recourse amount of any such Loan may, if Cellular Telephone
leases only a portion of the leaseable space in such Property, be a recourse amount for
the “bottom portion” of such Loan balance based on the percentage of the
Property leased by Cellular Telephone at such time multiplied by the principal amount of
such Loan, as such occupancy percentage may thereafter change in compliance with the Loan
Documents; for example, if Cellular Telephone leases one half of a building with a
$10,000,000 loan, then the recourse shall be equal to $5,000,000 of such loan, and such
recourse amount as to such loan shall not be diminished by the receipt of any funds in any
exercise of remedies by Lender or the receipt of any paydowns from parties other than the
Guarantors, except only as and to the extent that the balance of such Loan is reduced). 

      Section
8.7 Intentionally Omitted.

16

        Section
8.8 Parking Compliance. Borrower and Guarantors acknowledge that certain
of the Properties may not be in current compliance with the parking requirements
applicable under the zoning ordinances applicable to such Properties (such Properties are
known as Mack Centre II and Mack Centre III). Based on the receipt of
Certificates of Occupancy and other documentation, Borrower is under the understanding
that the Properties in fact comply in all material compliance with all Laws (as defined in
the Mortgage) applicable to the parking requirements for such Properties; in addition,
without limiting the provisions of Section 2.04(b) of the Mortgages, Borrower has
received no notice of any violation or potential violation of the Laws applicable to the
parking requirements for such Properties which has not been remedied or satisfied.
Borrower and Guarantors hereby covenant and agree that, without limiting the provisions of
Section 3.05(c) of the Mortgages, that if proceedings are initiated alleging, or
Borrower receives notice, that it or the Property is not in compliance with the Laws
applicable to the parking requirements for such Properties (a “Parking Violation
Notice”), Borrower will promptly send Lender notice and a copy of the proceeding or
violation notice, and that if the Property is not in compliance with all Laws, and,
without limiting the provisions of Section 3.05(c) of the Mortgages, but subject to
the Parking Contest Rights (as defined below) Borrower and Guarantor shall undertake and
shall be liable for the cost (the “Additional Parking Cost”) to (i) build
any additional parking spaces necessary to comply with such Laws and/or (ii) as and
if necessary to secure such compliance, acquire any additional land necessary to provide
such parking spaces in compliance with Laws. Borrower and Guarantors further agree that
liability of Borrower and Guarantor to pay the Additional Parking Cost shall be recourse
to Borrower and the Exculpated Parties. So long as no Event of Default is continuing,
Borrower may, prior to the deadlines applicable to any Parking Violation Notice and at its
sole expense, contest any Parking Violation Notice, but this shall not change or extend
Borrower’s obligation to comply with the Parking Violation Notice as required above
unless (A) Borrower gives Lender prior written notice of its intent to contest the
Parking Violation Notice; (B) Borrower demonstrates to Lender’s reasonable
satisfaction that (1) the Property will not lose any rights or permits, including,
but not limited to, any existing certificates of occupancy or the right to secure building
permits for tenant improvements, prior to the final determination of the legal proceedings
relating to the Parking Violation Notice, (2) it has taken such actions as are
required or permitted to accomplish a stay of any such action referenced in
subsection (1) above, and (3) it has furnished to Lender such tenant estoppel
certificates as Lender may require (satisfactory to Lender in form and amount) sufficient
to assure Lender that the Major Tenants of such Property have no claim against Borrower
under their Lease relating to the matters addressed in the Parking Violation Notice;
(C) at Lender’s option, Borrower has deposited the full amount necessary to pay
the Additional Parking Costs with Lender; and (D) such proceeding shall be permitted
under any other instrument to which Borrower or the Property is subject (whether superior
or inferior to this Instrument). 

      Section
9. EVENTS OF DEFAULT; ACCELERATION; ETC.

        Section
9.1. Events of Default. The term “Event of Default,” as used in this
Agreement, shall mean the occurrence of any of the events described in Section 6.01
of the Mortgages (and the term “Default”, as used in this Agreement, shall mean
the occurrence of any of such events, without regard to any requirement of notice or
whether any cure period is required in order to constitute an Event of Default). Any
periods of notice and cure set forth herein and in the other Loan Documents (or set forth
in more than one Loan Document) shall run concurrently, and not consecutively. 

17

        Section
9.2. Acceleration and Remedies. If an Event of Default shall occur, then, and
in any such event, so long as the same may be continuing, Lender may declare the entire
balance of the Obligations (including the entire principal balance thereof, all accrued
and unpaid interest and any prepayment premium and late charges thereon and all other such
sums secured hereby) to be immediately due and payable, and upon any such declaration the
entire unpaid balance of the Obligations shall become and be immediately due and payable,
without presentment, demand, protest, or further notice of any kind, all of which are
hereby expressly waived by each Borrower, anything in the Loan Documents to the contrary
notwithstanding. In case any one or more of the Events of Default shall have occurred and
be continuing, and whether or not Lender shall have exercised any of their rights under
the Loan Documents, Lender may proceed to protect and enforce the rights and remedies
under this Agreement, the Notes or any of the other Loan Documents by suit in equity,
action at law or other appropriate proceeding, whether for the specific performance of any
covenant or agreement contained in this Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations to such Lender are evidenced, including to
the full extent permitted by applicable law, the obtaining of the ex parte
appointment of a receiver. No remedy herein conferred upon any Lender is intended to be
exclusive of any other remedy and each and every remedy shall be cumulative and shall be
in addition to every other remedy given hereunder or now or hereafter existing at law or
in equity or by statute or any other provision of law. 

        Section
9.3. Distribution of Collateral Proceeds. In the event that, following the
occurrence or during the continuance of any Event of Default, Lender receive any monies in
connection with the enforcement of any of the Security Documents, or otherwise with
respect to the realization upon any of the Collateral, such monies shall be distributed in
accordance with the Loan Documents to such portion of the Loans as Lender may desire. 

      Section
10. REPRESENTATIONS AND WARRANTIES.

         (a)       
          Exhibit G sets forth the ownership structure of each
          Borrower and of Guarantor and the percentage ownership of each constituent
          partner in each Borrower. 

         (b)       
          Borrowers hereby certify to Lender that there have been none of the following
          matters involving any Borrower, any general partner(s) of any Borrower, the
          Guarantor, or any general partner(s) of the Guarantor within the period from
          September 1, 1994 to the date hereof: 

          		    (i)       
               Litigation involving any lenders or financial institutions, including
               foreclosure actions; 

               

          		    (ii)       
               Deeds (or conveyances) in lieu of foreclosure, or sales (pursuant to power of
               sale); 

               

18

          		    (iii)       
               Petitions in bankruptcy or insolvency, or for reorganization, liquidation,
               dissolution, or for the appointment of a receiver, filed by or against any of
               the individuals or entities set forth above; or 

               

          		    (iv)       
               workouts or modifications of any loan in which the interest rate was changed,
               the principal amount was reduced or the loan term was extended. 

               

         (c)       
          Borrowers have heretofore furnished (i) financial statements of Borrower,
          consisting of consolidated financial statements of Mack-Cali Realty Corporation
          for the year ending December 31, 2003, and (ii) financial statements
          of the Tenants described in Section 8.2(1), (4) and (6), provided, that as
          to such Tenants, such financial information includes only financial information
          on such Tenants for the last three full fiscal years thereof to the extent
          Borrowers have obtained or can obtain such information, and to the extent not
          obtained prior to the date hereof, or, as to 2003 financial information not
          available as of the date hereof, Borrowers shall obtain such financial
          information when such financial information is available after Closing. 

         (d)       
          Borrowers hereby represent that, to its actual knowledge, all of the information
          submitted or to be submitted by Borrowers to Lender in connection with the
          Application and the Loan was, and as of the date hereof is, true, correct and
          complete in all material respects. 

        Section
11. LOAN BROKERS AND COMMISSIONS. Neither any Borrower nor Guarantor has
engaged or used the services of any mortgage broker in connection with the Loan. Lender
represent to Borrowers that they have not engaged or used the services of any mortgage
broker in connection with the Loan. Lender, on one hand, and Guarantor and Borrowers, on
the other hand, shall each indemnify and hold the other harmless against the payment of
any brokerage commissions or fees of any kind with respect to the Loan, and for any legal
fees or expenses incurred by the other in connection with any claims for such commissions
or fees by any person engaged, or claiming to have been engaged, by the indemnifying party
(and no Lender shall be liable for any such obligation hereunder with respect to any
mortgage broker or other person claiming such rights or commissions on account of such
person’s distribution of loan solicitations or other materials with respect to any of
the Properties or such Lender’s receipt thereof). Such indemnity shall not be subject
to the limitations on personal liability set forth in Section 3 hereof. 

        Section
12. EFFECT OF APPROVALS. Any approval by Lender of documents or
materials submitted by any Borrower or by Guarantor shall be for loan underwriting
purposes only, and Borrowers and Guarantor acknowledge that they are not in any way
relying upon such approval for any purpose other than satisfaction of the terms and
conditions of the Application. The mere fact that the description of any document, report
or other item required by the Application sets forth certain information to be provided
therein, does not obligate Lender to approve the content of such information when it
appears in such document, report or other item. Any such approvals are to be relied upon
by Lender only, and shall not constitute an assumption of liability by Lender with respect
to Guarantor, any Borrower, or any contractors, architects, or engineers, or any present
or future tenant, occupant or owner of the Property. 

19

        Section
13. NOTICES. Any notice, request, demand, consent, approval, direction,
agreement, or other communication (any “notice”) required or permitted under the
Loan Documents shall be in writing and shall be validly given if sent by a
nationally-recognized courier that obtains receipts, delivered personally by a courier
that obtains receipts, or mailed by United States certified mail (with return receipt
requested and postage prepaid) addressed to the applicable person as follows: 

		
	If to Borrower:

c/o Mack-Cali Realty Corporation

11 Commerce Drive

Cranford, New Jersey  07016-3599

Attn:  Mitchell E. Hersh
	

		
	With a copy to notices sent to Borrower to:

Mack-Cali Realty, L.P.

c/o Mack-Cali Realty Corporation 
11 Commerce Drive 
Cranford, New Jersey  07016-3599
Attn:  Barry Lefkowitz	    With a copy to notices sent to Borrower to:

    Mack-Cali Realty, L.P.

    c/o Mack-Cali Realty Corporation
    11 Commerce Drive
    Cranford, New Jersey  07016-3599
    Attn:  Roger W. Thomas

		
	If to Lender:

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Prudential Capital Group 
2200 Ross Avenue, Suite 4900-E
Dallas, Texas   75201
Attention:  Asset Management Department
Reference Loan Nos. 6 105 349 - 6 105 355	    With a copy of notices sent to Lender to:

    THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

    2200 Ross Avenue, Suite 4900-E
    Dallas, Texas   75201
    Attention:  Legal Department
    Reference Loan Nos. 6 105 349 - 6 105 355

Each notice shall be effective
(i) upon delivery, if delivered in person, (ii) one business day after having
been deposited for overnight delivery with a reputable overnight courier service, or
(iii) three business days after having been sent by U.S. registered or certified
mail, postage prepaid. Refusal to accept delivery or the inability to deliver because of a
changed address for which no notice was given shall be deemed receipt. Any party may
periodically change its address for notice hereunder (and such change shall be applicable
to all Loan Documents) and specify up to two (2) additional addresses for copies by giving
the other party at least ten (10) days’ prior notice. 

20

        Section
14. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE. THIS AGREEMENT
IS A CONTRACTS UNDER THE LAWS OF THE STATE OF NEW JERSEY AND SHALL FOR ALL PURPOSES BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SUCH STATE (EXCLUDING THE LAWS
APPLICABLE TO CONFLICTS OR CHOICE OF LAW). BORROWER AGREES THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW JERSEY OR
ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF SUCH
COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON BORROWER BY MAIL AT THE
ADDRESS SPECIFIED IN SECTION 13. BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW
OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS
BROUGHT IN AN INCONVENIENT COURT. 

        Section
15. HEADINGS. The captions in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof. 

      Section
16. RULES OF INTERPRETATION.

         (a)       
          A reference to any document or agreement shall include such document or
          agreement as amended, modified or supplemented from time to time in accordance
          with its terms and the terms of this Agreement. 

         (b)       
          The singular includes the plural and the plural includes the singular. 

         (c)       
          A reference to any law includes any amendment or modification to such law. 

         (d)       
          A reference to any Person includes its permitted successors and permitted
          assigns. 

         (e)       
          Accounting terms not otherwise defined herein have the meanings assigned to them
          by generally accepted accounting principles. 

         (f)       
          The words “include”, “includes” and “including”
          are not limiting. 

         (g)       
          All terms not specifically defined herein or by generally accepted accounting
          principles, which terms are defined in the Uniform Commercial Code as in effect
          in New Jersey, have the meanings assigned to them therein. 

         (h)       
          Reference to a particular “Section” refers to that section of this
          Agreement unless otherwise indicated. 

         (i)       
          The words “herein”, “hereof “, “hereunder” and
          words of like import shall refer to this Agreement as a whole and not to any
          particular section or subdivision of this Agreement. 

21

         (j)       
          The covenants, warranties and agreements of Borrower herein shall be made
          jointly and severally. Such joint and several liability of each Borrower shall
          not be affected, diminished or impaired by the dissolution, merger,
          consolidation, insolvency or bankruptcy of either Person or any determination by
          a court or tribunal of competent jurisdiction or otherwise that, as to either
          Person, the obligations and liabilities of such Person hereunder and under the
          Security Documents on the other documents and instruments executed in connection
          herewith and therewith. 

        Section
17. COUNTERPARTS. This Agreement and any amendment hereof may be
executed in several counterparts and by each party on a separate counterpart, each of
which when so executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Agreement it shall not be necessary to produce
or account for more than one such counterpart signed by the party against whom enforcement
is sought. 

        Section
18. CONSENTS, AMENDMENTS, WAIVERS, ETC. Except as otherwise expressly
provided in this Agreement, any consent or approval required or permitted by this
Agreement may be given, and any term of this Agreement or of any other instrument related
hereto or mentioned herein may be amended, and the performance or observance by Borrowers
of any terms of this Agreement or such other instrument or the continuance of any Default
or Event of Default may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of Lender. No
waiver shall extend to or affect any obligation not expressly waived or impair any right
consequent thereon. No course of dealing or delay or omission on the part of Lender in
exercising any right shall operate as a waiver thereof or otherwise be prejudicial
thereto. No notice to or demand upon Borrowers shall entitle Borrowers to other or further
notice or demand in similar or other circumstances. 

        Section
19. SEVERABILITY. The provisions of this Agreement are severable, and if
any one clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect only such
clause or provision, or part thereof, in such jurisdiction, and shall not in any manner
affect such clause or provision in any other jurisdiction, or any other clause or
provision of this Agreement in any jurisdiction. 

        Section
20. NO UNWRITTEN AGREEMENTS. The written Loan Documents represent the
final agreement between the parties and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties. There are no unwritten oral
agreements between the parties. 

Section 21.       TIME OF THE
ESSENCE.  Time is of the essence of this Agreement. 

        Section
22. WAIVER OF JURY TRIAL. EACH OF BORROWERS, GUARANTORS AND LENDER HEREBY
WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM FILED BY EITHER PARTY, WHETHER IN CONTRACT, TORT OR OTHERWISE,
RELATING DIRECTLY OR INDIRECTLY TO THE LOAN, THE DOCUMENTS, OR ANY ACTS OR OMISSIONS OF
LENDER OR BORROWER IN CONNECTION THEREWITH. 

22

        Section
23. Liability. Guarantor’s recourse liability under this Agreement
shall be subject to the same limitations and other provisions as are set forth in
Paragraph 8 and Paragraph 9 of each applicable Note and as set forth in each
applicable Irrevocable Guaranty of Payment and Performance (Recourse Carveout Items), all
of which terms and provisions are incorporated herein by this reference, and, except to
the extent provided therein, Lender shall not enforce any deficiency judgment or personal
money judgment against Guarantor or any of its respective constituent partners, or any of
their respective officers, directors, agents, or shareholders with respect to any of the
liabilities or obligations arising hereunder. 

        IN
WITNESS WHEREOF, the undersigned have duly executed this Agreement as a sealed
instrument as of the date first set forth above. 

			GUARANTORS:

MACK-CALI REALTY CORPORATION,  a 
Maryland corporation

By:  /s/ BARRY LEFKOWITZ
——————————————

     Name:  Barry Lefkowitz
     Title:    Executive Vice President and Chief
                  Financial Officer

			MACK-CALI REALTY, L.P.,  a Delaware
limited partnership

By:  MACK-CALI REALTY CORPORATION, 
        a Maryland corporation, General Partner

         By:  /s/ BARRY LEFKOWITZ
         ——————————————

              Name:  Barry Lefkowitz
              Title:    Executive Vice President and
                           Chief Financial Officer

23

			BORROWERS:

MACK-CALI F PROPERTIES, a New Jersey 
limited partnership

By:  MACK-CALI SUB I INC., a Delaware
        corporation, General Partner

         By:  /s/ BARRY LEFKOWITZ
         ——————————————

              Name:  Barry Lefkowitz
              Title:    Executive Vice President and
                           Chief Financial Officer

			MACK-CALI REALTY, L.P.,  a Delaware
limited partnership

By:  MACK-CALI REALTY CORPORATION, a Maryland corporation, General Partner

         By:  /s/ BARRY LEFKOWITZ
         ——————————————

              Name:  Barry Lefkowitz
              Title:    Executive Vice President and
                           Chief Financial Officer

			MACK-CALI CHESTNUT RIDGE L.L.C., a

New Jersey limited liability company

By:  MACK-CALI REALTY, L.P., a Delaware 
        limited partnership, Sole Member

         By:  Mack-Cali Realty Corporation, a 
                 Maryland corporation, General Partner

                 By:  /s/ BARRY LEFKOWITZ
                 ——————————————

                     Name:  Barry Lefkowitz
                     Title:  Executive Vice President and
                                Chief Financial Officer

24

			LENDER:

THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA, a New Jersey
corporation

By:  /s/ MARK W. GLEASON
——————————————

     Name:  Mark W. Gleason
     Title:  Vice President

25

EXHIBIT A 

BORROWERS 

The Borrowers are listed below
opposite the name and location of each Property: 

			
	Property	 	Borrower	 	Property Address	 
	

	

	Saddle River	 	Mack-Cali Realty, L.P.	 	One Lake Street, Upper Saddle	 
	 	 	 	 	River, Bergen County, New Jersey	 
	

	

	Mack Centre I	 	Mack-Cali Realty, L.P.	 	365 West Passaic Street, Rochelle	 
	 	 	 	 	Park, Bergen County, New Jersey	 
	

	

	Mack Centre II	 	Mack-Cali Realty, L.P.	 	1 Mack Centre Drive, Paramus,	 
	 	 	 	 	Bergen County, New Jersey	 
	

	

	Mack Centre III	 	Mack-Cali Realty, L.P.	 	140 East Ridgewood Avenue, Paramus,	 
	 	 	 	 	Bergen County, New Jersey	 
	

	

	Mack Centre IV	 	Mack-Cali Realty, L.P.	 	61 South Paramus Road, Paramus,	 
	 	 	 	 	Bergen County, New Jersey	 
	

	

	Mack Centre VII	 	Mack-Cali F Properties	 	15 East Midland Avenue, Paramus,	 
	 	 	 	 	Bergen County, New Jersey	 
	

	

	Mack-Cali Corp. Center	 	Mack-Cali Chestnut Ridge L.L.C.	 	50 Tice Blvd., Woodcliff Lake,	 
	 	 	 	 	Bergen County, New JerseyEXHIBIT 4.1

                                                                  EXECUTION COPY

                                 XL CAPITAL LTD

                                       TO

                              THE BANK OF NEW YORK,

                                   AS TRUSTEE

                          SECOND SUPPLEMENTAL INDENTURE

                          DATED AS OF NOVEMBER 12, 2004

                             SENIOR DEBT SECURITIES

                SUPPLEMENT TO INDENTURE DATED AS OF JUNE 2, 2004

<PAGE>

              SECOND SUPPLEMENTAL INDENTURE, dated as of November 12, 2004 (the
"SECOND SUPPLEMENTAL INDENTURE"), by and between XL CAPITAL LTD, a Cayman
Islands exempted limited company (the "COMPANY"), having its principal office at
XL House, One Bermudiana Road, Hamilton HM11, Bermuda, and THE BANK OF NEW YORK,
a New York banking corporation, having a Corporate Trust Office at 101 Barclay
Street, Floor 8 West, New York, New York 10286, as trustee (the "TRUSTEE"),
under the Indenture.

              WHEREAS, the Company and the Trustee have as of June 2, 2004
entered into an Indenture (the "BASE INDENTURE") providing for the issuance by
the Company from time to time of its senior debt securities;

              WHEREAS, the Company issued a series of its 5.25% Senior Notes due
2014 (the "2014 SECURITIES") under the Base Indenture and provided for certain
additional provisions of such 2014 Securities in the First Supplemental
Indenture, dated as of August 23, 2004 (the "FIRST SUPPLEMENTAL INDENTURE");

              WHEREAS, the Company desires to issue additional 2014 Securities
as part of the same series of its 5.25% Senior Notes due 2014 as issued under
the Base Indenture, as amended and supplemented by the First Supplemental
Indenture;

              WHEREAS, the Company desires to issue a second series of senior
debt securities under the Base Indenture, and has duly authorized the creation
and issuance of such second series of senior debt securities and the execution
and delivery of this Second Supplemental Indenture to modify the Base Indenture
and provide certain additional provisions as hereinafter described (the Base
Indenture, as amended and supplemented by the First Supplemental Indenture and
this Second Supplemental Indenture, is hereinafter referred to as the
"INDENTURE");

              WHEREAS, the Company and the Trustee deem it advisable to enter
into this Second Supplemental Indenture for the purposes of establishing the
terms of such second series of senior debt securities and providing for the
rights, obligations and duties of the Trustee with respect to such second series
of senior debt securities;

              WHEREAS, the execution and delivery of this Second Supplemental
Indenture has been authorized by a resolution of the Board of Directors of the
Company or a duly authorized committee thereof;

              WHEREAS, concurrently with the execution hereof, the Company has
delivered an Officers' Certificate and has caused its counsel to deliver to the
Trustee an Opinion of Counsel; and

              WHEREAS, all conditions and requirements of the Base Indenture
necessary to make this Second Supplemental Indenture a valid, binding and legal
instrument in accordance with its terms have been performed and fulfilled by the
parties hereto and the execution and delivery thereof have been in all respects
duly authorized by the parties hereto.

              NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH:

<PAGE>

              For and in consideration of the mutual premises and agreements
herein contained, the Company and the Trustee covenant and agree, for the equal
and proportionate benefit of all Holders of the 2014 Securities and the 2024
Securities (as defined below), as follows:

                                   ARTICLE I

                           ADDITIONAL 2014 SECURITIES

       Section 1.1.  Issuance of Additional 2014 Securities.

              Pursuant to Sections 2.01 and 3.01 of the Base Indenture and
Section 2.4(b) of the First Supplemental Indenture, the Company hereby issues
$300,000,000 of 5.25% Senior Notes due 2014, which shall be part of the same
series of 5.25% Senior Notes due 2014 as issued under the Base Indenture, as
supplemented by the First Supplemental Indenture, and the terms of which shall
be governed by the First Supplemenal Indenture and not by the other provisions
of this Second Supplemental Indenture.

       Section 1.2.  Form of 2014 Securities.

              The definitive form of the 2014 Securities issued hereby shall be
substantially in the form set forth in EXHIBIT A to the First Supplemental
Indenture.

                                   ARTICLE II

                                   DEFINITIONS

       Section 2.1.  Definition of Terms.

              Unless otherwise provided herein or unless the context otherwise
requires:

              (a)    a term defined in the Base Indenture has the same meaning
       when used in this Second Supplemental Indenture;

              (b)    a term defined anywhere in this Second Supplemental
       Indenture has the same meaning throughout;

              (c)    the singular includes the plural and vice versa;

              (d)    headings are for convenience of reference only and do not
       affect interpretation; and

              (e)    the following terms have the meanings given to them in this
       Section 2.1(e):

              "ADDITIONAL AMOUNTS" has the meaning set forth in Section 3.13(b).

              "COMPARABLE TREASURY ISSUE" means the United States Treasury
security selected as having a maturity comparable to the remaining term of the
2024 Securities to be redeemed that would be used, at the time of selection and
under customary financial practice, in pricing

                                      -2-
<PAGE>

new issues of corporate debt securities of comparable maturity to the remaining
term of the 2024 Securities.

              "COMPARABLE TREASURY PRICE" means, with respect to any Redemption
Date, the average of the Reference Treasury Dealer Quotations for the Redemption
Date, after excluding the highest and lowest Reference Treasury Dealer
Quotations, or if the Trustee obtains fewer that four Reference Treasury Dealer
Quotations, the average of all Reference Treasury Dealer Quotations.

              "DEPOSITARY" has the meaning set forth in Section 3.7.

              "DESIGNATED SUBSIDIARY" means any present or future consolidated
subsidiary of the Company that is a regulated insurance company, the assets of
which constitute at least 20% of the Company's consolidated assets.

              "GLOBAL NOTE" means a Global Security representing the 2024
Securities.

              "ISSUE DATE" means November 12, 2004.

              "REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by the Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day before the Redemption Date.

              "REFERENCE TREASURY DEALERS" means each of Credit Suisse First
Boston LLC and Morgan Stanley & Co. Incorporated and their respective successors
and any other primary Treasury dealer the Company selects. If any of the
foregoing ceases to be a primary U.S. government securities dealer in New York
City, the Company must substitute another primary Treasury dealer.

              "RELEVANT DATE" means, in respect of any payment, the date on
which such payment first becomes due and payable, but if the full amount of the
moneys payable has not been received by the Trustee on or prior to such due
date, it means the first date on which, the full amount of such moneys having
been so received and being available for payment to Holders, notice to that
effect shall have been duly given to the Holders of the 2024 Securities.

              "TAX EVENT" means if the Company determines that, as a result of
(1) any change in, or amendment to, the law or treaties (or any regulations or
rulings promulgated thereunder), including the enactment of any legislation or
the publication of any regulatory determination, of the Cayman Islands, Bermuda
or any other jurisdiction from or through which the Company makes a payment on
the 2024 Securities or in which the Company generally becomes subject to
taxation; or (2) any change in, or amendment to, a position regarding the
application, administration or interpretation of such laws, treaties,
regulations or rulings (including a holding, judgment or order by a court of
competent jurisdiction) (each of the foregoing in clauses (1) and (2), a "CHANGE
IN TAX LAW"), the Company is, or on the next Interest Payment Date in respect of
the 2024 Securities would be, required to pay Additional Amounts with respect to
the 2024 Securities as described under Section 3.13(b), and such obligation
cannot be avoided by taking

                                      -3-
<PAGE>

commercially reasonable measures available to the Company. The Change in Tax Law
must become effective on or after November 8, 2004. In the case of a successor
entity, the Change in Tax Law must become effective after the date that such
successor entity first becomes an obligor on the 2024 Securities (unless the
Change in Tax Law had already occurred prior to such date, but on or after
November 8, 2004, with respect to the original entity).

              "TREASURY RATE" means, with respect to any Redemption Date, the
rate per year equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such Redemption Date. The Treasury Rate shall be calculated
on the third Business Day preceding the Redemption Date.

                                  ARTICLE III

                         CREATION OF THE 2024 SECURITIES

       Section 3.1.  Designation of Series.

              Pursuant to the terms hereof and Sections 2.01 and 3.01 of the
Base Indenture, the Company hereby creates a series of its senior debt
securities designated as the 6.375% Senior Notes due 2024 (the "2024
SECURITIES"), which 2024 Securities shall be deemed "Securities" for all
purposes under the Indenture.

       Section 3.2.  Form of 2024 Securities.

              The definitive form of the 2024 Securities shall be substantially
in the form set forth in EXHIBIT A attached hereto, which is incorporated herein
and made part hereof (and the 2024 Securities shall be referred to as the
"Notes" in Exhibit A).

              The Final Maturity of the 2024 Securities shall be November 15,
2024.

       Section 3.3.  Interest and Interest Rate Reset.

              (a)    The 2024 Securities will bear interest from the Issue Date
       or from the most recent Interest Payment Date to which interest has been
       paid or duly provided for, as the case may be, to maturity or early
       redemption, as the case may be, at the rate of 6.375% per annum payable
       semi-annually on May 15 and November 15 of each year, commencing on May
       15, 2005, to the persons in whose names the 2024 Securities were
       registered at the close of business on the preceding May 1 and November
       1, respectively.

              (b)    Interest on the 2024 Securities will be computed on the
       basis of a 360-day year comprised of twelve 30-day months. The amount of
       interest payable for any period shorter than a full semi-annual period
       for which interest is computed will be computed on the basis of the
       actual number of days elapsed in the 180-day period.

                                      -4-
<PAGE>

       Section 3.4.  Limit on Amount of 2024 Securities.

              (a)    The 2024 Securities initially will be limited in aggregate
       principal amount to $350,000,000 and may, upon execution of this Second
       Supplemental Indenture, be executed by the Company and delivered to the
       Trustee for authentication, and the Trustee shall thereupon authenticate
       and deliver said 2024 Securities in accordance with a Company Order.

              (b)    The Company may issue from time to time, without giving
       notice to or seeking the consent of the Holders of the 2024 Securities,
       additional notes having the same terms as the 2024 Securities (except for
       the initial public offering price, first Interest Payment Date and the
       Issue Date). Any such additional notes, together with the 2024
       Securities, will constitute a single series of Securities under the
       Indenture.

       Section 3.5.  Nature of 2024 Securities/Minimum Denomination.

              (a)    The 2024 Securities shall constitute senior, unsecured and
       unsubordinated obligations of the Company and shall rank pari passu with
       all other unsecured and unsubordinated indebtedness of the Company from
       time to time outstanding.

              (b)    The 2024 Securities shall be issuable only in registered
       form and without coupons in denominations of $1,000 and any integral
       multiples thereof.

       Section 3.6.  No Sinking Fund.

              The 2024 Securities do not have the benefit of any mandatory
redemption or sinking fund obligation and are not redeemable at the option of
the Holders.

       Section 3.7.  Issuance of 2024 Securities and Payment.

              (a)    The 2024 Securities, on original issuance, shall be issued
       in the form of one fully registered Global Note registered in the name of
       The Depository Trust Company, as Depositary (the "DEPOSITARY"), or its
       nominee, and deposited with the Trustee, as custodian for the Depositary,
       for credit by the Depositary to the respective accounts of beneficial
       owners of the 2024 Securities represented thereby (or such other accounts
       as they may direct).

              (b)    The payment of principal of and the interest on the 2024
       Securities will be payable at the Corporate Trust Office or, at the
       option of the Company, by check mailed to each Holder at its address set
       forth in the Security Register; PROVIDED HOWEVER, that if a Holder has
       given wire transfer instructions to the Company and the Paying Agent and
       Security Registrar at least ten Business Days prior to the applicable
       payment date, payment of principal of and the interest on the 2024
       Securities will be payable by wire transfer of immediately available
       funds to the account specified in such instructions.

       Section 3.8.  2024 Securities Not Convertible or Exchangeable.

              The 2024 Securities will not be convertible or exchangeable for
other securities or property.

                                      -5-
<PAGE>

       Section 3.9.  Redemption.

              Pursuant to Section 3.01(6) and Section 11.01 of the Base
Indenture, so long as any of the 2024 Securities are Outstanding, the following
provisions shall be applicable to the 2024 Securities:

              (a)    The 2024 Securities will be redeemable, in whole at any
       time or in part from time to time, at the Company's option, at a
       redemption price equal to accrued and unpaid interest on the principal
       amount of the 2024 Securities being redeemed to the Redemption Date plus
       the greater of: (A) 100% of the principal amount of the 2024 Securities
       to be redeemed, and (B) the sum of the present values of the remaining
       scheduled payments of principal and interest on the 2024 Securities to be
       redeemed (not including any portion of such payments of interest accrued
       to the Redemption Date) discounted to the Redemption Date on a
       semi-annual basis (assuming a 360-day year consisting of twelve 30-day
       months) at the Treasury Rate, plus 25 basis points.

              (b)    If a Tax Event occurs and is continuing, the Company may,
       at its option, redeem the 2024 Securities in whole, but not in part, at
       any time at a redemption price equal to 100% of the principal amount of
       the 2024 Securities, plus accrued and unpaid interest, if any, to the
       Redemption Date and Additional Amounts, if any, then due or that will
       become due on the date fixed for redemption as a result of such
       redemption. Installments of interest on 2024 Securities which are due and
       payable on or prior to a Redemption Date will be payable to Holders of
       the 2024 Securities registered as such at the close of business on the
       relevant record dates.

              (c)    (i)    Notwithstanding Section 11.04 of the Base Indenture,
       any notice of redemption pursuant to Section 3.9(a) or (b) shall (i) be
       sufficient if instead of setting forth a specific price with respect to
       the Redemption Price, it sets forth the manner of calculation thereof and
       (ii) be mailed to the Holders not less than 30 nor more than 60 days
       prior to the Redemption Date.

                     (ii)   Notwithstanding the foregoing, in case of a Tax
              Event redemption, no such notice of redemption will be given (a)
              earlier than 90 days prior to the earliest date on which the payor
              would be obliged to make such payment or withholding if a payment
              in respect of 2024 Securities by it were then due and (b) unless
              at the time such notice is given, such obligation to pay such
              Additional Amounts remains in effect. Prior to the publication or
              mailing of any notice of redemption of 2024 Securities pursuant to
              the foregoing, the Company will deliver to the Paying Agent (a) an
              Officers' Certificate stating that the Company is entitled to
              effect such redemption and setting forth a statement of facts
              showing that any factual conditions precedent to the Company's
              right so to redeem have been satisfied and (b) a legal opinion of
              an outside nationally recognized tax counsel to the effect that
              the circumstances referred to in this clause (ii) and the
              circumstances described in the definition of "Tax Event" exist.

                                      -6-
<PAGE>

       Section 3.10.  Guarantees.

              The 2024 Securities will not be guaranteed by any third party.

       Section 3.11.  Place of Payment.

              The Paying Agent for the 2024 Securities shall initially be the
Trustee, and the Place of Payment for the 2024 Securities shall initially be the
Corporate Trust Office, which as of the date hereof for such purpose is located
at 101 Barclay Street, Floor 8 West, New York, New York 10286. The Company may
from time to time designate one or more additional offices or agencies where
2024 Securities may be presented or surrendered for payment.

       Section 3.12.  Events of Default.

              The following shall constitute additional Events of Default
pursuant to Section 5.01 of the Base Indenture with respect to the 2024
Securities with the same effect as if expressly set forth in such Section 5.01:

              (a)    default by the Company under any instrument or instruments
       under which there is or may be secured or evidenced any of the Company's
       indebtedness (other than the 2024 Securities) having an outstanding
       principal amount of $50,000,000 (or its equivalent in any other currency
       or currencies) or more, individually or in the aggregate, that has caused
       the holders thereof to declare such indebtedness to be due and payable
       prior to its stated maturity, unless such declaration has been rescinded
       within 30 days;

              (b)    default by the Company in the payment when due of the
       principal of or premium, if any, on any bond, debenture, note or other
       evidence of the Company's indebtedness, in each case for money borrowed,
       or in the payment of principal or premium, if any, under any mortgage,
       indenture, agreement or instrument under which there may be issued or by
       which there may be secured or evidenced any indebtedness of the Company
       for money borrowed, which default for payment of principal or premium, if
       any, is in an aggregate principal amount exceeding $50,000,000 (or its
       equivalent in any other currency or currencies), if such default shall
       continue unremedied or unwaived for more than 30 days after the
       expiration of any grace period or extension of the time for payment
       applicable thereto;

              (c)    default in the payment of any Additional Amounts payable
       with respect to interest on any 2024 Securities, when such Additional
       Amounts become due and payable, and continuance of such default for a
       period of 30 days; and

              (d)    default in the payment of any Additional Amounts payable
       with respect to any principal of or premium, if any, on any 2024
       Securities, when such Additional Amounts become due and payable either at
       maturity, upon any redemption, by declaration of acceleration or
       otherwise.

              In addition, with respect to the 2024 Securities, the reference to
"60 days" in Section 5.01(1) of the Base Indenture shall be amended to be "30
days" with respect to the 2024 Securities.

                                      -7-
<PAGE>

              The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice of any Event of Default or any event which,
after notice or lapse of time or both, would constitute an Event of Default.

       Section 3.13.  Covenants.

              The 2024 Securities shall be entitled to the benefit of each of
the covenants in Article Ten of the Base Indenture and the following additional
covenants (each of which shall be deemed to be a provision of the Indenture and,
when referred to as a provision of the Indenture, shall be identified by
reference to the Section number that is set forth immediately preceding the
covenant):

              (a)    SECTION 10.09. LIMITATION ON LIENS ON STOCK OF DESIGNATED
       SUBSIDIARIES. The Company covenants that, so long as any 2024 Securities
       are outstanding, the Company will not, nor will the Company permit any
       Designated Subsidiary to, create, assume, incur, guarantee or otherwise
       permit to exist any indebtedness evidenced by notes, debentures, bonds or
       similar instruments that is secured by any mortgage, pledge, lien,
       security interest or other encumbrance upon any shares of Capital Stock
       of any Designated Subsidiary (whether such shares of stock are now owned
       or hereafter acquired) without effectively providing concurrently that
       the 2024 Securities will be secured equally and ratably with such
       indebtedness for at least the time period such other indebtedness is so
       secured.

              (b)    SECTION 10.10. ADDITIONAL AMOUNTS. All amounts payable
       (whether in respect of principal, interest or otherwise) in respect of
       the 2024 Securities will be made free and clear of and without
       withholding or deduction for or on account of any present or future
       taxes, duties, levies, assessments or governmental charges of whatever
       nature imposed or levied by or on behalf of the Cayman Islands or Bermuda
       or any political subdivision thereof or any authority or agency therein
       or thereof having power to tax, unless the withholding or deduction of
       such taxes, duties, levies, assessments or governmental charges is
       required by law. In that event, the Company will pay, or cause to be
       paid, such additional amounts as may be necessary in order that the net
       amounts receivable by a Holder after such withholding or deduction
       (including any withholding or deduction on such payment of additional
       amounts) shall equal the respective amounts that would have been
       receivable by such Holder had no such withholding or deduction been
       required ("ADDITIONAL AMOUNTS"), except that no such Additional Amounts
       shall be payable in relation to any payment (including a payment made in
       connection with a redemption) in respect of any of the 2024 Securities
       (a) to, or to a third party on behalf of, a Person who would be able to
       avoid such withholding or deduction by complying with such Person's
       statutory requirements or by making a declaration of non-residence or
       similar claim for exemption but, in either case, fails to do so, or is
       liable for such taxes, duties, levies, assessments or governmental
       charges in respect of such 2024 Security by reason of his having some
       connection with (including, without limitation, being a citizen of, being
       incorporated or engaged in a trade or business in, or having a residence
       or principal place of business or other presence in) the Cayman Islands
       or Bermuda, as the case may be, other than (i) the mere holding of such
       2024 Security; (ii) the receipt of principal, interest or other amount in
       respect of such 2024 Security; or (iii) the mere enforcement of rights
       with respect to such 2024 Security; (b) presented for payment more than
       30 days after the Relevant Date, except to the extent that the relevant
       Holder would

                                      -8-
<PAGE>

       have been entitled to such Additional Amounts on presenting the same for
       payment on or before the expiration of such period of 30 days; (c) to a
       fiduciary, a partnership or person who is not the beneficial owner of a
       2024 Security, if and to the extent that, as a result of an applicable
       tax treaty, no Additional Amounts would have been payable had the
       beneficiary, partner or beneficial owner owned the 2024 Security
       directly; (d) on account of any inheritance, gift, estate, personal
       property, stamp, sales or transfer or similar taxes, duties, levies,
       assessments or similar governmental charges; or (e) on account of any
       taxes, duties, levies, assessments or governmental charges that are
       payable otherwise than by withholding from payments in respect of such
       2024 Security.

              In the event that payments in respect of the 2024 Securities are
       subject to withholding or deduction for or on account of any taxes, the
       Company will (i) make any required withholding or deduction and (ii)
       remit the full amount deducted or withheld to the relevant taxing
       jurisdiction in accordance with applicable law. The Company will used
       commercially reasonable efforts to obtain certified copies of tax
       receipts evidencing the payment of any taxes so deducted or withheld from
       each relevant taxing jurisdiction imposing such taxes and will use
       commercially reasonable efforts to provide or make available such
       certified copies to each Holder.

              If the Company becomes subject generally at any time to any taxing
       jurisdiction other than or in addition to the Cayman Islands or Bermuda,
       or makes a payment on the 2024 Securities from any jurisdiction other
       than or in addition to the Cayman Islands or Bermuda, references in this
       Section 10.10 to the Cayman Islands and Bermuda shall be read and
       construed as references to such other jurisdiction(s) and/or to the
       Cayman Islands and Bermuda.

              Any reference in the Indenture to principal, premium or interest
       in respect of the 2024 Securities, any redemption amount and any other
       amounts in the nature of principal shall be deemed also to refer to any
       Additional Amounts that may be payable under the Indenture, and the
       express mention of the payment of Additional Amounts (if applicable) in
       any provision hereof shall not be construed as excluding Additional
       Amounts in those provisions hereof where such express mention is not
       made.

              Except as otherwise provided in or pursuant to the Indenture, if
       the 2024 Securities require the payment of Additional Amounts, at least
       30 days prior to each date on which any payments under or with respect to
       the 2024 Securities are due and payable (unless such obligation to pay
       Additional Amounts arises shortly before or after the 30th day prior to
       such date, in which case it shall be promptly thereafter) the Company or
       its designee shall furnish to the Trustee, the Registrar and the Paying
       Agent an Officers' Certificate stating the fact that Additional Amounts
       will be payable, the amounts so payable, and any other information to
       enable the Trustee or such Paying Agent to pay such Additional Amounts to
       Holders on the payment date.

              The Company will pay any present or future stamp, court or
       documentary taxes or any other excise or property taxes, charges or
       similar levies that arise in any jurisdiction from the execution,
       delivery or registration of any 2024 Securities or any other document or
       instrument referred to therein (other than a transfer of the 2024
       Securities), or the

                                      -9-
<PAGE>

       receipt of any payments with respect to the 2024 Securities, excluding
       any such taxes, charges or similar levies imposed by any jurisdiction
       outside the Cayman Islands or Bermuda in which a Paying Agent is located,
       other than those resulting from, or required to be paid in connection
       with, the enforcement of the 2024 Securities, the Indenture or any other
       such document or instrument following the occurrence of any Event of
       Default with respect to the 2024 Securities.

       Section 3.14.  Non-Applicability of Certain Sections.

       Sections 11.08, 11.09 and 11.10 of the Base Indenture shall not apply to
the 2024 Securities.

                                   ARTICLE IV

               APPOINTMENT OF THE TRUSTEE FOR THE 2024 SECURITIES

       Section 4.1.  Appointment of Trustee.

              Pursuant and subject to the Indenture, the Company and the Trustee
hereby constitute the Trustee as trustee to act on behalf of the Holders of the
2024 Securities, and as the principal Paying Agent and Security Registrar for
the 2024 Securities, effective upon execution and delivery of this Second
Supplemental Indenture. By execution, acknowledgment and delivery of this Second
Supplemental Indenture, the Trustee hereby accepts appointment as Trustee,
Paying Agent and Security Registrar with respect to the 2024 Securities, and
agrees to perform such trusts upon the terms and conditions set forth in the
Indenture and in this Second Supplemental Indenture.

       Section 4.2.  Rights, Powers, Duties and Obligations of the Trustee.

              Any rights, powers, duties and obligations by any provisions of
the Indenture conferred or imposed upon the Trustee shall, insofar as permitted
by law, be conferred or imposed upon and exercised or performed by the Trustee
with respect to the 2024 Securities.

                                   ARTICLE V

                                  MISCELLANEOUS

       Section 5.1.  Application of Second Supplemental Indenture.

              Each and every term and condition contained in this Second
Supplemental Indenture that modifies, amends or supplements the terms and
conditions of the Base Indenture with respect to the 2024 Securities shall apply
only to the 2024 Securities created hereby and not to any past or future series
of Securities issued under the Base Indenture.

                                      -10-
<PAGE>

       Section 5.2.  Benefits of Second Supplemental Indenture.

              Nothing contained in this Second Supplemental Indenture shall or
shall be construed to confer upon any person other than a Holder of the 2024
Securities, the Company and the Trustee any right or interest to avail itself or
himself, as the case may be, of any benefit under any provision of the Base
Indenture or this Second Supplemental Indenture.

       Section 5.3.  Amendment of Second Supplemental Indenture.

              The Company and the Trustee, at any time and from time to time,
may amend, modify or supplement this Second Supplemental Indenture in accordance
with the provisions of Article Nine of the Base Indenture.

       Section 5.4.  Effective Date.

              This Second Supplemental Indenture shall be effective as of the
date first above written and upon the execution and delivery hereof by each of
the parties hereto.

       Section 5.5. Governing Law; Waiver of Jury Trial; Submission
to Jurisdiction; Judgment Currency.

              THIS SECOND SUPPLEMENTAL INDENTURE AND EACH 2024 SECURITY SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.

              EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS SECOND
SUPPLEMENTAL INDENTURE, THE 2024 SECURITIES OR THE TRANSACTION CONTEMPLATED
HEREBY.

              The Company and the Trustee hereby submit to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York state court sitting in the Borough of Manhattan in
New York City for the purposes of all legal proceedings arising out of or
relating to the Indenture. The Company and the Trustee irrevocably waive, to the
fullest extent permitted by applicable law, any objection which they may now or
hereafter have to the laying of the venue of any such proceeding brought in such
a court and any claim that any such proceeding brought in such a court has been
brought in an inconvenient forum. The Company hereby designates and appoints CT
Corporation System, 111 Eighth Avenue, New York, New York 10011, as its
authorized agent upon which process may be served in any legal suit, action or
proceeding arising out of or relating to the Indenture which may be instituted
in any federal or state court in the Borough of Manhattan, The City of New York,
New York, and agrees that service of process upon such agent, and written notice
of said service to the Company by the Person serving the same, shall be deemed
in every respect effective service of process upon the Company in any such suit,
action or proceeding and further designates its domicile, the domicile of CT
Corporation System specified above and any domicile CT Corporation System may
have in the future as its domicile to receive any notice hereunder (including
service of process). If for any reason CT Corporation System (or any successor
agent for this purpose) shall cease to act as agent for service of process as
provided above, the

                                      -11-
<PAGE>

Company will promptly appoint a successor agent for this purpose reasonably
acceptable to the Trustee. The Company agrees to take any and all actions as may
be necessary to maintain such designation and appointment of such agent in full
force and effect.

              The Company agrees, to the fullest extent that it may effectively
do so under applicable law, that (a) if for the purpose of obtaining judgment in
any court it is necessary to convert the sum due (the "REQUIRED CURRENCY") into
a currency in which a judgment will be rendered (the "JUDGMENT CURRENCY"), the
rate of exchange used shall be the rate at which in accordance with normal
banking procedures the Trustee could purchase in The City of New York the
requisite amount of the Required Currency with the Judgment Currency on the New
York Banking Day preceding the day on which a final unappealable judgment is
given and (b) its obligations under the Indenture to make payments in the
Required Currency (i) shall not be discharged or satisfied by any tender, or any
recovery pursuant to any judgment (whether or not entered in accordance with
clause (a)), in any currency other than the Required Currency, except to the
extent that such tender or recovery shall result in the actual receipt, by the
payee, of the full amount of the Required Currency expressed to be payable in
respect of such payments, (ii) shall be enforceable as an alternative or
additional cause of action for the purpose of recovering in the Required
Currency the amount, if any, by which such actual receipt shall fall short of
the full amount of the Required Currency so expressed to be payable and (iii)
shall not be affected by judgment being obtained for any other sum due under the
Indenture. For purpose of the foregoing, "NEW YORK BANKING DAY" means any day
except a Saturday, Sunday or a legal holiday in The City of New York or a day on
which banking institutions in The City of New York are authorized or obligated
by law, regulation or executive order to be closed.

       Section 5.6.  Counterparts.

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

       Section 5.7.  Ratification of Base Indenture.

              The Base Indenture, as supplemented by this Second Supplemental
Indenture, is in all respects ratified and confirmed, and this Second
Supplemental Indenture shall be deemed part of the Base Indenture in the manner
and to the extent herein and therein provided.

       Section 5.8.  Validity and Sufficiency.

              The Trustee shall not be responsible in any manner whatsoever for
or in respect of the validity or sufficiency of this Second Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
are made solely by the Company.

                                      -12-
<PAGE>

              IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed as a deed by their respective
officers hereunto duly authorized, all as of the day and year first above
written.

                                         XL CAPITAL LTD, as Issuer

                                         By:         /s/ Fiona E. Luck
                                             -----------------------------------
                                             Name:  Fiona E. Luck
                                             Title: Executive Vice President of
                                                    Group Operations

<PAGE>

                                         THE BANK OF NEW YORK, as Trustee

                                         By:        /s/ Remo J. Reale
                                             -----------------------------------
                                             Name:  Remo J. Reale
                                             Title: Vice President

                                      -13-
<PAGE>

                                                                       EXHIBIT A
                                                                       ---------

                                  FORM OF NOTE

              [If the Note is a Global Note, insert - THIS NOTE IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE DEPOSITARY, WHICH
MAY BE TREATED BY THE COMPANY, THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND
HOLDER OF THIS NOTE FOR ALL PURPOSES, INCLUDING THE PAYMENT OF PRINCIPAL AND
INTEREST.

              UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE
INDIVIDUAL SECURITIES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE (I) BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR (II) BY A NOMINEE OF THE DEPOSITARY OR THE DEPOSITARY TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.]

              [If the Depository is The Depository Trust Company, insert -
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE COMPANY OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.]

                                      A-1
<PAGE>

                                          No.

                                         CUSIP No. 98372P AG 3
                                         $_______________

                                 XL CAPITAL LTD
                           6.375% SENIOR NOTE DUE 2024

              XL CAPITAL LTD, an exempted limited company duly organized and
existing under the laws of the Cayman Islands (the "COMPANY", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to __________________ the principal sum
of ________________ United States dollars (U.S.$______________) [If the Note is
a Global Note, insert - , as such amount may be increased or decreased as set
forth on the Schedule of Increases or Decreases in Global Note annexed hereto,]
on November 15, 2024 (such date is hereinafter referred to as the "STATED
MATURITY"), and to pay interest thereon, from November 12, 2004, or from the
most recent Interest Payment Date (as defined below) to which interest has been
paid or duly provided for, at the rate of 6.375% per annum to, but excluding,
the relevant Interest Payment Date, until the Stated Maturity or early
redemption.

              Interest on this Note initially shall be payable semi-annually in
arrears on May 15 and November 15 of each year (each, an "INTEREST PAYMENT
DATE"), commencing May 15, 2005 through and including November 15, 2024, until
the Stated Maturity or early redemption. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Note (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the May 1 and November 1,
respectively (whether or not a Business Day) preceding the relevant Interest
Payment Date.

              Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
be paid to the Person in whose name this Note (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice of
which shall be given to Holders of Securities of this series not less than 10
days prior to such Special Record Date and shall otherwise be payable, all as
more fully provided in the Indenture.

              Principal of and the interest on the Notes will be payable at the
Corporate Trust Office, or, at the option of the Company, by check mailed to
each Holder at its address set forth in the Security Register; PROVIDED HOWEVER,
that if a Holder has given wire transfer instructions to the Company and the
Paying Agent and Security Registrar at least ten Business Days prior to the
applicable payment date, principal of and the interest on the Notes will be
payable by wire transfer of immediately available funds to the account specified
in such instructions.

                                      A-2
<PAGE>

              Interest on the Notes will be computed on the basis of a 360-day
year comprised of twelve 30-day months. The amount of interest payable for any
period shorter than a full semi-annual period for which interest is computed
will be computed on the basis of the actual number of days elapsed in the
180-day period.

              Reference is hereby made to the further provisions of this Note
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if fully set forth at this place.

              Unless the certificate of authentication hereon has been executed
by the Trustee referred to on the reverse hereof by the manual signature of one
of its authorized signatories, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.

      [Remainder of Page Intentionally Left Blank; Signature Pages Follow]

                                      A-3
<PAGE>

              IN WITNESS WHEREOF, the Company has caused this Note to be
executed and delivered as a deed.

Dated:

                                         XL CAPITAL LTD

                                         By:________________________________
                                             Name:
                                             Title:

                                         By:________________________________
                                             Name:
                                             Title:

                                      A-4
<PAGE>

                          CERTIFICATE OF AUTHENTICATION

              This is one of the Securities of the series designated herein
referred to in the within-mentioned Indenture.

                                         The Bank of New York,
                                         as Trustee

                                         By:____________________________
                                              Authorized Officer

                                      A-5
<PAGE>

                                [FORM OF REVERSE]

              This Note is one of a duly authorized issue of securities of the
Company designated as its "6.375% Senior Notes due 2024" (herein sometimes
referred to as the "NOTES"), initially limited in aggregate principal amount to
$350,000,000, issued under and pursuant to an Indenture, dated as of June 2,
2004 (the "BASE INDENTURE"), duly executed and delivered, between the Company
and The Bank of New York, as Trustee (the "TRUSTEE"), and a Second Supplemental
Indenture, dated as of November 12, 2004 (the "SECOND SUPPLEMENTAL INDENTURE"),
between the Company and the Trustee (such Base Indenture as amended and
supplemented by the Second Supplemental Indenture, the "INDENTURE"), to which
Indenture and all subsequent indentures supplemental thereto relating to the
Notes reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Notes and of the terms upon which the Notes are,
and are to be, authenticated and delivered.

              The Notes are issuable only in registered form without coupons, in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Notes of this
series so issued are exchangeable for a like aggregate principal amount of Notes
of a different authorized denomination, as requested by the Holder surrendering
the same.

              The Notes will be redeemable, in whole at any time or in part from
time to time, at the Company's option, at a redemption price equal to the
accrued and unpaid interest on the principal amount of the Notes being redeemed
to the Redemption Date plus the greater of: (A) 100% of the principal amount of
the Notes to be redeemed, and (B) the sum of the present values of the remaining
scheduled payments of principal and interest on the Notes to be redeemed (not
including any portion of such payments of interest accrued to the Redemption
Date) discounted to the Redemption Date on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury Rate, plus 25
basis points, as provided in, and subject to the terms of, the Indenture.

              If a Tax Event occurs and is continuing, the Company may, at its
option, redeem the Notes in whole, but not in part, at any time at a redemption
price equal to 100% of the principal amount of the Notes, plus accrued and
unpaid interest, if any, to the Redemption Date and Additional Amounts, if any,
then due or that will become due on the Redemption Date as a result of the
redemption, as provided in, and subject to the terms of, the Indenture.

              No sinking fund is provided for the Notes.

              The Notes shall constitute the senior, unsecured and
unsubordinated obligations of the Company and shall rank equally in right of
payment with all existing and future senior, unsecured and unsubordinated
obligations of the Company.

              In the case of an Event of Default described in Section 5.01(5) or
5.01(6) of the Indenture, all unpaid principal of and accrued interest and
Additional Amounts on the Notes then Outstanding shall be due and payable
immediately without any declaration or other act on the part of the Trustee or
the Holders of any Notes. In the case of all other Events of Default, if any

                                      A-6
<PAGE>

such Event of Default shall occur and be continuing, the principal of all of the
Notes, together with accrued interest to the date of declaration, may be
declared due and payable in the manner and with the effect provided in the
Indenture.

              The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the written consent of the Holders of not less than a majority
in principal amount of the Securities at the time Outstanding and affected
thereby. The Indenture also contains, with certain exceptions as therein
provided, provisions permitting Holders of not less than a majority in principal
amount of the Securities of any series at the time Outstanding, on behalf of the
Holders of all the Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued in exchange herefor or in lieu
hereof whether or not notation of such consent or waiver is made upon this Note
or such other Note.

              As provided in and subject to the provisions of the Indenture, the
Holder of this Note shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless (i) such Holder shall have previously given
the Trustee written notice of a continuing Event of Default, (ii) the Holders of
not less than 25% in principal amount of the Notes that are Outstanding shall
have made a written request to the Trustee to institute proceedings in respect
of such Event of Default as Trustee and offered the Trustee indemnity
satisfactory to it, (iii) the Trustee shall have failed to institute any such
proceeding for 60 days after receipt of such notice, request and offer of
indemnity, and (iv) the Trustee shall not have received from the Holders of a
majority in principal amount of the Notes that are Outstanding a direction
inconsistent with such written request during such 60-day period. The foregoing
shall not apply to any suit instituted by any Holder of this Note for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.

              No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Note at the times, places and rate, and in the coin or
currency, herein prescribed.

              As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable on the Security
Register upon surrender of this Note for registration of transfer at the
Corporate Trust Office of the Trustee or at such other office or agency of the
Company as may be designated by it for such purpose in the Borough of Manhattan,
The City of New York (which shall initially be an office or agency of the
Trustee), or at such other offices or agencies as the Company may designate,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Security Registrar duly executed by, the Holder thereof or
his attorney duly authorized in writing, and thereupon one or more new Notes, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees by the Security Registrar. No

                                      A-7
<PAGE>

service charge shall be made for any such registration of transfer or exchange,
but the Company may require payment of a sum sufficient to recover any tax or
other governmental charge payable in connection therewith.

              Prior to due presentation of this Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner thereof
for all purposes, whether or not such Note be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.

              No recourse for the payment of the principal of (and premium, if
any on) or interest on this Note and no recourse under or upon any obligation,
covenant or agreement of the Company in the Indenture or any indenture
supplemental thereto or in any Note, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
stockholder, employee, agent, officer or director or subsidiary, as such, past,
present or future, of the Company or of any successor corporation, either
directly or through the Company or any successor corporation, whether by virtue
of any constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of consideration for the issue hereof, expressly waived and
released.

              [If Note is a Global Note, insert - This Note is a Global Note and
is subject to the provisions of the Indenture relating to Global Notes,
including the limitations in Section 2.03 of the Base Indenture on transfers and
exchanges of Global Notes.]

              THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

              All capitalized terms used in this Note which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.

                                      A-8
<PAGE>

                                  ABBREVIATIONS

       The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM--as tenants in common        UNIF GIFT MIN ACT- ______ Custodian _______
                                                        (Cust)           (Minor)

TEN ENT--as tenants by the entireties                 under Uniform Gifts to

JT TEN--as joint tenants with rights of
survivorship and not as tenants in common            Minors Act ________________
                                                                  (State)

Additional abbreviations may also be used though not on the above list.

                                      A-9
<PAGE>

                                   ASSIGNMENT

    FOR VALUE RECEIVED, the undersigned assigns and transfers this Note to:

           ----------------------------------------------------------

           ----------------------------------------------------------

           ----------------------------------------------------------
        (Insert assignee's social security or tax identification number)

           ----------------------------------------------------------

           ----------------------------------------------------------

           ----------------------------------------------------------
                    (Insert address and zip code of assignee)

and irrevocably appoints ________________ agent to transfer this Note on the
Security Register. The agent may substitute another to act for him or her.

Dated:

Signed:

Signature Guarantee:

(Sign exactly as your name appears on the other side of this Note)

Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

                                      A-10
<PAGE>

                         [TO BE ATTACHED TO GLOBAL NOTE]

                SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE

The following increases or decreases in this Global Note have been made:

   Amount of       Amount of
  Decrease in     Increase in    Stated Amount of  Signature of
 Stated Amount   Stated Amount   the Global Note    Authorized
 of the Global   of the Global    Following Such    Officer of
      Note            Note      Decrease/Increase    Trustee           Date
--------------- --------------- ----------------- -------------- ---------------

                                      A-11

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