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EXHIBIT 4.1
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iSTAR FINANCIAL INC.
7.0% SENIOR NOTES DUE 2008
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SECOND SUPPLEMENTAL INDENTURE
Dated as of March 14, 2003
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US BANK TRUST NATIONAL
ASSOCIATION
Trustee
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CROSS-REFERENCE TABLE*
<Table>
<Caption>
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
310(a)(1)....................................................................... 7.10
(a)(2)....................................................................... 7.10
(a)(3)....................................................................... N.A.
(a)(4)....................................................................... N.A.
(a)(5)....................................................................... 7.10
(b).......................................................................... 7.10
(c).......................................................................... N.A.
311(a).......................................................................... 7.11
(b).......................................................................... 7.11
(c).......................................................................... N.A.
312(a).......................................................................... 2.05
(b).......................................................................... 11.03
(c).......................................................................... 11.03
313(a).......................................................................... 7.06
(b)(2)....................................................................... 7.07
(c).......................................................................... 7.06;11.02
(d).......................................................................... 7.06
314(a).......................................................................... 4.03;11.02
(c)(1)....................................................................... 11.04
(c)(2)....................................................................... 11.04
(c)(3)....................................................................... N.A.
(e).......................................................................... 11.05
(f).......................................................................... N.A.
315(a).......................................................................... 7.01
(b).......................................................................... 7.05,11.02
(c).......................................................................... 7.01
(d).......................................................................... 7.01
(e).......................................................................... 6.11
316(a)(last sentence)........................................................... 2.09
(a)(1)(A).................................................................... 6.05
(a)(1)(B).................................................................... 6.04
(a)(2)....................................................................... N.A.
(b).......................................................................... 6.07
(c).......................................................................... 2.13
317(a)(1)....................................................................... 6.08
(a)(2)....................................................................... 6.09
(b).......................................................................... 2.04
318(a).......................................................................... 11.01
(b).......................................................................... N.A.
(c).......................................................................... 11.01
</Table>
N.A. means not applicable.
* This Cross-Reference Table is not part of the Indenture.
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TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions...........................................................................1
Section 1.02. Other Definitions....................................................................20
Section 1.03. Incorporation by Reference of Trust Indenture Act....................................20
Section 1.04. Rules of Construction................................................................20
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating......................................................................21
Section 2.02. Execution and Authentication.........................................................22
Section 2.03. Registrar and Paying Agent...........................................................22
Section 2.04. Paying Agent to Hold Money in Trust..................................................23
Section 2.05. Holder Lists.........................................................................23
Section 2.06. Transfer and Exchange................................................................23
Section 2.07. Replacement Notes....................................................................27
Section 2.08. Outstanding Notes....................................................................28
Section 2.09. Treasury Notes.......................................................................28
Section 2.10. Temporary Notes......................................................................28
Section 2.11. Cancellation.........................................................................28
Section 2.12. Defaulted Interest...................................................................29
Section 2.13. Record Date..........................................................................29
Section 2.14. CUSIP Numbers........................................................................29
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee...................................................................29
Section 3.02. Selection of Notes to Be Redeemed....................................................30
Section 3.03. Notice of Redemption.................................................................30
Section 3.04. Effect of Notice of Redemption.......................................................31
Section 3.05. Deposit of Redemption Price..........................................................31
Section 3.06. Notes Redeemed in Part...............................................................31
Section 3.07. Optional Redemption..................................................................32
Section 3.08. Mandatory Redemption.................................................................33
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ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes.....................................................................33
Section 4.02. Maintenance of Office or Agency......................................................33
Section 4.03. Reports to Holders...................................................................34
Section 4.04. Compliance Certificate...............................................................34
Section 4.05. Taxes................................................................................35
Section 4.06. Stay, Extension and Usury Laws.......................................................35
Section 4.07. Limitation on Restricted Payments....................................................35
Section 4.08. Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries.........37
Section 4.09. Limitation on Incurrence of Additional Indebtedness..................................38
Section 4.10. Limitation on Transactions with Affiliates...........................................40
Section 4.11. Limitation on Liens..................................................................41
Section 4.12. Corporate Existence..................................................................41
Section 4.13. Offer to Repurchase Upon Change of Control...........................................42
Section 4.14. Limitation on Preferred Stock of Subsidiaries........................................43
Section 4.15. Conduct of Business..................................................................43
Section 4.16. Limitation of Guarantees by Subsidiaries.............................................44
Section 4.17. Maintenance of Total Unencumbered Assets.............................................44
Section 4.18. Termination of Certain Covenants In Event of Investment Grade Rating.................44
Section 4.19. Maintenance of Properties; Books and Records; Compliance with Law....................45
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.............................................45
Section 5.02. Successor Corporation Substituted....................................................47
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default....................................................................47
Section 6.02. Acceleration.........................................................................49
Section 6.03. Other Remedies.......................................................................50
Section 6.04. Waiver of Past Defaults..............................................................50
Section 6.05. Control by Majority..................................................................50
</Table>
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Section 6.06. Limitation on Suits..................................................................50
Section 6.07. Rights of Holders of Notes to Receive Payment........................................51
Section 6.08. Collection Suit by Trustee...........................................................51
Section 6.09. Trustee May File Proofs of Claim.....................................................51
Section 6.10. Priorities...........................................................................52
Section 6.11. Undertaking for Costs................................................................52
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee....................................................................53
Section 7.02. Rights of Trustee....................................................................54
Section 7.03. Individual Rights of Trustee.........................................................54
Section 7.04. Trustee's Disclaimer.................................................................55
Section 7.05. Notice of Defaults...................................................................55
Section 7.06. Reports by Trustee...................................................................55
Section 7.07. Compensation and Indemnity...........................................................55
Section 7.08. Replacement of Trustee...............................................................56
Section 7.09. Successor Trustee by Merger, etc.....................................................57
Section 7.10. Eligibility; Disqualification........................................................57
Section 7.11. Preferential Collection of Claims....................................................58
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.............................58
Section 8.02. Legal Defeasance and Discharge.......................................................58
Section 8.03. Covenant Defeasance..................................................................58
Section 8.04. Conditions to Legal or Covenant Defeasance...........................................59
Section 8.05. Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions............................................................61
Section 8.06. Repayment to Company.................................................................61
Section 8.07. Reinstatement........................................................................61
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes..................................................62
Section 9.02. With Consent of Holders of Notes.....................................................63
Section 9.03. Compliance with Trust Indenture Act..................................................64
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Section 9.04. Revocation and Effect of Consents....................................................64
Section 9.05. Notation on or Exchange of Notes.....................................................64
Section 9.06. Trustee to Sign Amendments, etc......................................................65
ARTICLE 10
SATISFACTION AND DISCHARGE
Section 10.01. Satisfaction and Discharge...........................................................65
Section 10.02. Application of Trust Money...........................................................66
ARTICLE 11
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls.........................................................66
Section 11.02. Notices..............................................................................66
Section 11.03. Communication by Holders of Notes with Other Holders of Notes........................67
Section 11.04. Certificate and Opinion as to Conditions Precedent...................................68
Section 11.05. Statements Required in Certificate or Opinion........................................68
Section 11.06. Rules by Trustee and Agents..........................................................68
Section 11.07. No Personal Liability of Directors, Officers, Employees and Stockholders.............68
Section 11.08. Governing Law........................................................................68
Section 11.09. No Adverse Interpretation of Other Agreements........................................69
Section 11.10. Successors...........................................................................69
Section 11.11. Severability.........................................................................69
Section 11.12. Counterpart Originals................................................................69
Section 11.13. Table of Contents, Headings, etc.....................................................69
Section 11.14. Conflicts with Indenture.............................................................69
</Table>
EXHIBITS
Exhibit A FORM OF NOTE
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SUPPLEMENTAL INDENTURE dated as of March 14, 2003 between iStar Financial
Inc., a Maryland corporation (the "COMPANY"), and US Bank Trust National
Association, as trustee (the "TRUSTEE").
The Company has heretofore delivered to the Trustee an Indenture dated as
of February 5, 2001, a form of which has been filed with the Securities and
Exchange Commission under the Securities Act as an exhibit to the Company's
Registration Statement on Form S-3 (Registration No. 333-55396), providing for
the issuance from time to time of debt securities of the Company.
The Board of Directors of the Company has duly adopted resolutions
authorizing the Company to execute and deliver this Supplemental Indenture.
The Company and the Trustee agree as follows for the benefit of each other
and for the equal and ratable benefit of the Holders of the Notes:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"ACQUIRED INDEBTEDNESS" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Subsidiary of the
Company or at the time it merges or consolidates with the Company or any of its
Subsidiaries or assumed in connection with the acquisition of assets from such
Person and in each case whether or not incurred by such Person in connection
with, or in anticipation or contemplation of, such Person becoming a Subsidiary
of the Company or such acquisition, merger or consolidation.
"ADDITIONAL NOTES" means additional Notes (other than the Initial Notes)
issued under this Supplemental Indenture in accordance with Section 2.02 and
4.09.
"AFFILIATE" means, with respect to any specified Person, any other Person
who directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative of the foregoing.
"AGENT" means any Registrar, Paying Agent or co-registrar.
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"APPLICABLE PROCEDURES" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary that apply to such transfer or exchange.
"ASSET ACQUISITION" means: (1) an Investment by the Company or any
Subsidiary of the Company in any other Person pursuant to which such Person
shall become a Subsidiary of the Company or any Subsidiary of the Company, or
shall be merged with or into the Company or any Subsidiary of the Company; or
(2) the acquisition by the Company or any Subsidiary of the Company of the
assets of any Person (other than a Subsidiary of the Company) that constitute
all or substantially all of the assets of such Person or comprises any division
or line of business of such Person or any other properties or assets of such
Person other than in the ordinary course of business.
"ASSET SALE" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment or other transfer for value by the Company or any
Subsidiary of the Company (including any sale and leaseback transaction) to any
Person other than the Company or a Wholly Owned Subsidiary of the Company of:
(1) any Capital Stock of any Subsidiary of the Company; or
(2) any of the Company's or its Subsidiaries' other property or
assets other than sales of loan-related assets made in the ordinary course
of the Company's real estate lending business and other asset sales made in
the ordinary course of the Company's business.
"BANKRUPTCY LAW" means Title 11, United States Bankruptcy Code of 1978, as
amended, or any similar United States federal or state law relating to
bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or
relief of debtors or any amendment to, succession to or change in any such law.
"BOARD OF DIRECTORS" means, as to any Person, the board of directors of
such Person or any duly authorized committee thereof.
"BOARD RESOLUTION" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in the City of New York are
authorized or obligated by law or executive order to close.
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"CAPITALIZED LEASE OBLIGATION" means, as to any Person, the obligations of
such Person under a lease that are required to be classified and accounted for
as capital lease obligations under GAAP and, for purposes of this definition,
the amount of such obligations at any date shall be the capitalized amount of
such obligations at such date, determined in accordance with GAAP.
"CAPITAL STOCK" means:
(1) with respect to any Person that is a corporation, any and
all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock, including each
class of Common Stock and Preferred Stock of such Person; and
(2) with respect to any Person that is not a corporation, any
and all partnership, membership or other equity interests of such Person.
"CASH EQUIVALENTS" means:
(1) marketable direct obligations issued by, or unconditionally
guaranteed by, the United States Government or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within one year from the date of acquisition thereof;
(2) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date
of acquisition thereof and, at the time of acquisition, having one of the
two highest ratings obtainable from either S&P or Moody's;
(3) commercial paper maturing no more than one year from the
date of creation thereof and, at the time of acquisition, having a rating
of at least A-1 from S&P or at least P-1 from Moody's;
(4) certificates of deposit or bankers' acceptances maturing
within one year from the date of acquisition thereof issued by any bank
organized under the laws of the United States of America or any state
thereof or the District of Columbia or any U.S. branch of a foreign bank
having at the date of acquisition thereof combined capital and surplus of
not less than $250.0 million;
(5) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clause (1) above
entered into with any bank meeting the qualifications specified in clause
(4) above; and
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(6) investments in money market funds that invest substantially
all their assets in securities of the types described in clauses (1)
through (5) above.
"CHANGE OF CONTROL" means the occurrence of one or more of the following
events:
(1) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially
all of the assets of the Company to any Person or group of related Persons
for purposes of Section 13(d) of the Exchange Act (a "GROUP"), together
with any Affiliates thereof (whether or not otherwise in compliance with
the provisions of this Supplemental Indenture) other than to the Permitted
Holders;
(2) the approval by the holders of Capital Stock of the Company
of any plan or proposal for the liquidation or dissolution of the Company
(whether or not otherwise in compliance with the provisions of this
Supplemental Indenture);
(3) any Person or Group (other than the Permitted Holders) shall
become the owner, directly or indirectly, beneficially or of record, of
shares representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding Capital Stock of the Company;
PROVIDED, HOWEVER, that no Change of Control shall be deemed to have
occurred as a result of the sale or transfer by the Permitted Holders of
shares of Capital Stock of the Company representing more than 50% of the
aggregate ordinary voting power represented by the issued and outstanding
Capital Stock of the Company to a Person or Group, whether in one
transaction or a series of related transactions, that has an investment
grade senior unsecured credit rating from both of Moody's and S&P and the
Company's senior unsecured ratings from Moody's and S&P are the same or
better immediately following such sale or transfer as before such sale or
transfer; or
(4) the replacement of a majority of the Board of Directors of
the Company over a two-year period from the directors who constituted the
Board of Directors of the Company at the beginning of such period, and such
replacement shall not have been approved by a vote of at least a majority
of the Board of Directors of the Company then still in office who either
were members of such Board of Directors at the beginning of such period or
whose election as a member of such Board of Directors was previously so
approved.
"CODE" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto, as interpreted by the rules and regulations
thereunder, in each case as in effect from time to time.
"COMMISSION" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or if at any time after the
execution of this Supplemental Indenture such Commission is not existing and
performing the duties now
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assigned to it under the Trust Indenture Act, then the body performing such
duties at such time.
"COMMON STOCK" of any Person means any and all shares, interests or other
participations in, and other equivalents (however designated and whether voting
or non-voting) of such Person's common stock, whether outstanding on the
Measurement Date or issued after the Measurement Date, and includes, without
limitation, all series and classes of such common stock.
"COMPANY" means iStar Financial Inc. and any and all successors thereto
that become a party to this Supplemental Indenture in accordance with its terms.
"CONSOLIDATED ADJUSTED EARNINGS" with respect to any Person, for any
period, means the Consolidated Net Income, less dividend payments on Preferred
Stock, plus depreciation and amortization (including the Company's share of
joint venture depreciation and amortization).
"CONSOLIDATED EBITDA" means, with respect to any Person, for any period,
the sum (without duplication) of:
(1) Consolidated Net Income; and
(2) to the extent Consolidated Net Income has been reduced
thereby:
(a) all income taxes of such Person and its Subsidiaries
paid or accrued in accordance with GAAP for such period (other than
income taxes attributable to extraordinary gains or losses and
direct impairment charges or the reversal of such charges on the
Company's assets);
(b) Consolidated Interest Expense; and
(c) depreciation and amortization;
all as determined on a consolidated basis for such Person and its Subsidiaries
in accordance with GAAP.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means, with respect to any
Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "FOUR QUARTER PERIOD") ending prior to the date of the
transaction giving rise to the need to calculate the Consolidated Fixed Charge
Coverage Ratio for which financial statements are available (the "TRANSACTION
DATE") to Consolidated Fixed Charges of such Person for the Four Quarter Period.
In addition to and without limitation of the foregoing, for purposes of this
definition, "Consolidated EBITDA" and "Consolidated Fixed Charges" shall be
calculated after giving effect on a pro forma basis for the period of such
calculation to:
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(1) the incurrence or repayment of any Indebtedness of such
Person or any of its Subsidiaries (and the application of the proceeds
thereof) giving rise to the need to make such calculation and any
incurrence or repayment of other Indebtedness (and the application of the
proceeds thereof), other than the incurrence or repayment of Indebtedness
in the ordinary course of business for working capital purposes pursuant to
working capital facilities, occurring during the Four Quarter Period or at
any time subsequent to the last day of the Four Quarter Period and on or
prior to the Transaction Date, as if such incurrence or repayment, as the
case may be (and the application of the proceeds thereof), occurred on the
first day of the Four Quarter Period; and
(2) any asset sales or other dispositions or any asset
originations, asset purchases, Investments and Asset Acquisitions
(including, without limitation, any Asset Acquisition giving rise to the
need to make such calculation as a result of such Person or one of its
Subsidiaries (including any Person who becomes a Subsidiary as a result of
the Asset Acquisition) incurring, assuming or otherwise being liable for
Acquired Indebtedness and also including any Consolidated EBITDA (including
any pro forma expense and cost reductions calculated on a basis consistent
with Regulation S-X under the Exchange Act) attributable to the assets
which are originated or purchased, the Investments that are made and the
assets that are the subject of the Asset Acquisition or asset sale or other
disposition during the Four Quarter Period) occurring during the Four
Quarter Period or at any time subsequent to the last day of the Four
Quarter Period and on or prior to the Transaction Date, as if such asset
sale or other disposition or asset origination, asset purchase, Investment
or Asset Acquisition (including the incurrence, assumption or liability for
any such Acquired Indebtedness) occurred on the first day of the Four
Quarter Period. If such Person or any of its Subsidiaries directly or
indirectly guarantees Indebtedness of a third Person, the preceding
sentence shall give effect to the incurrence of such guaranteed
Indebtedness as if such Person or any Subsidiary of such Person had
directly incurred or otherwise assumed such guaranteed Indebtedness.
"CONSOLIDATED FIXED CHARGES" means, with respect to any Person for any
period, the sum, without duplication, of:
(1) Consolidated Interest Expense; plus
(2) the amount of all dividend payments on any series of
Preferred Stock of such Person and, to the extent permitted under this
Supplemental Indenture, its Subsidiaries (other than dividends paid in
Qualified Capital Stock) paid, accrued or scheduled to be paid or accrued
during such period.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person for any
period, the sum of, without duplication:
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(1) the aggregate of the interest expense of such Person and its
Subsidiaries for such period determined on a consolidated basis in
accordance with GAAP, including without limitation: (a) any amortization of
debt discount; (b) the net costs under Interest Swap Obligations; (c) all
capitalized interest; and (d) the interest portion of any deferred payment
obligation; and
(2) to the extent not already included in clause (1), the
interest component of Capitalized Lease Obligations paid, accrued and/or
scheduled to be paid or accrued by such Person and its Subsidiaries during
such period as determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, with respect to any Person, for any
period, the aggregate net income (or loss) of such Person and its Subsidiaries
before the payment of dividends on Preferred Stock for such period on a
consolidated basis, determined in accordance with GAAP; PROVIDED that there
shall be excluded therefrom:
(1) after-tax gains and losses from Asset Sales or abandonments
or reserves relating thereto (including gains and losses from the sale of
corporate tenant lease assets);
(2) after-tax items classified as extraordinary gains or losses
and direct impairment charges or the reversal of such charges on the
Company's assets;
(3) the net income of any Person acquired in a "pooling of
interests" transaction accrued prior to the date it becomes a Subsidiary of
the referent Person or is merged or consolidated with the referent Person
or any Subsidiary of the referent Person;
(4) the net income (but not loss) of any Subsidiary of the
referent Person to the extent that the declaration of dividends or similar
distributions by that Subsidiary of that income is restricted by a
contract, operation of law or otherwise, except for such restrictions
permitted by clauses (f), (g) and (h) of Section 4.08 whether such
permitted restrictions exist on the Measurement Date or are created
thereafter;
(5) the net income or loss of any other Person, other than a
Consolidated Subsidiary of the referent Person, except:
(a) to the extent (in the case of net income) of cash
dividends or distributions paid to the referent Person, or to a
Wholly Owned Subsidiary of the referent Person (other than a
Subsidiary described in clause (4) above), by such other Person; or
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(b) that the referent Person's share of any net income or
loss of such other Person under the equity method of accounting for
Affiliates shall not be excluded;
(6) any restoration to income of any contingency reserve of an
extraordinary, nonrecurring or unusual nature, except to the extent that
provision for such reserve was made out of Consolidated Net Income accrued
at any time following the Measurement Date;
(7) income or loss attributable to discontinued operations
(including, without limitation, operations disposed of during such period
whether or not such operations were classified as discontinued); and
(8) in the case of a successor to the referent Person by
consolidation or merger or as a transferee of the referent Person's assets,
any earnings of the successor corporation prior to such consolidation,
merger or transfer of assets.
"CONSOLIDATED NET WORTH" of any Person means the consolidated stockholders'
equity of such Person, as of the end of the last completed fiscal quarter ending
on or prior to the date of the transaction giving rise to the need to calculate
Consolidated Net Worth determined on a consolidated basis in accordance with
GAAP, less (without duplication) amounts attributable to Disqualified Capital
Stock of such Person and interests in such Person's Consolidated Subsidiaries
not owned, directly or indirectly, by such Person.
"CONSOLIDATED SUBSIDIARY" means, with respect to any Person, a Subsidiary
of such Person, the financial statements of which are consolidated with the
financial statements of such Person in accordance with GAAP.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of the
Trustee specified in Section 11.02 or such other address as to which the Trustee
may give notice to the Company.
"CURRENCY AGREEMENTS" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company or any Subsidiary of the Company against fluctuations in currency
values.
"CUSTODIAN" means any custodian, receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"DEFAULT" means an event or condition the occurrence of which is, or with
the lapse of time or the giving of notice or both would be, an Event of Default.
"DEFINITIVE NOTE" means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 2.06, in the form of
Exhibit A except that such
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Note shall not bear the Global Note Legend and shall not have the "Schedule of
Exchanges of Interests in the Global Note" attached thereto.
"DEPOSITARY" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Supplemental Indenture.
"DISQUALIFIED CAPITAL STOCK" means that portion of any Capital Stock that,
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable at the option of the holder thereof), or upon the
happening of any event (other than an event which would constitute a Change of
Control), matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the sole option of the holder
thereof (except, in each case, upon the occurrence of a Change of Control) on or
prior to the final maturity date of the Notes.
"EQUITY OFFERING" means an underwritten public offering of Qualified
Capital Stock of the Company pursuant to a registration statement filed with the
Commission in accordance with the Securities Act or a private placement of
Qualified Capital Stock of the Company generating gross proceeds of at least
$25.0 million.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, or
any successor statute or statutes thereto.
"EXISTING CREDIT AGREEMENTS" mean: (1) the Credit Agreement dated as of
July 26, 2001, between the Company, the lenders party thereto in their
capacities as lenders thereunder and Bank of America, N.A., as agent; (2) the
Amended and Restated Credit Agreement dated as of December 28, 2000 between SFI
II, Inc. and Greenwich Capital Markets, Inc., as lender; (3) the credit facility
between Deutsche Bank AG, New York Branch, and iStar DB Seller LLC, dated as of
January 11, 2001; (4) the credit facility, dated as of August 12, 1998, between
Lehman Brothers Holdings, Inc. and SFT Whole Loan A, Inc.; and (5) the Master
Repurchase Agreement dated September 30, 2002 between Goldman Sachs Mortgage
Company and iStar Finance Sub V LLC, in each case, together with the related
documents thereto (including, without limitation, any security documents), in
each case as such agreements may be amended (including any amendment and
restatement thereof), supplemented or otherwise modified from time to time,
including any agreement extending the maturity of, refinancing, replacing or
otherwise restructuring (including increasing the amount of available borrowings
thereunder (provided that such increase in borrowings is permitted by Section
4.09 hereof) or adding Subsidiaries of the Company as additional borrowers or
guarantors thereunder) all or any portion of the Indebtedness under such
agreement or any successor or replacement agreement and whether by the same or
any other agent, lender or group of lenders.
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"FAIR MARKET VALUE" means, with respect to any asset or property, the price
which could be negotiated in an arm's-length, free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. Fair market value
shall be determined by the Board of Directors of the Company acting reasonably
and in good faith and shall be evidenced by a Board Resolution of the Board of
Directors of the Company delivered to the Trustee.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the Measurement Date.
"GLOBAL NOTE LEGEND" means the legend set forth in Section 2.06(f) which is
required to be placed on all Global Notes issued under this Supplemental
Indenture.
"GLOBAL NOTES" means, individually and collectively, the Global Notes, in
the form of Exhibit A, issued in accordance with Section 2.01 or 2.06.
"GOVERNMENT SECURITIES" means direct obligations of, or obligations
guaranteed by, the United States of America, and for the payment of which the
United States pledges its full faith and credit.
"GUARANTOR" means: each of the Company's Subsidiaries that in the future
executes a supplemental indenture in which such Subsidiary agrees to be bound by
the terms of this Supplemental Indenture as a Guarantor; provided that any
Person constituting a Guarantor as described above shall cease to constitute a
Guarantor when its respective Guarantee is released in accordance with the terms
of this Supplemental Indenture.
"HOLDER" or "NOTEHOLDER" means a Person in whose name a Note is registered.
"INDEBTEDNESS" means with respect to any Person, without duplication:
(1) all Obligations of such Person for borrowed money;
(2) all Obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments;
(3) all Capitalized Lease Obligations of such Person;
(4) all Obligations of such Person issued or assumed as the
deferred purchase price of property, all conditional sale obligations and
all Obligations under any title retention agreement (but excluding trade
accounts payable and other accrued
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liabilities arising in the ordinary course of business that are not overdue
by 90 days or more or are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted);
(5) all Obligations for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction;
(6) guarantees and other contingent obligations in respect of
Indebtedness referred to in clauses (1) through (5) above and clause (8)
below;
(7) all Obligations of any other Person of the type referred to
in clauses (1) through (6) above which are secured by any lien on any
property or asset of such Person, the amount of such Obligation being
deemed to be the lesser of the fair market value of such property or asset
and the amount of the Obligation so secured;
(8) all Obligations under Currency Agreements and Interest Swap
Obligations of such Person; and
(9) all Disqualified Capital Stock issued by such Person with
the amount of Indebtedness represented by such Disqualified Capital Stock
being equal to the greater of its voluntary or involuntary liquidation
preference and its maximum fixed repurchase price, but excluding accrued
dividends, if any.
For purposes hereof, the "maximum fixed repurchase price" of any
Disqualified Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Capital Stock as if
such Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Supplemental Indenture, and
if such price is based upon, or measured by, the fair market value of such
Disqualified Capital Stock, such fair market value shall be determined
reasonably and in good faith by the Board of Directors of the issuer of such
Disqualified Capital Stock.
"INDENTURE" means the Indenture dated as of February 5, 2001 between the
Company and the Trustee as amended or supplemented from time to time.
"INDEPENDENT FINANCIAL ADVISOR" means a firm: (1) that does not, and whose
directors, officers and employees or Affiliates do not, have a direct or
indirect financial interest in the Company; and (2) that, in the judgment of the
Board of Directors of the Company, is otherwise independent and qualified to
perform the task for which it is to be engaged.
"INDIRECT PARTICIPANT" means a Person who holds a beneficial interest in a
Global Note through a Participant.
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"INITIAL NOTES" means the $150.0 million principal amount of 7.0% Senior
Notes due 2008 of the Company issued on the Issue Date.
"INTEREST PAYMENT DATE" means March 15 and September 15 of each year
commencing September 15, 2003.
"INTEREST SWAP OBLIGATIONS" means the obligations of any Person pursuant to
any arrangement with any other Person, whereby, directly or indirectly, such
Person is entitled to receive from time to time periodic payments calculated by
applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by such other Person calculated by
applying a fixed or a floating rate of interest on the same notional amount and
shall include, without limitation, interest rate swaps, caps, floors, collars
and similar agreements.
"INVESTMENT" means, with respect to any Person, any direct or indirect loan
or other extension of credit (including, without limitation, a guarantee), or
corporate tenant lease to or capital contribution to (by means of any transfer
of cash or other property to others or any payment for property or services for
the account or use of others), or any purchase or acquisition by such Person of
any Capital Stock, bonds, notes, debentures or other securities or evidences or
Indebtedness issued by, any Person. "Investment" shall exclude extensions of
trade credit by the Company and any Subsidiary of the Company on commercially
reasonable terms in accordance with the Company's or its Subsidiaries' normal
trade practices, as the case may be.
"INVESTMENT GRADE" means a rating of the Notes by both S&P and Moody's,
each such rating being one of such agency's four highest generic rating
categories that signifies investment grade (i.e. BBB- (or the equivalent) or
higher by S&P and Baa3 (or the equivalent) or higher by Moody's); PROVIDED, in
each case, such ratings are publicly available; PROVIDED, FURTHER, that in the
event Moody's or S&P is no longer in existence for purposes of determining
whether the Notes are rated "Investment Grade," such organization may be
replaced by a nationally recognized statistical rating organization (as defined
in Rule 436 under the Securities Act) designated by the Company, notice of which
shall be given to the Trustee.
"ISSUE DATE" means March 14, 2003, the date of original issuance of the
Initial Notes.
"LIEN" means any lien, mortgage, deed of trust, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof and any agreement to give
any security interest).
"MATURITY" when used with respect to the Notes means the date on which the
principal of the Notes becomes due and payable as therein provided or as
provided in this Supplemental Indenture, whether at Stated Maturity or on a
redemption date or pursuant to a Change of
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Control Offer, and whether by declaration of acceleration, call for redemption,
purchase or otherwise.
"MEASUREMENT DATE" means August 16, 2001.
"MOODY'S" means Moody's Investors Service, Inc. or any successor rating
agency.
"NON-RECOURSE INDEBTEDNESS" means any of the Company's or any of its
Subsidiaries' Indebtedness that is:
(1) specifically advanced to finance the acquisition of
investment assets and secured only by the assets to which such Indebtedness
relates without recourse to the Company or any of its Subsidiaries (other
than subject to such customary carve-out matters for which the Company or
its Subsidiaries acts as a guarantor in connection with such Indebtedness,
such as fraud, misappropriation and misapplication, unless, until and for
so long as a claim for payment or performance has been made thereunder
(which has not been satisfied) at which time the obligations with respect
to any such customary carve-out shall not be considered Non-Recourse
Indebtedness, to the extent that such claim is a liability of the Company
for GAAP purposes);
(2) advanced to any of the Company's Subsidiaries or group of
its Subsidiaries formed for the sole purpose of acquiring or holding
investment assets against which a loan is obtained that is made without
recourse to, and with no cross-collateralization against, the Company or
any of the Company's Subsidiaries' other assets (other than subject to such
customary carve-out matters for which the Company or its Subsidiaries acts
as a guarantor in connection with such Indebtedness, such as fraud,
misappropriation and misapplication, unless, until and for so long as a
claim for payment or performance has been made thereunder (which has not
been satisfied) at which time the obligations with respect to any such
customary carve-out shall not be considered Non-Recourse Indebtedness, to
the extent that such claim is a liability of the Company for GAAP purposes)
and upon complete or partial liquidation of which the loan must be
correspondingly completely or partially repaid, as the case may be; or
(3) specifically advanced to finance the acquisition of real
property and secured by only the real property to which such Indebtedness
relates without recourse to the Company or any of its Subsidiaries (other
than subject to such customary carve-out matters for which the Company or
its Subsidiaries acts as a guarantor in connection with such Indebtedness,
such as fraud, misappropriation and misapplication, unless, until and for
so long as a claim for payment or performance has been made thereunder
(which has not been satisfied) at which time the obligations with respect
to any such customary carve-out shall not be considered Non-Recourse
Indebtedness, to the extent that such claim is a liability of the Company
for GAAP purposes).
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"NOTES" means, collectively, the Initial Notes and the Additional Notes, if
any, and treated as a single class of securities, as amended or supplemented
from time to time in accordance with the terms hereof, that are issued pursuant
to this Supplemental Indenture.
"OBLIGATIONS" means all obligations for principal, premium, interest,
penalties, fees, indemnification, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
"OFFICER" means, with respect to any Person, the President, Chief Executive
Officer, any Vice President, Chief Operating Officer, Treasurer, Secretary or
the Chief Financial Officer of such Person.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a certificate
signed by two Officers of such Person; provided, however, that every Officers'
Certificate with respect to compliance with a covenant or condition provided for
in this Supplemental Indenture shall include (i) a statement that the Officers
making or giving such Officers' Certificate have read such condition and any
definitions or other provisions contained in this Supplemental Indenture
relating thereto and (ii) a statement as to whether, in the opinion of the
signers, such conditions have been complied with.
"OPINION OF COUNSEL" means an opinion from legal counsel who is reasonably
acceptable to the Trustee that meets the requirements of Section 11.05. The
counsel may be an employee of or counsel to the Company, any Subsidiary of the
Company or the Trustee.
"PARTICIPANT" means, with respect to the Depositary, a Person who has an
account with the Depositary.
"PERMITTED HOLDER(S)" means SOFI-IV SMT Holdings, L.L.C. and Starwood
Capital Group, L.L.C. and each of their respective Affiliates.
"PERMITTED INDEBTEDNESS" means, without duplication, each of the following:
(1) Indebtedness under the Initial Notes and under the Company's
$350.0 million aggregate principal amount of 8 3/4% Senior Notes due 2008
that were issued on the Measurement Date;
(2) Indebtedness incurred pursuant to the Existing Credit
Agreements in an aggregate principal amount at any time outstanding not to
exceed the maximum aggregate amount available under the Existing Credit
Agreements in existence on the Measurement Date and as in effect on the
Measurement Date reduced by any required permanent repayments (which are
accompanied by a corresponding permanent commitment reduction) thereunder;
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(3) other Indebtedness of the Company and its Subsidiaries
outstanding on the Measurement Date reduced by the amount of any scheduled
amortization payments or mandatory prepayments when actually paid or
permanent reductions thereon;
(4) Interest Swap Obligations of the Company covering
Indebtedness of the Company or any of its Subsidiaries and Interest Swap
Obligations of any Subsidiary of the Company covering Indebtedness of such
Subsidiary; PROVIDED, HOWEVER, that such Interest Swap Obligations are
entered into to protect the Company and its Subsidiaries from fluctuations
in interest rates on Indebtedness incurred in accordance with this
Supplemental Indenture to the extent the notional principal amount of such
Interest Swap Obligation does not exceed the principal amount of the
Indebtedness to which such Interest Swap Obligation relates;
(5) Indebtedness under Currency Agreements; PROVIDED that in the
case of Currency Agreements which relate to Indebtedness, such Currency
Agreements do not increase the Indebtedness of the Company and its
Subsidiaries outstanding other than as a result of fluctuations in foreign
currency exchange rates or by reason of fees, indemnities and compensation
payable thereunder;
(6) Indebtedness of a Subsidiary of the Company to the Company
or to a Wholly Owned Subsidiary of the Company for so long as such
Indebtedness is held by the Company or a Wholly Owned Subsidiary of the
Company;
(7) Indebtedness of the Company to a Wholly Owned Subsidiary of
the Company for so long as such Indebtedness is held by a Wholly Owned
Subsidiary of the Company, in each case subject to no Lien; PROVIDED that:
(a) any Indebtedness of the Company to any Wholly Owned Subsidiary of the
Company is unsecured and subordinated, pursuant to a written agreement, to
the Company's obligations under this Supplemental Indenture and the Notes;
and (b) if as of any date any Person other than a Wholly Owned Subsidiary
of the Company owns or holds any such Indebtedness or any Person holds a
Lien in respect of such Indebtedness, such date shall be deemed the
incurrence of Indebtedness not constituting Permitted Indebtedness by the
Company;
(8) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business; PROVIDED, HOWEVER, that such
Indebtedness is extinguished within two business days of incurrence;
(9) Indebtedness of the Company or any of its Subsidiaries
represented by letters of credit for the account of the Company or such
Subsidiary, as the case may be, in order to provide security for workers'
compensation claims, payment
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obligations in connection with self-insurance or similar requirements in
the ordinary course of business;
(10) Refinancing Indebtedness; and
(11) additional Indebtedness of the Company and its Subsidiaries
in an aggregate principal amount not to exceed $15.0 million at any one
time outstanding (which amount may, but need not, be incurred in whole or
in part under the Existing Credit Agreements).
For purposes of determining compliance with Section 4.09 hereof, in the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Indebtedness described in clauses (1) through (11) above
or is entitled to be incurred pursuant to the second paragraph of such covenant,
the Company shall, in its sole discretion, classify (or later reclassify) such
item of Indebtedness in any manner that complies with this covenant. Accrual of
interest, accretion or amortization of original issue discount, the payment of
interest on any Indebtedness in the form of additional Indebtedness with the
same terms, and the payment of dividends on Disqualified Capital Stock in the
form of additional shares of the same class of Disqualified Capital Stock will
not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified
Capital Stock for purposes of the "Limitation on Incurrence of Additional
Indebtedness" covenant.
"PERMITTED LIENS" means the following types of Liens:
(1) Liens for taxes, assessments or governmental charges or
claims either: (a) not delinquent; or (b) contested in good faith by
appropriate proceedings and as to which the Company or its Subsidiaries
shall have set aside on its books such reserves as may be required pursuant
to GAAP;
(2) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens
imposed by law incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith, if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall have been
made in respect thereof;
(3) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, including any Lien securing letters of
credit issued in the ordinary course of business consistent with past
practice in connection therewith, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money);
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(4) judgment Liens not giving rise to an Event of Default so
long as such Lien is adequately bonded and any appropriate legal
proceedings which may have been duly initiated for the review of such
judgment shall not have been finally terminated or the period within which
such proceedings may be initiated shall not have expired;
(5) easements, rights-of-way, zoning restrictions and other
similar charges or encumbrances in respect of real property not interfering
in any material respect with the ordinary conduct of the business of the
Company or any of its Subsidiaries;
(6) any interest or title of a lessor under any Capitalized
Lease Obligation; PROVIDED that such Liens do not extend to any property or
assets which is not leased property subject to such Capitalized Lease
Obligation;
(7) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(8) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(9) Liens encumbering deposits made to secure obligations
arising from statutory, regulatory, contractual, or warranty requirements
of the Company or any of its Subsidiaries, including rights of offset and
set-off;
(10) Liens securing Interest Swap Obligations which Interest Swap
Obligations relate to Indebtedness that is otherwise permitted under this
Supplemental Indenture; and
(11) Liens securing Indebtedness under Currency Agreements.
"PERSON" means an individual, partnership, corporation, unincorporated
organization, trust or joint venture, or a governmental agency or political
subdivision thereof.
"PREFERRED STOCK" of any Person means any Capital Stock of such Person that
has preferential rights to any other Capital Stock of such Person with respect
to dividends or redemptions or upon liquidation.
"QUALIFIED CAPITAL STOCK" means any Capital Stock that is not Disqualified
Capital Stock.
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"REFINANCE" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"REFINANCING INDEBTEDNESS" means any Refinancing by the Company or any
Subsidiary of the Company of Indebtedness incurred in accordance with Section
4.09 hereof (other than pursuant to clauses (2), (4), (5), (6), (7), (8), (9) or
(11) of the definition of Permitted Indebtedness), in each case that does not:
(1) result in an increase in the aggregate principal amount of
Indebtedness of such Person as of the date of such proposed Refinancing
(plus the amount of any premium required to be paid under the terms of the
instrument governing such Indebtedness and plus the amount of reasonable
expenses incurred by the Company in connection with such Refinancing); or
(2) create Indebtedness with: (a) a Weighted Average Life to
Maturity that is less than the Weighted Average Life to Maturity of the
Indebtedness being Refinanced; or (b) a final maturity earlier than the
final maturity of the Indebtedness being Refinanced; PROVIDED that (i) if
such Indebtedness being Refinanced is Indebtedness of the Company, then
such Refinancing Indebtedness shall be Indebtedness solely of the Company,
and (ii) if such Indebtedness being Refinanced is subordinate or junior to
the Notes, then such Refinancing Indebtedness shall be subordinate to the
Notes at least to the same extent and in the same manner as the
Indebtedness being Refinanced.
"REIT" means Real Estate Investment Trust.
"RESPONSIBLE OFFICER" means, when used with respect to the Trustee, any
managing director, director, principal, vice president, assistant vice
president, assistant treasurer, associate or any other officer within the
corporate trust department of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
shall mean, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge and familiarity
with the particular subject.
"SECURED INDEBTEDNESS" means any Indebtedness secured by a Lien upon the
property of the Company or any of its Subsidiaries.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR RECOURSE INDEBTEDNESS" means all Indebtedness of the Company and
its Subsidiaries (other than Indebtedness that is Non-Recourse Indebtedness and
other than Subordinated Indebtedness).
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"SIGNIFICANT SUBSIDIARY," with respect to any Person, means any Subsidiary
of such Person that satisfies the criteria for a "significant subsidiary" set
forth in Rule 1.02(w) of Regulation S-X under the Exchange Act.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill
Inc., a New York corporation, or any successor rating agency.
"STATED MATURITY" when used with respect to any Indebtedness or any
installment of interest thereon means the dates specified in such Indebtedness
as the fixed date on which the principal of or premiums on such Indebtedness or
such installment of interest is due and payable.
"SUBORDINATED INDEBTEDNESS" means all of the Company's and its
Subsidiaries' Indebtedness that expressly provides that such Indebtedness shall
be subordinated in right of payment to any other Indebtedness and matures or is
mandatorily redeemable pursuant to a sinking fund obligation or otherwise, or is
redeemable at the sole option of the holder thereof (except, in each case, upon
the occurrence of a Change of Control) on or after the final maturity date of
the Notes.
"SUBSIDIARY," with respect to any Person, means:
(1) any corporation of which the outstanding Capital Stock
having at least a majority of the votes entitled to be cast in the election
of directors under ordinary circumstances shall at the time be owned,
directly or indirectly, by such Person; or
(2) any other Person of which at least a majority of the voting
interest under ordinary circumstances is at the time, directly or
indirectly, owned by such Person.
"SUPPLEMENTAL INDENTURE" means this Supplemental Indenture as amended or
supplemented from time to time.
"TOTAL UNENCUMBERED ASSETS" as of any date means the sum of:
(1) those Undepreciated Real Estate Assets not securing any
portion of Secured Indebtedness; and
(2) all other assets (but excluding intangibles and accounts
receivable) of the Company and its Subsidiaries not securing any portion of
Secured Indebtedness determined on a consolidated basis in accordance with
GAAP.
"TRUSTEE" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Supplemental Indenture and
thereafter means the successor serving hereunder.
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"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as amended.
"UNDEPRECIATED REAL ESTATE ASSETS" means, as of any date, the cost (being
the original cost to the Company or any of Subsidiaries plus capital
improvements) of real estate assets of the Company and its Subsidiaries on such
date, before depreciation and amortization of such real estate assets,
determined on a consolidated basis in accordance with GAAP.
"UNSECURED INDEBTEDNESS" means any Indebtedness of the Company or any of
its Subsidiaries that is not Secured Indebtedness.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing: (1) the then outstanding
aggregate principal amount of such Indebtedness into; (2) the sum of the total
of the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"WHOLLY OWNED SUBSIDIARY" of any Person means any Subsidiary of such Person
of which all the outstanding voting securities (other than in the case of a
foreign Subsidiary, directors' qualifying shares or an immaterial amount of
shares required to be owned by other Persons pursuant to applicable law) are
owned by such Person or any Wholly Owned Subsidiary of such Person.
SECTION 1.02. OTHER DEFINITIONS.
<Table>
<Caption>
DEFINED IN
TERM SECTION
"AFFILIATE TRANSACTION".........................................................4.10
"AUTHENTICATION ORDER"..........................................................2.02
"CHANGE OF CONTROL DATE"........................................................4.13
"CHANGE OF CONTROL PAYMENT DATE"................................................4.13
"CHANGE OF CONTROL OFFER".......................................................4.13
"CHANGE OF CONTROL PURCHASE DATE"...............................................4.13
"CHANGE OF CONTROL PURCHASE PRICE"..............................................4.13
"COVENANT DEFEASANCE"...........................................................8.03
"DTC"...........................................................................2.03
"EVENT OF DEFAULT"..............................................................6.01
"INCUR".........................................................................4.09
"LEGAL DEFEASANCE"..............................................................8.02
"PAYING AGENT"..................................................................2.03
"REGISTRAR".....................................................................2.03
"REDEMPTION DATE"...............................................................3.07
</Table>
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<Table>
<Caption>
DEFINED IN
TERM SECTION
"RESTRICTED PAYMENT"............................................................4.07
"SURVIVING ENTITY"..............................................................5.01
</Table>
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever
this Supplemental Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Supplemental Indenture.
All terms used in this Supplemental Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural include
the singular;
(e) provisions apply to successive events and transactions; and
(f) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement of successor sections or rules
adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING
(a) GENERAL. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Note shall be dated the date of its authentication. The Notes
shall be in denominations of $1,000 and integral multiples thereof.
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The terms and provisions contained in the Notes shall constitute, and are
hereby expressly made, a part of this Supplemental Indenture and the Company and
the Trustee, by their execution and delivery of this Supplemental Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Supplemental Indenture, the provisions of this Supplemental Indenture shall
govern and be controlling.
(b) GLOBAL NOTES. Notes issued in global form shall be
substantially in the form of Exhibit A attached hereto (including the Global
Note Legend thereon and the "Schedule of Exchanges of Interests in the Global
Note" attached thereto). Notes issued in definitive form shall be substantially
in the form of Exhibit A attached hereto (but without the Global Note Legend
thereon and without the "Schedule of Exchanges of Interests in the Global Note"
attached thereto). Each Global Note shall represent such of the outstanding
Notes as shall be specified therein and each shall provide that it shall
represent the aggregate principal amount of outstanding Notes from time to time
endorsed thereon and that the aggregate principal amount of outstanding Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby shall be made by the
Trustee or the Custodian, at the direction of the Trustee, in accordance with
written instructions given by the Holder thereof as required by Section 2.06
hereof.
SECTION 2.02. EXECUTION AND AUTHENTICATION. One or more Officers shall
sign the Notes for the Company by manual or facsimile signature.
If an Officer whose signature is on a Note no longer holds that office at
the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Supplemental Indenture.
The Trustee shall, upon a written order of the Company signed by one or
more Officers (an "AUTHENTICATION ORDER"), authenticate Notes for original issue
on the Issue Date in aggregate principal amount not to exceed $150,000,000
(other than as provided in Section 2.07). The Trustee shall authenticate
Additional Notes thereafter (so long as permitted by the terms of this
Supplemental Indenture) for original issue upon one or more Authentication
Orders in aggregate principal amount as specified in such order (other than as
provided in Section 2.07). Each such Authentication Order shall specify the
amount of Notes to be authenticated, whether the Notes are to be Initial Notes
or Additional Notes and whether the Notes are to be issued as Definitive Notes
or Global Notes or such other information as the Trustee shall reasonably
request.
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The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Supplemental Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT. The Company shall maintain an
office or agency where Notes may be presented for registration of transfer or
for exchange ("REGISTRAR") and an office or agency where Notes may be presented
for payment ("PAYING AGENT"). The Registrar shall keep a register of the Notes
and of their transfer and exchange. The Company may appoint one or more
co-registrars and one or more additional paying agents. The term "Registrar"
includes any co-registrar and the term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company shall notify the Trustee in writing of the
name and address of any Agent not a party to this Supplemental Indenture. If the
Company fails to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may
act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. The Company shall
require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent will hold in trust for the benefit of Holders or the Trustee all
money held by the Paying Agent for the payment of principal, premium, if any, or
interest on the Notes, and will notify the Trustee in writing of any default by
the Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other
than the Company or a Subsidiary) shall have no further liability for the money.
If the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold
in a separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Notes.
SECTION 2.05. HOLDER LISTS. The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of all Holders and shall otherwise comply with TIA Section
312(a). If the Trustee is not the Registrar, the Company shall furnish to the
Trustee at least seven Business Days before each interest payment date and at
such other times as the Trustee may request in writing, a list in such form
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and as of such date as the Trustee may reasonably require of the names and
addresses of the Holders and the Company shall otherwise comply with TIA Section
312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF GLOBAL NOTES. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if (i) the Company delivers to the Trustee
written notice from the Depositary that it is unwilling or unable to continue to
act as Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Company within 120 days after the date of such notice from the Depositary or
(ii) the Company in its sole discretion determines that the Global Notes (in
whole but not in part) should be exchanged for Definitive Notes and delivers a
written notice to such effect to the Trustee. Upon the occurrence of either of
the preceding events in (i) or (ii) above, Definitive Notes shall be issued in
such names as the Depositary shall instruct the Trustee in writing. Global Notes
also may be exchanged or replaced, in whole or in part, as provided in Sections
2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or
in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06
or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form
of, and shall be, a Global Note. A Global Note may not be exchanged for another
Note other than as provided in this Section 2.06(a); PROVIDED, HOWEVER, that
beneficial interests in a Global Note may be transferred and exchanged as
provided in Section 2.06(b) or (c) hereof.
(b) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE GLOBAL NOTES.
The transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Supplemental Indenture and the Applicable Procedures. Transfers of beneficial
interests in the Global Notes also shall require compliance with either
subparagraph (i) or (ii) below, as applicable, as well as one or more of the
other following subparagraphs, as applicable:
(i) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL NOTE.
Beneficial interests in any Global Note may be transferred to Persons who
take delivery thereof in the form of a beneficial interest in a Global
Note. No written orders or instructions shall be required to be delivered
to the Registrar to effect the transfers described in this Section
2.06(b)(i).
(ii) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL INTERESTS IN
GLOBAL NOTES. In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.06(b)(i) above, the transferor
of such beneficial interest must deliver to the Registrar either (A) (1) a
written order from a Participant or an Indirect
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Participant given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to credit or cause to be credited a
beneficial interest in another Global Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions
given in accordance with the Applicable Procedures containing information
regarding the Participant account to be credited with such increase or (B)
(1) a written order from a Participant or an Indirect Participant given to
the Depositary in accordance with the Applicable Procedures directing the
Depositary to cause to be issued a Definitive Note in an amount equal to
the beneficial interest to be transferred or exchanged and (2) instructions
given by the Depositary to the Registrar containing information regarding
the Person in whose name such Definitive Note shall be registered to effect
the transfer or exchange referred to in (1) above. Upon satisfaction of all
of the requirements for transfer or exchange of beneficial interests in
Global Notes contained in this Supplemental Indenture and the Notes or
otherwise applicable under the Securities Act, the Trustee shall adjust the
principal amount of the relevant Global Note(s) pursuant to Section 2.06(g)
hereof.
(c) TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS FOR DEFINITIVE NOTES.
If any holder of a beneficial interest in a Global Note proposes to exchange
such beneficial interest for a Definitive Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a Definitive
Note, then, upon satisfaction of the conditions set forth in Section 2.06(b)(ii)
hereof, the Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly pursuant to Section 2.06(g) hereof, and
the Company shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c) shall be registered in such name or
names and in such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The Trustee shall
deliver such Definitive Notes to the Persons in whose names such Notes are so
registered.
(d) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR BENEFICIAL INTERESTS.
A Holder of a Definitive Note may exchange such Note for a beneficial interest
in a Global Note or transfer such Definitive Notes to a Person who takes
delivery thereof in the form of a beneficial interest in a Global Note at any
time. Upon receipt of a request for such an exchange or transfer, the Trustee
shall cancel the applicable Definitive Note and increase or cause to be
increased the aggregate principal amount of one of the Global Notes.
If any such exchange or transfer from a Definitive Note to a beneficial
interest is effected at a time when a Global Note has not yet been issued, the
Company shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee shall authenticate one or more Global
Notes in an aggregate principal amount equal to the principal amount of
Definitive Notes so transferred.
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(e) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR DEFINITIVE NOTES.
Upon written request by a Holder of Definitive Notes and such Holder's
compliance with the provisions of this Section 2.06(e), the Registrar shall
register the transfer or exchange of Definitive Notes. Prior to such
registration of transfer or exchange, the requesting Holder shall present or
surrender to the Registrar the Definitive Notes duly endorsed or accompanied by
a written instruction of transfer in form satisfactory to the Registrar duly
executed by such Holder or by its attorney, duly authorized in writing. In
addition, the requesting Holder shall provide any additional certifications,
documents and information, as applicable, required pursuant to this Section
2.06(e).
A Holder of Definitive Notes may transfer such Notes to a Person who takes
delivery thereof in the form of a Definitive Note. Upon receipt of a written
request to register such a transfer, the Registrar shall register the Definitive
Notes pursuant to the instructions from the Holder thereof.
(f) GLOBAL NOTE LEGEND. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN
THE SUPPLEMENTAL INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN
CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I)
THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE SUPPLEMENTAL INDENTURE, (II) THIS
GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO
SECTION 2.06(a) OF THE SUPPLEMENTAL INDENTURE, (III) THIS GLOBAL NOTE
MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE SUPPLEMENTAL INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT
OF THE COMPANY."
(g) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the
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direction of the Trustee to reflect such reduction; and if the beneficial
interest is being exchanged for or transferred to a Person who will take
delivery thereof in the form of a beneficial interest in another Global Note,
such other Global Note shall be increased accordingly and an endorsement shall
be made on such Global Note by the Trustee or by the Depositary at the direction
of the Trustee to reflect such increase.
(h) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon the Company's order or at the Registrar's request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company and the Trustee may
require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon exchange or
transfer pursuant to Sections 2.10, 3.06, 4.13 and 9.05 hereof).
(iii) The Registrar shall not be required to register the transfer
of or exchange any Note selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Supplemental Indenture, as the
Global Notes or Definitive Notes surrendered upon such registration of
transfer or exchange.
(v) The Company shall not be required (A) to issue, to register
the transfer of or to exchange any Notes during a period beginning at the
opening of business 15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close of business on
the day of selection, (B) to register the transfer of or to exchange any
Note so selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part or (C) to register the transfer
of or to exchange a Note between a record date and the next succeeding
Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer
of any Note, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of and interest on
such Notes and for all other purposes, and none of the Trustee, any Agent
or the Company shall be affected by notice to the contrary.
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(vii) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a registration of transfer or exchange may be submitted by
facsimile.
SECTION 2.07. REPLACEMENT NOTES. If any mutilated Note is surrendered to
the Trustee or the Company and the Trustee receives evidence to its satisfaction
of the destruction, loss or theft of any Note, the Company shall issue and the
Trustee, upon receipt of an Authentication Order, shall authenticate a
replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company may charge for its
expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and shall
be entitled to all of the benefits of this Supplemental Indenture equally and
proportionately with all other Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING NOTES. The Notes outstanding at any time are all
the Notes authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation, those reductions in the interest in a Global
Note effected by the Trustee in accordance with the provisions hereof, and those
described in this Section as not outstanding. Except as set forth in Section
2.09 hereof, a Note does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes shall
be deemed to be no longer outstanding and shall cease to accrue interest.
SECTION 2.09. TREASURY NOTES. In determining whether the Holders of the
required principal amount of Notes have concurred in any direction, waiver or
consent, Notes owned by the Company, or by any Affiliate of the Company, shall
be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be
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protected in relying on any such direction, waiver or consent, only Notes that
the Trustee actually knows are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES. Until certificates representing Notes are
ready for delivery, the Company may prepare and the Trustee, upon receipt of an
Authentication Order, shall authenticate temporary Notes. Temporary Notes shall
be substantially in the form of certificated Notes but may have variations that
the Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate definitive Notes in exchange for temporary
Notes.
Holders of temporary Notes shall be entitled to all of the benefits of this
Supplemental Indenture.
SECTION 2.11. CANCELLATION. The Company at any time may deliver Notes to
the Trustee for cancellation. The Registrar and Paying Agent shall forward to
the Trustee any Notes surrendered to them for registration of transfer, exchange
or payment. The Trustee and no one else shall cancel all Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation and
shall destroy canceled Notes (subject to the record retention requirement of the
Exchange Act). The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST. If the Company defaults in a payment of
interest on the Notes, it shall pay the defaulted interest in any lawful manner
plus, to the extent lawful, interest payable on the defaulted interest, to the
Persons who are Holders on a subsequent special record date, in each case at the
rate provided in the Notes and in Section 4.01 hereof. The Company shall notify
the Trustee in writing of the amount of defaulted interest proposed to be paid
on each Note and the date of the proposed payment. The Company shall fix or
cause to be fixed each such special record date and payment date; PROVIDED that
no such special record date shall be less than 10 days prior to the related
payment date for such defaulted interest. At least 15 days before the special
record date, the Company (or, upon the written request of the Company, the
Trustee in the name and at the expense of the Company) shall mail or cause to be
mailed to Holders a notice that states the special record date, the related
payment date and the amount of such interest to be paid.
SECTION 2.13. RECORD DATE. The Company may set a record date for purposes
of determining the identity of Holders entitled to vote or to consent to any
action by vote or consent authorized or permitted by Sections 6.04 and 6.05.
SECTION 2.14. CUSIP NUMBERS. The Company in issuing the Notes may use
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
CUSIP numbers in notices of redemption as a convenience to Holders; PROVIDED
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of a redemption and that reliance may be placed only on
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the other identification numbers printed on the Notes, and any such redemption
shall not be affected by any defect in or the omission of such numbers. The
Company will promptly notify the Trustee in writing of any change in the CUSIP
numbers.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE. If the Company elects to redeem Notes
pursuant to the optional redemption provisions of Section 3.07 hereof, it shall
furnish to the Trustee, at least 30 days but not more than 60 days before a
redemption date, an Officers' Certificate setting forth (i) the clause of this
Supplemental Indenture pursuant to which the redemption shall occur, (ii) the
redemption date, (iii) the principal amount of Notes to be redeemed, (iv) the
redemption price and (v) the CUSIP numbers of the Notes to be redeemed.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED. In the event that the
Company chooses to redeem less than all of the Notes, selection of the Notes for
redemption will be made by the Trustee either:
(1) in compliance with the requirements of the principal
national securities exchange, if any, on which the Notes are listed; or
(2) on a PRO RATA basis, by lot or by such method as the Trustee
shall deem fair and appropriate.
No Notes of a principal amount of $1,000 or less shall be redeemed in part.
If a partial redemption is made with the proceeds of an Equity Offering (as
defined in Section 3.07(b)), the Trustee will select the Notes only on a PRO
RATA basis or on as nearly a PRO RATA basis as is practicable (subject to DTC
procedures).
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Supplemental Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION. At least 30 days but not more than 60
days before a redemption date, the Company shall mail or cause to be mailed, by
first class mail (at
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its own expense), a notice of redemption to each Holder whose Notes are to be
redeemed at its registered address.
The notice shall identify the Notes to be redeemed, including the CUSIP
numbers, and shall state:
(a) the redemption date;
(b) the redemption price and the amount of accrued and unpaid interest,
if any, to be paid;
(c) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the redemption date upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion shall be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;
(g) the paragraph of the Notes and/or Section of this Supplemental
Indenture pursuant to which the Notes called for redemption are being redeemed;
and
(h) that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's written request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; PROVIDED, HOWEVER, that the
Company shall have provided to the Trustee, at least 45 days prior to the
redemption date (unless a shorter notice shall be satisfactory to the Trustee),
the information required by clauses (a) through (d) above.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption is
mailed in accordance with Section 3.03 hereof, Notes called for redemption
become irrevocably due and payable on the redemption date at the redemption
price. A notice of redemption may not be conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. One Business Day prior to the
redemption date, the Company shall deposit with the Trustee or with the Paying
Agent money sufficient to pay the redemption price of and accrued interest on
all Notes to be redeemed on that date and any amounts owed the Trustee. The
Trustee or the Paying Agent shall promptly
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return to the Company any money deposited with the Trustee or the Paying Agent
by the Company in excess of the amounts necessary to pay the redemption price
of, and accrued interest on, all Notes to be redeemed and any amounts owed the
Trustee.
If the Company complies with the provisions of the preceding paragraph, on
and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest shall be paid to the Person in whose name
such Note was registered at the close of business on such record date. If any
Note called for redemption shall not be so paid upon surrender for redemption
because of the failure of the Company to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the redemption date until
such principal is paid, and to the extent lawful on any interest not paid on
such unpaid principal, in each case at the rate provided in the Notes and in
Section 4.01 hereof.
SECTION 3.06. NOTES REDEEMED IN PART. Upon surrender of a Note that is
redeemed in part, the Company shall issue and, upon the Company's written
request, the Trustee shall authenticate for the Holder at the expense of the
Company a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION. (a) At any time on or prior to
March 15, 2008, the Notes may be redeemed or purchased in whole but not in part
at the Company's option at a price equal to 100% of the principal amount thereof
plus the Applicable Premium as of, and accrued but unpaid interest, if any, to,
the date of redemption or purchase (the "REDEMPTION DATE") (subject to the right
of Holders of record on the relevant record date to receive interest due on the
relevant interest payment date).
"APPLICABLE PREMIUM" means, with respect to a Note at any Redemption Date,
the greater of: (1) 1.0% of the principal amount of such Note; and (2) the
excess of (a) the present value at such Redemption Date of (i) the principal
amount of such Note on March 15, 2008 plus (ii) all required remaining scheduled
interest payments due on such Note through March 15, 2008, computed using a
discount rate equal to the Treasury Rate plus 50 basis points; over (b) the
principal amount of such Note on such Redemption Date. Calculation of the
Applicable Premium will be made by the Company or on behalf of the Company by
such Person as the Company shall designate; PROVIDED, HOWEVER, that such
calculation shall not be a duty or obligation of the Trustee.
"TREASURY RATE" means, with respect to a Redemption Date, the yield to
maturity at the time of computation of United States Treasury securities with a
constant maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15(519) that has become publicly available at least two
Business Days prior to such Redemption Date (or, if such Statistical Release is
no longer published, any publicly available source of similar market data)) most
nearly equal to the period from such Redemption Date to March 15, 2008;
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PROVIDED, HOWEVER, that if the period from such Redemption Date to March 15,
2008 is not equal to the constant maturity of the United States Treasury
security for which a weekly average yield is given, the Treasury Rate shall be
obtained by linear interpolation (calculated to the nearest one-twelfth of a
year) from the weekly average yields of United States Treasury securities for
which such yields are given, except that if the period from such Redemption Date
to March 15, 2008 is less than one year, the weekly average yield on actually
traded United States Treasury securities adjusted to a constant maturity of one
year shall be used.
(b) OPTIONAL REDEMPTION UPON EQUITY OFFERINGS. At any time, or from
time to time, on or prior to March 15, 2006, the Company may, at its option, use
the net cash proceeds of one or more Equity Offerings to redeem up to 35% of the
principal amount of the Notes issued under this Supplemental Indenture at a
redemption price of 107% of the principal amount thereof plus accrued and unpaid
interest thereon, if any, to the date of redemption; PROVIDED that:
(1) at least 65% of the principal amount of Notes issued under
this Supplemental Indenture remains outstanding immediately after any such
redemption; and
(2) the Company makes such redemption not more than 60 days
after the consummation of any such Equity Offering.
Other than as specifically provided in this Section 3.07, any redemption
pursuant to this Section 3.07 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION. The Company shall not be required to
make mandatory redemption payments with respect to the Notes prior to Maturity.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF NOTES. The Company shall pay or cause to be paid
the principal of, premium, if any, and interest on the Notes on the dates and in
the manner provided in the Notes. Principal, premium, if any, and interest shall
be considered paid on the date due if the Paying Agent, if other than the
Company or a Subsidiary, holds as of 10:00 a.m. Eastern Time on the due date
money deposited by the Company in immediately available funds and designated for
and sufficient to pay all principal, premium, if any, and interest then due.
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The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
the then applicable interest rate on the Notes to the extent lawful; it shall
pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at the same rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY. The Company shall maintain
in the Borough of Manhattan, the City of New York, an office or agency (which
may be an office of the Trustee or an affiliate of the Trustee, Registrar or
co-registrar) where Notes may be surrendered for registration of transfer or for
exchange and where notices and demands to or upon the Company in respect of the
Notes and this Supplemental Indenture may be served. The Company shall give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; PROVIDED, HOWEVER,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
the City of New York for such purposes. The Company shall give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee as
one such office or agency of the Company in accordance with Section 2.03.
SECTION 4.03. REPORTS TO HOLDERS. Whether or not required by the rules and
regulations of the Commission, so long as any Notes are outstanding, the Company
shall furnish the Holders of Notes:
(1) all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms 10-Q and
10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" that describes the financial condition and results of
operations of the Company and its consolidated Subsidiaries(showing in
reasonable detail, either on the face of the financial statements or in the
footnotes thereto and in Management's Discussion and Analysis of Financial
Condition and Results of Operations, the financial condition and results of
operations of the Company and its Subsidiaries separate from the financial
condition and results of operations of the Unrestricted Subsidiaries of the
Company, if any) and,
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with respect to the annual information only, a report thereon by the
Company's certified independent accountants; and
(2) all current reports that would be required to be filed with
the Commission on Form 8-K if the Company were required to file such
reports, in each case within the time periods specified in the Commission's
rules and regulations.
In addition, whether or not required by the rules and regulations of the
Commission, the Company shall file a copy of all such information and reports
with the Commission for public availability within the time periods specified in
the Commission's rules and regulations (unless the Commission will not accept
such a filing) and make such information available to securities analysts and
prospective investors upon request. In addition, the Company has agreed that,
for so long as any Notes remain outstanding, it will furnish to the Holders and
to securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
SECTION 4.04. COMPLIANCE CERTIFICATE. (a) The Company shall deliver to the
Trustee, within 90 days after the end of each fiscal year, an Officers'
Certificate stating that a review of the activities of the Company and its
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled their obligations under this
Supplemental Indenture, and further stating, as to each such Officer signing
such certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Supplemental Indenture and is not in default in the performance or observance of
any of the terms, provisions and conditions of this Supplemental Indenture (or,
if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and what
action the Company is taking or proposes to take with respect thereto) and that
to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto.
(b) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
SECTION 4.05. TAXES. The Company shall pay, and shall cause each of its
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders.
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SECTION 4.06. STAY, EXTENSION AND USURY LAWS. The Company covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Supplemental Indenture; and the Company (to the extent that it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it shall not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law has been enacted.
SECTION 4.07. LIMITATION ON RESTRICTED PAYMENTS.. The Company shall not,
and shall not cause or permit any of its Subsidiaries to, directly or
indirectly:
(1) declare or pay any dividend or make any distribution (other
than dividends or distributions payable in Qualified Capital Stock of the
Company) on or in respect of shares of the Company's Capital Stock to
holders of such Capital Stock;
(2) purchase, redeem or otherwise acquire or retire for value
any Capital Stock of the Company or any warrants, rights or options to
purchase or acquire shares of any class of such Capital Stock; or
(3) make any principal payment on, purchase, defease, redeem,
prepay, decrease or otherwise acquire or retire for value, prior to any
scheduled final maturity, scheduled repayment or scheduled sinking fund
payment, any Indebtedness of the Company that is subordinate or junior in
right of payment to the Notes
if at the time of such action (each, a "RESTRICTED PAYMENT") or immediately
after giving effect thereto,
(i) a Default or an Event of Default shall have occurred
and be continuing; or
(ii) the Company is not able to incur at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) in
compliance with Section 4.09 hereof; or
(iii) the aggregate amount of Restricted Payments (including
such proposed Restricted Payment) made subsequent to the
Measurement Date (the amount expended for such purposes, if other
than in cash, being the fair market value of such property as
determined in good faith by the Board of Directors of the Company)
shall exceed the sum of:
(w) 95% of the cumulative Consolidated Adjusted Earnings
(or if cumulative Consolidated Adjusted Earnings shall
be a loss,
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minus 100% of such loss) of the Company earned
subsequent to June 30, 2001 and on or prior to the
date the Restricted Payment occurs (the "Reference
Date") (treating such period as a single accounting
period); plus
(x) 100% of the aggregate net cash proceeds received by
the Company from any Person (other than a Subsidiary
of the Company) from the issuance and sale subsequent
to the Measurement Date and on or prior to the
Reference Date of Qualified Capital Stock of the
Company; plus
(y) without duplication of any amounts included in clause
(iii)(x) above, 100% of the aggregate net cash
proceeds of any equity contribution received by the
Company from a holder of the Company's Capital Stock
(excluding, in the case of clauses (iii)(x) and (y),
any net cash proceeds from an Equity Offering to the
extent used to redeem the Notes in compliance with the
provisions set forth under Section 3.07(b) hereof).
The foregoing provisions do not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration of such dividend if the dividend would have been permitted on
the date of declaration;
(2) if no Default or Event of Default shall have occurred and be
continuing, the acquisition of any shares of Capital Stock of the Company,
either (i) solely in exchange for shares of Qualified Capital Stock of the
Company or (ii) through the application of net proceeds of a substantially
concurrent sale for cash (other than to a Subsidiary of the Company) of
shares of Qualified Capital Stock of the Company;
(3) if no Default or Event of Default shall have occurred and be
continuing, the acquisition of any Indebtedness of the Company that is
subordinate or junior in right of payment to the Notes either (i) solely in
exchange for shares of Qualified Capital Stock of the Company, or (ii)
through the application of net proceeds of a substantially concurrent sale
for cash (other than to a Subsidiary of the Company) of (a) shares of
Qualified Capital Stock of the Company or (b) Refinancing Indebtedness;
(4) so long as no Default or Event of Default shall have
occurred and be continuing, repurchases by the Company of Common Stock of
the Company from employees of the Company or any of its Subsidiaries or
their authorized representatives upon the death, disability or termination
of employment of such employees, in an aggregate amount not to exceed
$500,000 in any calendar year;
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(5) the declaration or payment by the Company of any dividend or
distribution that is necessary to maintain its status as a REIT under the
Code if:
(a) the Consolidated Fixed Charge Coverage Ratio of the
Company is greater than 2.0 to 1.0; and
(b) no Default or Event of Default shall have occurred and
be continuing;
(6) the payment of any dividend on Preferred Stock of the
Company; and
(7) Restricted Payments in an amount not to exceed $75.0
million.
In determining the aggregate amount of Restricted Payments made subsequent
to the Measurement Date in accordance with clause (iii) of the immediately
preceding paragraph, amounts expended pursuant to clauses (1), (2) (ii), 3 (ii)
(a), (4), (5) and (7) shall be included in such calculation.
SECTION 4.08. LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES. The Company shall not, and shall not cause or permit
any of its Subsidiaries to, directly or indirectly, create or otherwise cause or
permit to exist or become effective any encumbrance or restriction on the
ability of any Subsidiary of the Company to:
(1) pay dividends or make any other distributions on or in
respect of its Capital Stock;
(2) make loans or advances or to pay any Indebtedness or other
obligation owed to the Company or any other Subsidiary of the Company; or
(3) transfer any of its property or assets to the Company or any
other Subsidiary of the Company, except for such encumbrances or
restrictions existing under or by reason of:
(a) applicable law;
(b) this Supplemental Indenture;
(c) customary non-assignment provisions of any contract or any
lease governing a leasehold interest of any Subsidiary of the Company;
(d) any instrument governing Acquired Indebtedness, which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person or the properties
or assets of the Person so acquired;
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(e) agreements existing on the Measurement Date to the extent
and in the manner such agreements are in effect on the Measurement Date;
(f) provisions of any agreement governing Indebtedness incurred
in accordance with this Supplemental Indenture that impose such
encumbrances or restrictions upon the occurrence of a default or failure to
meet financial covenants or conditions under the agreement;
(g) restrictions on the transfer of assets (other than cash)
held in a Subsidiary of the Company imposed under any agreement governing
Indebtedness incurred in accordance with this Supplemental Indenture;
(h) provisions of any agreement governing Indebtedness incurred
in accordance with this Supplemental Indenture that require a Subsidiary to
service its debt obligations before making dividends, distributions or
advancements in respect of its Capital Stock;
(i) an agreement governing Indebtedness incurred to Refinance
the Indebtedness issued, assumed or incurred pursuant to an agreement
referred to in clause (b), (d) or (e) above; PROVIDED, HOWEVER, that the
provisions relating to such encumbrance or restriction contained in any
such Indebtedness are not materially less favorable to the Company in any
material respect as determined by the Board of Directors of the Company in
their reasonable and good faith judgment than the provisions relating to
such encumbrance or restriction contained in agreements referred to in such
clause (b), (d) or (e).
SECTION 4.09. LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS. The
Company shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, create, incur, assume, guarantee, become liable, contingently or
otherwise, with respect to, or otherwise become responsible for payment of
(collectively, "INCUR") any Indebtedness (including, without limitation,
Acquired Indebtedness) other than Permitted Indebtedness.
Notwithstanding the foregoing, if no Default or Event of Default shall have
occurred and be continuing at the time of or as a consequence of the incurrence
of any such Indebtedness, the Company or any of its Subsidiaries may incur
Indebtedness (including, without limitation, Acquired Indebtedness), in each
case if on the date of the incurrence of such Indebtedness, after giving effect
to the incurrence thereof:
- the Consolidated Fixed Charge Coverage Ratio of the Company is greater
than 1.50 to 1.0;
- the ratio of the aggregate amount of Indebtedness outstanding on a
consolidated basis to the Company's Consolidated Net Worth is less than
5.0 to 1.0; and
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- the ratio of the aggregate amount of Senior Recourse Indebtedness
outstanding on a consolidated basis to the sum of: (1) the Company's
Consolidated Net Worth; and (2) the aggregate amount of the Subordinated
Indebtedness outstanding on a consolidated basis is less than 2.75 to
1.0; PROVIDED, HOWEVER, that the aggregate principal amount of such
Subordinated Indebtedness is not in excess of the Company's Consolidated
Net Worth.
Notwithstanding the foregoing, the Company shall not permit TriNet
Corporate Realty Trust, Inc. ("TRINET") or any of its Subsidiaries to incur
Indebtedness (as defined in the indenture governing TriNet's outstanding
publicly-held debt securities on the Measurement Date) if, immediately after
giving effect to the incurrence of such Indebtedness and the application of the
proceeds thereof, the aggregate principal amount of all outstanding Indebtedness
of TriNet and its Subsidiaries on a consolidated basis determined in accordance
with GAAP is greater than 55% of the sum of (without duplication): (1) the Total
Assets (as defined in the indenture governing TriNet's outstanding publicly-held
debt securities on the Measurement Date) of TriNet and its Subsidiaries as of
the end of the calendar quarter covered in TriNet's Annual Report on Form 10-K
or Quarterly Report on Form 10-Q, as the case may be, most recently filed with
the Commission (or, if such filing is not permitted under the Exchange Act, with
the Trustee) prior to the incurrence of such additional Indebtedness; and (2)
the purchase price of any real estate assets or mortgages receivable acquired,
and the amount of any securities offering proceeds received (to the extent that
such proceeds were not used to acquire real estate assets or mortgages
receivable or used to reduce Indebtedness), by TriNet or any Subsidiary of
TriNet since the end of such calendar quarter, including those proceeds obtained
in connection with the incurrence of such additional Indebtedness. The above
limitation shall terminate immediately upon TriNet ceasing to exist as a
Subsidiary of the Company as a result of a merger or consolidation of TriNet
with the Company or the sale, transfer, disposition or distribution of all or
substantially all of TriNet's assets to the Company.
SECTION 4.10. LIMITATION ON TRANSACTIONS WITH AFFILIATES. The Company
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, enter into or permit to exist any transaction or series of related
transactions (including, without limitation, the purchase, sale, lease or
exchange of any property or the rendering of any service) with, or for the
benefit of, any of its Affiliates (each an "AFFILIATE TRANSACTION"), other than:
(1) Affiliate Transactions permitted as described below; and (2) Affiliate
Transactions on terms that are no less favorable than those that might
reasonably have been obtained in a comparable transaction at such time on an
arm's-length basis from a Person that is not an Affiliate of the Company or such
Subsidiary.
All Affiliate Transactions (and each series of related Affiliate
Transactions which are similar or part of a common plan) involving aggregate
payments or other property with a fair market value in excess of $5.0 million
shall be approved by the Board of Directors of the Company or such Subsidiary,
as the case may be, such approval to be evidenced by a Board
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Resolution stating that such Board of Directors has determined that such
transaction complies with the foregoing provisions. If the Company or any
Subsidiary of the Company enters into an Affiliate Transaction (or a series of
related Affiliate Transactions related to a common plan) that involves an
aggregate fair market value of more than $10.0 million, the Company or such
Subsidiary, as the case may be, shall, prior to the consummation thereof, obtain
a favorable opinion as to the fairness of such transaction or series of related
transactions to the Company or the relevant Subsidiary, as the case may be, from
a financial point of view, from an Independent Financial Advisor and file the
same with the Trustee.
The restrictions set forth in the first paragraph of this Section 4.10
shall not apply to:
(1) reasonable fees and compensation paid to and indemnity
provided on behalf of, officers, directors, employees or consultants of the
Company or any Subsidiary of the Company as determined in good faith by the
Company's Board of Directors or senior management;
(2) transactions exclusively between or among the Company and
any of its Subsidiaries or exclusively between or among such Subsidiaries
in the ordinary course of business, PROVIDED such transactions are not
otherwise prohibited by this Supplemental Indenture;
(3) transactions between the Company or one of its Subsidiaries
and any Person in which the Company or one of its Subsidiaries has made an
Investment in the ordinary course of the Company's real estate lending
business and such Person is an Affiliate solely because of such Investment;
(4) transactions between the Company or one of its Subsidiaries
and any Person in which the Company or one of its Subsidiaries holds an
interest as a joint venture partner and such Person is an Affiliate solely
because of such interest;
(5) any agreement as in effect as of the Measurement Date or any
amendment thereto or any transaction contemplated thereby (including
pursuant to any amendment thereto) in any replacement agreement thereto so
long as any such amendment or replacement agreement is not more
disadvantageous to the Holders in any material respect than the original
agreement as in effect on the Measurement Date; and
(6) Restricted Payments permitted by Section 4.07.
SECTION 4.11. LIMITATION ON LIENS. The Company shall not, and shall not
cause or permit any of its Subsidiaries to, directly or indirectly, create,
incur, assume or permit or suffer to exist any Liens of any kind on the assets
of the Company securing Indebtedness of the Company unless:
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(1) in the case of Liens securing Indebtedness of the Company
that is expressly subordinate or junior in right of payment to the Notes,
the Notes are secured by a Lien on such property, assets or proceeds that
is senior in priority to such Liens; and
(2) in all other cases, the Notes are equally and ratably
secured except for:
(a) Liens existing as of the Measurement Date to the
extent and in the manner such Liens are in effect on the
Measurement Date;
(b) Liens securing the Notes;
(c) Liens securing Refinancing Indebtedness that is
incurred to Refinance any Indebtedness that has been secured by a
Lien permitted under this Supplemental Indenture and that has been
incurred in accordance with the provisions of this Supplemental
Indenture; PROVIDED, HOWEVER, that such Liens: (i) are no less
favorable to the Holders than the Liens in respect of the
Indebtedness being Refinanced; and (ii) do not extend to or cover
any property or assets of the Company not securing the Indebtedness
so Refinanced; and
(d) Permitted Liens.
SECTION 4.12. CORPORATE EXISTENCE. Subject to Article 5 hereof, the
Company shall do or cause to be done all things necessary to preserve and keep
in full force and effect (i) its corporate existence, and the corporate,
partnership or other existence of each of its Subsidiaries, in accordance with
the respective organizational documents (as the same may be amended from time to
time) of the Company or any such Subsidiary and (ii) the rights (charter and
statutory), licenses and franchises of the Company and its Subsidiaries;
PROVIDED, HOWEVER, that the Company shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of
any of its Subsidiaries, if the Board of Directors of the Company shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and its Subsidiaries, taken as a whole, and that the
loss thereof is not adverse in any material respect to the Holders.
SECTION 4.13. OFFER TO REPURCHASE UPON CHANGE OF CONTROL (a) Upon the
occurrence of a Change of Control (the date of such occurrence, the "CHANGE OF
CONTROL DATE"), each Holder shall have the right to require the Company to
purchase such Holder's Notes in whole or in part in integral multiples of $1,000
at a purchase price (the "CHANGE OF CONTROL PURCHASE PRICE") in cash equal to
101% of the principal amount of such Notes, plus accrued and unpaid interest, if
any, at the date of purchase (the "CHANGE OF CONTROL PURCHASE DATE"), pursuant
to and in accordance with the offer described in this Section 4.13 (the "CHANGE
OF CONTROL OFFER").
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(b) Within 30 days following the Change of Control Date the Company
shall send, by first class mail, a notice to the Holders and the Trustee
stating:
(i) that the Change of Control Offer is being made pursuant to
this Section 4.13 and that all Notes validly tendered will be accepted for
payment;
(ii) the Change of Control Purchase Price and the Change of
Control Purchase Date, which shall be a Business Day that is no earlier
than 30 days nor later than 60 days from the date such notice is mailed
(the "CHANGE OF CONTROL PAYMENT DATE") other than as may be required by
law;
(iii) that any Note not tendered will continue to accrue interest;
(iv) that any Note accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of Control
Payment Date unless the Company shall default in the payment of the Change
of Control Purchase Price of the Notes and the only remaining right of the
Holder is to receive payment of the Change of Control Purchase Price upon
surrender of the applicable Note to the Paying Agent;
(v) that Holders electing to have a portion of a Note purchased
pursuant to a Change of Control Offer may only elect to have such Note
purchased in integral multiples of $1,000;
(vi) that if a Holder elects to have a Note purchased pursuant to
the Change of Control Offer it will be required to surrender the Note, with
the form entitled "Option of Holder to Elect Purchase" on the reverse of
the Note completed, or transfer by book-entry transfer, to the Paying Agent
at the address specified in the notice prior to the close of business on
the third Business Day prior to the Change of Control Payment Date;
(vii) that a Holder will be entitled to withdraw its election if
the Company receives, not later than the third Business Day preceding the
Change of Control Payment Date, a telegram, telex, facsimile transmission
or letter setting forth the name of such Holder, the principal amount of
Notes such Holder delivered for purchase, and a statement that such Holder
is withdrawing its election to have such Note purchased; and
(viii) that if Notes are purchased only in part a new Note of the
same type will be issued in principal amount equal to the unpurchased
portion of the Notes surrendered.
(c) On or before the Change of Control Payment Date, the Company shall,
to the extent lawful, accept for payment, all Notes or portions thereof validly
tendered pursuant to
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the Change of Control Offer, and shall deliver to the Trustee an Officers'
Certificate stating that such Notes or portions thereof were accepted for
payment by the Company in accordance with the terms of this Section 4.13. The
Company, the Depositary or the Paying Agent, as the case may be, shall promptly
mail or deliver to each tendering Holder an amount equal to the purchase price
of the Notes tendered by such Holder and accepted by the Company for purchase,
and the Company shall promptly issue a new Note, and the Trustee, upon written
request from the Company shall authenticate and mail or deliver such new Note to
such Holder, in a principal amount equal to any unpurchased portion of the Note
surrendered. Any Note not so accepted shall be promptly mailed or delivered by
the Company to the Holder thereof.
(d) The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to an offer hereunder. To the extent the provisions
of any securities laws or regulations conflict with the provisions under this
Section 4.13, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.13 by virtue thereof.
SECTION 4.14. LIMITATION ON PREFERRED STOCK OF SUBSIDIARIES. The Company
shall not permit any of its Subsidiaries to issue any Preferred Stock (other
than to the Company or to a Wholly Owned Subsidiary of the Company) or permit
any Person (other than the Company or a Wholly Owned Subsidiary of the Company)
to own any Preferred Stock of any Subsidiary of the Company, other than
Preferred Stock outstanding on the Measurement Date of Subsidiaries formed to
facilitate maintaining the Company's REIT status.
SECTION 4.15. CONDUCT OF BUSINESS. The Company and its Subsidiaries shall
engage primarily in the financing and real-estate related businesses
contemplated by Article III(b) of the Company's Amended and Restated Charter as
in effect on the Measurement Date and other activities related to or arising out
of those activities.
SECTION 4.16. LIMITATION OF GUARANTEES BY SUBSIDIARIES. The Company shall
not permit any of its Subsidiaries, directly or indirectly, by way of the pledge
of any intercompany note or otherwise, to assume, guarantee or in any other
manner become liable with respect to any Indebtedness of the Company, unless, in
any such case:
(1) such Subsidiary executes and delivers a supplemental
indenture to this Supplemental Indenture, providing a guarantee of payment
of the Notes by such Subsidiary; and
(2) if such assumption, guarantee or other liability of such
Subsidiary is provided in respect of Indebtedness that is expressly
subordinated to the Notes, the guarantee or other instrument provided by
such Subsidiary in respect of such subordinated Indebtedness shall be
subordinated to the Guarantee pursuant to
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subordination provisions no less favorable to the Holders of the Notes than
those contained in this Supplemental Indenture.
Notwithstanding the foregoing, any such Guarantee by a Subsidiary of the
Notes shall provide by its terms that it shall be automatically and
unconditionally released and discharged, without any further action required on
the part of the Trustee or any Holder, upon:
(1) the unconditional release of such Subsidiary from its
liability in respect of the Indebtedness in connection with which such
Guarantee was executed and delivered pursuant to the preceding paragraph;
or
(2) any sale or other disposition (by merger or otherwise) to
any Person that is not a Subsidiary of the Company of all of the Company's
Capital Stock in, or all or substantially all of the assets of, such
Subsidiary; PROVIDED that: (a) such sale or disposition of such Capital
Stock or assets is otherwise in compliance with the terms of this
Supplemental Indenture; and (b) such assumption, guarantee or other
liability of such Subsidiary has been released by the holders of the other
Indebtedness so guaranteed.
SECTION 4.17. MAINTENANCE OF TOTAL UNENCUMBERED ASSETS. The Company and
its Subsidiaries shall maintain Total Unencumbered Assets of not less than 125%
of the aggregate outstanding principal amount of the Unsecured Indebtedness of
the Company and its Subsidiaries, in each case on a consolidated basis.
SECTION 4.18. TERMINATION OF CERTAIN COVENANTS IN EVENT OF INVESTMENT
GRADE RATING. In the event that each of the Rating Categories assigned to the
Notes by the Rating Agencies is Investment Grade, the obligations under the
covenants contained in Sections 4.07, 4.08, 4.10, 4.11, 4.14, 4.15 and 4.16
hereof shall cease to apply to the Company in the event, and only for so long
as, the Notes are rated Investment Grade and no Default or Event of Default has
occurred and is continuing.
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SECTION 4.19. MAINTENANCE OF PROPERTIES; BOOKS AND RECORDS; COMPLIANCE
WITH LAW. (a) The Company shall and shall cause each of its Subsidiaries to at
all times cause all properties used or useful in the conduct of its business to
be maintained and kept in good condition, repair and working order (reasonable
wear and tear excepted) and supplied with all necessary equipment, and shall
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereto; PROVIDED that nothing in this Section 4.19 shall prevent
the Company or any of its Subsidiaries from discontinuing the operation or
maintenance of any of such properties, or disposing of any of them, if such
discontinuance or disposal is either (i) in the ordinary course of business,
(ii) in the reasonable and good faith judgment of the Board of Directors or
management of the Company or the Subsidiary concerned, as the case may be,
desirable in the conduct of the business of the Company or such Subsidiary, as
the case may be, or (iii) otherwise permitted by this Supplemental Indenture.
(b) The Company shall and shall cause each of its Subsidiaries to keep
proper and true books of record and account, in which full and correct entries
shall be made of all financial transactions and the assets and business of the
Company and each of its Subsidiaries, and reflect on its financial statements
adequate accruals and appropriations to reserves, all in accordance with GAAP
consistently applied to the Company and its Subsidiaries taken as a whole.
(c) The Company shall and shall cause each of its Subsidiaries to
comply in all material respects with all statutes, laws, ordinances, or
government rules and regulations to which it is subject, non-compliance with
which would materially adversely affect the business, earnings, properties,
assets or condition (financial or otherwise) of the Company and its Subsidiaries
taken as a whole.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS. The Company shall
not, in a single transaction or series of related transactions, consolidate or
merge with or into any Person, or sell, assign, transfer, lease, convey or
otherwise dispose of (or cause or permit any Subsidiary of the Company to sell,
assign, transfer, lease, convey or otherwise dispose of) all or substantially
all of the Company's assets (determined on a consolidated basis for the Company
and the Company's Subsidiaries) whether as an entirety or substantially as an
entirety to any Person unless:
(1) either:
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(a) the Company shall be the surviving or continuing
corporation;
or
(b) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person
which acquires by sale, assignment, transfer, lease, conveyance or
other disposition the properties and assets of the Company and of
the Company's Subsidiaries substantially as an entirety (the
"SURVIVING ENTITY"):
(i) shall be a corporation organized and validly
existing under the laws of the United States or any State
thereof or the District of Columbia; and
(ii) shall expressly assume, by supplemental
indenture (in form and substance satisfactory to the
Trustee), executed and delivered to the Trustee, the due and
punctual payment of the principal of, and premium, if any,
and interest on all of the Notes and the performance of
every covenant of the Notes and this Supplemental Indenture
on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction and the
assumption contemplated by clause (1)(b)(ii) above (including giving effect
to any Indebtedness and Acquired Indebtedness incurred or anticipated to be
incurred in connection with or in respect of such transaction), the Company
or such Surviving Entity, as the case may be: (a) shall have a Consolidated
Net Worth equal to or greater than the Consolidated Net Worth of the
Company immediately prior to such transaction; and (b) shall be able to
incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 4.09 hereof; PROVIDED, HOWEVER, that this
clause (2) shall not apply in the event of a transaction between the
Company and TriNet;
(3) immediately before and immediately after giving effect to
such transaction and the assumption contemplated by clause (1)(b)(ii) above
(including, without limitation, giving effect to any Indebtedness and
Acquired Indebtedness incurred or anticipated to be incurred and any Lien
granted in connection with or in respect of the transaction), no Default or
Event of Default shall have occurred or be continuing; and
(4) the Company or the Surviving Entity shall have delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, merger, sale, assignment, transfer, lease,
conveyance or other disposition and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture
comply with the applicable provisions of this Supplemental Indenture and
that all conditions precedent in this Supplemental Indenture relating to
such transaction have been satisfied.
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For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Subsidiaries of the
Company the Capital Stock of which constitutes all or substantially all of the
properties and assets of the Company, shall be deemed to be the transfer of all
or substantially all of the properties and assets of the Company.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED. Upon any consolidation or
merger, or any sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the assets of the Company in
accordance with Section 5.01 hereof, in which the Company is not the continuing
corporation, the successor corporation formed by such consolidation or into or
with which the Company is merged or to which such sale, assignment, transfer,
lease, conveyance or other disposition is made shall succeed to, and be
substituted for (so that from and after the date of such consolidation, merger,
sale, lease, conveyance or other disposition, the provisions of this
Supplemental Indenture referring to the "Company" shall refer instead to the
successor corporation and not to the Company), and may exercise every right and
power of, the Company under this Supplemental Indenture and the Notes with the
same effect as if such successor corporation had been named as the Company
herein; provided, however, that, in the case of a transfer by lease, the
predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. The following are "EVENTS OF DEFAULT":
(1) the failure to pay interest on any Notes when the same
becomes due and payable and the default continues for a period of 30 days;
(2) the failure to pay the principal on any Notes, when such
principal becomes due and payable, at maturity, upon redemption or
otherwise (including the failure to make a payment to purchase Notes
tendered pursuant to a Change of Control Offer);
(3) a default in the observance or performance of any other
covenant or agreement contained in this Supplemental Indenture and such
default continues for a period of 30 days after the Company receives
written notice specifying the default (and demanding that such default be
remedied) from the Trustee or the Holders of at least 25% of the
outstanding principal amount of the Notes (except in the case of a default
with respect to Section 5.01 hereof, which will constitute an Event of
Default with such notice requirement but without such passage of time
requirement);
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(4) the failure to pay at final maturity (giving effect to any
applicable grace periods and any extensions thereof) the principal amount
of any Indebtedness (other than Non-Recourse Indebtedness) of the Company
or any Subsidiary of the Company, or the acceleration of the final stated
maturity of any such Indebtedness (which acceleration is not rescinded,
annulled or otherwise cured within 20 days of receipt by the Company or
such Subsidiary of notice of any such acceleration) if the aggregate
principal amount of such Indebtedness, together with the principal amount
of any other such Indebtedness in default for failure to pay principal at
final maturity or which has been accelerated, aggregates $20.0 million or
more at any time;
(5) one or more judgments in an aggregate amount in excess of
$20.0 million shall have been rendered against the Company or any of its
Subsidiaries and such judgments remain undischarged, unpaid or unstayed for
a period of 60 days after such judgment or judgments become final and
non-appealable (other than any judgments as to which, and only to the
extent, a reputable insurance company has acknowledged coverage of such
judgments in writing);
(6) there shall have been the entry by a court of competent
jurisdiction of:
(a) a decree or order for relief in respect of the Company
or any Significant Subsidiary in an involuntary case or proceeding
under any applicable Bankruptcy Law; or
(b) a decree or order adjudging the Company or any
Significant Subsidiary bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment or composition of or in
respect of the Company or any Significant Subsidiary under any
applicable federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or any Significant Subsidiary or of
any substantial part of its property, or ordering the winding up or
liquidation of its affairs, and any such decree or order for relief
shall continue to be in effect, or any such other decree or order
shall be unstayed and in effect, for a period of 60 consecutive
days; or
(7) (a) the Company or any Significant Subsidiary commences a
voluntary case or proceeding under any applicable Bankruptcy Law or any
other case or proceeding to be adjudicated bankrupt or insolvent;
(b) the Company or any Significant Subsidiary consents to the
entry of a decree or order for relief in respect of the Company or such
Significant Subsidiary in an involuntary case or proceeding under any
applicable Bankruptcy Law or to the commencement of any bankruptcy or
insolvency case or proceeding against it;
(c) the Company or any Significant Subsidiary files a petition
or answer or consent seeking reorganization or relief under any applicable
federal or state law;
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(d) the Company or any Significant Subsidiary:
(i) consents to the filing of such petition or the
appointment of, or taking possession by, a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of
the Company or such Significant Subsidiary or of any substantial
part of its property;
(ii) makes an assignment for the benefit of
creditors; or
(iii) admits in writing its inability to pay its
debts generally as they become due; or
(e) the Company or any Significant Subsidiary takes any
corporate action in furtherance of any such actions in this clause (7).
SECTION 6.02. ACCELERATION. If an Event of Default (other than an Event of
Default specified in clauses (6) or (7) above with respect to the Company) shall
occur and be continuing, the Trustee or the Holders of at least 25% in principal
amount of outstanding Notes may declare the principal of and accrued interest on
all the Notes to be due and payable by notice in writing to the Company and the
Trustee specifying the respective Event of Default and that it is a "notice of
acceleration" (the "ACCELERATION NOTICE"), and the same shall become immediately
due and payable.
If an Event of Default specified in clauses (6) or (7) above with respect
to the Company occurs and is continuing, then all unpaid principal of, and
premium, if any, and accrued and unpaid interest on all of the outstanding Notes
shall IPSO FACTO become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder.
At any time after a declaration of acceleration with respect to the Notes
as described in the preceding paragraph, the Holders of a majority in principal
amount of the Notes may rescind and cancel such declaration and its
consequences:
(1) if the rescission would not conflict with any judgment or
decree;
(2) if all existing Events of Default have been cured or waived
except nonpayment of principal or interest that has become due solely
because of the acceleration;
(3) to the extent the payment of such interest is lawful,
interest on overdue installments of interest and overdue principal, which
has become due otherwise than by such declaration of acceleration, has been
paid;
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(4) if the Company has paid the Trustee its reasonable
compensation and reimbursed the Trustee for its expenses, disbursements and
advances; and
(5) in the event of the cure or waiver of an Event of Default of
the type described in clauses (6) or (7) of Section 6.01 hereof, the
Trustee shall have received an Officers' Certificate and an Opinion of
Counsel that such Event of Default has been cured or waived. No such
rescission shall affect any subsequent Default or impair any right
consequent thereto.
SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal, premium, if any, and interest on the Notes or to enforce the
performance of any provision of the Notes or this Supplemental Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder of a Note in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS. Holders of not less than a majority
in aggregate principal amount of the then outstanding Notes by notice in writing
to the Trustee may on behalf of the Holders of all of the Notes waive an
existing Default or Event of Default and its consequences hereunder, except a
continuing Default or Event of Default in the payment of the principal of,
premium, if any, or interest on, the Notes (including in connection with a
Change of Control Offer or other offer to purchase) (PROVIDED, HOWEVER, that the
Holders of a majority in aggregate principal amount of the then outstanding
Notes may rescind an acceleration and its consequences, including any related
payment default that resulted from such acceleration). Upon any such waiver,
such Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured for every purpose of this Supplemental
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY. Holders of a majority in principal
amount of the then outstanding Notes may, by written notice, direct the time,
method and place of conducting any proceeding for exercising any remedy
available to the Trustee or exercising any trust or power conferred on it.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Supplemental Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in any personal liability.
SECTION 6.06. LIMITATION ON SUITS. A Holder of a Note may pursue a remedy
with respect to this Supplemental Indenture or the Notes only if:
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(a) a Holder gives to the Trustee written notice of a continuing Event
of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability or
expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a written direction
inconsistent with the request.
A Holder may not use this Supplemental Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over another Holder.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Supplemental Indenture, the right of
any Holder to receive payment of principal, premium, if any, and interest on the
Notes so held, on or after the respective due dates expressed in the Notes
(including in connection with an offer to purchase), or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default specified
in Section 6.01(1) or (2) occurs and is continuing, the Trustee is authorized to
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount of principal of, premium, if any, and interest
remaining unpaid on the Notes and interest on overdue principal and, to the
extent lawful, interest and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel and
any amounts due the Trustee under Section 7.07 hereof.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee is authorized
to file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and the Holders allowed in any judicial
proceedings relative to the Company (or any other obligor upon the Notes), its
creditors or its property and shall be entitled and empowered to collect,
receive and distribute any money or other property payable or deliverable on any
such claims and any custodian in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee, and in the event
that the Trustee shall consent in writing to the making of such payments
directly to the Holders, to pay to the Trustee any amount due to it
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for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES. If the Trustee collects any money pursuant to
this Article, it shall pay out the money in the following order:
FIRST: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;
SECOND: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium, if any, and interest, ratably, without preference
or priority of any kind, according to the amounts due and payable on the
Notes for principal, premium, if any and interest, respectively; and
THIRD: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement of
any right or remedy under this Supplemental Indenture or in any suit against the
Trustee for any action taken or omitted by it as a Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07
hereof, or a suit by Holders of more than 10% in principal amount of the then
outstanding Notes.
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ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE. (a) If an Event of Default has occurred
and is continuing, the Trustee shall exercise such of the rights and powers
vested in it by this Supplemental Indenture, and use the same degree of care and
skill in its exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Supplemental Indenture and no
implied covenants or obligations shall be read into this Supplemental
Indenture against the Trustee; and
(ii) the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Supplemental Indenture in the absence of bad faith on
the Trustee's part; PROVIDED, HOWEVER, that the Trustee shall examine the
certificates and opinions to determine whether or not they substantially
conform to the requirements of this Supplemental Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a written
direction received by it pursuant to Section 6.05; and
(iv) the Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of
its duties under this Supplemental Indenture or in the exercise of any of
its rights or powers, if it has reasonable grounds to believe repayment of
the funds or adequate indemnity against the risk or liability is not
reasonably assured to it.
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(d) Every provision of this Supplemental Indenture relating to the
conduct or affecting the liability of or affording protection to the Trustee is
subject to the provisions of this Section 7.01 and to the provisions of the TIA.
(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money and
Government Securities held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) The Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
Holders of not less than a majority in principal amount of the Notes at the time
outstanding given pursuant to Section 6.05 of this Supplemental Indenture,
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred upon
the Trustee under this Supplemental Indenture.
SECTION 7.02. RIGHTS OF TRUSTEE. (a) The Trustee may rely on any document
believed by it to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel that conforms to Section 11.04.
The Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within its rights or
powers, except conduct that constitutes willful misconduct, negligence or bad
faith.
(e) The Trustee may consult with counsel, and the Trustee will not be
liable for any action it takes or omits in reliance on, and in accordance with,
written advice of counsel.
(f) The Trustee will not be required to investigate any facts or
matters stated in any document, but if it decides to investigate any matters or
facts, the Trustee or its agents or attorneys will be entitled to examine the
books, records and premises of the Company.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its individual
or any other capacity may become the owner or pledgee of Notes and may otherwise
deal with the
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Company or any Affiliate of the Company with the same rights it would have if it
were not Trustee. Any Paying Agent, Registrar, co-registrar or co-paying agent
may do the same with like rights. However, the Trustee must comply with Sections
7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee (i) is not responsible for
and makes no representation as to the validity or adequacy of this Supplemental
Indenture, (ii) shall not be accountable for the Company's use of the proceeds
from the Notes and (iii) shall not be responsible for any statement of the
Company in this Supplemental Indenture, other than the Trustee's certificate of
authentication, or in any prospectus used in the sale of any of the Notes, other
than statements, if any, provided in writing by the Trustee for use in such
prospectus.
SECTION 7.05. NOTICE OF DEFAULTS. The Trustee will give to the Holders
notice of any Default with regard to the Notes actually known to a Responsible
Officer within 90 days after receipt of such knowledge and in the manner and to
the extent provided in TIA Section 313(c), and otherwise as provided in Section
11.02 of this Supplemental Indenture; PROVIDED, HOWEVER, that except in the case
of a Default in payment of the principal of, premium, if any, or interest on any
Note, the Trustee will be protected in withholding notice of Default if and so
long as a committee of its Responsible Officers in good faith determines that
withholding of the notice is in the interests of the Holders of the Notes.
SECTION 7.06. REPORTS BY TRUSTEE. Within 60 days after each October 15
beginning with the October 15 following the date of this Supplemental Indenture,
the Trustee will mail to each Holder, at the name and address which appears on
the registration books of the Company, and to each Holder who has, within the
two years preceding the mailing, filed that person's name and address with the
Trustee for that purpose and each Holder whose name and address have been
furnished to the Trustee pursuant to Section 2.05, a brief report dated as of
that October 15 which complies with TIA Section 313(a). Reports to Noteholders
pursuant to this Section 7.06 shall be transmitted in the manner and to the
extent provided in TIA Section 313(c). The Trustee also will comply with TIA
Section 313(b).
A copy of each report will at the time of its mailing to Holders be filed
with each stock exchange on which the Notes are listed and also with the SEC.
The Company will promptly notify the Trustee when the Notes are listed on any
stock exchange and of any delisting of the Notes.
SECTION 7.07. COMPENSATION AND INDEMNITY. The Company shall pay to the
Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts.
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The Company shall indemnify the Trustee against any and all loss, liability
or expense (including reasonable attorney's fees) incurred by it in connection
with the administration of the trust created by this Supplemental Indenture and
the performance of its duties under this Supplemental Indenture. The Trustee
shall notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder. The Company shall defend the claim and the Trustee
may have separate counsel and the Company shall pay the fees and expenses of
such counsel. The Company need not pay for any settlement made without its
consent. The Company need not reimburse any expense or indemnify against any
loss, expense or liability incurred by the Trustee to the extent it is due to
the Trustee's own willful misconduct, negligence or bad faith.
To secure the Company's obligations to make payments to the Trustee under
this Section 7.07, the Trustee shall have a Lien prior to the Notes on all money
or property held or collected by the Trustee, other than money or property held
in trust to pay principal or interest on particular Notes. Those obligations of
the Company shall survive the satisfaction and discharge of this Supplemental
Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Sections 6.01(6) or (7) hereof occurs, the expenses and the
compensation for the services of the Trustee are intended to constitute expenses
of administration under any Bankruptcy Law.
For purposes of this Section 7.07, "Trustee" will include any predecessor
Trustee, but the willful misconduct, negligence or bad faith of any Trustee
shall not affect the rights of any other Trustee under this Section 7.07.
SECTION 7.08. REPLACEMENT OF TRUSTEE. The Trustee may resign at any time
by so notifying the Company. The Holders of a majority in aggregate principal
amount of the then outstanding Notes may remove the Trustee by so notifying the
Trustee and the Company and may appoint a successor Trustee. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in aggregate principal amount of
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the then outstanding Notes may appoint a successor Trustee to replace the
successor Trustee appointed by the Company.
No removal or appointment of a Trustee will be valid if that removal or
appointment would conflict with any law applicable to the Company.
A successor Trustee will deliver a written acceptance of its appointment to
the retiring Trustee and to the Company. Immediately after that, the retiring
Trustee will, subject to the Lien provided for in Section 7.07, transfer all
property held by it as Trustee to the successor Trustee, the resignation or
removal of the retiring Trustee will become effective, and the successor Trustee
will have all the rights, powers and duties of the Trustee under this
Supplemental Indenture. A successor Trustee will mail notice of its succession
to each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in aggregate principal amount of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this Section,
the Company's obligations under Section 7.07 shall continue for the benefit of
the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust assets to, another Person, the resulting, surviving
or transferee Person will, without any further act, be the successor Trustee.
If at the time a successor by merger, conversion or consolidation to the
Trustee succeeds to the trusts created by this Supplemental Indenture any of the
Notes have been authenticated but not delivered, the successor to the Trustee
may adopt the certificate of authentication of the predecessor Trustee, and
deliver the Notes which were authenticated by the predecessor Trustee; and if at
that time any of the Notes have not been authenticated, the successor to the
Trustee may authenticate those Notes in its own name as the successor to the
Trustee; and in either case the certificates of authentication will have the
full force provided in this Supplemental Indenture for certificates of
authentication.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee will at all times
satisfy the requirements of TIA Section 310(a). The Trustee will at all times
have (or shall be a member of a bank holding company system whose parent
corporation has) a combined capital and surplus
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of at least $50,000,000 as set forth in its most recently published annual
report of condition, which will be deemed for this paragraph to be its combined
capital and surplus. The Trustee will comply with TIA Section 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS. The Trustee shall comply
with TIA Section 311(a), excluding any creditor relationship listed in TIA
Section 311(b). A Trustee who has resigned or been removed shall be subject to
TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by a Board
Resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE. Upon the Company's exercise
under Section 8.01 hereof of the option applicable to this Section 8.02, the
Company shall, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, be deemed to have been discharged from its obligations with
respect to all outstanding Notes on the date the conditions set forth below are
satisfied (hereinafter, "LEGAL DEFEASANCE"). For this purpose, Legal Defeasance
means that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes, which shall thereafter be
deemed to be "outstanding" only for the purposes of Section 8.05 hereof and the
other Sections of this Supplemental Indenture referred to in (a) and (b) below,
and to have satisfied all its other obligations under such Notes and this
Supplemental Indenture (and the Trustee, on written demand of and at the expense
of the Company, shall execute proper instruments acknowledging the same), except
for the following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of outstanding Notes to receive
solely from the trust fund described in Section 8.04 hereof, and as more fully
set forth in such Section, payments in respect of the principal of, premium, if
any, and interest on such Notes when such payments are due, (b) the Company's
obligations with respect to such Notes under Article 2 and Section 4.02 hereof,
(c) the rights, powers, trusts, duties and immunities of the Trustee hereunder
and the Company's obligations in connection therewith and (d) this Article 8.
Subject to compliance with this Article 8, the Company may exercise its option
under this Section 8.02 notwithstanding the prior exercise of its option under
Section 8.03 hereof.
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SECTION 8.03. COVENANT DEFEASANCE. Upon the Company's exercise under
Section 8.01 hereof of the option applicable to this Section 8.03, the Company
shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be released from its obligations under the covenants contained in
Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.14, 4.15, 4.16, 4.17, 4.18 hereof and
clause (2) of Section 5.01 hereof with respect to the outstanding Notes on and
after the date the conditions set forth in Section 8.04 are satisfied
(hereinafter, "COVENANT DEFEASANCE"), and the Notes shall thereafter be deemed
not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Notes shall not
be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01 hereof, but, except as specified
above, the remainder of this Supplemental Indenture and such Notes shall be
unaffected thereby. In addition, upon the Company's exercise under Section 8.01
hereof of the option applicable to this Section 8.03 hereof, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(4) and (5) hereof shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE. The following
shall be the conditions to the application of either Section 8.02 or 8.03 hereof
to the outstanding U.S. Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in United States dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and interest on the
outstanding Notes on the stated date for payment thereof or on the applicable
redemption date, as the case may be, and any other amounts owing under this
Supplemental Indenture, if in the case of an optional redemption date prior to
electing to exercise either Legal Defeasance or Covenant Defeasance, the Company
has delivered to the Trustee an irrevocable notice to redeem all of the
outstanding Notes on such redemption date;
(b) in the case of an election under Section 8.02 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (i) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (ii) since the date of this Supplemental Indenture, there has been a
change in the applicable federal income tax law, in either case to the effect
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that, and based thereon such Opinion of Counsel shall confirm that, the Holders
of the outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as Events of Default from
bankruptcy or insolvency events are concerned, at any time in the period ending
on the 91st day after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under this Supplemental
Indenture or any other material agreement or instrument to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company or others;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance, as the case may be, have been complied with; and
(h) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that, assuming no intervening bankruptcy of the Company
between the date of deposit and the 91st day following the date of deposit and
that no Holder is an insider of the Company, after the 91st day following the
date of deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally.
Notwithstanding the foregoing, the opinion of counsel required by clause
(b) above with respect to Legal Defeasance need not be delivered if all Notes
not theretofore delivered to the Trustee for cancellation (1) have become due
and payable or (2) will become due and payable on the maturity date within one
year under arrangements satisfactory to the Trustee
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for the giving of notice of redemption by the Trustee in the name, and at the
expense, of the Company.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS. Subject to Section 8.06 hereof, all money
and non-callable Government Securities (including the proceeds thereof)
deposited with the Trustee pursuant to Section 8.04 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Supplemental Indenture, to
the payment, either directly or through any Paying Agent (including the Company
acting as Paying Agent) as the Trustee may determine, to the Holders of such
Notes of all sums due and to become due thereon in respect of principal,
premium, if any, and interest, but such money need not be segregated from other
funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the written request
of the Company any money or non-callable Government Securities held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(a) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
SECTION 8.06. REPAYMENT TO COMPANY. Any money deposited with the Trustee
or any Paying Agent, or then held by the Company, in trust for the payment of
the principal of, premium, if any, or interest on any Note and remaining
unclaimed for two years after such principal, and premium, if any, or interest
has become due and payable shall be paid to the Company on its written request
or (if then held by the Company) shall be discharged from such trust; and the
Holder of such Note shall thereafter look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in the NEW YORK TIMES and THE WALL STREET
JOURNAL (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
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SECTION 8.07. REINSTATEMENT. If the Trustee or Paying Agent is unable to
apply any United States dollars or non-callable Government Securities in
accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the Company's
obligations under this Supplemental Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03
hereof until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 8.02 or 8.03 hereof, as the case may be;
PROVIDED, HOWEVER, that, if the Company makes any payment of principal of,
premium, if any, or interest on any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or Paying
Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES. Notwithstanding
Section 9.02 of this Supplemental Indenture, the Company and the Trustee may
amend or supplement this Supplemental Indenture or the Notes without the consent
of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency that does not
adversely affect in any material respect the rights hereunder of any Holder of
the Notes;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes or to alter the provisions of Article 2 hereof (including the
related definitions) in a manner that does not materially adversely affect any
Holder;
(c) to provide for the assumption of the Company's obligations to the
Holders by a successor to the Company pursuant to Article 5 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect in any
material respect the rights hereunder of any Holder of the Notes;
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Supplemental Indenture under the TIA; or
(f) to evidence and provide for the acceptance of appointment under
this Supplemental Indenture of a successor Trustee.
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Upon the written request of the Company accompanied by, to the extent
necessary, a Board Resolution authorizing the execution of any such amended or
supplemental Supplemental Indenture, and upon receipt by the Trustee of the
documents described in Section 7.02 hereof, the Trustee shall join with the
Company in the execution of any amended or supplemental Supplemental Indenture
authorized or permitted by the terms of this Supplemental Indenture and to make
any further appropriate agreements and stipulations that may be therein
contained, but the Trustee shall not be obligated to enter into such amended or
supplemental Supplemental Indenture that affects its own rights, duties or
immunities under this Supplemental Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES. Except as provided below
in this Section 9.02, the Company and the Trustee may amend or supplement this
Supplemental Indenture (including Section 4.13 hereof), and the Notes with the
written consent of the Holders of at least a majority in principal amount of the
Notes then outstanding voting as a single class (including consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the
Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or
Event of Default (other than a Default or Event of Default in the payment of the
principal of, premium, if any, or interest on the Notes, except a payment
default resulting from an acceleration that has been rescinded) or compliance
with any provision of this Supplemental Indenture or the Notes may be waived
with the written consent of the Holders of a majority in principal amount of the
then outstanding Notes voting as a single class (including consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the
Notes).
Upon the written request of the Company accompanied by a Board Resolution
authorizing the execution of any such amended or supplemental Supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee shall
join with the Company in the execution of such amended or supplemental
Supplemental Indenture unless such amended or supplemental Supplemental
Indenture directly affects the Trustee's own rights, duties or immunities under
this Supplemental Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such amended or
supplemental Supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such amended or supplemental
Supplemental Indenture or waiver. Subject to Sections 6.04 and
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6.07 hereof, the Holders of a majority in aggregate principal amount of the
Notes then outstanding voting as a single class may waive in writing compliance
in a particular instance by the Company with any provision of this Supplemental
Indenture or the Notes. However, without the written consent of each Holder
affected, an amendment or waiver under this Section 9.02 may not (with respect
to any Notes held by a non-consenting Holder):
(a) reduce the amount of Notes whose Holders must consent to an
amendment;
(b) reduce the rate of or change or have the effect of changing the
time for payment of interest, including defaulted interest, on any Notes;
(c) reduce the principal of or change or have the effect of changing
the fixed maturity of any Notes, or change the date on which any Notes may be
subject to redemption or reduce the redemption price therefor;
(d) make any Notes payable in money other than that stated in the
Notes;
(e) make any change in provisions of this Supplemental Indenture
protecting the right of each Holder to receive payment of principal of and
interest on such Note on or after the due date thereof or to bring suit to
enforce such payment, or permitting Holders of a majority in principal amount of
Notes to waive Defaults or Events of Default;
(f) after the Company's obligation to purchase Notes arises thereunder,
amend, change or modify in any material respect the obligation of the Company to
make and consummate a Change of Control Offer in the event of a Change of
Control, modify any of the provisions or definitions with respect thereto; or
(g) modify or change any provision of this Supplemental Indenture or
the related definitions affecting the subordination or ranking of the Notes in a
manner which adversely affects the Holders.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment or
supplement to this Supplemental Indenture or the Notes shall be set forth in a
amended or supplemental Supplemental Indenture that complies with the TIA as
then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS. Until an amendment,
supplement or waiver becomes effective, a consent to it by a Holder is a
continuing consent by the Holder of a Note and every subsequent Holder of a Note
or portion of a Note that evidences the same debt as the consenting Holder's
Note, even if notation of the consent is not made on any Note. However, any such
Holder or subsequent Holder may revoke the consent as to its Note if the Trustee
receives written notice of revocation before the date the waiver, supplement or
amendment becomes effective. An amendment, supplement or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
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SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES. The Trustee may place an
appropriate notation about an amendment, supplement or waiver on any Note
thereafter authenticated. The Company in exchange for all Notes may issue and
the Trustee shall, upon receipt of an Authentication Order, authenticate new
Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC. The Trustee shall sign any
amended or supplemental Supplemental Indenture authorized pursuant to this
Article 9 if the amendment or supplement does not adversely affect the rights,
duties, liabilities or immunities of the Trustee. The Company may not sign an
amendment or supplemental Supplemental Indenture until the Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully
protected in relying conclusively upon, in addition to the documents required by
Section 11.04 hereof, an Officer's Certificate and an Opinion of Counsel stating
that the execution of such amended or supplemental indenture is authorized or
permitted by this Supplemental Indenture.
ARTICLE 10
SATISFACTION AND DISCHARGE
SECTION 10.01. SATISFACTION AND DISCHARGE. This Supplemental Indenture will
be discharged and will cease to be of further effect (except as to surviving
rights or registration of transfer or exchange of the Notes, as expressly
provided for in this Supplemental Indenture) as to all outstanding Notes, when:
(a) either:
(i) all the Notes theretofore authenticated and
delivered (except lost, stolen or destroyed Notes that have been
replaced or paid and Notes for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from
such trust) have been delivered to the Trustee for cancellation; or
(ii) all Notes not theretofore delivered to the
Trustee for cancellation have become due and payable and the
Company has irrevocably deposited or caused to be deposited with
the Trustee funds in an amount
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sufficient to pay and discharge the entire Indebtedness on the
Notes not theretofore delivered to the Trustee for cancellation,
for principal of, premium, if any, and interest on the Notes to the
date of deposit together with irrevocable instructions from the
Company directing the Trustee to apply such funds to the payment
thereof at maturity or redemption, as the case may be;
(b) the Company has paid all other sums payable under this Supplemental
Indenture by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel stating that all conditions precedent under this
Supplemental Indenture relating to the satisfaction and discharge of this
Supplemental Indenture have been complied with.
SECTION 10.02. APPLICATION OF TRUST MONEY. Subject to the provisions of
Section 8.06, all money deposited with the Trustee pursuant to Section 10.01
shall be held in trust and applied by it, in accordance with the provisions of
the Notes and this Supplemental Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying Agent)
as the Trustee may determine, to the Persons entitled thereto, of the principal
(and premium, if any) and interest for whose payment such money has been
deposited with the Trustee; but such money need not be segregated from other
funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or Government
Securities in accordance with Section 10.01 by reason of any legal proceeding or
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
obligations under this Supplemental Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 10.01; PROVIDED
that if the Company has made any payment of principal of, premium, if any, or
interest on any Notes because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or Government Securities held by the Trustee
or Paying Agent.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS. If any provision of this
Supplemental Indenture limits, qualifies or conflicts with the duties imposed by
TIA Section 318(c), the imposed duties shall control.
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SECTION 11.02. NOTICES. Any notice or communication by the Company or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the others' address:
If to the Company:
iStar Financial Inc.
1114 Avenue of the Americas, 27th Floor
New York, NY 10036
Facsimile: (212) 930-9494
Attention: Chief Executive Officer
With a copy to:
Clifford Chance US LLP
200 Park Avenue, 52nd Floor
New York, NY 10166-0153
Facsimile: (212) 878-8375
Attention: Kathleen L. Werner, Esq.
If to the Trustee:
US Bank Trust National Association
100 Wall Street, 19th Floor
New York, NY 10005
Attention: Angelita Pena, Corporate Trust Department
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
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If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
SECTION 11.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF
NOTES. Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Supplemental Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon any
request or application by the Company to the Trustee to take any action under
this Supplemental Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Supplemental
Indenture relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 11.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Supplemental Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA
Section 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
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SECTION 11.06. RULES BY TRUSTEE AND AGENTS. The Trustee may make reasonable
rules for action by or at a meeting of Holders. The Registrar or Paying Agent
may make reasonable rules and set reasonable requirements for its functions.
SECTION 11.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS. No past, present or future director, officer, employee,
incorporator or stockholder of the Company, as such, shall have any liability
for any obligations of the Company under the Notes, this Supplemental Indenture
or for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes.
SECTION 11.08. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE AND THE NOTES
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This
Supplemental Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Supplemental Indenture.
SECTION 11.10. SUCCESSORS. All agreements of the Company in this
Supplemental Indenture and the Notes shall bind its successors. All agreements
of the Trustee in this Supplemental Indenture shall bind its successors.
SECTION 11.11. SEVERABILITY. In case any provision in this Supplemental
Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 11.12. COUNTERPART ORIGINALS. The parties may sign any number of
copies of this Supplemental Indenture. Each signed copy shall be an original,
but all of them together represent the same agreement.
SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC. The Table of Contents,
Cross-Reference Table and Headings of the Articles and Sections of this
Supplemental Indenture have been inserted for convenience of reference only, are
not to be considered a part of this Supplemental Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 11.14. CONFLICTS WITH INDENTURE. If any provision of this
Supplemental Indenture is inconsistent with any provision of the Indenture, the
provision of this Supplemental Indenture will control with regard to the Notes.
-70-
<Page>
[Signatures on following page]
-71-
<Page>
SIGNATURES
Dated as of March 14, 2003
iSTAR FINANCIAL INC.
By: /s/ Catherine D. Rice
-----------------------------------
Name: Catherine D. Rice
Title: Chief Financial Officer
US BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Trustee
By: /s/ Angelita Pena
-----------------------------------
Name: Angelita Pena
Title: Assistant Vice President
<Page>
EXHIBIT A
[Face of Note]
[INSERT THE GLOBAL NOTE LEGEND, IF APPLICABLE PURSUANT TO THE PROVISIONS OF THE
SUPPLEMENTAL INDENTURE]
CUSIP/CINS 45031UAA9
7.0% Senior Notes due 2008
No. ___ $___________
iSTAR FINANCIAL INC.
promises to pay to __________________________, or registered assigns, the
principal sum of ____
Dollars on March 15, 2008.
Interest Payment Dates: March 15 and September 15
Record Dates: March 1 and September 1
Dated: [ ]
iSTAR FINANCIAL INC.
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
SEAL
This is one of the Notes referred to
in the within-mentioned Supplemental Indenture:
US BANK TRUST NATIONAL ASSOCIATION
as Trustee
By:
------------------------------------
Authorized Signatory
<Page>
[Back of Note]
7.0% Senior Notes due 2008
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST. iStar Financial Inc., a Maryland corporation (the "COMPANY"),
promises to pay interest on the principal amount of this Note at 7.0% per annum
from March 14, 2003 until maturity. The Company will pay interest semi-annually
in arrears on March 15 and September 15 of each year, or if any such day is not
a Business Day, on the next succeeding Business Day (each an "INTEREST PAYMENT
DATE"). Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from March 14, 2003;
PROVIDED that if there is no existing Default in the payment of interest, and if
this Note is authenticated between a record date referred to on the face hereof
and the next succeeding Interest Payment Date, interest shall accrue from such
next succeeding Interest Payment Date; PROVIDED, FURTHER, that the first
Interest Payment Date shall be September 15, 2003. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at the rate then in effect; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes (except
defaulted interest) to the Persons who are registered Holders of Notes at the
close of business on the March 1 or September 1 next preceding the Interest
Payment Date, even if such Notes are canceled after such record date and on or
before such Interest Payment Date, except as provided in Section 2.12 of the
Indenture with respect to defaulted interest. The Notes will be payable as to
principal, premium, if any, and interest at the office or agency of the Company
maintained for such purpose within or without the City and State of New York,
or, at the option of the Company, payment of interest may be made by check
mailed to the Holders at their addresses set forth in the register of Holders,
and PROVIDED that payment by wire transfer of immediately available funds will
be required with respect to principal of and interest, and premium, if any, on,
all Global Notes and all other Notes the Holders of which shall have provided
wire transfer instructions to the Company or the Paying Agent. Such payment
shall be in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts. The Company
reserves the right to pay interest to Holders of Notes by check mailed to such
Holders at their registered addresses or by wire transfer to Holders of at least
$5 million aggregate principal amount of Notes.
3. PAYING AGENT AND REGISTRAR. Initially, US Bank Trust National
Association, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
<Page>
4. INDENTURE. The Company issued the Notes under an Indenture dated as of
February 5, 2001, as amended and supplemented, including as supplemented by a
Supplemental Indenture dated as of March 14, 2003 (collectively, the
"INDENTURE") between the Company and the Trustee. The terms of the Notes include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939, as amended (15 U.S. Code Sections
77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred
to the Indenture and such Act for a statement of such terms. To the extent any
provision of this Note conflicts with the express provisions of the Indenture,
the provisions of the Indenture shall govern and be controlling. The Notes are
obligations of the Company. The Company is issuing $150.0 million in aggregate
principal amount on the Issue Date and may issue Additional Notes in accordance
with the terms of the Indenture.
5. OPTIONAL REDEMPTION.
OPTIONAL REDEMPTION. (a) At any time on or prior to March 15, 2008, the
Notes may be redeemed or purchased in whole but not in part at the Company's
option at a price equal to 100% of the principal amount thereof plus the
Applicable Premium as of, and accrued but unpaid interest, if any, to, the date
of redemption or purchase (the "REDEMPTION DATE") (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date). Such redemption or purchase may be made upon
notice mailed by first-class mail to each Holder's registered address, not less
than 30 nor more than 60 days prior to the Redemption Date.
"APPLICABLE PREMIUM" means, with respect to a Note at any Redemption Date,
the greater of: (1) 1.0% of the principal amount of such Note; and (2) the
excess of (a) the present value at such Redemption Date of (i) the redemption
price of such Note on March 15, 2008 plus (ii) all required remaining scheduled
interest payments due on such Note through March 15, 2008, computed using a
discount rate equal to the Treasury Rate plus 50 basis points; over (b) the
principal amount of such Note on such Redemption Date. Calculation of the
Applicable Premium will be made by the Company or on behalf of the Company by
such Person as the Company shall designate; PROVIDED, HOWEVER, that such
calculation shall not be a duty or obligation of the Trustee.
"TREASURY RATE" means, with respect to a Redemption Date, the yield to
maturity at the time of computation of United States Treasury securities with a
constant maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15(519) that has become publicly available at least two
Business Days prior to such Redemption Date (or, if such Statistical Release is
no longer published, any publicly available source of similar market data)) most
nearly equal to the period from such Redemption Date to March 15, 2008;
PROVIDED, HOWEVER, that if the period from such Redemption Date to March 15,
2008 is not equal to the constant maturity of the United States Treasury
security for which a weekly average yield is given, the Treasury Rate shall be
obtained by linear interpolation (calculated to the nearest one-twelfth of a
year) from the weekly average yields of United States Treasury securities for
which such yields are given, except that if the period from such Redemption Date
to March 15, 2008 is less than one year, the weekly average yield on actually
traded United States Treasury securities adjusted to a constant maturity of one
year shall be used.
<Page>
OPTIONAL REDEMPTION UPON EQUITY OFFERINGS. At any time, or from time to
time, on or prior to March 15, 2006, the Company may, at its option, use the net
cash proceeds of one or more Equity Offerings to redeem up to 35% of the
principal amount of the Notes issued under the Indenture at a redemption price
of 107% of the principal amount thereof plus accrued and unpaid interest
thereon, if any, to the date of redemption; PROVIDED that:
(1) at least 65% of the principal amount of Notes issued under the
Indenture remains outstanding immediately after any such redemption; and
(2) the Company makes such redemption not more than 60 days after the
consummation of any such Equity Offering.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall not be required
to make mandatory redemption payments with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
Upon the occurrence of a Change of Control, the Company will be required to
offer to purchase all of the outstanding Notes at a purchase price equal to 101%
of the principal amount thereof, plus accrued and unpaid interest, if any,
thereon to the date of repurchase.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company and the Trustee may require a Holder to pay any taxes and fees required
by law or permitted by the Indenture. The Company need not exchange or register
the transfer of any Note or portion of a Note selected for redemption, except
for the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated
as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the written consent
of the
<Page>
Holders of at least a majority in principal amount of the then outstanding Notes
voting as a single class, and any existing default or compliance with any
provision of the Indenture or the Notes may be waived with the written consent
of the Holders of a majority in principal amount of the then outstanding Notes
voting as a single class. Without the consent of any Holder of a Note, the
Indenture or the Notes may be amended or supplemented to cure any ambiguity,
defect or inconsistency, to provide for uncertificated Notes in addition to or
in place of certificated Notes, to provide for the assumption of the Company's
obligations to Holders of the Notes in case of a merger or consolidation, to
make any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect in any material respects
the rights under the Indenture of any such Holder, to comply with the
requirements of the SEC in order to effect or maintain the qualification of the
Indenture under the Trust Indenture Act or to evidence and provide for the
acceptance of appointment under the Indenture of a successor Trustee.
12. DEFAULTS AND REMEDIES. Events of Default are set forth in the
Indenture. If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable. Notwithstanding the foregoing, in
the case of an Event of Default arising from certain events of bankruptcy or
insolvency, all outstanding Notes will become due and payable without further
action or notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a majority
in principal amount of the then outstanding Notes may direct the Trustee in
writing in its exercise of any trust or power. The Trustee may withhold from
Holders of the Notes notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal or
interest) if it determines that withholding notice is in their interest. The
Holders of a majority in aggregate principal amount of the Notes then
outstanding by written notice to the Trustee may on behalf of the Holders of all
of the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes. The Company is required
to deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. A director, officer, employee, incorporator
or stockholder, of the Company, as such, shall not have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the Notes.
<Page>
15. AUTHENTICATION. This Note shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
<Page>
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
iStar Financial Inc.
1114 Avenue of the Americas, 27th Floor
New York, NY 10036
Attention: Investor Relations
<Page>
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: __________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
------------------
Your Signature:
-----------------------------
(Sign exactly as your name
appears on the face of this
Note)
Signature Guarantee*:
------------------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
<Page>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.13 of the Indenture, check the following box : / /
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.13 of the Indenture, state the amount you elect to have
purchased:
$______________
Date:
------------------
Your Signature:
-----------------------------
(Sign exactly as your name
appears on the face of this
Note)
Tax Identification No.:
--------------------
Signature Guarantee*:
----------------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
<Page>
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
<Table>
<Caption>
PRINCIPAL AMOUNT
AMOUNT OF AMOUNT OF OF THIS GLOBAL NOTE SIGNATURE OF
DECREASE IN INCREASE IN FOLLOWING SUCH AUTHORIZED OFFICER
PRINCIPAL AMOUNT PRINCIPAL AMOUNT DECREASE OF TRUSTEE OR NOTE
DATE OF EXCHANGE OF THIS GLOBAL NOTE OF THIS GLOBAL NOTE (OR INCREASE) CUSTODIAN
- ---------------- ------------------- ------------------- ------------------- ------------------
</Table>