As filed with the Office of the Securities and
Exchange Commission on May 16, 2024
Registration No. 333-______
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
SHORE BANCSHARES, INC.
(Exact Name of Registrant as Specified in Its Charter)
| Maryland |
|
52-1974638 |
| (State or other jurisdiction of incorporation) |
|
(I.R.S. Employer Identification Number) |
18 E. Dover Street, Easton, Maryland 21601
(Address, including zip code, and telephone number,
including area code of registrant’s principal executive offices)
James M. Burke
President and Chief Executive Officer
Shore Bancshares, Inc.
18 E. Dover Street, Easton, Maryland 21601
(410) 763-7800
(Name, address, including zip code, and telephone
number including area code, of agent for service)
Copies to:
Kevin M. Houlihan, Esq.
William H. Levay, Esq.
Holland & Knight LLP
800
17th Street, NW
Suite 1100
Washington, DC 20006
(202) 469-5269
Approximate
date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement.
If
the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please
check the following box. ¨
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check
the following box. x
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act registration statement number of the earlier effective registration statement
for the same offering. ¨
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box
and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If
this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become
effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ¨
If
this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register
additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following
box. ¨
Indicate by check mark whether
the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging
growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company”
and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large
accelerated filer ¨ |
Accelerated
filer x |
| Non-accelerated
filer ¨ |
Smaller
reporting company x |
| |
Emerging
growth company ¨ |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ¨
The registrant hereby amends this registration
statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment that
specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until this registration statement shall become effective on such date as the Securities and Exchange
Commission, acting pursuant to Section 8(a), may determine.
The information contained in this
prospectus is not complete and may be changed. We may not sell these securities or accept your offer to buy any of them until the documentation
filed with the Securities and Exchange Commission relating to these securities has been declared “effective” by the Securities
and Exchange Commission. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted or legal.
SUBJECT TO COMPLETION, DATED MAY 16,
2024
Prospectus
$175,000,000
Common Stock
Preferred Stock
Depositary Shares
Debt Securities
Warrants
Units
We may offer and sell from
time to time, in one or more offerings, together or separately, any combination of our common stock, preferred stock, which we may issue
in one or more series, depositary shares, debt securities, warrants and units, up to a maximum offering price of $175,000,000. This prospectus
provides you with a general description of these securities and the general manner in which we will offer these securities. Each time
we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The
prospectus supplement may also add, update or change information contained in this prospectus.
You should read both this
prospectus and any prospectus supplement, together with additional information described under the headings “Incorporation of Certain
Information by Reference” beginning on page 1 of this prospectus and “Where You Can Find More Information” beginning
on page 2 of this prospectus, before you make your investment decision.
Our common stock is listed
on the NASDAQ Global Select Market under the symbol “SHBI.” On May 13, 2024, the closing price of our common stock on
the NASDAQ Global Select Market was $11.09 per share.
Investing in our securities
involves certain risks. You should carefully review the risks and uncertainties described under the heading “Risk Factors”
beginning on page 5 of this prospectus, and the risk factors that may be included in a prospectus supplement and in our periodic
reports and other information we file with the Securities and Exchange Commission and incorporated by reference herein.
NEITHER THE SECURITIES
AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SECURITIES OFFERED
HEREBY WILL BE EITHER OUR EQUITY SECURITIES OR UNSECURED OBLIGATIONS OF OUR COMPANY AND WILL NOT BE DEPOSITS OR SAVINGS ACCOUNTS OR OTHER
OBLIGATIONS OF ANY BANK OR NON-BANK SUBSIDIARY OF SHORE BANCSHARES, INC., AND THEY ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY OR INSTRUMENTALITY.
Our principal executive office
is located at 18 E. Dover Street, Easton, Maryland 21601 and our telephone number is (410) 763-7800.
This prospectus may not be
used to sell securities unless it is accompanied by a prospectus supplement.
The date of this prospectus is , 2024
TABLE OF CONTENTS
We have not authorized
anyone to provide you with different information or make any statement that differs from what is in this prospectus. No dealer, salesperson
or other person is authorized to give any information or to represent anything not contained or incorporated by reference in this prospectus.
You must not rely on any unauthorized information or representation. This prospectus is an offer to sell only the securities offered hereby,
but only under circumstances and in jurisdictions where it is lawful to do so. You should assume that the information in this prospectus
and in any prospectus supplement is accurate only as of the date on the front of the document and that any information we have incorporated
by reference is accurate only as of the date of the document incorporated by reference, regardless of the time of delivery of this prospectus,
any prospectus supplement or any sale of a security.
ABOUT THIS PROSPECTUS
This prospectus is part of
a registration statement that we filed with the Securities and Exchange Commission, or SEC, using a “shelf” registration process.
Under this shelf registration process, we may from time to time offer and sell, either separately or together, any combination of the
securities described in this prospectus in one or more offerings. We may also issue any of the common stock, preferred stock, depositary
shares, debt securities, warrants or units upon conversion, exchange or exercise of any of the securities mentioned above. The aggregate
amount of securities that we may offer under the registration statement is $175,000,000, denominated in U.S. dollars.
This prospectus provides
you with a general description of the securities we may offer and sell. Each time we offer securities under this prospectus, we will
provide a prospectus supplement that will contain more specific information about the terms of that particular offering. The prospectus
supplement may also add, update or change information contained in this prospectus. To the extent information in this prospectus is inconsistent
with information contained in a prospectus supplement, you should rely on the information in the prospectus supplement. You should carefully
read both this prospectus, especially the section entitled “Risk Factors” beginning on page 5, and any prospectus supplement
before making a decision to invest in any of the securities. You should also carefully read the additional information incorporated by
reference herein described below under the headings “Incorporation of Certain Information by Reference” and “Where
You Can Find More Information” before making a decision to invest in any of the securities.
The registration statement
that contains this prospectus, including the exhibits to the registration statement, contains additional information about us and the
securities offered under this prospectus. That registration statement can be read at the SEC’s website at http://www.sec.gov, our
website at www.shorebancshares.com, or at the SEC offices, which are mentioned in this prospectus under the heading “Where You Can
Find More Information.” The reference to our website is not intended to be an active link and the information on, or that can be
accessed through, our website is not, and you must not consider the information to be, a part of this prospectus or any other filings
we make with the SEC.
Unless otherwise mentioned
or unless the context requires otherwise, all references in this prospectus to “Shore Bancshares,” “the Company,”
“we,” “us,” “our” and similar terms refer to Shore Bancshares, Inc.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC’s rules allow
us to “incorporate by reference” information we have filed with the SEC into this prospectus. This means that we can disclose
important information to you by referring you to another document. Any information referred to in this way is considered part of this
prospectus from the date we file the document. Any reports filed by us with the SEC after the date of this prospectus and before the date
that the offering of the securities by means of this prospectus is terminated will automatically update and, where applicable, supersede
any information contained in this prospectus or incorporated by reference in this prospectus.
We incorporate by reference
into this prospectus the following documents and information filed with the SEC (other than, in each case, documents or information deemed
to have been furnished and not filed in accordance with SEC rules):
In addition, all documents
that we file pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the initial filing date of the registration
statement to which this prospectus relates and prior to the termination of the offering of the securities to which this prospectus relates
will automatically be deemed to be incorporated by reference into this prospectus. In no event, however, will any of the information that
we “furnish” to the SEC under Items 2.02, 7.01 or 8.01 of any Current Report on Form 8-K from time to time be incorporated
by reference into, or otherwise be included in, this prospectus. Any statement contained in a document incorporated or deemed to be incorporated
by reference in this prospectus shall be deemed to be modified or superseded to the extent that a statement contained in this prospectus
or in a document subsequently filed modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this prospectus.
Upon written or oral request
made to us at the address or telephone number below, we will, at no cost to the requester, provide to each person, including any beneficial
owner, to whom this prospectus is delivered, a copy of any or all of the information that has been incorporated by reference in this prospectus
(other than an exhibit to a filing, unless that exhibit is specifically incorporated by reference into that filing), but not delivered
with this prospectus.
Shore Bancshares, Inc.
Attn: Corporate Secretary
18 E. Dover Street, Easton, Maryland 21601
(410) 763-7800
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is a part
of a registration statement on Form S-3 filed by us with the SEC under the Securities Act of 1933, as amended, or the Securities
Act. This prospectus does not contain all the information set forth in the registration statement, certain parts of which are omitted
in accordance with the rules and regulations of the SEC. For further information with respect to us and the securities offered by
this prospectus, reference is made to the registration statement. Statements contained in this prospectus concerning the provisions of
such documents are necessarily summaries of such documents and each such statement is qualified in its entirety by reference to the copy
of the applicable document filed with the SEC.
We file periodic reports,
proxy statements and other information with the SEC. Our filings with the SEC are available to the public over the Internet at the SEC’s
website at http://www.sec.gov. Our filings with the SEC are also available to the public on our website at http://www.shorebancshares.com,
as well as through document retrieval services. You may read and copy any periodic reports, proxy statements or other information we file
at the SEC’s public reference room in Washington, D.C., located at: Public Reference Room, 100 F Street, N.E., Washington, D.C.
20549. You can request copies of these documents, upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330
for further information on the operation of the SEC’s public reference rooms.
Financial and other information
can also be accessed through our website at www.shorebancshares.com, where we make available, free of charge, copies of our Annual Report
on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished,
as soon as reasonably practicable after filing such material electronically or otherwise furnishing it to the SEC. Our website and the
information contained therein or connected thereto are not incorporated into this prospectus, and such information should not be considered
to be part of this prospectus. You should not rely on any such information in making your decision whether to purchase our securities.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained,
or incorporated by reference, in this prospectus and in any prospectus supplement may include projections, predictions, expectations or
statements as to beliefs or future events or results or refer to other matters that are not historical facts. Such statements constitute
“forward-looking information” within the meaning of The Private Securities Litigation Reform Act of 1995.
These forward-looking statements
represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning
future events, business plans, expected operating results and the assumptions upon which those statements are based. In some cases, you
can identify these forward-looking statements by words like “may,” “will,” “should,” “expect,”
“plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,”
“potential,” or “continue” or the negative of those words and other comparable terminology, although not all forward-looking
statements contain these words. Forward-looking statements are not a guarantee of future performance or results, and will not necessarily
be accurate indications of the times at, or by, which such performance or results will be achieved. We caution that the forward-looking
statements are based largely on our expectations and information available at the time the statements are made and are subject to a number
of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control.
Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking
statements for many reasons, including the factors described in the section entitled “Risk Factors” in this prospectus, in
any risk factors described in a supplement to this or in other filings.
The following factors, among
others, could cause our financial performance to differ materially from that expressed in such forward-looking statements:
| · | general economic conditions, (including the interest rate environment, government economic and monetary
policies, the strength of global financial markets and inflation/deflation and supply chain issues), whether national or regional, and
conditions in the lending markets in which we participate that may have an adverse effect on the demand for our loans and other products,
our credit quality and related levels of nonperforming assets and loan losses, and the value and salability of the real estate that we
own or that is the collateral for our loans; |
| · | recent adverse developments in the banking industry highlighted by high-profile bank failures and the
potential impact of such developments on customer confidence, liquidity, and regulatory responses to these developments; |
| · | the Company’s ability to remediate the material weaknesses identified in the Company’s internal
control over financial reporting; |
| · | the effectiveness of the Company’s internal control over financial reporting and disclosure controls
and procedures; |
| · | cybersecurity threats and the cost of defending against them; |
| · | results of examinations of us by our regulators, including the possibility that our regulators may, among
other things, require us to increase our reserve for loan losses or to write-down assets; |
| · | changing bank regulatory conditions, policies or programs, whether arising as new legislation or regulatory
initiatives, which could lead to restrictions on activities of banks generally, or our subsidiary bank in particular, more restrictive
regulatory capital requirements, increased costs, including deposit insurance premiums, regulation or prohibition of certain income producing
activities or changes in the secondary market for loans and other products; |
| · | changes in market rates and prices may adversely impact the value of securities, loans, deposits and other
financial instruments and the interest rate sensitivity of our balance sheet; |
| · | our liquidity requirements could be adversely affected by changes in our assets and liabilities; |
| · | our ability to prudently manage our growth and execute our strategy; |
| · | impairment of our goodwill and intangible assets; |
| · | competitive factors among financial services organizations, including product and pricing pressures and
our ability to attract, develop and retain qualified banking professionals; |
| · | the expected cost savings, synergies and other financial benefits from the acquisition of The Community
Financial Corporation or any other acquisition the Company has made or may make might not be realized within the expected time frames
or at all; |
| · | the growth and profitability of non-interest or fee income being less than expected; |
| · | the effect of legislative or regulatory developments, including changes in laws concerning taxes, banking,
securities, insurance and other aspects of the financial services industry; |
| · | the effect of any change in federal government enforcement of federal laws affecting the cannabis industry; |
| · | the effect of changes in accounting policies and practices, as may be adopted by the Financial Accounting
Standards Board, the SEC, the Public Company Accounting Oversight Board and other regulatory agencies; |
| · | potential changes in federal policy and at regulatory agencies as a result of the upcoming 2024 presidential
election; |
| · | a deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S. government
may take to avoid exceeding the debt ceiling, and uncertainties surrounding the debt ceiling and the federal budget; |
| · | the impact of recent or future changes in Federal Deposit Insurance Corporation or, the FDIC,
insurance assessment rate or the rules and regulations related to the calculation of the FDIC insurance assessment amount, including
any special assessments; |
| · | the effect of fiscal and governmental policies of the U.S. federal government; |
| · | climate change, including the enhanced regulatory, compliance, credit and reputational risks and costs;
and |
| · | geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or
other governments in response to acts of terrorism, and/or military conflicts, including the war between Russian and Ukraine and the conflict
in the Middle East, which could impact business and economic conditions in the United States and abroad. |
If one or more of the factors
affecting our forward-looking information and statements proves incorrect, then our actual results, performance or achievements could
differ materially from those expressed in, or implied by, forward-looking information and statements contained in this prospectus and
in the information incorporated by reference herein. Therefore, we caution you not to place undue reliance on our forward-looking information
and statements.
We undertake no obligation
to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however,
to consult any further disclosures we make on related subjects in our periodic and current reports that we file with the SEC. Also note
that we provide cautionary discussion of risks, uncertainties and possibly inaccurate assumptions relevant to our businesses in our periodic
and current reports to the SEC incorporated by reference in this prospectus and in prospectus supplements and other offering materials.
These are factors that, individually or in the aggregate, management believes could cause our actual results to differ materially from
expected and historical results. You should understand that it is not possible to predict or identify all such factors. Consequently,
you should not consider such disclosures to be a complete discussion of all potential risks or uncertainties.
The forward-looking statements
speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation
to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect
the occurrence of unanticipated events. In addition, we cannot assess the impact of each factor on our business or the extent to which
any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
RISK FACTORS
An investment in our securities
involves a high degree of risk. You should carefully consider the risks and uncertainties and the risk factors set forth in the documents
and reports filed with the SEC that are incorporated by reference into this prospectus, as well as any risks described in any applicable
prospectus supplement, before making an investment decision. Before making an investment decision, you should carefully consider the risks
described under “Risk Factors” in the applicable prospectus supplement and in our most recent Annual Report on Form 10-K,
and in all other information appearing in this prospectus or incorporated by reference into this prospectus and any applicable prospectus
supplement. See “Where You Can Find More Information” for information about how to obtain a copy of these documents. Our business,
financial condition and/or results of operations could be materially adversely affected by any of these risks. The trading price of our
securities could decline due to any of these risks, and you may lose all or part of your investment.
USE OF PROCEEDS
Except as we may indicate
otherwise in a prospectus supplement accompanying this prospectus, we intend to use the proceeds from the sale of the securities for general
corporate purposes, which may include acquisitions, capital expenditures, investments and the repayment, redemption or refinancings of
all or a portion of any indebtedness or other securities outstanding at a particular time. Pending the application of the net proceeds,
we expect to invest the proceeds in short-term, interest-bearing instruments or otherwise investment-grade securities.
ABOUT SHORE BANCSHARES, INC.
Shore Bancshares was incorporated
under the laws of Maryland on March 15, 1996 and is a financial holding company registered under the Bank Holding Company Act of
1956. The Company is the largest independent financial holding company located on the Eastern Shore of Maryland. The Company conducts
business primarily through two wholly-owned subsidiaries, Shore United Bank, N.A., or the Bank and Mid-Maryland Title Company, Inc., or the Title Company. The Bank provides consumer and commercial banking products and services and secondary mortgage lending,
trust, wealth management and financial planning services. The Title Company engages in title work related to real estate transactions.
The Company, Bank and Title Company are Affirmative Action/Equal Opportunity Employers. The Bank is a national banking association chartered
under the laws of the United States with trust powers that can trace its origin to 1876. The Bank currently operates 42 full-service branches,
42 automatic teller machines, 3 interactive teller machines, 5 loan production offices, and provides a full range of commercial and consumer
banking products and services to individuals, businesses, and other organizations in Baltimore County, Howard County, Kent County, Queen
Anne’s County, Caroline County, Talbot County, Dorchester County, Anne Arundel County, Charles County, St Mary’s County, Calvert
County and Worcester County in Maryland, Kent County and Sussex County in Delaware and Accomack County, Fredericksburg City, Stafford
County and Spotsylvania County in Virginia. The Bank’s deposits are insured up to applicable legal limits by the FDIC.
The Bank is an independent
community bank that serves businesses and individuals in their respective market areas. Services offered are essentially the same as those
offered by larger regional institutions that compete with the Bank. Services provided to businesses include commercial checking, savings,
certificates of deposit and overnight investment sweep accounts. The Bank offers all forms of commercial lending, including secured and
unsecured loans, working capital loans, lines of credit, term loans, accounts receivable financing, real estate acquisition and development,
construction loans and letters of credit. Treasury management services are also available, such as, merchant card processing services,
remote deposit capture, ACH origination, digital banking, and telephone banking services.
Services to individuals include
checking accounts, various savings programs, mortgage loans, home improvement loans, installment and other personal loans, credit cards,
personal lines of credit, automobile and other consumer financing, safe deposit boxes, debit cards, 24-hour telephone banking, internet
banking, mobile banking and 24-hour ATM services. The Bank, through Wye Financial Partners, a department of the Bank, provides full-service
investment and insurance solutions through our broker/dealer, LPL Financial. The Bank also offers wealth management solutions such as
corporate trustee services and trust administration through Wye Trust, a division of the Bank. Additionally, the Bank has Saturday hours
and extended hours on certain evenings during the week for added customer convenience. A detailed discussion of our business is contained
in Item 1 of Part I of our Annual Report on Form 10-K for the year ended December 31, 2023 and any subsequent reports that
we file with the SEC, which are incorporated by reference in this prospectus. See “Where You Can Find More Information” above
for information on how to obtain a copy of our Annual Report on Form 10-K and any subsequent reports.
Our principal executive office
is located at 18 E. Dover Street, Easton, Maryland 21601 and our telephone number is (410) 763-7800. Our common stock is traded on the
NASDAQ Global Select Market under the symbol “SHBI.” We maintain an Internet site at www.shorebancshares.com on which we make
available free of charge our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K,
and all amendments to the foregoing as soon as reasonably practicable after these reports are electronically filed with, or furnished
to, the SEC. Neither our website nor the information on our website is included or incorporated in, or is a part of, this prospectus.
DESCRIPTION OF OUR SECURITIES AND THE SECURITIES
TO BE REGISTERED
This prospectus relates to
the offer and sale of shares of our common stock, shares of our preferred stock, depositary shares, debt securities, and warrants to purchase
shares of our common stock, shares of our preferred stock and/or debt securities, and units comprised of one or more shares of common
stock, shares of preferred stock and warrants in any combination. The following is a summary of the general terms of our capital stock
and the securities covered by this prospectus and does not purport to be a complete description. The full terms of our capital stock and
the securities covered by this prospectus are set forth in Exhibit 3.1(i) through Exhibit 4.9, inclusive, to the registration
statement that contains this prospectus, which are incorporated by reference in this prospectus. Unless expressly stated otherwise, the
following summary does not give effect to provisions of applicable statutory or common law.
Capital Stock
We are authorized by our Amended
and Restated Articles of Incorporation, as amended, or Charter, to issue up to 50,000,000 shares of capital stock, par value $.01 per
share, all of which are currently classified as shares of common stock. Our Charter generally permits the Board of Directors of the Company
to increase or decrease the number of authorized shares of capital stock of any class or series without the approval of our stockholders.
Our Charter also generally permits the Board of Directors to classify and reclassify any unissued shares of capital stock of any class
or series by setting or changing in any one or more respects the preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, or terms or conditions of redemption of the shares of stock.
As of May 13, 2024, we
had 33,210,995 shares of common stock issued and outstanding held by approximately 1,774 owners of record. Our common stock is listed
on the NASDAQ Global Select Market under the symbol “SHBI.”
Common Stock
The following section describes
the material features and rights of our common stock. The summary does not purport to be exhaustive and is qualified in its entirety by
reference to our Charter, as supplemented, and Second Amended and Restated By-Laws, as amended, our By-Laws, which have been filed as
exhibits to the registration statement of which this prospectus is a part, and to applicable Maryland law, including the Maryland General
Corporation Law, or the MGCL.
General
The holders of our common
stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. Holders of shares of
common stock are not entitled to cumulative voting rights in the election of directors. Subject to preferences that may be applicable
to any outstanding preferred stock, holders of common stock are entitled to receive ratable dividends which are declared by our Board
of Directors out of funds legally available for such a purpose.
Our ability to pay dividends
is subject to the requirements of Maryland corporate laws, federal and state banking laws, and the policies and actions of our regulators.
Moreover, our ability to pay dividends to stockholders is largely dependent upon our earnings in future periods and upon the receipt of
dividends from the Bank. Under corporate law, stockholders are entitled to dividends on their shares of common stock if, when,
and as declared by our Board of Directors out of funds legally available for that purpose. The Board of Governors of the Federal Reserve
System, or FRB, guidance requires a bank holding company, like us, to consult with the FRB before paying dividends if our earnings do
not exceed the aggregate amount of the proposed dividend. The FRB has the ability to prohibit a dividend in such a situation. Both federal
and state laws impose restrictions on the ability of Shore United Bank to pay dividends. Federal law prohibits the payment of a dividend
by an insured depository institution if the depository institution is considered “undercapitalized” or if the payment of the
dividend would make the institution “undercapitalized.” Maryland banking law provides that a state-chartered bank may pay
dividends out of undivided profits or, with the prior approval of the Commissioner of Financial Regulation of Maryland, or the Commissioner,
from surplus in excess of 100% of required capital stock. If, however, the surplus of a Maryland bank is less than 100% of its required
capital stock, then cash dividends may not be paid in excess of 90% of net earnings. In addition to these specific restrictions, bank
regulatory agencies also have the ability to prohibit proposed dividends by a financial institution that would otherwise be permitted
under applicable regulations if the regulatory body determines that such distribution would constitute an unsafe or unsound practice.
As a general corporate law
matter, the MGCL prohibits us from paying dividends on shares of the common stock unless, after giving effect to a proposed dividend,
(a) we will be able to pay our debts as they come due in the normal course of business and (b) our total assets will be greater
than our total liabilities plus, unless our Charter permits otherwise, the amount that would be needed, if we were to be dissolved at
the time of the dividend, to satisfy the preferential rights upon dissolution of stockholders whose preferential rights on dissolution
are superior to those receiving the dividend. Currently, we have no authorized class of capital stock with preferential rights upon dissolution
that are superior to the common stock.
In the event of our liquidation,
dissolution or winding up, holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities
and liquidation preferences, if any, on any outstanding shares of preferred stock. Holders of common stock have no preemptive rights and
have no rights to convert their common stock into any other securities. The common stock is not redeemable. All of the outstanding shares
of our common stock are fully paid and nonassessable.
The Transfer Agent for the
common stock is Broadridge Corporate Issuer Solutions.
Anti-Takeover Provisions under Maryland Law, Our Charter and
Our By-Laws
The provisions of Maryland
law and our Charter and By-Laws that we summarize below may have an anti-takeover effect and may delay, defer or prevent a tender offer
or takeover attempt that a stockholder might consider in his or her best interest, including those attempts that might result in a premium
over the market price for the common stock.
Business
Combinations under Maryland Law. Section 3-602 of the MGCL, as in effect on the date hereof, generally prohibits corporations
from being involved in any “business combination” (defined as a variety of transactions, including a merger, consolidation,
share exchange, asset transfer or issuance or reclassification of equity securities) with any “interested stockholder” for
a period of five years following the most recent date on which the interested stockholder became an interested stockholder. An interested
stockholder is defined generally as a person who is the beneficial owner of 10% or more of the voting power of the outstanding voting
stock of the corporation after the date on which the corporation had 100 or more beneficial owners of its stock or who is an affiliate
or associate of the corporation and was the beneficial owner, directly or indirectly, of 10% percent or more of the voting power of the
then outstanding stock of the corporation at any time within the two-year period immediately prior to the date in question and after the
date on which the corporation had 100 or more beneficial owners of its stock.
A business combination that
is not prohibited must be recommended by the board of directors, and approved by the affirmative vote of at least 80% of the corporation’s
outstanding shares entitled to vote and two-thirds of the outstanding shares entitled to vote which are not held by the interested shareholder
with whom the business combination is to be effected, unless, among other things, the corporation’s common stockholders receive
an acceptable price (as determined in accordance with criteria set forth in the MGCL) for their shares, in cash or in the same form as
paid by the interested stockholder for its shares. These provisions will not apply if the board of directors has exempted the transaction
in question or the interested stockholder prior to the time that the interested stockholder became an interested stockholder. In addition,
the board of directors may adopt a resolution approving or exempting specific business combinations, business combinations generally,
or generally by type, as to specifically identified or unidentified existing or future stockholders or their affiliates from the business
combination provisions of the MGCL.
Control
Share Acquisitions. Maryland’s control share acquisition law (Sections 3-701 to 709 of the MGCL), as in effect on the
date hereof, generally provides that “control shares” of a Maryland corporation acquired in a “control share acquisition”
have no voting rights except to the extent approved by the stockholders at a meeting by the affirmative vote of two-thirds of all the
votes entitled to be cast on the matter, excluding all interested shares. “Control shares” are shares of stock that, if aggregated
with all other shares of stock of the corporation previously acquired by a person or in respect of which that person is entitled to exercise
or direct the exercise of voting power, except solely by virtue of a revocable proxy, entitle that person, directly or indirectly, to
exercise or direct the exercise of the voting power of shares of stock of the corporation in the election of directors within any of the
following ranges of voting power: one-tenth or more, but less than one-third of all voting power; one-third or more, but less than a majority
of all voting power; or a majority or more of all voting power. “Control share acquisition” means the acquisition, directly
or indirectly, by any person, or ownership of, or the power to direct the exercise of voting power with respect to, issued and outstanding
control shares, subject to certain exceptions. If voting rights or control shares acquired in a control share acquisition are not approved
at a stockholders’ meeting, then, subject to certain conditions, the issuer may redeem any or all of the control shares for fair
value. If voting rights of such control shares are approved at a stockholders’ meeting and the acquiror becomes entitled to vote
a majority of the shares of stock entitled to vote, all other stockholders may exercise appraisal rights.
Our By-Laws contain a provision
exempting all shares of our capital stock from the MGCL’s control share acquisition law.
Preference
Stock Authorization. As noted above under the heading “Capital Stock,” the Charter gives our Board of Directors
the authority to, without stockholder approval, create and issue a class or series of capital stock with rights superior to the rights
of the holders of our common stock. As a result, this “blank check” stock, while not intended as a defensive measure against
takeovers, could be issued quickly and easily, could adversely affect the rights of holders of common stock and could be issued with terms
calculated to delay or prevent a change of control of the Company or make removal of management more difficult.
Advance
Notice Procedure for Stockholder Proposals. Our Charter and By-Laws allow stockholders to submit director nominations and stockholder
proposals. For nominations and proposals to properly come before the meeting, however, the proposing stockholder must have given timely
notice in writing to the Corporate Secretary pursuant to the By-Laws.
For
an annual meeting, notice of intention to make a director nomination must be delivered or mailed to the Corporate Secretary at the Company’s
principal executive offices not less than 120 days nor more than 180 days prior to the meeting called for the election of directors. In
the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from the anniversary date
of the preceding year’s annual meeting, notice by the stockholder must be delivered not earlier than the 180th day prior to such
annual meeting and no later than close of business on the later of the 120th day
prior to such annual meeting of the 10th day following the day on which public announcement
of the date of such annual meeting is first made. In the case of a special meeting called for the purpose of electing directors, a stockholders’
notice must be given not later than the close of business on the 10th day following the
day on which notice of the date of the special meeting was mailed or public announcement of the meeting was made, whichever occurs first.
Notice to the Corporate Secretary shall set forth:
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the name and address of each proposed nominee; |
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the principal occupation of each proposed nominee; |
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the number of shares of capital stock of Shore Bancshares owned by each proposed nominee; |
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the name and residence address of the notifying stockholder; |
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the number of shares of capital stock of Shore Bancshares owned by the notifying stockholder; |
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the consent in writing of the proposed nominee as to the proposed nominee’s name being placed in nomination for director; |
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a description of all arrangements or understandings between the notifying stockholder and each proposed nominee and any other person(s) (including their names) pursuant to which the nomination(s) are to be made by the notifying stockholders; |
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a representation that such notifying stockholder intends to appear in person or by proxy at the meeting to make the nomination; and |
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any other information relating to the nominee required to be disclosed in a proxy statement in connection with the solicitation of proxies for election of directors by Regulation 14A under the Exchange Act and Rule 14a-11 promulgated thereunder. |
A
stockholder proposal will be timely if it is delivered or mailed and received by the Corporate Secretary at the Company’s principal
executive offices not less than 60 days nor more than 90 days prior to the first anniversary of the preceding year’s annual meeting.
If, however, the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from the anniversary date
of the preceding year’s annual meeting, then notice by the stockholder must be so delivered not earlier than the 90th
day prior to such annual meeting and not later than the close of business on the later of the 60th
day prior to such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first
made. Notice to the Corporate Secretary shall set forth as to each proposal:
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a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the meeting; |
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the name and address of such stockholder as they appear on Shore Bancshares’ books and of the beneficial owner, if any, on whose behalf the proposal is made; |
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the class or series and number of shares of capital stock of Shore Bancshares owned beneficially or of record by such stockholder and such beneficial owner; |
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a description of all arrangements or understandings between the stockholder and any other person(s) (including their names) in connection with the proposal and any material interest of such stockholder in such business; and |
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a representation that such stockholder intends to appear in person or by proxy at the meeting to make the proposal. |
Classified
Board; Removal of Directors. Our Charter provides that the members of our Board of Directors are divided into three classes
as nearly equal as possible. Each class is elected for a three-year term. At each annual meeting of stockholders, approximately one-third
of the members of the Board are elected for a three-year term and the other directors remain in office until their three-year terms expire.
Our By-Laws provide that a director may be removed only in accordance with the provisions of Maryland law. The MGCL provides that, because
our Board of Directors is divided into classes, no director may be removed without cause. Any removal for cause requires the affirmative
vote of the holders of at least a majority of the voting power of the outstanding capital stock entitled to vote for the election of directors.
Thus, control of the Board of Directors cannot be changed in one year without removing the directors for cause as described above; rather,
at least two annual meetings must be held before a majority of the members of the Board could be changed. Generally, an amendment or repeal
of these provisions requires the authorization of the Board of Directors and the approval of the holders of at least 80% of the aggregate
votes entitled to be cast on the matter; however, two-thirds of the entire Board of Directors may alter the number of directors set by
the Charter to not exceeding 25 nor less than one, but such action may not affect the tenure of office of any director.
Preferred Stock
All of our authorized capital
stock is currently classified as common stock. As stated above, however, our Charter gives the Board of Directors the authority to, without
stockholder approval, create a class or series of capital stock, such as preferred stock, with rights superior to the rights of the holders
of our common stock. Prior to the issuance of any shares of preferred stock, our Board would authorize such preferred stock by classifying
authorized but unissued shares of common stock as one or more classes or series of preferred stock and approve the rights, preferences,
privileges and restrictions applicable to such class or series of preferred stock, including the dividend rate, the time of payment for
dividends, whether such dividends shall be cumulative or non-cumulative, and the date or dates from which any cumulative dividends will
begin to accrue, redemption terms (including sinking fund provisions), redemption price or prices, liquidation preferences, the extent
of the voting powers, if any, and conversion rights. The terms of any class or series of preferred stock so created would be set forth
in Articles Supplementary, which we would file with the State Department of Assessments and Taxation of Maryland. The prospectus supplement
will describe the specific terms of any preferred stock we offer. To the extent any preferred stock we offer has general voting rights,
or voting rights with respect to the election of directors, the anti-takeover provisions discussed above in the “Common Stock”
section would apply to such preferred stock. All of the shares of preferred stock offered by us, when issued and paid for, will be fully
paid and not subject to further call or assessment by us.
Depositary Shares
General
We may elect to offer fractional
shares of preferred stock, rather than full shares of preferred stock. In such event, we will issue receipts for depositary shares, each
of which will represent a fraction of a share of a particular series of preferred stock. The terms of any depositary shares and any depositary
receipts that we offer for sale and any deposit agreement relating to a particular series of preferred stock will be described in more
detail in a prospectus supplement.
The depositary shares will
be evidenced by depositary receipts issued pursuant to the deposit agreement. Depositary receipts will be distributed to those persons
purchasing the fractional shares of preferred stock in accordance with the terms of the applicable prospectus supplement.
Dividends and Other Distributions
The preferred stock depositary
will distribute all cash dividends or other cash distributions received in respect of the deposited preferred stock to the record holders
of depositary shares relating to such preferred stock in proportion to the number of such depositary shares owned by such holders.
The preferred stock depositary
will distribute any property received by it other than cash to the record holders of depositary shares entitled thereto. If the preferred
stock depositary determines that it is not feasible to make such distribution, it may, with our approval, sell such property and distribute
the net proceeds from such sale to such holders.
Redemption of Preferred Stock
If a series of preferred stock represented by depositary
shares is to be redeemed, the depositary shares will be redeemed from the proceeds received by the preferred stock depositary resulting
from the redemption, in whole or in part, of such series of preferred stock. The depositary shares will be redeemed by the preferred stock
depositary at a price per depositary share equal to the applicable fraction of the redemption price per share payable in respect of the
shares of preferred stock so redeemed.
Whenever we redeem shares of preferred stock held
by the preferred stock depositary, the preferred stock depositary will redeem as of the same date the number of depositary shares representing
the shares of preferred stock so redeemed. If fewer than all the depositary shares are to be redeemed, the depositary shares to be redeemed
will be selected by the preferred stock depositary by lot or ratably or by any other equitable method as the preferred stock depositary
may decide.
Withdrawal of Preferred Stock
Unless the related depositary
shares have previously been called for redemption, any holder of depositary shares may receive the number of whole shares of the related
series of preferred stock and any money or other property represented by such depositary receipts after surrendering the depositary receipts
at the corporate trust office of the preferred stock depositary. Holders of depositary shares making such withdrawals will be entitled
to receive whole shares of preferred stock on the basis set forth in the related prospectus supplement for such series of preferred stock.
However, holders of such whole
shares of preferred stock will not be entitled to deposit such preferred stock under the deposit agreement or to receive depositary receipts
for such preferred stock after such withdrawal. If the depositary shares surrendered by the holder in connection with such withdrawal
exceed the number of depositary shares that represent the number of whole shares of preferred stock to be withdrawn, the preferred stock
depositary will deliver to such holder at the same time a new depositary receipt evidencing such excess number of depositary shares.
Voting Deposited Preferred Stock
Upon receipt of notice of
any meeting at which the holders of any series of deposited preferred stock are entitled to vote, the preferred stock depositary will
mail the information contained in such notice of meeting to the record holders of the depositary shares relating to such series of preferred
stock. Each record holder of such depositary shares on the record date will be entitled to instruct the preferred stock depositary to
vote the amount of the preferred stock represented by such holder’s depositary shares. The preferred stock depositary will seek
to vote the amount of such series of preferred stock represented by such depositary shares in accordance with such instructions.
We will agree to take all
reasonable actions that the preferred stock depositary determines are necessary to enable the preferred stock depositary to vote as instructed.
The preferred stock depositary will vote all shares of any series of preferred stock held by it proportionately with instructions received
if it does not receive specific instructions from the holders of depositary shares representing such series of preferred stock.
Debt Securities
If we issue any debt securities
offered by this prospectus and any accompanying prospectus supplement, we will issue them under an indenture to be entered into by the
Company and a trustee to be identified in the applicable prospectus supplement, as trustee. The terms of the debt securities will include
those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939, as in effect on the
date of the indenture. We have filed a copy of the proposed form of indenture as an exhibit to the registration statement that contains
this prospectus. Each indenture will be subject to and governed by the terms of the Trust Indenture Act of 1939. Unless otherwise specified
in the applicable prospectus supplement, the debt securities will represent direct, unsecured obligations of the Company and will rank
equally with all of our other unsecured indebtedness, if any. The following statements relating to the debt securities and the indenture
are summaries only. These summaries are subject in their entirety to the detailed provisions of the indenture. For complete information,
we urge you to read the actual documents.
General
We may issue the debt securities
in one or more series with the same or various maturities, at par, at a premium, or at a discount. We will describe the particular terms
of each series of debt securities in a prospectus supplement relating to that series, which we will file with the SEC. To review the terms
of a series of debt securities, you must refer to both the prospectus supplement for the particular series and to the description of debt
securities in this prospectus.
The prospectus supplement
will set forth the following terms of the debt securities in respect of which this prospectus is delivered:
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the title; |
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the aggregate principal amount and whether there is any limit on the aggregate principal amount that we may subsequently issue; |
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the issue price or prices (expressed as a percentage of the principal amount thereof); |
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the date or dates on which principal is payable; |
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the interest rate or rates (which may be fixed or variable), or, if applicable, the method used to determine such rate or rates; |
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the date or dates from which the interest, if any, will accrue and the date or dates on which such interest, if any, shall commence and be payable and any regular record date for the interest payable; |
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the place or places where principal (and premium, if any) and interest, if any, is payable or the method of such payment, if by wire transfer, mail or other means; |
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the period or periods within which, the price or prices at which and the terms and conditions upon which we may redeem the debt securities; |
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our obligation, if any, to redeem or purchase the debt securities pursuant to any sinking fund or analogous provisions or at the option of a holder of such debt security and the period or periods within which, the price or prices at which and the terms and conditions upon which such debt securities shall be redeemed or purchased, in whole or in part, pursuant to such obligation; |
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the dates, if any, on which and the price or prices at which we will repurchase the debt security at the option of the holders of such debt security and other terms and provisions of such repurchase obligations; |
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the denominations in which the debt securities may be issuable; |
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whether the debt securities are to be issuable in the form of certificated debt securities (as described below) or global debt securities (as described below); |
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the portion of principal amount that will be payable upon declaration of acceleration of the maturity date in the case of debt securities issued at a discount from their face amount; |
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the currency of denomination; |
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the designation of the currency, currencies or currency units in which payment of principal (and premium, if any) and interest, if any, will be made; |
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if payments of principal (and premium, if any) and interest, if any, on the debt securities are to be made in one or more currencies or currency units other than the currency of denomination, the manner in which the exchange rate with respect to these payments will be determined; |
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if amounts of principal (and premium, if any) and interest, if any, may be determined (a) by reference to an index based on a currency or currencies other than the currency of denomination or designation or (b) by reference to a commodity, commodity index, stock exchange index or financial index, then the manner in which these amounts will be determined; |
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the provisions, if any, relating to any security provided for the debt securities; |
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any addition to or change in the covenants in the indenture; |
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any addition to or change in the events of default and/or the acceleration provisions described in the indenture; |
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the terms and conditions for conversion into or exchange for shares of common stock or preferred stock; |
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any other terms, which may modify or delete any provision of the indenture insofar as it applies to that series; |
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any depositaries, interest rate calculation agents, exchange rate calculation agents or other agents; |
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the terms and conditions, if any, upon which the debt securities and any guarantees thereof shall be subordinated in right of payment to our other indebtedness, if any, or other indebtedness of any guarantor; |
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any provisions relating to covenant defeasance and defeasance; and |
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the form and terms of any guarantee of the debt securities. |
We may issue discount debt
securities that provide for an amount less than the stated principal amount to be due and payable upon acceleration of the maturity of
the debt securities in accordance with the terms of the indenture. We may also issue debt securities in bearer form, with or without coupons.
If we issue discount securities or debt securities in bearer form, we will describe United States federal income tax considerations and
other special considerations that apply to the debt securities in the applicable prospectus supplement. We may issue debt securities denominated
in or payable in a foreign currency or currencies or a foreign currency unit or units. If we do so, we will describe the restrictions,
elections, general tax considerations, specific terms and other information with respect to the issue of debt securities and the foreign
currency or currencies or foreign currency unit or units in the applicable prospectus supplement.
Exchange and/or Conversion Rights
If we issue debt securities
that may be exchanged for or converted into shares of common stock or preferred stock, we will describe the terms of exchange or conversion
in the prospectus supplement relating to those debt securities.
Transfer and Exchange
We may issue debt securities
that will be represented by either:
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“book-entry securities,” which means that there will be one or more global securities registered in the name of The Depository Trust Company, as depository, or a nominee of the depository; or |
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“certificated securities,” which means that they will be represented by a certificate issued in definitive registered form. |
We will specify in the prospectus
supplement applicable to a particular offering whether the debt securities offered will be book-entry or certificated securities.
Certificated Debt Securities
If you hold certificated debt
securities that have been offered by this prospectus, you may transfer or exchange them at the trustee’s office or at the paying
agency in accordance with the terms of the indenture. You will not be charged a service charge for any transfer or exchange of certificated
debt securities, but may be required to pay an amount sufficient to cover any tax or other governmental charge payable in connection with
the transfer or exchange.
You may effect the transfer
of certificated debt securities and of the right to receive the principal of (and premium, if any) and interest, if any, on your certificated
debt securities only by surrendering the certificate representing your certificated debt securities and having us or the trustee issue
a new certificate to the new holder.
Global Debt Securities and Book Entry System
If we decide to issue debt
securities in the form of one or more global securities, then we will register the global securities in the name of the depositary for
the global securities or the nominee of the depositary and the global securities will be delivered by the trustee to the depositary for
credit to the accounts of the holders of beneficial interests in the debt securities.
The prospectus supplement
or term sheet will describe the specific terms of the depositary arrangement for debt securities of a series that are issued in global
form. Neither us, the trustee, any payment agent nor the security registrar will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership interests in a global debt security or for maintaining, supervising
or reviewing any records relating to these beneficial ownership interests.
No Protection in the Event of Change of
Control
The indenture does not provide
for a put or increased interest or otherwise that would give holders of debt securities additional protection in the event of a recapitalization
transaction, a change of control or a highly leveraged transaction. If we offer this type of provision with respect to any debt securities
in the future, we will describe it in the applicable prospectus supplement.
Covenants
Unless otherwise indicated
in this prospectus or a prospectus supplement, the debt securities will not have the benefit of any covenants that limit or restrict our
business or operations, the pledging of our assets or the incurrence by us of additional indebtedness.
Consolidation, Merger and Sale of Assets
We will agree in the indenture
not to consolidate with or merge into any other person or convey, transfer, sell or lease all or substantially all of our properties and
assets to any person, unless:
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either (a) in the case of a merger or consolidation, we are the surviving person, or (b) the person formed by the consolidation or into or with which we are merged or the person to which our properties and assets are conveyed, transferred, sold or leased, is a corporation organized and existing under the laws of the United States, any State thereof or the District of Columbia and such person has expressly assumed all of our obligations, including the payment of the principal of (and premium, if any) and interest, if any, on the debt securities and the performance of the other covenants under the indenture; and |
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immediately before and immediately after giving effect to the transaction, no event of default, and no event which, after notice or lapse of time or both, would become an event of default, has occurred and is continuing under the indenture. |
Events of Default
Unless otherwise specified
in the applicable prospectus supplement, the following events will be events of default under the indenture with respect to debt securities
of any series:
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we fail to pay any principal or premium, if any, when it becomes due; |
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we fail to pay any interest within 30 days after it becomes due; |
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we fail to deposit any sinking fund payment, when due, in respect of
any debt security of that series; |
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we fail to observe or perform any other covenant in the debt securities or the indenture for 90 days after written notice from the trustee or the holders of not less than 25% in aggregate principal amount of the outstanding debt securities of that series; or |
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certain events occur involving bankruptcy, insolvency or reorganization. |
The trustee may withhold notice to the holders
of the debt securities of any series of any default, except in payment of the principal of (and premium, if any) and interest, if any,
on the debt securities of that series, if the trustee considers it to be in the interest of the holders of the debt securities of that
series to do so. If an event of default (other than an event of default resulting from certain events of bankruptcy, insolvency or reorganization)
occurs, and is continuing, then the trustee or the holders of not less than 25% in aggregate principal amount of the outstanding debt
securities of any series may accelerate the maturity of the debt securities.
If this happens, the entire
principal amount of all the outstanding debt securities of that series plus accrued interest to the date of acceleration will be immediately
due and payable. At any time after an acceleration, but before a judgment or decree based on the acceleration is obtained by the trustee,
the holders of a majority in aggregate principal amount of outstanding debt securities of that series may rescind and annul the acceleration
if all events of default (other than nonpayment of accelerated principal, premium or interest) have been cured or waived as provided for
in the indenture.
If an event of default resulting
from certain events of bankruptcy, insolvency or reorganization occurs, the principal, premium and interest amount with respect to all
of the debt securities of any series shall be due and payable immediately without any declaration or other act on the part of the trustee
or the holders of the debt securities of that series. Subject to certain limitations specified in the indenture, the holders of a majority
in principal amount of the outstanding debt securities of a series shall have the right to waive any existing default or compliance with
any provision of the indenture or the debt securities of that series.
No holder of any debt security
of a series will have any right to institute any proceeding or pursue any remedy with respect to the indenture or the debt securities
of that series, unless:
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the holder gives to the trustee written notice of a continuing event of default; |
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the holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series make a written request and offer reasonable indemnity to the trustee to pursue the remedy; |
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the trustee fails to comply with the request within 60 days of the receipt of the request and the offer of indemnity; and |
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the holders of a majority in aggregate principal amount of the outstanding debt securities of that series have not given the trustee a direction inconsistent with such written request during the 60-day period. |
However, these limitations
do not apply to a suit instituted for payment on debt securities of any series on or after the due dates expressed in the debt securities.
Modification and Waiver
Modifications of and amendments
to the indenture may be made by us and the trustee with the consent of the holders of a majority in aggregate principal amount of the
outstanding debt securities of each series of debt securities affected by such modification or amendment; provided, however,
that no modification or amendment may, without the consent of the holder of each outstanding debt security affected:
| · | change the stated maturity of the principal of, or any installment of principal of or interest on, any
debt security; |
| · | reduce the principal amount of, or any premium or interest on, any debt security; |
| · | reduce the amount of principal of an original issue discount debt security or any other debt security
payable upon acceleration of the maturity; |
| · | change the place or currency of payment of principal of, or any premium or interest on, any debt security; |
| · | modify any of the subordination provisions in a manner adverse to the holders of those securities; |
| · | impair the right to institute suit for the enforcement of any payment on or with respect to any debt security; |
| · | reduce the percentage in principal amount of outstanding debt securities of any series, the consent of
whose holders is required for modification or amendment of the indenture; |
| · | reduce the percentage in principal amount of outstanding debt securities of any series necessary for waiver
of compliance with certain provisions of the indenture or for waiver of certain defaults; or |
| · | except as provided by the indenture, modify provisions of the indenture relating to modification and waiver. |
In addition, as described in the indenture, certain
modifications and amendments to the indenture may be made by us and the trustee without the consent of holders of debt securities.
Defeasance and Covenant Defeasance
The indenture permits us,
at any time, to elect to discharge our obligations with respect to one or more series of debt securities by following certain procedures
described in the indenture. These procedures will allow us either:
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to defease and be discharged from any and all of our obligations with respect to any debt securities except for the following obligations (which discharge is referred to as “defeasance”): |
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to exchange or register the transfer of the debt securities; |
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to replace stolen, lost or mutilated debt securities; |
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to compensate and indemnify the trustee; |
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to maintain an office or agency in respect of the debt securities and to hold monies for payment in trust; or |
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to be released from our obligations with respect to the debt securities under certain covenants contained in the indenture, as well as any additional covenants which may be contained in the applicable prospectus supplement (which release is referred to as “covenant defeasance”). |
To exercise either defeasance
option, we must deposit with the trustee or other qualifying trustee, in trust for this purpose:
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money; |
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U.S. government obligations which through the scheduled payment of
principal and interest in accordance with their terms will provide money; or |
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a combination of money and/or U.S. government obligations sufficient
in the written opinion of a nationally-recognized firm of independent accountants to provide money; |
which, in each case, provides a sufficient amount
to pay the principal of (and premium, if any) and interest, if any, on the debt securities of a series, on the scheduled due dates or
on a selected date of redemption in accordance with the terms of the indenture.
In addition, defeasance may
be effected only if, among other things:
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in the case of defeasance, we deliver to the trustee an opinion of counsel stating that we have received from, or there has been published by, the Internal Revenue Service a ruling to the effect that, or there has been a change in any applicable federal income tax law with the effect that, and the opinion shall confirm that, the holders of outstanding debt securities will not recognize income, gain or loss for United States federal income tax purposes solely as a result of the legal defeasance and will be subject to United States federal income tax on the same amounts, in the same manner, including as a result of prepayment, and at the same times as would have been the case if a legal defeasance had not occurred; |
| |
· |
in the case of covenant defeasance, we deliver to the trustee an opinion of counsel to the effect that the holders of the outstanding debt securities will not recognize income, gain or loss for United States federal income tax purposes as a result of the covenant defeasance and will be subject to United States federal income tax on the same amounts, in the same manner and at the same times as would have been the case if a covenant defeasance had not occurred; and |
| |
· |
certain other conditions described in the indenture are satisfied. |
If we fail to comply with
our remaining obligations under the indenture and applicable supplemental indenture after a covenant defeasance of the indenture and applicable
supplemental indenture, and the debt securities are declared due and payable because of the occurrence of any undefeased event of default,
the amount of money and/or U.S. government obligations on deposit with the trustee could be insufficient to pay amounts due under the
debt securities of that series at the time of acceleration. We will, however, remain liable in respect of these payments.
The Trustee
We will identify the trustee
with respect to any series of debt securities in the prospectus supplement relating to the debt securities. You should note that if the
trustee becomes a creditor of ours, the indenture and the Trust Indenture Act of 1939 limit the rights of the trustee to obtain payment
of claims in certain cases, or to realize on certain property received in respect of certain claims, as security or otherwise. The trustee
and its affiliates may engage in, and will be permitted to continue to engage in, other transactions with us and our affiliates. If, however,
the trustee acquires any “conflicting interest” within the meaning of the Trust Indenture Act of 1939, it must eliminate the
conflict or resign.
Generally, the holders of
a majority in principal amount of the debt securities then outstanding of any series may direct the time, method and place of conducting
any proceeding for exercising any remedy available to the trustee. If an event of default occurs and is continuing, the trustee, in the
exercise of its rights and powers, must use the degree of care and skill of a prudent person in the conduct of his or her own affairs.
Subject to this provision, the trustee will be under no obligation to exercise any of its rights or powers under the indenture at the
request of any of the holders of the debt securities, unless they have offered to the trustee reasonable indemnity or security.
Warrants
We may issue warrants, including
warrants to purchase debt securities, common stock or preferred stock or any combination of the foregoing. Warrants may be issued independently
or together with any other securities offered by this prospectus and may be attached to or separate from the other securities. If warrants
are issued, they will be issued under warrant agreements to be entered into between us and a bank or trust company, as warrant agent,
all of which will be described in the prospectus supplement relating to warrants being offered.
A prospectus supplement relating
to any warrants being offered will include specific terms relating to the offering, including a description of any other securities sold
together with the warrants. Such terms will include:
| |
· |
the title of the warrants; |
| |
· |
the aggregate number of the warrants; |
| |
· |
the price or prices at which the warrants will be issued; |
| |
· |
the currencies in which the price or prices of the warrants may be payable; |
| |
· |
the designation, amount, and terms of the debt securities, common stock or preferred stock purchasable upon exercise of the warrants and procedures by which those numbers may be adjusted; |
| |
· |
the designation and terms of the other offered securities, if any, with which the warrants are issued and the number of the warrants issued with each security; |
| |
· |
if applicable, the date on and after which the warrants and the offered securities purchasable upon exercise of the warrants will be separately transferable; |
| |
· |
the price or prices at which the offered securities purchasable upon exercise of the warrants may be purchased; |
| |
· |
the date on which the right to exercise the warrants shall commence and the date on which the right shall expire; |
| |
· |
the minimum or maximum amount of the warrants that may be exercised at any one time; |
| |
· |
any terms relating to the modification of the warrants, including adjustments in the exercise price; |
| |
· |
information with respect to book-entry procedures, if any; |
| |
· |
a discussion of any material federal income tax considerations; and |
| |
· |
any other material terms of the warrants, including terms, procedures, and limitations relating to the transferability, exchange, exercise or redemption of the warrants. |
The descriptions of the warrant
agreements in this prospectus and in any prospectus supplement are summaries of the applicable provisions of the applicable agreements.
These descriptions do not restate those agreements in their entirety and do not contain all of the information that you may find useful.
We urge you to read the applicable agreements because they, and not the summaries, define your rights as holders of the warrants. For
more information, please review the form of the relevant agreements, which we will file with the SEC and will be available as described
in the heading “Where You Can Find More Information” above.
Units
We may issue units comprised
of one or more shares of common stock, shares of preferred stock, debt securities and warrants in any combination. Each unit will be issued
so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights
and obligations of a holder of each included security. If units are issued, they will be issued under unit agreements to be entered into
between us and a unit agent, as detailed in the prospectus supplement relating to the units being offered. The unit agreement under which
a unit is issued may provide that the securities included in the unit may not be held or transferred separately at any time or before
a specified date. A prospectus supplement relating to any units being offered will include specific terms relating to the offering, including
a description of any securities included in each unit. Such terms will include:
| |
· |
the designation and terms of the units, and the terms of any of the debt securities, common stock, preferred stock and warrants comprising the units, including whether and under what circumstances those securities may be held or transferred separately; |
| |
· |
a description of the terms of any unit agreement governing the units; |
| |
· |
a description of the provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units; |
| |
· |
a discussion of material federal income tax considerations, if applicable; and |
| |
· |
whether the units will be issued in fully registered or in global form. |
The descriptions of the units
in this prospectus and in any prospectus supplement are summaries of the applicable provisions of the applicable agreements. These descriptions
do not restate those agreements in their entirety and do not contain all of the information that you may find useful. We urge you to read
the applicable agreements because they, and not the summaries, define your rights as holders of the units. For more information, please
review the form of the relevant agreements, which we will file with the SEC and will be available as described in the heading “Where
You Can Find More Information” above.
PLAN OF DISTRIBUTION
We may sell the securities
in any of three ways (or in any combination): (a) to or through one or more underwriters or dealers, (b) directly to a limited
number of purchasers or a single purchaser or (c) through agents. These firms may also act as our agents in the sale of the securities.
Only underwriters named in the prospectus supplement will be considered as underwriters of the securities offered by the prospectus supplement.
We may offer and sell all
or a portion of the securities covered by this prospectus from time to time, together or separately, in one or more or any combination
of the following transactions: (i) on the NASDAQ Global Select Market, in the over-the-counter market or on any other national securities
exchange on which our securities are listed or traded; (ii) in privately negotiated transactions; (iii) in underwritten transactions;
(iv) in a block trade in which a broker-dealer will attempt to sell the offered securities as agent but may purchase and resell a
portion of the block as principal to facilitate the transaction; (iv) through purchases by a broker-dealer as principal and resale
by the broker-dealer for its account pursuant to this prospectus; (v) in ordinary brokerage transactions and transactions in which
the broker solicits purchasers; (vi) “at the market” or through market makers or into an existing market for the securities;
and (vii) through any other method permitted by applicable law.
We may distribute the securities
at different times in one or more transactions. We may sell the securities at fixed prices, which may change, at market prices prevailing
at the time of sale, at prices related to the prevailing market prices or at negotiated prices.
In connection with the sale
of the securities, underwriters may receive compensation from us or from purchasers of the securities in the form of discounts, concessions
or commissions. Underwriters, dealers and agents that participate in the distribution of the securities may be deemed to be underwriters.
Discounts or commissions they receive and any profit on their resale of the securities may be considered underwriting discounts and commissions
under the Securities Act. We will identify any underwriter or agent, and we will describe any compensation, in the prospectus supplement.
We may agree to indemnify
underwriters, dealers and agents who participate in the distribution of the securities against certain liabilities, including liabilities
under the Securities Act.
We may authorize dealers or
other persons who act as our agents to solicit offers by certain institutions to purchase the securities from us under contracts which
provide for payment and delivery on a future date. We may enter into these contracts with commercial and savings banks, insurance companies,
pension funds, investment companies, educational and charitable institutions and others. If we enter into these agreements concerning
any series of securities, we will indicate that in the prospectus supplement.
In connection with an offering
of the securities, underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of the securities. Specifically,
underwriters may over-allot in connection with the offering, creating a syndicate short position in the securities for their own account.
In addition, underwriters may bid for, and purchase, securities in the open market to cover short positions or to stabilize the price
of the securities. Finally, underwriters may reclaim selling concessions allowed for distributing the securities in the offering if the
underwriters repurchase previously distributed securities in transactions to cover short positions, in stabilization transactions or otherwise.
Any of these activities may stabilize or maintain the market price of the securities above independent market levels. Underwriters are
not required to engage in any of these activities and may end any of these activities at any time.
Each series of securities
(other than our common stock) offered will be a new issue of securities and will have no established trading market. The securities (other
than our common stock) may or may not be listed on a national securities exchange. No assurance can be given as to the existence of trading
markets for any securities offered (other than with respect to our common stock) or the liquidity of any securities offered.
At the time we enter any material
arrangement with an underwriter or broker-dealer for the sale of securities through a block trade, special offering, exchange distribution,
secondary distribution or a purchase by an underwriter or broker-dealer, we will file a supplement to this prospectus, if required, pursuant
to Rule 424(b) of the Securities Act, disclosing certain material information, including:
| · | the number of securities being offered; |
| · | the terms of the offering; |
| · | the names of the participating underwriters, broker-dealers or agents; and |
| · | any discounts, commissions or other compensation paid to underwriters or broker-dealers and any discounts,
commissions or concessions allowed or reallowed or paid by any underwriters to dealers; the public offering price; and other material
terms of the offering. |
To the extent required, this
prospectus may be amended and/or supplemented from time to time to describe a specific plan of distribution.
LEGAL MATTERS
Unless otherwise indicated
in the applicable prospectus supplement, the validity of the securities offered pursuant to this prospectus has been passed upon for us
by Holland & Knight LLP, Washington, D.C. If legal matters in connection with offerings made pursuant to this prospectus are
passed upon by counsel for the underwriters, dealers or agents, if any, such counsel will be named in the prospectus supplement relating
to such offering.
EXPERTS
The consolidated financial
statements incorporated in this prospectus by reference from our Annual Report on Form 10-K for the year ended December 31, 2023 and the effectiveness of our internal control over financial reporting have been audited by Yount, Hyde & Barbour, P.C.,
an independent registered public accounting firm, as stated in their report, which is incorporated herein by reference. Such consolidated
financial statements have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting
and auditing.
* * *
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table itemizes the expenses we have
incurred in connection with the offering of the securities being registered hereby. All amounts shown are estimates.
| Registration Fee - Securities and Exchange Commission | |
$ | 25,830.00 | |
| Accounting Fees and Expenses | |
| ** | |
| Legal Fees and Expenses | |
| ** | |
| Printing Fees and Expenses | |
| ** | |
| Miscellaneous | |
| ** | |
| Total | |
| $** | |
**These
fees depend on the securities offered and the number of issuances and cannot be estimated at this time.
Item 15. Indemnification of Directors and Officers.
The Maryland General Corporation Law (“MGCL”) permits a Maryland
corporation to include in its articles a provision limiting the liability of its directors and officers to the corporation and its shareholders
for money damages except for liability resulting from (a) actual receipt of an improper benefit or profit in money, property or services
or (b) active and deliberate dishonesty established by a final judgment as being material to the cause of action. The Company’s
amended and restated articles of incorporation (the “Charter”), and second amended and restated by-laws (the “By-Laws”),
require the Company to indemnify its directors and officers to the fullest extent required or permitted by Maryland law, including the
advancement of expenses. The Charter also provides for the elimination of personal liability of the Company’s directors and officers
to the Company or its stockholders for money damages to the fullest extent permitted by Maryland law.
The Company has provided for
indemnification of directors, officers, employees and agents in Section (a)(5) of Article Seventh of its Charter. This
provision of the Charter reads as follows:
(5) The Corporation
shall indemnify (A) its directors and officers, whether serving the Corporation or at its request any other entity, to the full extent
required or permitted by the General Laws of the State of Maryland now or hereafter in force, including the advance of expenses under
the procedures and to the full extent permitted by law and (B) other employees and agents to such extent as shall be authorized by
the Board of Directors or the Corporation’s By-Laws and be permitted by law. The foregoing rights of indemnification shall not be
exclusive of any other rights to which those seeking indemnification may be entitled. The Board of Directors may take such action as is
necessary to carry out these indemnification provisions and is expressly empowered to adopt, approve and amend from time to time such
by-laws, resolutions or contracts implementing such provisions or such further indemnification arrangements as may be permitted by law.
No amendment of the Charter of the Corporation or repeal of any of its provisions shall limit or eliminate the right to indemnification
provided hereunder with respect to acts or omissions occurring prior to such amendment or repeal.
The Company has limited the
liability of its directors and officers for money damages in Section (a)(6) of Article Seventh of the Charter. This provision
reads as follows:
(6) To the
fullest extent permitted by Maryland statutory or decisional law, as amended or interpreted, no director or officer of the Corporation
shall be personally liable to the Corporation or its stockholders for money damages. No amendment of the Charter of the Corporation or
repeal of any of its provisions shall limit or eliminate the limitation on liability provided to directors and officers hereunder with
respect to any act or omission occurring prior to such amendment or repeal.
Section 2-418 of the
MGCL provides that a Maryland corporation may indemnify any present or former director or officer or any individual who, while a director
or officer of the corporation and at the request of the corporation, has served another enterprise as a director, officer, partner, trustee,
employee or agent who is made a party to any proceeding by reason of service in that capacity against judgments, penalties, fines, settlements
and reasonable expenses actually incurred by the director or officer in connection with the proceeding, unless it is proved that (a) the
act or omission of the director or officer was material to the matter giving rise to the proceeding and (i) was committed in bad
faith or (ii) was the result of active and deliberate dishonesty; (b) the director or officer actually received an improper
personal benefit in money, property, or services; or (c) in the case of any criminal proceeding, the director or officer had reasonable
cause to believe that the act or omission was unlawful. Notwithstanding the above, a director or officer may not be indemnified in respect
of any proceeding, by or in the right of the corporation, in which such director or officer will have been adjudged liable to the corporation
or in respect of any proceeding charging improper receipt of a personal benefit (except as described below). In addition, a corporation
may not indemnify a director or officer or advance expenses for a proceeding brought by that director or officer against the corporation,
except for a proceeding brought to enforce indemnification, or unless the articles, bylaws, resolution of the board of directors, or an
agreement approved by the board of directors expressly provides otherwise. Termination of any proceeding by judgment, order or settlement
does not create a presumption that the director or officer did not meet the requisite standard of conduct. Termination of any proceeding
by conviction, plea of nolo contendere or its equivalent, or entry of an order of probation prior to judgment, creates a rebuttable presumption
that the director or officer did not meet the requisite standard of conduct. Indemnification is not permitted unless authorized for a
specific proceeding, after a determination that indemnification is permissible because the requisite standard of conduct has been met
(1) by a majority vote of a quorum consisting of directors not, at the time, parties to the proceeding (or a majority of a committee
of one or more such directors designated by the full board); (2) by special legal counsel selected by the board of directors by vote
as described in clause (1) of this paragraph (or a committee thereof); or (3) by the shareholders (other than shareholders who
are also directors or officers who are parties to the proceeding).
Section 2-418 of the
MGCL provides that a present or former director or officer who has been successful, on the merits or otherwise, in the defense of any
proceeding will be indemnified against reasonable expenses incurred by the director or officer in connection with the proceeding. A court
of appropriate jurisdiction upon application of a director or officer and such notice as the court will require may order indemnification
in the following circumstances: (1) if it determines a director or officer is entitled to reimbursement pursuant to a director’s
or officer’s success, on the merits or otherwise, in the defense of any proceeding, the court will order indemnification, in which
case the director or officer will be entitled to recover the expenses of securing such reimbursement; or (2) if it determines that
a director or officer is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, the court may order
such indemnification as the court deems proper. However, indemnification with respect to any proceeding by or in the right of the corporation
or in which liability has been adjudged in the case of a proceeding charging improper personal benefit to the director or officer, will
be limited to expenses.
The reasonable expenses incurred
by a director or officer who is a party to a proceeding may be paid or reimbursed by the corporation in advance of the final disposition
of the proceeding upon receipt by the corporation of both a written affirmation by the director or officer of his or her good faith belief
that the standard of conduct necessary for indemnification by the corporation has been met, and a written undertaking by or on behalf
of the director or officer to repay the amount if it is ultimately determined that the standard of conduct has not been met.
The indemnification and advancement
of expenses provided or authorized by Section 2-418 are not exclusive of any other rights to which a director or officer may be entitled
both as to action in his or her official capacity and as to action in another capacity while holding such office.
Pursuant to Section 2-418,
a corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the
corporation, or who, while serving in such capacity, is or was at the request of the corporation serving as a director, officer, partner,
trustee, employee or agent of another corporation or legal entity or of an employee benefit plan, against any liability asserted against
and incurred by such person in any such capacity or arising out of such person’s position, whether or not the corporation would
have the power to indemnify against liability under Section 2-418. A corporation may provide similar protection, including a trust
fund, letter of credit or surety bond, which is not inconsistent with Section 2-418. A subsidiary or an affiliate of the corporation
may provide the insurance or similar protection.
As permitted under Section 2-418
of the MGCL, The Company has purchased and maintains insurance on behalf of its directors and officers against any liability asserted
against such directors and officers in their capacities as such, whether or not the Company would have the power to indemnify such persons
under the provisions of Maryland law governing indemnification.
Section 8(k) of
the Federal Deposit Insurance Act (the “FDI Act”) provides that the Federal Deposit Insurance Corporation (“FDIC”) may prohibit or limit, by regulation or order, payments
by any insured depository institution or its holding company for the benefit of directors and officers of the insured depository institution,
or others who are or were “institution-affiliated parties,” as defined under the FDI Act, to pay or reimburse such person
for any liability or legal expense sustained with regard to any administrative or civil enforcement action which results in a final order
against the person. The FDIC has adopted regulations prohibiting, subject to certain exceptions, insured depository institutions, their
subsidiaries and affiliated holding companies from indemnifying officers, directors or employees for any civil money penalty or judgment
resulting from an administrative or civil enforcement action commenced by any federal banking agency, or for that portion of the costs
sustained with regard to such an action that results in a final order or settlement that is adverse to the director, officer or employee.
Item 16. Exhibits.
| Exhibit No. |
|
Description |
| 3.1(i) |
|
Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K filed on December 14, 2000) |
| 3.1(ii) |
|
Articles of Amendment of Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K filed on July 3, 2023) |
| 3.1(iii) |
|
Articles Supplementary filed for record on January 7, 2009 creating the Fixed Rate Cumulative Perpetual Preferred Stock, Series A (incorporated by reference Exhibit 4.1 of the Company’s Form 8-K filed on January 13, 2009) |
| 3.1(iv) |
|
Articles Supplementary filed for record on June 16, 2009 reclassifying all shares of authorized Fixed Rate Cumulative Perpetual Preferred Stock, Series A as shares of common stock (incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K filed on June 17, 2009) |
| 3.2 |
|
Second Amended and Restated By-Laws, dated July 1, 2023 (incorporated by reference to Exhibit 3.2 of the Company’s Form 8-K filed on July 3, 2023) |
| 4.1 |
|
Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 of the Company’s Form S-3 filed on June 25, 2010) |
| 4.2 |
|
Form of Articles Supplementary relating to Preferred Stock* |
| 4.3 |
|
Specimen Preferred Stock Certificate* |
| 4.4 |
|
Form of Depositary Shares* |
| 4.5 |
|
Form of Indenture (filed herewith) |
| 4.6 |
|
Form of Note* |
| 4.7 |
|
Form of Warrant* |
| 4.8 |
|
Form of Warrant Agreement* |
| 4.9 |
|
Form of Unit Agreement* |
| 5.1 |
|
Opinion of Holland & Knight LLP (filed herewith) |
| 23.1 |
|
Consent of Yount, Hyde & Barbour, P.C., Independent Registered Public Accounting Firm (filed herewith) |
| 23.4 |
|
Consent of Holland & Knight LLP (included in Exhibit 5.1) |
| 24.1 |
|
Power of Attorney (included in the signature page hereto) |
| 25.1 |
|
Statement of Eligibility of Trustee under the Indenture on Form T-1 (to be filed separately pursuant to Section 305(b)(2) of the Trust Indenture Act of 1939)* |
| 107 |
|
Filing Fee Table (filed herewith) |
* To be filed, if necessary, by amendment or as
an exhibit to a Current Report on Form 8-K.
Item 17. Undertakings.
(a) The undersigned registrant
hereby undertakes:
(1) To file, during any
period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus
required by Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the
prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration
Fee” table in the effective registration statement; and
(iii) To include any
material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change
to such information in the registration statement;
Provided,
however, that paragraphs (a)(1)(i), (a)(1)(ii), and (a)(1)(iii) do not apply if the information required to be included in
a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration
statement.
(2) That, for the purpose
of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof;
(3) To remove from registration
by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering;
(4) N/A;
(5) That, for the purpose
of determining liability under the Securities Act of 1933 to any purchaser:
(i) Each prospectus filed
by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of this registration statement as of the date the filed
prospectus was deemed part of and included in this registration statement; and
(ii) Each prospectus
required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of this registration statement in reliance on Rule 430B
relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required
by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in this registration statement as
of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities
in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is
at that date an underwriter, such date shall be deemed to be a new effective date of this registration statement relating to the securities
in this registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof, provided, however, that no statement made in a registration statement or prospectus
that is part of this registration statement or made in a document incorporated or deemed incorporated by reference into this registration
statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such
effective date, supersede or modify any statement that was made in this registration statement or prospectus that was part of this registration
statement or made in any such document immediately prior to such effective date;
(6) That, for the purpose
of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities,
the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to
such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will
be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus
or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing
prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of
any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities
provided by or on behalf of the undersigned registrant; and
(iv) Any other communication
that is an offer in the offering made by the undersigned registrant to the purchaser.
(b) The undersigned registrant
hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s
annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time will be deemed to be the initial bona fide offering thereof.
(c)-(g) N/A.
(h) Insofar as indemnification
for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(i) N/A.
(j) Each undersigned
registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission
under Section 305(b)(2) of the Act.
(k) N/A.
SIGNATURES
Pursuant to the requirements
of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Easton, State of Maryland, on May 16, 2024.
| |
SHORE BANCSHARES, INC.: |
| |
|
|
| |
By: |
/s/ JAMES M. BURKE |
| |
|
James M. Burke |
| |
|
President and Chief Executive Officer |
KNOW ALL MEN BY THESE PRESENTS,
that each person whose signature appears below constitutes and appoints James M. Burke and Alan J. Hyatt and each of them (with full power
to each of them to act alone), his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective
amendments) to this registration statement, and to file the same, with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority
to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any
of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
| Signatures |
|
Title |
|
Date |
| |
|
|
|
|
| /s/ JAMES M. BURKE |
|
President and Chief Executive Officer
(Principal Executive Officer) |
|
May 16, 2024 |
| James M. Burke |
|
|
|
| |
|
|
|
|
| /s/ TODD L. CAPITANI |
|
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer) |
|
May 16, 2024 |
| Todd L. Capitani |
|
|
|
| |
|
|
|
|
| /s/ ALAN J. HYATT |
|
Chairman of the Board of Directors |
|
May 16, 2024 |
| Alan J. Hyatt |
|
|
|
|
| |
|
|
|
|
| /s/ AUSTIN J. SLATER, JR. |
|
Vice Chairman of the Board of Directors |
|
May 16, 2024 |
| Austin J. Slater, Jr. |
|
and Lead Independent Director |
|
|
| |
|
|
|
|
| /s/ MICHAEL B. ADAMS |
|
Director |
|
May 16, 2024 |
| Michael B. Adams |
|
|
|
|
| |
|
|
|
|
| /s/ R. MICHAEL CLEMMER, JR. |
|
Director |
|
May 16, 2024 |
| R. Michael Clemmer, Jr. |
|
|
|
|
| |
|
|
|
|
| /s/ WILLIAM E. ESHAM, III |
|
Director |
|
May 16, 2024 |
| William E. Esham, III |
|
|
|
|
| /s/ LOUIS P. JENKINS, JR. |
|
Director |
|
May 16, 2024 |
| Louis P. Jenkins, Jr. |
|
|
|
|
| |
|
|
|
|
| /s/ DAVID S. JONES |
|
Director |
|
May 16, 2024 |
| David S. Jones |
|
|
|
|
| |
|
|
|
|
| /s/ JAMES A. JUDGE |
|
Director |
|
May 16, 2024 |
| James A. Judge |
|
|
|
|
| |
|
|
|
|
| /s/ CLYDE V. KELLY, III |
|
Director |
|
May 16, 2024 |
| Clyde V. Kelly, III |
|
|
|
|
| |
|
|
|
|
| /s/ JOHN A. LAMON, III |
|
Director |
|
May 16, 2024 |
| John A. Lamon, III |
|
|
|
|
| |
|
|
|
|
| /s/ FRANK E. MASON, III |
|
Director |
|
May 16, 2024 |
| Frank E. Mason, III |
|
|
|
|
| |
|
|
|
|
| /s/ REBECCA M. MCDONALD |
|
Director |
|
May 16, 2024 |
| Rebecca M. McDonald |
|
|
|
|
| |
|
|
|
|
| /s/ DAVID W. MOORE |
|
Director |
|
May 16, 2024 |
| David W. Moore |
|
|
|
|
| |
|
|
|
|
| /s/ MARY TODD PETERSON |
|
Director |
|
May 16, 2024 |
| Mary Todd Peterson |
|
|
|
|
| |
|
|
|
|
| /s/ E. LAWRENCE SANDERS, III |
|
Director |
|
May 16, 2024 |
| E. Lawrence Sanders, III |
|
|
|
|
| |
|
|
|
|
| /s/ JOSEPH V. STONE, JR. |
|
Director |
|
May 16, 2024 |
| Joseph V. Stone, Jr. |
|
|
|
|
| |
|
|
|
|
| /s/ ESTHER A. STREETE |
|
Director |
|
May 16, 2024 |
| Esther A. Streete |
|
|
|
|
| |
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| /s/ KONRAD M. WAYSON |
|
Director |
|
May 16, 2024 |
| Konrad M. Wayson |
|
|
|
|
| |
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| /s/ DAWN M. WILLEY |
|
Director |
|
May 16, 2024 |
| Dawn M. Willey |
|
|
|
|
EXHIBIT
4.5
SHORE BANCSHARES, INC.
Issuer
TO
Trustee
Indenture
Dated as of____________,
20___
[SENIOR/SUBORDINATED]* DEBT SECURITIES1
1
This form of Indenture includes provisions for an Indenture relating to the issuance of Senior Debt Securities and provisions
for an Indenture relating to the issuance of Subordinated Debt Securities. Material within brackets marked with an asterisk ( * ) will
be included only if the Indenture relates to the issuance of Subordinated Debt Securities. Material within brackets marked with a dagger
( † ) will be included only if the Indenture relates to the issuance of Senior Debt Securities.
TABLE
OF CONTENTS
PAGE
| Article One Definitions and Other Provisions of General Application |
1 |
| |
|
| Section 101. |
Definitions |
|
1 |
| |
Act |
|
1 |
| |
Affiliate |
|
1 |
| |
Authenticating Agent |
|
1 |
| |
Board of Directors |
|
1 |
| |
Board Resolution |
|
2 |
| |
Business Day |
|
2 |
| |
Commission |
|
2 |
| |
Company |
|
2 |
| |
Company Request |
|
2 |
| |
Corporate Trust Office |
|
2 |
| |
Covenant Defeasance |
|
2 |
| |
Defaulted Interest |
|
2 |
| |
Defeasance |
|
2 |
| |
Depositary |
|
2 |
| |
Event of Default |
|
2 |
| |
Exchange Act |
|
2 |
| |
Expiration Date |
|
2 |
| |
Global Security |
|
2 |
| |
Holder |
|
2 |
| |
Indenture |
|
2 |
| |
interest |
|
2 |
| |
Interest Payment Date |
|
2 |
| |
Investment Company |
|
3 |
| |
Maturity |
|
3 |
| |
Notice of Default |
|
3 |
| |
Officers’ Certificate |
|
3 |
| |
Opinion of Counsel |
|
3 |
| |
Original Issue Discount Security |
|
3 |
| |
Outstanding |
|
3 |
| |
Paying Agent |
|
4 |
| |
Person |
|
4 |
| |
Place of Payment |
|
4 |
| |
Predecessor Security |
|
4 |
| |
Redemption Date |
|
4 |
| |
Redemption Price |
|
4 |
| |
Regular Record Date |
|
4 |
| |
Securities |
|
4 |
| |
Securities Act |
|
4 |
| |
Security Register |
|
4 |
| |
Senior Indebtedness |
|
4 |
| |
Special Record Date |
|
4 |
| |
Stated Maturity |
|
4 |
| |
Subordination Provisions |
|
4 |
| |
Subsidiary |
|
4 |
| |
Trust Indenture Act |
|
5 |
| |
Trustee |
|
5 |
| |
U.S. Government Obligation |
|
5 |
| |
Vice President |
|
5 |
| Section 102. |
Compliance Certificates and Opinions |
|
5 |
| Section 103. |
Form of Documents Delivered to Trustee |
|
5 |
| Section 104. |
Acts of Holders; Record Dates |
|
6 |
| Section 105. |
Notices, Etc., to Trustee and Company |
|
7 |
| Section 106. |
Notice to Holders; Waiver |
|
7 |
| Section 107. |
Conflict with Trust Indenture Act |
|
8 |
| Section 108. |
Effect of Headings and Table of Contents |
|
8 |
| Section 109. |
Successors and Assigns |
|
8 |
| Section 110. |
Separability Clause |
|
8 |
| Section 111. |
Benefits of Indenture |
|
8 |
| Section 112. |
Governing Law |
|
8 |
| Section 113. |
Legal Holidays |
|
8 |
| Section 115. |
Waiver of Jury Trial |
|
8 |
| Section 116. |
Force Majeure |
|
9 |
| Section 117. |
USA Patriot Act |
|
9 |
| |
|
|
|
| Article Two Security Forms |
9 |
| |
|
| Section 201. |
Forms Generally |
|
9 |
| Section 202. |
Form of Face of Security |
|
9 |
| Section 203. |
Form of Reverse of Security |
|
10 |
| Section 204. |
Form of Legend for Global Securities |
|
13 |
| Section 205. |
Form of Trustee’s Certificate of Authentication |
|
13 |
| |
|
|
|
| Article Three The Securities |
14 |
| |
|
| Section 301. |
Amount Unlimited; Issuable in Series |
|
14 |
| Section 302. |
Denominations |
|
16 |
| Section 303. |
Execution, Authentication, Delivery and Dating |
|
16 |
| Section 304. |
Temporary Securities |
|
17 |
| Section 305. |
Registration, Registration of Transfer and Exchange |
|
17 |
| Section 306. |
Mutilated, Destroyed, Lost and Stolen Securities |
|
18 |
| Section 307. |
Payment of Interest; Interest Rights Preserved |
|
19 |
| Section 308. |
Persons Deemed Owners |
|
19 |
| Section 309. |
Cancellation |
|
19 |
| Section 310. |
Computation of Interest |
|
20 |
| Section 311. |
CUSIP |
|
20 |
| |
|
|
|
| Article Four Satisfaction and Discharge |
20 |
| |
|
| Section 401. |
Satisfaction and Discharge of Indenture |
|
20 |
| Section 402. |
Application of Trust Money |
|
21 |
| |
|
|
|
| Article Five Remedies |
21 |
| |
|
| Section 501. |
Events of Default |
|
21 |
| Section 502. |
Acceleration of Maturity; Rescission and Annulment |
|
22 |
| Section 503. |
Collection of Indebtedness and Suits for Enforcement by Trustee |
|
23 |
| Section 504. |
Trustee May File Proofs of Claim |
|
23 |
| Section 505. |
Trustee May Enforce Claims Without Possession of Securities |
|
23 |
| Section 506. |
Application of Money Collected |
|
24 |
| Section 507. |
Limitation on Suits |
|
24 |
| Section 508. |
Unconditional Right of Holders to Receive Principal, Premium and Interest |
|
24 |
| Section 509. |
Restoration of Rights and Remedies |
|
24 |
| Section 510. |
Rights and Remedies Cumulative |
|
25 |
| Section 511. |
Delay or Omission Not Waiver |
|
25 |
| Section 512. |
Control by Holders |
|
25 |
| Section 513. |
Waiver of Past Defaults |
|
25 |
| Section 514. |
Undertaking for Costs |
|
25 |
| Section 515. |
Waiver of Usury, Stay or Extension Laws |
|
26 |
| Article Six The Trustee |
26 |
| |
|
| Section 601. |
Certain Duties and Responsibilities |
|
26 |
| Section 602. |
Notice of Defaults |
|
26 |
| Section 603. |
Certain Rights of Trustee |
|
26 |
| Section 604. |
Not Responsible for Recitals or Issuance of Securities |
|
27 |
| Section 605. |
May Hold Securities |
|
28 |
| Section 606. |
Money Held in Trust |
|
28 |
| Section 607. |
Compensation and Reimbursement |
|
28 |
| Section 608. |
Conflicting Interests |
|
28 |
| Section 609. |
Corporate Trustee Required; Eligibility |
|
28 |
| Section 610. |
Resignation and Removal; Appointment of Successor |
|
29 |
| Section 611. |
Acceptance of Appointment by Successor |
|
30 |
| Section 612. |
Merger, Conversion, Consolidation or Succession to Business |
|
30 |
| Section 613. |
Preferential Collection of Claims Against Company |
|
30 |
| Section 614. |
Appointment of Authenticating Agent |
|
30 |
| |
|
|
|
| Article Seven Holders’ Lists and Reports by Trustee and Company |
32 |
| |
|
| Section 701. |
Company to Furnish Trustee Names and Addresses of Holders |
|
32 |
| Section 702. |
Preservation of Information; Communications to Holders |
|
32 |
| Section 703. |
Reports by Trustee |
|
32 |
| Section 704. |
Reports by Company |
|
32 |
| |
|
|
|
| Article Eight Consolidation, Merger, Conveyance, Transfer or Lease |
33 |
| |
|
| Section 801. |
Company May Consolidate, Etc., Only on Certain Terms |
|
33 |
| Section 802. |
Successor Substituted |
|
33 |
| |
|
|
|
| Article Nine Supplemental Indentures |
33 |
| |
|
| Section 901. |
Supplemental Indentures Without Consent of Holders |
|
33 |
| Section 902. |
Supplemental Indentures With Consent of Holders |
|
34 |
| Section 903. |
Execution of Supplemental Indentures |
|
35 |
| Section 904. |
Effect of Supplemental Indentures |
|
35 |
| Section 905. |
Conformity with Trust Indenture Act |
|
35 |
| Section 906. |
Reference in Securities to Supplemental Indentures |
|
35 |
| |
|
|
|
| Article Ten Covenants |
35 |
| |
|
| Section 1001. |
Payment of Principal, Premium and Interest |
|
35 |
| Section 1002. |
Maintenance of Office or Agency |
|
35 |
| Section 1003. |
Money for Securities Payments to Be Held in Trust |
|
36 |
| Section 1004. |
Statement by Officers as to Default |
|
36 |
| Section 1005. |
Existence |
|
37 |
| Section 1006. |
Maintenance of Properties |
|
37 |
| Section 1007. |
Payment of Taxes and Other Claims |
|
37 |
| Section 1008. |
Waiver of Certain Covenants |
|
37 |
| |
|
|
|
| Article Eleven Redemption of Securities |
37 |
| |
|
| Section 1101. |
Applicability of Article |
|
37 |
| Section 1102. |
Election to Redeem; Notice to Trustee |
|
38 |
| Section 1103. |
Selection by Trustee of Securities to Be Redeemed |
|
38 |
| Section 1104. |
Notice of Redemption |
|
38 |
| Section 1105. |
Deposit of Redemption Price |
|
39 |
| Section 1106. |
Securities Payable on Redemption Date |
|
39 |
| Section 1107. |
Securities Redeemed in Part |
|
39 |
| |
|
|
|
| Article Twelve Sinking Funds |
39 |
| |
|
| Section 1201. |
Applicability of Article |
|
39 |
| Section 1202. |
Satisfaction of Sinking Fund Payments with Securities |
|
39 |
| Section 1203. |
Redemption of Securities for Sinking Fund |
|
40 |
| |
|
|
|
| Article Thirteen Defeasance and Covenant Defeasance |
40 |
| |
|
| Section 1301. |
Company’s Option to Effect Defeasance or Covenant Defeasance |
|
40 |
| Section 1302. |
Defeasance and Discharge |
|
40 |
| Section 1303. |
Covenant Defeasance |
|
40 |
| Section 1304. |
Conditions to Defeasance or Covenant Defeasance |
|
41 |
| Section 1305. |
Deposited Money and U.S. Government Obligations to Be Held in Trust; Miscellaneous Provisions |
|
42 |
| Section 1306. |
Reinstatement |
|
42 |
| Section 1307. |
[Effect on Subordination Provisions.]* |
|
43 |
NOTE: This table of contents shall not, for any
purpose, be deemed to be a part of the Indenture.
SHORE BANCSHARES, INC.
Certain Sections of this Indenture relating to
Sections 310 through 318,
inclusive, of the Trust Indenture Act of 1939:
| Trust Indenture Act Section |
Indenture Section |
| § 310(a)(1) |
609 |
| (a)(2) |
609 |
| (a)(3) |
Not Applicable |
| (a)(4) |
Not Applicable |
| (b) |
608 |
| |
610 |
| § 311(a) |
613 |
| (b) |
613 |
| § 312(a) |
701 |
| |
702 |
| (b) |
702 |
| (c) |
702 |
| § 313(a) |
703 |
| (b) |
703 |
| (c) |
703 |
| (d) |
703 |
| § 314(a) |
704 |
| (a)(4) |
101 |
| |
1004 |
| (b) |
Not Applicable |
| (c)(1) |
102 |
| (c)(2) |
102 |
| (c)(3) |
1304 |
| |
1305 |
| (d) |
Not Applicable |
| (e) |
102 |
| § 315(a) |
601 |
| (b) |
603 |
| (c) |
601 |
| (d) |
601 |
| (e) |
514 |
| § 316(a) |
101 |
| (a)(1)(A) |
502 |
| |
512 |
| (a)(1)(B) |
513 |
| (a)(2) |
Not Applicable |
| (b) |
508 |
| (c) |
104 |
| § 317(a)(1) |
503 |
| (a)(2) |
504 |
| (b) |
1003 |
| § 318(a) |
107 |
___________________
Note: This reconciliation and tie shall not, for
any purpose, be deemed to be a part of the Indenture.
INDENTURE, dated as of_________,
between Shore Bancshares, Inc., a corporation duly organized and existing under the laws of the State of Maryland (herein called
the “Company”), and , a ,
as Trustee (herein called the “Trustee”).
Recitals
of the Company
The Company has duly authorized
the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured debentures, notes or other
evidences of indebtedness (herein called the “Securities”), to be issued in one or more series as in this Indenture provided.
All things necessary to make
this Indenture a valid agreement of the Company, in accordance with its terms, have been done.
Now,
Therefore, this Indenture Witnesseth:
For and in consideration
of the premises and the purchase of the Securities by the Holders thereof, it is mutually agreed, for the equal and proportionate benefit
of all Holders of the Securities or of series thereof, as follows:
Article One
Definitions and Other Provisions
of General Application
Section 101. Definitions
For all purposes of this
Indenture, except as otherwise expressly provided or unless the context otherwise requires:
(1) the
terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;
(2) all
other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned
to them therein;
(3) all
accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles,
and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any
computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the date of such computation;
(4) unless
the context otherwise requires, any reference to an “Article” or a “Section” refers to an Article or a Section,
as the case may be, of this Indenture; and
(5) the
words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Indenture
as a whole and not to any particular Article, Section or other subdivision.
“Act”, when used
with respect to any Holder, has the meaning specified in Section 104.
“Affiliate” of
any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control
with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person
means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to
the foregoing.
“Authenticating Agent”
means any Person authorized by the Trustee pursuant to Section 614 to act on behalf of the Trustee to authenticate Securities of
one or more series.
“Board of Directors”
means either the board of directors of the Company or any duly authorized committee of that board.
“Board Resolution”
means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.
“Business Day”,
when used with respect to any Place of Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law or executive order to close.
“Commission” means
the Securities and Exchange Commission, from time to time constituted, created under the Exchange Act, or, if at any time after the execution
of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
“Company” means
the Person named as the “Company” in the first paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor Person.
“Company Request”
or “Company Order” means a written request or order signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary, and delivered to the Trustee.
“Corporate Trust Office”
means the principal office of the Trustee in at which at
any particular time its corporate trust business shall be administered.
“Covenant Defeasance”
has the meaning specified in Section 1303.
“Defaulted Interest”
has the meaning specified in Section 307.
“Defeasance” has
the meaning specified in Section 1302.
“Depositary” means,
with respect to Securities of any series issuable in whole or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for such Securities as contemplated by Section 301.
“Event of Default”
has the meaning specified in Section 501.
“Exchange Act”
means the Securities Exchange Act of 1934 and any statute successor thereto, in each case as amended from time to time.
“Expiration Date”
has the meaning specified in Section 104.
“Global Security”
means a Security that evidences all or part of the Securities of any series and bears the legend set forth in Section 204 (or such
legend as may be specified as contemplated by Section 301 for such Securities).
“Holder” means
a Person in whose name a Security is registered in the Security Register.
“Indenture” means
this instrument as originally executed and as it may from time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental
indenture, respectively. The term “Indenture” shall also include the terms of particular series of Securities established
as contemplated by Section 301.
“interest”, when
used with respect to an Original Issue Discount Security which by its terms bears interest only after Maturity, means interest payable
after Maturity.
“Interest Payment Date”,
when used with respect to any Security, means the Stated Maturity of an installment of interest on such Security.
“Investment Company
Act” means the Investment Company Act of 1940 and any statute successor thereto, in each case as amended from time to time.
“Maturity”, when
used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.
“Notice of Default”
means a written notice of the kind specified in Section 501(4) or 501(5).
“Officers’ Certificate”
means a certificate signed by the Chairman of the Board, a Vice Chairman of the Board, the President or a Vice President, and by the Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company, and delivered to the Trustee. One of the officers signing
an Officers’ Certificate given pursuant to Section 1004 shall be the principal executive, financial or accounting officer of
the Company.
“Opinion of Counsel”
means a written opinion of legal counsel, who shall be acceptable to the Trustee, which opinion meets the requirements of Section 102.
The counsel may be counsel for the Company.
“Original Issue Discount
Security” means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration
of acceleration of the Maturity thereof pursuant to Section 502.
“Outstanding”,
when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(1) Securities
theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;
(2) Securities
for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other
than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for
the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made;
(3) Securities
as to which Defeasance has been effected pursuant to Section 1302; and
(4) Securities
which have been paid pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee
proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of
the Company;
provided, however, that in determining
whether the Holders of the requisite principal amount of the Outstanding Securities have given, made or taken any request, demand, authorization,
direction, notice, consent, waiver or other action hereunder as of any date, (A) the principal amount of an Original Issue Discount
Security which shall be deemed to be Outstanding shall be the amount of the principal thereof which would be due and payable as of such
date upon acceleration of the Maturity thereof to such date pursuant to Section 502, (B) if, as of such date, the principal
amount payable at the Stated Maturity of a Security is not determinable, the principal amount of such Security which shall be deemed to
be Outstanding shall be the amount as specified or determined as contemplated by Section 301, (C) the principal amount of a
Security denominated in one or more foreign currencies or currency units which shall be deemed to be Outstanding shall be the U.S. dollar
equivalent, determined as of such date in the manner provided as contemplated by Section 301, of the principal amount of such Security
(or, in the case of a Security described in Clause (A) or (B) above, of the amount determined as provided in such Clause), and
(D) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor
shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent, waiver or other action, only Securities which the Trustee knows to
be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor.
“Paying Agent”
means any Person authorized by the Company to pay the principal of or any premium or interest on any Securities on behalf of the Company.
“Person” means
any individual, corporation, partnership, joint venture, trust, unincorporated organization or government or any agency or political subdivision
thereof.
“Place of Payment”,
when used with respect to the Securities of any series, means the place or places where the principal of and any premium and interest
on the Securities of that series are payable as specified as contemplated by Section 301.
“Predecessor Security”
of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular
Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or
in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost
or stolen Security.
“Redemption Date”,
when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture.
“Redemption Price”,
when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture.
“Regular Record Date”
for the interest payable on any Interest Payment Date on the Securities of any series means the close of business on the 15th
calendar day prior to the applicable Interest Payment Date, without regard to whether the Regular Record Date is a Business Day.
“Responsible Officer”
means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president,
assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily
performs functions similar to those performed by the Persons who at the time will be such officers, respectively, or to whom any corporate
trust matter is referred because of such Person’s knowledge of and familiarity with the particular subject and who will have direct
responsibility for the administration of this Indenture.
“Securities” has
the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under
this Indenture.
“Securities Act”
means the Securities Act of 1933 and any statute successor thereto, in each case as amended from time to time.
“Security Register”
and “Security Registrar” have the respective meanings specified in Section 305.
[“Senior Indebtedness”,
when used with respect to the Securities of any series, shall have the meaning established pursuant to Section 301(20) with respect
to the Securities of such series.]*
“Special Record Date”
for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 307.
“Stated Maturity”,
when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security
as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.
[“Subordination Provisions”,
when used with respect to the Securities of any series, shall have the meaning established pursuant to Section 301(20) with respect
to Securities of such series.]*
“Subsidiary” means
a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more
other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, “voting stock”
means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of
stock has such voting power by reason of any contingency.
“Trust Indenture Act”
means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date, “Trust Indenture Act” means, to the extent required
by any such amendment, the Trust Indenture Act of 1939 as so amended.
“Trustee” means
the Person named as the “Trustee” in the first paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean or include each Person who is
then a Trustee hereunder, and if at any time there is more than one such Person, “Trustee” as used with respect to the Securities
of any series shall mean the Trustee with respect to Securities of that series.
“U.S. Government Obligation”
has the meaning specified in Section 1304.
“Vice President”,
when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words
added before or after the title “vice president”.
Section 102. Compliance
Certificates and Opinions.
Upon any application or request
by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee such
certificates and opinions as may be required under the Trust Indenture Act. Each such certificate or opinion shall be given in the form
of an Officers’ Certificate, if to be given by an officer of the Company, or an Opinion of Counsel, if to be given by counsel, and
shall comply with the requirements of the Trust Indenture Act and any other requirements set forth in this Indenture.
Every certificate or opinion
with respect to compliance with a condition or covenant provided for in this Indenture (except for certificates provided for in Section 1004)
shall include,
(1) a
statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating
thereto;
(2) 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;
(3) a
statement that, in the opinion of each such individual, he/she has made such examination or investigation as is necessary to enable him/her
to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(4) a
statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.
Section 103. Form of
Documents Delivered to Trustee.
In any case where several
matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but
one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and
any such Person may certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion
of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his/her certificate or opinion is based are erroneous. Any such certificate or opinion of counsel
may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers
of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters
are erroneous.
Where any Person is required
to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this
Indenture, they may, but need not, be consolidated and form one instrument.
Section 104. Acts
of Holders; Record Dates.
Any request, demand, authorization,
direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument
or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose
of this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Company, if made in the manner provided
in this Section.
The fact and date of the
execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate
of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him/her the execution thereof. Where such execution is by a signer acting in a capacity other than his/her
individual capacity, such certificate or affidavit shall also constitute sufficient proof of his/her authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner
which the Trustee deems sufficient.
The ownership of Securities
shall be proved by the Security Register.
Any request, demand, authorization,
direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and
the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action
is made upon such Security.
The Company may set any day
as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to give, make or take any
request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given,
made or taken by Holders of Securities of such series, provided that the Company may not set a record date for, and the provisions
of this paragraph shall not apply with respect to, the giving or making of any notice, declaration, request or direction referred to in
the next paragraph. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of the relevant series
on such record date, and no other Holders, shall be entitled to take the relevant action, whether or not such Holders remain Holders after
such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration
Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date. Nothing in this paragraph
shall be construed to prevent the Company from setting a new record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled
and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite
principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any record date is
set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders
and the applicable Expiration Date to be given to the Trustee in writing and to each Holder of Securities of the relevant series in the
manner set forth in Section 106.
The Trustee may set any day
as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to join in the giving or
making of (i) any Notice of Default, (ii) any declaration of acceleration referred to in Section 502, (iii) any request
to institute proceedings referred to in Section 507(2) or (iv) any direction referred to in Section 512, in each case
with respect to Securities of such series. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities
of such series on such record date, and no other Holders, shall be entitled to join in such notice, declaration, request or direction,
whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless
taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series
on such record date. Nothing in this paragraph shall be construed to prevent the Trustee from setting a new record date for any action
for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically
and with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be construed to render ineffective
any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the Trustee, at the Company’s expense, shall cause notice
of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Company in writing and to each
Holder of Securities of the relevant series in the manner set forth in Section 106.
With respect to any record
date set pursuant to this Section, the party hereto which sets such record dates may designate any day as the “Expiration Date”
and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective
unless notice of the proposed new Expiration Date is given to the other party hereto in writing, and to each Holder of Securities of the
relevant series in the manner set forth in Section 106, on or prior to the existing Expiration Date. If an Expiration Date is not
designated with respect to any record date set pursuant to this Section, the party hereto which set such record date shall be deemed to
have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change
the Expiration Date as provided in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than the 180th day
after the applicable record date.
Without limiting the foregoing,
a Holder entitled hereunder to take any action hereunder with regard to any particular Security may do so with regard to all or any part
of the principal amount of such Security or by one or more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
Section 105. Notices,
Etc., to Trustee and Company.
Any request, demand, authorization,
direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given
or furnished to, or filed with,
(1) the
Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention: [Corporate Trust Administration], or
(2) the
Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in
the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company.
Section 106. Notice
to Holders; Waiver.
Where this Indenture provides
for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, to each Holder affected by such event, at his/her address as it appears in the Security Register,
not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice. In
any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to
any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall
not be a condition precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the
suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification
as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.
Section 107. Conflict
with Trust Indenture Act.
If any provision hereof limits,
qualifies or conflicts with a provision of the Trust Indenture Act which is required under such Act to be a part of and govern this Indenture,
the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act which
may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the
case may be.
Section 108. Effect
of Headings and Table of Contents.
The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect the construction hereof.
Section 109. Successors
and Assigns.
All covenants and agreements
in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not.
Section 110. Separability
Clause.
In case any provision in
this Indenture or in the Securities 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 111. Benefits
of Indenture.
Nothing in this Indenture
or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder [, the
holders of Senior Indebtedness]* and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 112. Governing
Law.
This Indenture and the Securities
shall be governed by and construed in accordance with the law of the State of New York.
Section 113. Legal
Holidays.
In any case where any Interest
Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding
any other provision of this Indenture or of the Securities (other than a provision of any Security which specifically states that such
provision shall apply in lieu of this Section)) payment of interest or principal (and premium, if any) need not be made at such Place
of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as
if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity.
Section 115 Waiver
of Jury Trial.
EACH PARTY HERETO IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 116 Force
Majeure.
In no event will the Trustee
be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly
or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism,
civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities,
communications or computer (software and hardware) services; it being understood that the Trustee will use reasonable efforts that are
consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
Section 117 USA
Patriot Act.
The Trustee hereby notifies
the Company that in accordance with the requirements of the USA Patriot Act, it is required to obtain, verify and record information that
identifies the Company, which information includes the name and address of the Company and other information that will allow the Trustee
to identify the Company in accordance with the USA Patriot Act.
Article Two
Security Forms
Section 201. Forms
Generally.
The Securities of each series
shall be in substantially the form set forth in this Article, or in such other form as shall be established by or pursuant to a Board
Resolution or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and
such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depositary
therefor or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution thereof.
If the form of Securities of any series is established by action taken pursuant to a Board Resolution, a copy of an appropriate record
of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Company Order contemplated by Section 303 for the authentication and delivery of such Securities.
The definitive Securities
shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the
officers executing such Securities, as evidenced by their execution of such Securities.
Section 202. Form of
Face of Security.
[Insert any legend required by the Internal
Revenue Code and the regulations thereunder.]
Shore Bancshares, Inc.
[Insert title of the Securities]
Shore Bancshares, Inc.,
a corporation duly organized and existing under the laws of Maryland (herein called the “Company”, which term includes any
successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to ________________________,
or registered assigns, the principal sum of _________________________ Dollars on ____________________________ [if the Security is
to bear interest prior to Maturity, insert — , and to pay interest thereon from or
from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on ______ and ______ in
each year, commencing ______, at the rate of % per annum, until the principal hereof is paid or
made available for payment [if applicable, insert — , provided that any principal and premium, and any such installment
of interest, which is overdue shall bear interest at the rate of % per annum (to the extent that the payment
of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment,
and such interest shall be payable on demand]. The interest so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such interest, which shall be the ____ or ____ (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior
to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more
fully provided in said Indenture].
[If the Security is not to bear interest prior
to Maturity, insert — The principal of this Security shall not bear interest except in the case of a default in payment of
principal upon acceleration, upon redemption or at Stated Maturity and in such case the overdue principal and any overdue premium shall
bear interest at the rate of % per annum (to the extent that the payment of such interest shall be legally
enforceable), from the dates such amounts are due until they are paid or made available for payment. Interest on any overdue principal
or premium shall be payable on demand.]
Payment of the principal
of (and premium, if any) and [if applicable, insert — any such] interest on this Security will be made at the office or agency
of the Company maintained for that purpose in _______, 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 [if applicable, insert — ; provided, however, that
at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register].
Reference is hereby made
to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of
authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not
be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company
has caused this instrument to be duly executed under its corporate seal.
Dated:
| By__________________________________________________________ |
|
Attest:
| ____________________________________________________________ | |
Section 203. Form of
Reverse of Security.
This Security is one of
a duly authorized issue of securities of the Company (herein called the “Securities”), issued and to be issued in one or
more series under an Indenture, dated as of ________ (herein called the “Indenture”, which term shall have the meaning
assigned to it in such instrument), between the Company and __________, as Trustee (herein called the
“Trustee”, which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture
for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee[, the
holders of Senior Indebtedness]* and the Holders of the Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on the face hereof [if applicable, insert —,
limited in aggregate principal amount to $________].
[If applicable, insert
— The Securities of this series are subject to redemption upon not less than 30 days’ nor more than 60 days’ notice
by mail, at any time [if applicable, insert — on or after _______, 20__], as a whole or in part, at the election of the
Company, at the following Redemption Prices (expressed as percentages of the principal amount): If redeemed [if applicable, insert
— on or before _______, ___%, and if redeemed] during the 12-month period beginning _______ of the years indicated,
| Year |
Redemption Price |
Year |
Redemption
Price |
and thereafter at a Redemption Price equal to
% of the principal amount, together in the case of any such redemption with accrued interest to the Redemption
Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof,
all as provided in the Indenture.]
[If applicable, insert
— The Securities of this series are subject to redemption upon not less than 30 days’ notice by mail, (1) on
in any year commencing with the year and ending with the year through
operation of the sinking fund for this series at the Redemption Prices for redemption through operation of the sinking fund (expressed
as percentages of the principal amount) set forth in the table below, and (2) at any time [if applicable, insert —
on or after ], as a whole or in part,
at the election of the Company, at the Redemption Prices for redemption otherwise than through operation of the sinking fund (expressed
as percentages of the principal amount) set forth in the table below: If redeemed during the 12-month period beginning of
the years indicated,
| Year |
Redemption Price
For Redemption
Through Operation
of the
Sinking Fund |
Redemption Price For
Redemption Otherwise
than Through Operation
of the Sinking Fund |
and thereafter at a Redemption Price equal to
% of the principal amount, together in the case of any such redemption (whether through operation
of the sinking fund or otherwise) with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on
or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record
at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert
— Notwithstanding the foregoing, the Company may not, prior to ______, redeem any Securities of this series as contemplated
by [if applicable, insert — Clause (2) of] the preceding paragraph as a part of, or in anticipation of, any refunding
operation by the application, directly or indirectly, of moneys borrowed having an interest cost to the Company (calculated in accordance
with generally accepted financial practice) of less than % per annum.]
[If applicable, insert
— The sinking fund for this series provides for the redemption on ________ in each year beginning with the year ____
and ending with the year ___of [if applicable, insert — not less than $____ (“mandatory sinking fund”)
and not more than] $____ aggregate principal amount of Securities of this series. Securities of this series acquired or redeemed
by the Company otherwise than through [if applicable, insert — mandatory] sinking fund payments may be credited against subsequent
[if applicable, insert — mandatory] sinking fund payments otherwise required to be made [if applicable, insert —
, in the inverse order in which they become due].]
[If the Security is subject
to redemption of any kind, insert — In the event of redemption of this Security in part only, a new Security or Securities of
this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation
hereof.]
[Insert paragraph regarding
subordination of the Security.]*
[If applicable, insert
— The Indenture contains provisions for defeasance at any time of [the entire indebtedness of this Security] [or] [certain restrictive
covenants and Events of Default with respect to this Security] [, in each case] upon compliance with certain conditions set forth in the
Indenture.]
[If the Security is not
an Original Issue Discount Security, insert — If an Event of Default with respect to Securities of this series shall occur and
be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided
in the Indenture.]
[If the Security is an
Original Issue Discount Security, insert — If an Event of Default with respect to Securities of this series shall occur and
be continuing, an amount of principal of the Securities of this series may be declared due and payable in the manner and with the effect
provided in the Indenture. Such amount shall be equal to — insert formula for determining the amount. Upon payment (i) of
the amount of principal so declared due and payable and (ii) of interest on any overdue principal, premium and interest (in each
case to the extent that the payment of such interest shall be legally enforceable), all of the Company’s obligations in respect
of the payment of the principal of and premium and interest, if any, on the Securities of this series shall terminate.]
The Indenture permits, with
certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the
rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected.
The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series
at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions
of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this
Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon
the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject
to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the
Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously
given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less
than 25% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default as Trustee and provided the Trustee indemnity satisfactory to the Trustee, and
the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding
a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such
notice, request and indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement
of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.
No reference herein to the
Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin
or currency, herein prescribed.
As provided in the Indenture
and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender
of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium
and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed by, the Holder hereof or his/her attorney duly authorized in writing, and thereupon
one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.
The Securities of this series
are issuable only in registered form without coupons in denominations of $____ and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be
made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Prior to due presentment
of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person
in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security
which are defined in the Indenture shall have the meanings assigned to them in the Indenture.
Section 204. Form of
Legend for Global Securities.
Unless otherwise specified
as contemplated by Section 301 for the Securities evidenced thereby, every Global Security authenticated and delivered hereunder
shall bear a legend in substantially the following form:
This Security
is a Global Security within the meaning of the Indenture hereinafter referred to and is registered in the name of a Depositary or a nominee
thereof. This Security may not be exchanged in whole or in part for a Security registered, and no transfer of this Security in whole or
in part may be registered, in the name of any Person other than a transfer of this Security as a whole by the depositary to a nominee
thereof, or by a nominee of a depositary to the depositary or another nominee thereof or by the depositary or any nominee thereof to a
successor of the depositary, or a nominee of the successor depositary, except in the limited circumstances described in the Indenture.
Section 205. Form of
Trustee’s Certificate of Authentication.
The Trustee’s certificates
of authentication shall be in substantially the following form:
This is one of the Securities
of the series designated therein referred to in the within-mentioned Indenture.
| | ____________________________________________________________ |
, |
As Trustee
Authorized Officer
Article Three
The Securities
Section 301. Amount
Unlimited; Issuable in Series.
The aggregate principal amount
of Securities which may be authenticated and delivered under this Indenture is unlimited.
The Securities may be issued
in one or more series. There shall be established in or pursuant to a Board Resolution and, subject to Section 303, set forth, or
determined in the manner provided, in an Officers’ Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series,
(1) the
title of the Securities of the series (which shall distinguish the Securities of the series from Securities of any other series);
(2) any
limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities
of the series pursuant to Section 304, 305, 306, 906 or 1107 and except for any Securities which, pursuant to Section 303, are
deemed never to have been authenticated and delivered hereunder);
(3) the
Person to whom any interest on a Security of the series shall be payable, if other than the Person in whose name that Security (or one
or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest;
(4) the
date or dates on which the principal of any Securities of the series is payable;
(5) the
rate or rates at which any Securities of the series shall bear interest, if any, the date or dates from which any such interest shall
accrue, the Interest Payment Dates on which any such interest shall be payable and the Regular Record Date for any such interest payable
on any Interest Payment Date;
(6) the
place or places where the principal of and any premium and interest on any Securities of the series shall be payable;
(7) the
period or periods within which, the price or prices at which and the terms and conditions upon which any Securities of the series may
be redeemed, in whole or in part, at the option of the Company and, if other than by a Board Resolution, the manner in which any election
by the Company to redeem the Securities shall be evidenced;
(8) the
obligation, if any, of the Company to redeem or purchase any Securities of the series pursuant to any sinking fund or analogous provisions
or at the option of the Holder thereof and the period or periods within which, the price or prices at which and the terms and conditions
upon which any Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;
(9) if
other than denominations of $1,000 and any integral multiple thereof, the denominations in which any Securities of the series shall be
issuable;
(10) if
the amount of principal of or any premium or interest on any Securities of the series may be determined with reference to an index or
pursuant to a formula, the manner in which such amounts shall be determined;
(11) if
other than the currency of the United States of America, the currency, currencies or currency units in which the principal of or any premium
or interest on any Securities of the series shall be payable and the manner of determining the equivalent thereof in the currency of the
United States of America for any purpose, including for purposes of the definition of “Outstanding” in Section 101;
(12) if
the principal of or any premium or interest on any Securities of the series is to be payable, at the election of the Company or the Holder
thereof, in one or more currencies or currency units other than that or those in which such Securities are stated to be payable, the currency,
currencies or currency units in which the principal of or any premium or interest on such Securities as to which such election is made
shall be payable, the periods within which and the terms and conditions upon which such election is to be made and the amount so payable
(or the manner in which such amount shall be determined);
(13) if
other than the entire principal amount thereof, the portion of the principal amount of any Securities of the series which shall be payable
upon declaration of acceleration of the Maturity thereof pursuant to Section 502;
(14) if
the principal amount payable at the Stated Maturity of any Securities of the series will not be determinable as of any one or more dates
prior to the Stated Maturity, the amount which shall be deemed to be the principal amount of such Securities as of any such date for any
purpose thereunder or hereunder, including the principal amount thereof which shall be due and payable upon any Maturity other than the
Stated Maturity or which shall be deemed to be Outstanding as of any date prior to the Stated Maturity (or, in any such case, the manner
in which such amount deemed to be the principal amount shall be determined);
(15) if
applicable, that the Securities of the series, in whole or any specified part, shall be defeasible pursuant to Section 1302 or Section 1303
or both such Sections and, if other than by a Board Resolution, the manner in which any election by the Company to defease such Securities
shall be evidenced;
(16) if
applicable, that any Securities of the series shall be issuable in whole or in part in the form of one or more Global Securities and,
in such case, the respective Depositaries for such Global Securities, the form of any legend or legends which shall be borne by any such
Global Security in addition to or in lieu of that set forth in Section 204 and any circumstances in addition to or in lieu of those
set forth in Clause (2) of the last paragraph of Section 305 in which any such Global Security may be exchanged in whole or
in part for Securities registered, and any transfer of such Global Security in whole or in part may be registered, in the name or names
of Persons other than the Depositary for such Global Security or a nominee thereof;
(17) any
addition to or change in the Events of Default which applies to any Securities of the series and any change in the right of the Trustee
or the requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant to Section 502;
(18) any
addition to or change in the covenants set forth in Article Ten which applies to Securities of the series; and
(19) any
other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture, except as permitted by Section 901(5))[;
and
(20) the
terms pursuant to which the Securities of such series will be made subordinate in right of payment to Senior Indebtedness and the definition
of such Senior Indebtedness with respect to such series; and, such Board Resolution, Officers’ Certificate or supplemental indenture,
as the case may be, establishing the terms of such series shall expressly state which articles, sections or other provisions thereof constitute
the “Subordination Provisions” with respect to the Securities of such series]*.
All Securities of any one
series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board
Resolution referred to above and (subject to Section 303) set forth, or determined in the manner provided, in the Officers’
Certificate referred to above or in any such indenture supplemental hereto.
If any of the terms of the
series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified
by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers’
Certificate setting forth the terms of the series.
[The Securities of each series
shall be subordinated in right of payment to Senior Indebtedness as provided in the Subordination Provisions for such series. [The Securities
shall [not be superior in right of payment to, and shall] rank pari passu with[,] — insert description of existing debt of the
Company that is intended to rank on a parity with the Securities.]]*
Section 302. Denominations.
The Securities of each series
shall be issuable only in registered form without coupons and only in such denominations as shall be specified as contemplated by Section 301.
In the absence of any such specified denomination with respect to the Securities of any series, the Securities of such series shall be
issuable in denominations of $1,000 and any integral multiple thereof.
Section 303. Execution,
Authentication, Delivery and Dating.
The Securities shall be executed
on behalf of the Company by its Chairman of the Board, its Vice Chairman of the Board, its President or one of its Vice Presidents, under
its corporate seal reproduced thereon attested by its Secretary or one of its Assistant Secretaries. The signature of any of these officers
on the Securities may be manual or facsimile.
Securities bearing the manual
or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding
that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did
not hold such offices at the date of such Securities.
At any time and from time
to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to
the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee
in accordance with the Company Order shall authenticate and deliver such Securities. If the form or terms of the Securities of the series
have been established by or pursuant to one or more Board Resolutions as permitted by Sections 201 and 301, in authenticating such Securities,
and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating,
(1) if
the form of such Securities has been established by or pursuant to Board Resolution as permitted by Section 201, that such form has
been established in conformity with the provisions of this Indenture;
(2) if
the terms of such Securities have been established by or pursuant to Board Resolution as permitted by Section 301, that such terms
have been established in conformity with the provisions of this Indenture; and
(3) that
such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors’ rights and to general equity principles.
If such form or terms have been so established,
the Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect
the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not acceptable
to the Trustee.
Notwithstanding the provisions
of Section 301 and of the preceding paragraph, if all Securities of a series are not to be originally issued at one time, it shall
not be necessary to deliver the Officers’ Certificate otherwise required pursuant to Section 301 or the Company Order and Opinion
of Counsel otherwise required pursuant to such preceding paragraph at or prior to the authentication of each Security of such series if
such documents are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued.
Each Security shall be dated
the date of its authentication.
No Security shall be entitled
to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication
substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall
be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. Notwithstanding
the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the
Company shall deliver such Security to the Trustee for cancellation as provided in Section 309, for all purposes of this Indenture
such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of
this Indenture.
Section 304. Temporary
Securities.
Pending the preparation of
definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary
Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially
of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions
and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities.
If temporary Securities of
any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay. After the
preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities
of such series upon surrender of the temporary Securities of such series at the office or agency of the Company in a Place of Payment
for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series,
the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor one or more definitive Securities of the
same series, of any authorized denominations and of like tenor and aggregate principal amount. Until so exchanged, the temporary Securities
of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series and
tenor.
Section 305. Registration,
Registration of Transfer and Exchange.
The Company shall cause to
be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency
of the Company in a Place of Payment being herein sometimes collectively referred to as the “Security Register”) in which,
subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers
of Securities. The Trustee is hereby appointed “Security Registrar” for the purpose of registering Securities and transfers
of Securities as herein provided.
Upon surrender for registration
of transfer of any Security of a series at the office or agency of the Company in a Place of Payment for that series, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities
of the same series, of any authorized denominations and of like tenor and aggregate principal amount.
At the option of the Holder,
Securities of any series may be exchanged for other Securities of the same series, of any authorized denominations and of like tenor and
aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive.
All Securities issued upon
any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.
Every Security presented
or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or
be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his/her attorney duly authorized in writing.
No service charge shall be
made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.
If the Securities of any
series (or of any series and specified tenor) are to be redeemed in part, the Company shall not be required (A) to issue, register
the transfer of or exchange any Securities of that series (or of that series and specified tenor, as the case may be) during a period
beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of any such Securities selected for
redemption under Section 1103 and ending at the close of business on the day of such mailing, or (B) to register the transfer
of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed
in part.
The provisions of Clauses
(1), (2), (3) and (4) below shall apply only to Global Securities:
(1) Each
Global Security authenticated under this Indenture shall be registered in the name of the Depositary designated for such Global Security
or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(2) Notwithstanding
any other provision in this Indenture, no Global Security may be exchanged in whole or in part for Securities registered, and no transfer
of a Global Security in whole or in part may be registered, in the name of any Person other than a transfer of this Security as a whole
by the Depositary to a nominee thereof, or by a nominee of the Depositary to the Depositary or another nominee thereof or by the Depositary
or any nominee thereof to a successor of the Depositary or a nominee of the successor Depositary, unless (A) such Depositary (i) has
notified the Company that it is unwilling or unable to continue as Depositary for such Global Security or (ii) has ceased to be a
clearing agency registered under the Exchange Act, (B) there shall have occurred and be continuing an Event of Default with respect
to such Global Security or (C) there shall exist such circumstances, if any, in addition to or in lieu of the foregoing as have been
specified for this purpose as contemplated by Section 301.
(3) Subject
to Clause (2) above, any exchange of a Global Security for other Securities may be made in whole or in part, and all Securities issued
in exchange for a Global Security or any portion thereof shall be registered in such names as the Depositary for such Global Security
shall direct.
(4) Every
Security authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Section, Section 304, 306, 906 or 1107 or otherwise, shall be authenticated and delivered in the
form of, and shall be, a Global Security, unless such Security is registered in the name of a Person other than the Depositary for such
Global Security or a nominee thereof.
Section 306. Mutilated,
Destroyed, Lost and Stolen Securities.
If any mutilated Security
is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security
of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered
to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such
security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and the
Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and
of like tenor and principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated,
destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing
a new Security, pay such Security.
Upon the issuance of any
new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any
series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that series
duly issued hereunder.
The provisions of this Section are
exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities.
Section 307. Payment
of Interest; Interest Rights Preserved.
Except as otherwise provided
as contemplated by Section 301 with respect to any series of Securities, interest on any Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date for such interest.
Any interest on any Security
of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted
Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder,
and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or (2) below:
(1) The
Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to
be paid on each Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date
of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record Date therefor to be given to each Holder of Securities of such
series in the manner set forth in Section 106, not less than 10 days prior to such Special Record Date. Notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons
in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the following Clause (2).
(2) The
Company may make payment of any Defaulted Interest on the Securities of any series in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange,
if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such manner of payment shall be
deemed practicable by the Trustee.
Subject to the foregoing
provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu
of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.
Section 308. Persons
Deemed Owners.
Prior to due presentment
of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person
in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of and any premium
and (subject to Section 307) any interest on such Security and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.
Section 309. Cancellation.
All Securities surrendered
for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to
any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver
to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in
any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold, and all Securities so delivered shall be promptly cancelled
by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled Securities held by the Trustee shall be disposed of as directed by a Company
Order.
Section 310. Computation
of Interest.
Except as otherwise specified
as contemplated by Section 301 for Securities of any series, interest on the Securities of each series shall be computed by the Company
on the basis of a 360-day year of twelve 30-day months.
Section 311. CUSIP
The Company in issuing the
Securities may use CUSIP numbers (if then generally in use) and, if so, the Company shall notify the Trustee of any CUSIP numbers and
any change in the CUSIP numbers. The Trustee may use such 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 Securities
or as contained in any notice of redemption and that reliance may be placed only on the other identification numbers printed on the Securities,
and any such notice shall not be affected by any defect in or omission of such numbers.
Article Four
Satisfaction and Discharge
Section 401. Satisfaction
and Discharge of Indenture.
This Indenture shall upon
Company Request cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities
herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction
and discharge of this Indenture, when
(1) either
(A) all
Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 306 and (ii) Securities 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, as provided
in Section 1003) have been delivered to the Trustee for cancellation; or
(B) all
such Securities not theretofore delivered to the Trustee for cancellation
(i) have
become due and payable, or
(ii) will
become due and payable at their Stated Maturity within one year, or
(iii) are
to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company, and the Company, in the case of (i), (ii) or (iii) above, has deposited
or caused to be deposited with the Trustee as trust funds in trust for the purpose money in an amount sufficient to pay and discharge
the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal and any premium and
interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption
Date, as the case may be;
(2) the
Company has paid or caused to be paid all other sums payable hereunder by the Company; and
(3) the
Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction
and discharge of this Indenture, the obligations of the Company to the Trustee under Section 607, the obligations of the Trustee
to any Authenticating Agent under Section 614 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of
Clause (1) of this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003 shall
survive.
Section 402. Application
of Trust Money.
Subject to the provisions
of the last paragraph of Section 1003, all money deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this 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 any premium and interest for whose payment such money has been deposited with the Trustee.
Article Five
Remedies
Section 501. Events
of Default.
“Event of Default”,
wherever used herein with respect to Securities of any series, means any one of the following events (whatever the reason for such Event
of Default and whether it shall be [occasioned by the Subordination Provisions of a Security of such series or be]* voluntary or involuntary
or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body):
(1) default
in the payment of any interest upon any Security of that series when it becomes due and payable, and continuance of such default for a
period of 30 days; or
(2) default
in the payment of the principal of or any premium on any Security of that series at its Maturity; or
(3) default
in the deposit of any sinking fund payment, when and as due by the terms of a Security of that series; or
(4) default
in the performance, or breach, of any covenant or warranty of the Company in this Indenture (other than a covenant or warranty a default
in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has expressly been included in
this Indenture solely for the benefit of series of Securities other than that series), and continuance of such default or breach for a
period of 90 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and a Responsible
Officer of the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of that series, a written notice
specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder;
or
(5) [a
default under any bond, debenture, note or other evidence of indebtedness for money borrowed by the Company (including a default with
respect to Securities of any series other than that series) having an aggregate principal amount outstanding of at least $ ,
or under any mortgage, indenture or instrument (including this Indenture) under which there may be issued or by which there may be secured
or evidenced any indebtedness for money borrowed by the Company whether such indebtedness now exists or shall hereafter be created, which
default shall have resulted in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise
have become due and payable, without such indebtedness having been discharged, or such acceleration having been rescinded or annulled,
within a period of 10 days after there shall have been given, by registered or certified mail, to the Company by the Trustee or to the
Company and a Responsible Officer of the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of that
series a written notice specifying such default and requiring the Company to cause such indebtedness to be discharged or cause such acceleration
to be rescinded or annulled, as the case may be, and stating that such notice is a “Notice of Default” hereunder; or]†
(6) a
court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company in an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appoints a receiver, liquidator, assignee, custodian,
trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or orders the winding up or
liquidation of its affairs and such decree, appointment or order shall remain unstayed and in effect for a period of 90 consecutive days;
or
(7) the
Company shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, shall
consent to the entry of an order for relief in an involuntary case under any such law, or shall consent to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Company or of any substantial
part of its property, or shall make any general assignment for the benefit of creditors, or shall fail generally to pay its debts as they
become due; or
(8) any
other Event of Default provided with respect to Securities of that series.
Section 502. Acceleration
of Maturity; Rescission and Annulment.
If an Event of Default (other
than an Event of Default specified in Section 501(6) or 501(7)) with respect to Securities of any series at the time Outstanding
occurs and is continuing, then in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount of all the Securities of that series (or, if any Securities of that series
are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified by the terms thereof)
to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration
such principal amount (or specified amount) shall become immediately due and payable.
If an Event of Default described
(other than an Event of Default specified in Section 501(6) or 501(7)) occurs and is continuing, which Event of Default is with
respect to less than all series of Securities then Outstanding, then in every such case the Trustee or the Holders of not less than 25%
in principal amount of the Securities of each such affected series then Outstanding (each such series voting as a separate class) may
declare the principal amount of all Securities of such series (or, if the Securities of such series are Original Issue Discount Securities,
such portion of the principal amount of such Securities as may be specified by the terms thereof) to be due and payable immediately, by
a notice in writing to the Company (and to the Trustee if given by Holders), and upon such declaration such principal amount (or specified
amount) shall become immediately due and payable.
If an Event of Default specified
in Section 501(6) or 501(7) with respect to Securities of any series at the time Outstanding occurs, the principal amount
of all the Securities of that series (or, if any Securities of that series are Original Issue Discount Securities, such portion of the
principal amount of such Securities as may be specified by the terms thereof) shall automatically, and without any declaration or other
action on the part of the Trustee or any Holder, become immediately due and payable.
At any time after such a
declaration of acceleration with respect to Securities of any series has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount
of the Outstanding Securities of that series, by written notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if
(1) the
Company has paid or deposited with the Trustee a sum sufficient to pay:
(A) all
overdue interest on all Securities of that series,
(B) the
principal of (and premium, if any, on) any Securities of that series which have become due otherwise than by such declaration of acceleration
and any interest thereon at the rate or rates prescribed therefor in such Securities,
(C) to
the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Securities,
(D) all
sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and
(2) all
Events of Default with respect to Securities of that series, other than the non-payment of the principal of Securities of that series
which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513.
No such rescission shall
affect any subsequent default or impair any right consequent thereon.
Section 503. Collection
of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that
if
(1) default
is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period
of 30 days, or
(2) default
is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee,
pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal and
any premium and interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal
and premium and on any overdue interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, 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.
If an Event of Default with
respect to Securities of any series occurs and is continuing, the Trustee may proceed to protect and enforce its rights and the rights
of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect
and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise
of any power granted herein, or to enforce any other proper remedy.
Section 504. Trustee
May File Proofs of Claim.
In case of any judicial proceeding
relative to the Company (or any other obligor upon the Securities), its property or its creditors, the Trustee shall be entitled and empowered,
by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have
claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive
any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official 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 to the making of such payments directly to the Holders,
to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee hereunder.
No provision of this Indenture
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 Securities or the rights of any Holder thereof or to authorize the Trustee to vote
in respect of the claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of the Holders, vote
for the election of a trustee in bankruptcy or similar official and be a member of a creditors’ or other similar committee.
Section 505. Trustee
May Enforce Claims Without Possession of Securities.
All rights of action and
claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities
or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its
own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities
in respect of which such judgment has been recovered.
Section 506. Application
of Money Collected.
Any money collected by the
Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case
of the distribution of such money on account of principal or any premium or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if fully paid:
First:
To the payment of all amounts due the Trustee (including any predecessor trustee) under Section 607;
second:
[Subject to the Subordination Provisions with respect to such Securities, to]* [To]† the payment of the amounts then due and unpaid
for principal of and any premium and interest on the Securities in respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and any
premium and interest, respectively; and
third:
To the payment of the remainder, if any, to the Company or to such party as a court of competent jurisdiction shall direct.
Section 507. Limitation
on Suits.
No Holder of any Security
of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture or any Security,
or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such
Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of that series;
(2) the
Holders of not less than 25% in principal amount of the Outstanding Securities of that series shall have made written request to the Trustee
to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;
(3) such
Holder or Holders have provided to the Trustee security and indemnity satisfactory to the Trustee against the costs, expenses and liabilities
to be incurred in compliance with such request;
(4) the
Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and
(5) no
direction inconsistent with such written request has been received by the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or
more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect,
disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other
of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit
of all of such Holders.
Section 508. Unconditional
Right of Holders to Receive Principal, Premium and Interest.
Notwithstanding any other
provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment
of the principal of and any premium and (subject to Section 307) interest on such Security on the respective Stated Maturities expressed
in such Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
Section 509. Restoration
of Rights and Remedies.
If the Trustee or any Holder
has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned
for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination
in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder
and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.
Section 510. Rights
and Remedies Cumulative.
Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 306,
no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder,
or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
Section 511. Delay
or Omission Not Waiver.
No delay or omission of the
Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or
by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or
by the Holders, as the case may be.
Section 512. Control
by Holders.
The Holders of a majority
in principal amount of the Outstanding Securities of any series shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that
(1) such
direction shall not be in conflict with any rule of law or with this Indenture,
(2) the
Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction, and
(3) the
Trustee shall have the right to decline to follow any such direction if the Trustee in good faith determines that the proceeding so directed
would involve the Trustee in personal liability.
Section 513. Waiver
of Past Defaults.
The Holders of not less than
a majority in principal amount of the Outstanding Securities of any series may on behalf of the Holders of all the Securities of such
series waive any past default hereunder with respect to such series and its consequences, except a default
(1) in
the payment of the principal of or any premium or interest on any Security of such series, or
(2) in
respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder
of each Outstanding Security of such series affected.
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
Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.
Section 514. Undertaking
for Costs.
In any suit for the enforcement
of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee,
a court may require any party litigant in such suit to file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust Indenture Act; provided that neither this Section nor
the Trust Indenture Act shall be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit
instituted by the Company.
Section 515. Waiver
of Usury, Stay or Extension Laws.
The Company covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this 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 will not hinder, delay or impede the execution of any power herein granted
to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.
Article Six
The Trustee
Section 601. Certain
Duties and Responsibilities.
The duties and responsibilities
of the Trustee shall be as provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision of this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not assured to it. Whether or not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this
Section.
Section 602. Notice
of Defaults.
If a default occurs hereunder
with respect to Securities of any series, the Trustee shall give the Holders of Securities of such series notice of such default as and
to the extent provided by the Trust Indenture Act; provided, however, that in the case of any default of the character specified
in Section 501(4) with respect to Securities of such series, no such notice to Holders shall be given until at least 30 days
after the occurrence thereof. For the purpose of this Section, the term “default” means any event which is, or after notice
or lapse of time or both would become, an Event of Default with respect to Securities of such series.
Section 603. Certain
Rights of Trustee.
Subject to the provisions
of Section 601:
(1) the
Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;
(2) any
request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order, and any resolution
of the Board of Directors shall be sufficiently evidenced by a Board Resolution;
(3) whenever
in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith
on its part, conclusively rely upon an Officers’ Certificate or Opinion of Counsel, or both;
(4) before
the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel or both. The Trustee
will 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;
(5) the
Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;
(6) the
Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall have provided to the Trustee security and indemnity satisfactory
to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;
(7) the
Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document,
but the Trustee may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney at the sole cost to the Company and shall incur no liability of any kind by reason of such inquiry
or investigation;
(8) the
Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys
and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care
by it hereunder;
(9) in
no event will the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever
(including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or
damage and regardless of the form of action;
(10) the
Trustee will not be required to take notice or be deemed to have notice of any default or Event of Default, except failure by the Company
to pay or cause to be made any of the payments required to be made to the Trustee, unless the Trustee is specifically notified by a writing
of such default or Event of Default by notice received by a Responsible Officer of the Trustee at the Corporate Trust Office of the Trustee
and such notice references the Securities and this Indenture. In the absence of actual written notice delivered to a Responsible Officer
of the Trustee, the Trustee may conclusively assume no default or Event of Default exists. The Trustee shall have no duty to monitor
or confirm compliance of the Company with the terms of this Indenture or any Security. Delivery of reports and information to the Trustee
does not constitute actual or constructive knowledge of or notice to the Trustee;
(11) the
rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified,
are extended to, and will be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person
employed or appointed to act hereunder;
(12) the
Trustee undertakes to perform such duties and only such duties as are specifically set forth in the Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee;
(13) the
Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder;
(14) any
permissive right or authority granted to the Trustee in this Indenture shall not be construed as a mandatory duty; and
(15) the
Trustee shall not be liable or responsible for any calculation in connection with the transactions contemplated hereunder nor for any
information used in connection with such calculation.
Section 604. Not
Responsible for Recitals or Issuance of Securities.
The recitals contained herein
and in the Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Company, and
neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no representations
as to the validity or sufficiency of this Indenture or of the Securities. Neither the Trustee nor any Authenticating Agent shall be accountable
for the use or application by the Company of Securities or the proceeds thereof.
Section 605. May Hold
Securities.
The Trustee, any Authenticating
Agent, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become
the owner or pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent.
Section 606. Money
Held in Trust.
Money held by the Trustee
in trust hereunder need not be segregated from other funds except to the extent required by law and will be held uninvested. The Trustee
shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Company.
Section 607. Compensation
and Reimbursement.
The Company agrees
(1) to
pay to the Trustee from time to time compensation for all services rendered by the Trustee acting in any capacity hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);
(2) except
as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to the Trustee’s
gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final, non-appealable order; and
(3) to
indemnify each of the Trustee acting in any capacity or any predecessor trustee and their agents for, and to hold them harmless against,
any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance
or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its powers or duties hereunder.
The obligations of the Company under this Section 607
shall survive the satisfaction and discharge of this Indenture.
Section 608. Conflicting
Interests.
If the Trustee has or shall
acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign,
to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. To the extent
permitted by such Act, the Trustee shall not be deemed to have a conflicting interest by virtue of being a trustee under this Indenture
with respect to Securities of more than one series [or a trustee under — list here any prior indentures between the Company and
the Trustee that have not been satisfied and discharged and that may be excluded by the proviso to Section 310(b)(1) of the
Trust Indenture Act].
Section 609. Corporate
Trustee Required; Eligibility.
There shall at all times
be one (and only one) Trustee hereunder with respect to the Securities of each series, which may be Trustee hereunder for Securities of
one or more other series. Each Trustee shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such, has a combined
capital and surplus required by the Trust Indenture Act and is subject to supervision or examination by federal or state authority. If
any such Person publishes reports of condition at least annually, pursuant to law or to the requirements of its supervising or examining
authority, then for the purposes of this Section and to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.
If at any time the Trustee with respect to the Securities of any series shall cease to be eligible in accordance with the provisions of
this Section, upon written request of the Company, it shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
Section 610. Resignation
and Removal; Appointment of Successor.
No resignation or removal
of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable requirements of Section 611.
The Trustee may resign at
any time with respect to the Securities of one or more series by giving written notice thereof to the Company. If the instrument of acceptance
by a successor Trustee required by Section 611 shall not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
The Trustee may be removed
at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities
of such series, delivered to the Trustee and to the Company. If an instrument of acceptance by a successor Trustee shall not have been
delivered to the Trustee within 30 days after the giving of such notice of removal, the Trustee being removed may petition, at the expense
of the Company, any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such
series.
If at any time:
(1) the
Trustee shall fail to comply with the obligations imposed upon it under Section 608 after written request therefor by the Company
or by any Holder who has been a bona fide Holder of a Security for at least six months, or
(2) the
Trustee shall cease to be eligible under Section 609 and shall fail to resign after written request therefor by the Company or by
any such Holder of a Security, or
(3) the
Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (A) the Company by
a Board Resolution may remove the Trustee with respect to all Securities, or (B) subject to Section 514, any Holder who has
been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee
or Trustees.
If the Trustee shall resign,
be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities
of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities
of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular
series) and shall comply with the applicable requirements of Section 611. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by
Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable
requirements of Section 611, become the successor Trustee with respect to the Securities of such series and to that extent supersede
the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any series shall have been so
appointed by the Company or the Holders and accepted appointment in the manner required by Section 611, any Holder who has been a
bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.
The Company shall give notice
of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee
with respect to the Securities of any series to all Holders of Securities of such series in the manner provided in Section 106. Each
notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate
Trust Office.
Section 611. Acceptance
of Appointment by Successor.
In case of the appointment
hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such
retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder.
In case of the appointment
hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee
and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if
the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable
to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series
as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change
any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder
by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees
of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts
hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.
Upon request of any such
successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor
Trustee all such rights, powers and trusts referred to in the first or second preceding paragraph, as the case may be.
No successor Trustee shall
accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article.
No resigning or removed Trustee shall have any liability or responsibility for the action or inaction of any successor Trustee.
Section 612. Merger,
Conversion, Consolidation or Succession to Business.
Any corporation into which
the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible
under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case
any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
Section 613. Preferential
Collection of Claims Against Company.
If and when the Trustee shall
be or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of the
Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor).
Section 614. Appointment
of Authenticating Agent.
The Trustee may appoint an
Authenticating Agent with respect to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate
Securities of such series issued upon original issue and upon exchange, registration of transfer or partial redemption thereof or pursuant
to Section 306, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and
delivery of Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf
of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation
organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision
or examination by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital
and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report
of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this
Section, upon written request of the Company, such Authenticating Agent shall resign immediately in the manner and with the effect specified
in this Section.
Any corporation into which
an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency
or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall
be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or
the Authenticating Agent.
An Authenticating Agent may
resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency
of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and
shall give notice of such appointment in the manner provided in Section 106 to all Holders of Securities of the series with respect
to which such Authenticating Agent will serve. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating
Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.
The Company agrees to pay
to each Authenticating Agent from time to time reasonable compensation for its services under this Section. If the Trustee makes such
payments, it will be entitled to be reimbursed for such payments, subject to the provisions of Section 607.
If an appointment with respect
to one or more series is made pursuant to this Section, the Securities of such series may have endorsed thereon, in addition to the Trustee’s
certificate of authentication, an alternative certificate of authentication in the following form:
This is one of the Securities
of the series designated therein referred to in the within-mentioned Indenture.
As Trustee
As Authenticating Agent
| By | _________________________________________________________ |
Authorized Officer
Article Seven
Holders’ Lists and Reports by Trustee and Company
Section 701. Company
to Furnish Trustee Names and Addresses of Holders.
The Company will furnish
or cause to be furnished to the Trustee
(1) semi-annually,
not later than ________ and ________ in each year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders of Securities of each series as of the preceding _______ or _______, as the case may
be, and
(2) at
such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time such list is furnished;
excluding from any such list names and
addresses received by the Trustee in its capacity as Security Registrar.
Section 702. Preservation
of Information; Communications to Holders.
The Trustee shall preserve,
in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the
Trustee as provided in Section 701 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar.
The Trustee may destroy any list furnished to it as provided in Section 701 upon receipt of a new list so furnished.
The rights of Holders to
communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights
and privileges of the Trustee, shall be as provided by the Trust Indenture Act.
Every Holder of Securities,
by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either
of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the
Trust Indenture Act.
Section 703. Reports
by Trustee.
Within 60 days after May 15
in each year beginning with the May 15 following the date of this Indenture, and for so long as Securities remain outstanding, the
Trustee shall transmit by mail to all Holders, as their names and addresses appear on the register kept by the Registrar a brief report
dated as of such May 15 that complies with Section 313(a) of the Trust Indenture Act (but if no event described in Section 313(a) of
the Trust Indenture Act has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee
also will comply with Section 313(b)(2) of the Trust Indenture Act. The Trustee will also transmit by mail all reports as required
by Section 313(c) of the Trust Indenture Act. A copy of each report at the time of its mailing to Holders of any Securities
will be mailed by the Trustee to the Company and filed by the Trustee with the Securities and Exchange Commission and each stock exchange
on which the Securities are listed in accordance with Section 313(d) of the Trust Indenture Act. The Company shall promptly
notify the Trustee when Securities are listed on any stock exchange.
Section 704. Reports
by Company.
The Company shall file with
the Trustee and the Commission, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as
may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant to such Act; provided that
any such information, documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act shall be filed with the Trustee within 15 days after the same is so required to be filed with the Commission.
Article Eight
Consolidation, Merger, Conveyance, Transfer or Lease
Section 801. Company
May Consolidate, Etc., Only on Certain Terms.
Nothing contained in this
Indenture or in any of the Securities shall prevent any consolidation or merger of the Company with or into any other Person (whether
or not affiliated with the Company, as the case may be), or successive consolidations or mergers in which the Company or its successor
or successors, as the case may be, shall be a party or parties, or shall prevent any sale, conveyance, transfer, lease or other disposition
of the property of the Company, or its successor or successors as the case may be, as an entirety, or substantially as an entirety, to
any other Person (whether or not affiliated with the Company, or its successor or successors, as the case may be) authorized to acquire
and operate the same; provided that
(1) the
Company is the surviving Person, or the Person formed by or surviving any such consolidation or merger (if other than the Company) or
to which such sale, conveyance, transfer, lease or other disposition of property is made is a Person organized and existing under the
laws of the United States or any State thereof or the District of Columbia, and such Person expressly assumes all of the obligations of
the Company under the Securities and this Indenture and
(2) after
giving effect to, any such consolidation, merger, sale, conveyance, transfer, lease or other disposition, no Event of Default shall have
occurred and be continuing.
Section 802. Successor
Substituted.
In case of any such consolidation,
merger, sale, conveyance, transfer, lease or other disposition, and upon the assumption by the successor corporation, by supplemental
indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the obligation of due and punctual payment
of the principal of and premium, if any, and interest, if any, on all of the Securities and the due and punctual performance and observance
of all of the covenants and conditions of this Indenture to be performed or observed by the Company, such successor Person shall succeed
to and be substituted for the Company, with the same effect as if it had been named herein as the Company, and the Company thereupon shall
be relieved of any further liability or obligation hereunder or upon the Securities. Such successor Person thereupon may cause to be signed,
and may issue either in its own name or in the name of the Company, any or all of the Securities issuable hereunder which theretofore
shall not have been signed by the Company and delivered to the Trustee; and, upon the order of such successor Person instead of the Company
and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee or the Authenticating Agent shall authenticate
and deliver any Securities which previously shall have been signed and delivered by any officer of the Company to the Trustee or the Authenticating
Agent for authentication, and any Securities which such successor Person thereafter shall cause to be signed and delivered to the Trustee
or the Authenticating Agent for that purpose. All the Securities so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Securities theretofore or thereafter issued in accordance with the terms of this Indenture as though all of
such Securities had been issued at the date of the execution hereof.
Article Nine
Supplemental Indentures
Section 901. Supplemental
Indentures Without Consent of Holders.
The Company, when authorized
by a Board Resolution, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto,
without the consent of any Holders, in form satisfactory to the Trustee, for one or more of the following purposes:
(1) to
evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(2) to
add to the covenants of the Company for the benefit of the Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit
of such series) or to surrender any right or power herein conferred upon the Company; or
(3) to
add any additional Events of Default for the benefit of the Holders of all or any series of Securities (and if such additional Events
of Default are to be for the benefit of less than all series of Securities, stating that such additional Events of Default are expressly
being included solely for the benefit of such series); or
(4) to
add to or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal, and with or without interest coupons, or to permit or facilitate
the issuance of Securities in uncertificated form; or
(5) to
add to, change or eliminate any of the provisions of this Indenture in respect of one or more series of Securities, provided that
any such addition, change or elimination (A) shall neither (i) apply to any Security of any series created prior to the execution
of such supplemental indenture and entitled to the benefit of such provision nor (ii) modify the rights of the Holder of any such
Security with respect to such provision or (B) shall become effective only when there is no such Security Outstanding; or
(6) to
secure the Securities; or
(7) to
establish the form or terms of Securities of any series as permitted by Sections 201 and 301; or
(8) to
evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 611; or
(9) to
cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein,
or to make any other provisions with respect to matters or questions arising under this Indenture, provided that such action pursuant
to this Clause (9) shall not adversely affect the interests of the Holders of Securities of any series in any material respect.
Section 902. Supplemental
Indentures With Consent of Holders.
With the consent of the Holders
of not less than a majority in principal amount of the Outstanding Securities of each series affected by such supplemental indenture,
by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this
Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding
Security affected thereby,
(1) change
the Stated Maturity of the principal of, or any instalment of principal of or interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or reduce the amount of the principal of an
Original Issue Discount Security or any other Security which would be due and payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 502, or change any Place of Payment where, or the coin or currency in which, any Security or any premium
or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption Date), or [modify the provisions of this Indenture with respect to
the subordination of the Securities in a manner adverse to the Holders, or]*
(2) reduce
the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture
or certain defaults hereunder and their consequences) provided for in this Indenture, or
(3) modify
any of the provisions of this Section, Section 513 or Section 1008, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security
affected thereby; provided, however, that this clause shall not be deemed to require the consent of any Holder with respect
to changes in the references to “the Trustee” and concomitant changes in this Section and Section 1008, or the deletion
of this proviso, in accordance with the requirements of Sections 611 and 901(8).
A supplemental indenture which changes or eliminates
any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series
of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision,
shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.
It shall not be necessary
for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be
sufficient if such Act shall approve the substance thereof.
Section 903. Execution
of Supplemental Indentures.
In executing, or accepting
the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties
or immunities under this Indenture or otherwise.
Section 904. Effect
of Supplemental Indentures.
Upon the execution of any
supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall
form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section 905. Conformity
with Trust Indenture Act.
Every supplemental indenture
executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act.
Section 906. Reference
in Securities to Supplemental Indentures.
Securities of any series
authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company
shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding
Securities of such series.
Article Ten
Covenants
Section 1001. Payment
of Principal, Premium and Interest.
The Company covenants and
agrees for the benefit of each series of Securities that it will duly and punctually pay the principal of and any premium and interest
on the Securities of that series in accordance with the terms of the Securities and this Indenture.
Section 1002. Maintenance
of Office or Agency.
The Company will maintain
in each Place of Payment for any series of Securities an office or agency where Securities of that series may be presented or surrendered
for payment, where Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands
to or upon the Company in respect of the Securities of that series and this Indenture may be served. The Company will 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, and the Company hereby appoints the Trustee as
its agent to receive all such presentations, surrenders, notices and demands.
The Company may also from
time to time designate one or more other offices or agencies where the Securities of one or more series 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 each Place of Payment for Securities
of any series for such purposes. The Company will 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.
Section 1003. Money
for Securities Payments to Be Held in Trust.
If the Company shall at any
time act as its own Paying Agent with respect to any series of Securities, it will, on or before each due date of the principal of or
any premium or interest on any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto
a sum sufficient to pay the principal and any premium and interest so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall
have one or more Paying Agents for any series of Securities, it will, prior to each due date of the principal of or any premium or interest
on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.
The Company will cause each
Paying Agent for any series of Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will (1) comply with the provisions
of the Trust Indenture Act applicable to it as a Paying Agent and (2) during the continuance of any default by the Company (or any
other obligor upon the Securities of that series) in the making of any payment in respect of the Securities of that series, upon the written
request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent for payment in respect of the Securities
of that series.
The Company may at any time,
for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct
any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying
Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.
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 or any premium or interest
on any Security of any series and remaining unclaimed for two years after such principal, premium or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder
of such Security shall thereafter, as an unsecured general creditor, 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 a newspaper published in the English language, customarily published on each
Business Day and of general circulation in The City of New York, 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 publication, any unclaimed balance of such money then remaining will
be repaid to the Company.
Section 1004. Statement
by Officers as to Default.
The Company will deliver
to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers’ Certificate,
stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance and observance of any
of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder)
and, if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge.
Section 1005. Existence.
Subject to Article Eight,
the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter
and statutory) and franchises; provided, however, that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company
and that the loss thereof is not disadvantageous in any material respect to the Holders.
Section 1006. Maintenance
of Properties.
The Company will cause all
properties used or useful in the conduct of its business or the business of any Subsidiary to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided, however, that nothing in this Section shall
prevent the Company from discontinuing the operation or maintenance of any of such properties if such discontinuance is, in the judgment
of the Company, desirable in the conduct of its business or the business of any Subsidiary and not disadvantageous in any material respect
to the Holders.
Section 1007. Payment
of Taxes and Other Claims.
The Company will pay or discharge
or cause to be paid or discharged, before the same shall become delinquent, (1) all taxes, assessments and governmental charges levied
or imposed upon the Company or any Subsidiary or upon the income, profits or property of the Company or any Subsidiary, and (2) all
lawful claims for labor, materials and supplies which, if unpaid, might by law become a lien upon the property of the Company or any Subsidiary;
provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such
tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings.
Section 1008. Waiver
of Certain Covenants.
Except as otherwise specified
as contemplated by Section 301 for Securities of such series, the Company may, with respect to the Securities of any series, omit
in any particular instance to comply with any term, provision or condition set forth in any covenant provided pursuant to Section 301(18),
901(2) or 901(7) for the benefit of the Holders of such series or in Article Eight if before the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding Securities of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective,
the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full
force and effect.
Article Eleven
Redemption of Securities
Section 1101. Applicability
of Article.
Securities of any series
which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified
as contemplated by Section 301 for such Securities) in accordance with this Article.
Section 1102. Election
to Redeem; Notice to Trustee.
The election of the Company
to redeem any Securities shall be evidenced by a Board Resolution or in another manner specified as contemplated by Section 301 for
such Securities. In case of any redemption at the election of the Company of less than all the Securities of any series (including any
such redemption affecting only a single Security), the Company shall, at least 60 days prior to the Redemption Date fixed by the Company
(unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount of
Securities of such series to be redeemed and, if applicable, of the tenor of the Securities to be redeemed. In the case of any redemption
of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers’ Certificate evidencing compliance with such restriction.
Section 1103. Selection
by Trustee of Securities to Be Redeemed.
If less than all the Securities
of any series are to be redeemed (unless all the Securities of such series and of a specified tenor are to be redeemed or unless such
redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 60 days prior to
the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of a portion of the principal amount
of any Security of such series, provided that the unredeemed portion of the principal amount of any Security shall be in an authorized
denomination (which shall not be less than the minimum authorized denomination) for such Security. If less than all the Securities of
such series and of a specified tenor are to be redeemed (unless such redemption affects only a single Security), the particular Securities
to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series and specified tenor not previously called for redemption in accordance with the preceding sentence.
The Trustee shall promptly
notify the Company in writing of the Securities selected for redemption as aforesaid and, in case of any Securities selected for partial
redemption as aforesaid, the principal amount thereof to be redeemed.
The provisions of the two
preceding paragraphs shall not apply with respect to any redemption affecting only a single Security, whether such Security is to be redeemed
in whole or in part. In the case of any such redemption in part, the unredeemed portion of the principal amount of the Security shall
be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security.
For all purposes of this
Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of
any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is
to be redeemed.
Section 1104. Notice
of Redemption.
Notice of redemption shall
be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder
of Securities to be redeemed, at his/her address appearing in the Security Register.
All notices of redemption
shall state:
(1) the
Redemption Date,
(2) the
Redemption Price,
(3) if
less than all the Outstanding Securities of any series consisting of more than a single Security are to be redeemed, the identification
(and, in the case of partial redemption of any such Securities, the principal amounts) of the particular Securities to be redeemed and,
if less than all the Outstanding Securities of any series consisting of a single Security are to be redeemed, the principal amount of
the particular Security to be redeemed,
(4) that
on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(5) the
place or places where each such Security is to be surrendered for payment of the Redemption Price, and
(6) that
the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities
to be redeemed at the election of the Company shall be given by the Company or, at the Company’s request, by the Trustee in the
name and at the expense of the Company and shall be irrevocable.
Section 1105. Deposit
of Redemption Price.
Prior to any Redemption Date,
the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and
hold in trust as provided in Section 1003) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date.
Section 1106. Securities
Payable on Redemption Date.
Notice of redemption having
been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest)
such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such
Security shall be paid by the Company at the Redemption Price, together with accrued interest to the Redemption Date; provided,
however, that, unless otherwise specified as contemplated by Section 301, installments of interest whose Stated Maturity is
on or prior to the Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, registered
as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 307.
If any Security called for
redemption shall not be so paid upon surrender thereof for redemption, the principal and any premium shall, until paid, bear interest
from the Redemption Date at the rate prescribed therefor in the Security.
Section 1107. Securities
Redeemed in Part.
Any Security which is to
be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his/her
attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Security or Securities of the same series and of like tenor, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security
so surrendered.
Article Twelve
Sinking Funds
Section 1201. Applicability
of Article.
The provisions of this Article shall
be applicable to any sinking fund for the retirement of Securities of any series except as otherwise specified as contemplated by Section 301
for such Securities.
The minimum amount of any
sinking fund payment provided for by the terms of any Securities is herein referred to as a “mandatory sinking fund payment”,
and any payment in excess of such minimum amount provided for by the terms of such Securities is herein referred to as an “optional
sinking fund payment”. If provided for by the terms of any Securities, the cash amount of any sinking fund payment may be subject
to reduction as provided in Section 1202. Each sinking fund payment shall be applied to the redemption of Securities as provided
for by the terms of such Securities.
Section 1202. Satisfaction
of Sinking Fund Payments with Securities.
The Company (1) may
deliver Outstanding Securities of a series (other than any previously called for redemption) and (2) may apply as a credit Securities
of a series which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application
of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part
of any sinking fund payment with respect to any Securities of such series required to be made pursuant to the terms of such Securities
as and to the extent provided for by the terms of such Securities; provided that the Securities to be so credited have not been previously
so credited. The Securities to be so credited shall be received and credited for such purpose by the Trustee at the Redemption Price,
as specified in the Securities so to be redeemed, for redemption through operation of the sinking fund and the amount of such sinking
fund payment shall be reduced accordingly.
Section 1203. Redemption
of Securities for Sinking Fund.
Not less than 90 days prior
to each sinking fund payment date for any Securities, the Company will deliver to the Trustee an Officers’ Certificate specifying
the amount of the next ensuing sinking fund payment for such Securities pursuant to the terms of such Securities, the portion thereof,
if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting
Securities pursuant to Section 1202 and will also deliver to the Trustee any Securities to be so delivered. Not less than 60 days
prior to each such sinking fund payment date, the Trustee shall select the Securities to be redeemed upon such sinking fund payment date
in the manner specified in Section 1103 and cause notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 1104. Such notice having been duly given, the redemption of such Securities shall
be made upon the terms and in the manner stated in Sections 1106 and 1107.
Article Thirteen
Defeasance and Covenant Defeasance
Section 1301. Company’s
Option to Effect Defeasance or Covenant Defeasance.
The Company may elect, at
its option at any time, to have Section 1302 or Section 1303 applied to any Securities or any series of Securities, as the case
may be, designated pursuant to Section 301 as being defeasible pursuant to such Section 1302 or 1303, in accordance with any
applicable requirements provided pursuant to Section 301 and upon compliance with the conditions set forth below in this Article.
Any such election shall be evidenced by a Board Resolution or in another manner specified as contemplated by Section 301 for such
Securities.
Section 1302. Defeasance
and Discharge.
Upon the Company’s
exercise of its option (if any) to have this Section applied to any Securities or any series of Securities, as the case may be, the
Company shall be deemed to have been discharged from its obligations [and the Subordination Provisions shall cease to be effective,]*
with respect to such Securities as provided in this Section on and after the date the conditions set forth in Section 1304 are
satisfied (hereinafter called “Defeasance”). For this purpose, such Defeasance means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by such Securities and to have satisfied all its other obligations under such
Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging the same), subject to the following which shall survive until otherwise terminated or discharged hereunder:
(1) the rights of Holders of such Securities to receive, solely from the trust fund described in Section 1304 and as more fully
set forth in such Section, payments in respect of the principal of and any premium and interest on such Securities when payments are due,
(2) the Company’s obligations with respect to such Securities under Sections 304, 305, 306, 1002 and 1003, (3) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and (4) this Article. Subject to compliance with this Article, the
Company may exercise its option (if any) to have this Section applied to any Securities notwithstanding the prior exercise of its
option (if any) to have Section 1303 applied to such Securities.
Section 1303. Covenant
Defeasance.
Upon the Company’s
exercise of its option (if any) to have this Section applied to any Securities or any series of Securities, as the case may be, (1) the
Company shall be released from its obligations under Sections 1006 through 1008, inclusive, and any covenants provided pursuant to Section 301(18),
901(2) or 901(7) for the benefit of the Holders of such Securities[, and] (2) the occurrence of any event specified in
Sections 501(4) (with respect to any of Sections 1006 through 1008, inclusive, and any such covenants provided pursuant to Section 301(18),
901(2) or 901(7)), 501(5) and 501(8) shall be deemed not to be or result in an Event of Default [and (3) the Subordination
Provisions shall cease to be effective]*, in each case with respect to such Securities as provided in this Section on and after the
date the conditions set forth in Section 1304 are satisfied (hereinafter called “Covenant Defeasance”). For this purpose,
such Covenant Defeasance means that, with respect to such Securities, 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 specified Section (to the extent so specified in the case of
Section 501(4)), whether directly or indirectly by reason of any reference elsewhere herein to any such Section or by reason
of any reference in any such Section to any other provision herein or in any other document, but the remainder of this Indenture
and such Securities shall be unaffected thereby.
Section 1304. Conditions
to Defeasance or Covenant Defeasance.
The following shall be the
conditions to the application of Section 1302 or Section 1303 to any Securities or any series of Securities, as the case may
be:
(1) The
Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee which satisfies the requirements
contemplated by Section 609 and agrees to comply with the provisions of this Article applicable to it) as trust funds in trust
for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefits of the Holders
of such Securities, (A) money in an amount, or (B) U.S. Government Obligations which through the scheduled payment of principal
and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment,
money in an amount, or (C) a combination thereof, in each case sufficient, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the Trustee in such form as may be required by the Trust
Indenture Act, to pay and discharge, and which shall be applied by the Trustee (or any such other qualifying trustee) to pay and discharge,
the principal of and any premium and interest on such Securities on the respective Stated Maturities, in accordance with the terms of
this Indenture and such Securities. As used herein, “U.S. Government Obligation” means (x) any security which is (i) a
direct obligation of the United States of America for the payment of which the full faith and credit of the United States of America is
pledged or (ii) an obligation of a Person controlled or supervised by and acting as an agency or instrumentality of the United States
of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which,
in either case (i) or (ii), is not callable or redeemable at the option of the issuer thereof, and (y) any depositary receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any U.S. Government Obligation
which is specified in Clause (x) above and held by such bank for the account of the holder of such depositary receipt, or with respect
to any specific payment of principal of or interest on any U.S. Government Obligation which is so specified and held, provided that (except
as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt
from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal or interest
evidenced by such depositary receipt.
(2) In
the event of an election to have Section 1302 apply to any Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (A) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling or (B) since the date of this instrument, there has been a change in the applicable Federal
income tax law, in either case (A) or (B) to the effect that, and based thereon such opinion shall confirm that, the Holders
of such Securities will not recognize gain or loss for Federal income tax purposes as a result of the deposit, Defeasance and discharge
to be effected with respect to such Securities and will be subject to Federal income tax on the same amount, in the same manner and at
the same times as would be the case if such deposit, Defeasance and discharge were not to occur.
(3) In
the event of an election to have Section 1303 apply to any Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of such Securities will not recognize gain or
loss for Federal income tax purposes as a result of the deposit and Covenant Defeasance to be effected with respect to such Securities
and will be subject to Federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit
and Covenant Defeasance were not to occur.
(4) The
Company shall have delivered to the Trustee an Officers’ Certificate to the effect that neither such Securities nor any other Securities
of the same series, if then listed on any securities exchange, will be delisted as a result of such deposit.
(5) No
event which is, or after notice or lapse of time or both would become, an Event of Default with respect to such Securities or any other
Securities shall have occurred and be continuing at the time of such deposit or, with regard to any such event specified in Sections 501(6) and
(7), at any time on or prior to the 90th day after the date of such deposit (it being understood that this condition shall not be deemed
satisfied until after such 90th day).
(6) Such
Defeasance or Covenant Defeasance shall not cause the Trustee to have a conflicting interest within the meaning of the Trust Indenture
Act (assuming all Securities are in default within the meaning of such Act).
(7) Such
Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any other agreement or
instrument to which the Company is a party or by which it is bound.
(8) Such
Defeasance or Covenant Defeasance shall not result in the trust arising from such deposit constituting an investment company within the
meaning of the Investment Company Act unless such trust shall be registered under such Act or exempt from registration thereunder.
(9) [At
the time of such deposit, (A) no default in the payment of any principal of or premium or interest on any Senior Indebtedness shall
have occurred and be continuing, (B) no event of default with respect to any Senior Indebtedness shall have resulted in such Senior
Indebtedness becoming, and continuing to be, due and payable prior to the date on which it would otherwise have become due and payable
(unless payment of such Senior Indebtedness has been made or duly provided for), and (C) no other event of default with respect to
any Senior Indebtedness shall have occurred and be continuing permitting (after notice or lapse of time or both) the holders of such Senior
Indebtedness (or a trustee on behalf of such holders) to declare such Senior Indebtedness due and payable prior to the date on which it
would otherwise have become due and payable.]*
(10) The
Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been complied with.
Section 1305. Deposited Money
and U.S. Government Obligations to Be Held in Trust; Miscellaneous Provisions.
Subject to the provisions
of the last paragraph of Section 1003, all money and U.S. Government Obligations (including the proceeds thereof) deposited with
the Trustee or other qualifying trustee (solely for purposes of this Section and Section 1306, the Trustee and any such other
trustee are referred to collectively as the “Trustee”) pursuant to Section 1304 in respect of any Securities shall be
held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either
directly or through any such Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the
Holders of such Securities, of all sums due and to become due thereon in respect of principal and any premium and interest, but money
so held in trust 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 U.S. Government Obligations deposited pursuant
to Section 1304 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 Outstanding Securities.
Anything in this Article to
the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or U.S.
Government Obligations held by it as provided in Section 1304 with respect to any Securities which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee in such form as
may be required by the Trust Indenture Act, are in excess of the amount thereof which would then be required to be deposited to effect
the Defeasance or Covenant Defeasance, as the case may be, with respect to such Securities.
Section 1306. Reinstatement.
If the Trustee or the Paying
Agent is unable to apply any money in accordance with this Article with respect to any Securities by reason of any order or judgment
of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Company has been discharged or released pursuant to Section 1302 or 1303 shall be revived
and reinstated as though no deposit had occurred pursuant to this Article with respect to such Securities, until such time as the
Trustee or Paying Agent is permitted to apply all money held in trust pursuant to Section 1305 with respect to such Securities in
accordance with this Article; provided, however, that if the Company makes any payment of principal of or any premium or
interest on any such Security following such reinstatement of its obligations, the Company shall be subrogated to the rights (if any)
of the Holders of such Securities to receive such payment from the money so held in trust.
Section 1307. [Effect
on Subordination Provisions.]*
Unless otherwise expressly
provided pursuant to Section 301(20) with respect to the Securities of any series, the Subordination Provisions established pursuant
to Section 301(20) with respect to such series are hereby expressly made subject to the provisions for satisfaction and discharge
and defeasance and covenant defeasance set forth in Section 1302 and Section 1303 and, anything herein to the contrary notwithstanding,
upon the effectiveness of such satisfaction and discharge and defeasance and covenant defeasance pursuant to Section 1302 and Section 1303
with respect to the Securities of such series, such Securities shall thereupon cease to be so subordinated and shall no longer be subject
to the Subordination Provisions established pursuant to Section 301(20) with respect to such series and, without limitation to the
foregoing, all moneys, U.S. Government Obligations and other securities or property deposited with the Trustee (or other qualifying trustee)
in trust in connection with such satisfaction and discharge, defeasance or covenant defeasance, as the case may be, and all proceeds therefrom
may be applied to pay the principal of, premium, if any, and interest, if any, with respect to the Securities of such series as and when
the same shall become due and payable notwithstanding such Subordination Provisions.]*
This instrument may be executed
in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
IN WITNESS WHEREOF, the parties
hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as
of the day and year first above written.
Exhibit
5.1
800
17th Street N.W., Suite 1100 | Washington, DC 20006 | T 202.955.3000 | F 202.955.5564
Holland &
Knight LLP | www.hklaw.com |
May 16 2024
Board of Directors
Shore Bancshares, Inc.
18 E. Dover Street
Easton, Maryland 21601
Re: Registration Statement on Form S-3
Dear Ladies and Gentlemen:
At your request, we have examined
the Registration Statement on Form S-3 (the “Registration Statement”) to be filed on the date hereof by Shore
Bancshares, Inc., a Maryland corporation (the “Company”), with the U.S. Securities and Exchange Commission (the
“Commission”) under the Securities Act of 1933, as amended (the “Securities Act”). The Registration
Statement relates to the issuance and sale from time to time, pursuant to Rule 415 of the General Rules and Regulations of the
Commission promulgated under the Securities Act, of an unspecified amount of securities of the Company for $175,000,000, consisting of
(i) shares of common stock, par value $0.01 per share (the “Common Stock”), (ii) shares of preferred stock,
par value $0.01 per share (the “Preferred Stock”), (iii) debt securities of the Company (the “Debt Securities”),
which may be issued in one or more series under one or more indentures or supplemental indentures (the “Indentures”),
(iv) warrants (the “Warrants”) to purchase Common Stock, Preferred Stock and/or Debt Securities, (v) units
(“Units”) and (vi) depositary shares (evidenced by depositary receipts) representing interests in shares of Preferred
Stock (the “Depositary Shares”), and such indeterminate amount of Debt Securities and number of shares of Common Stock
or Preferred Stock as may be issued upon conversion, exchange or exercise of any Debt Securities, Preferred Stock, Warrants, Units or
Depositary Shares, including such shares of Common Stock or Preferred Stock as may be issued pursuant to anti-dilution adjustments, in
amounts, at prices and on terms to be determined at the time of offering. The Common Stock, the Preferred Stock, the Debt Securities,
the Warrants, the Units and the Depositary Shares are collectively referred to herein as the “Securities.”
This opinion letter is being
furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act.
In connection with the issuance
of this opinion letter, we have examined originals or copies, certified or otherwise identified to our satisfaction, of:
| (i) | the Registration Statement, and all exhibits thereto; |
| (ii) | the Amended and Restated Articles of Incorporation of the Company, as amended, and as supplemented by
the Articles Supplementary filed for record on January 7, 2009 and June 16, 2009, as presently in effect (the “Articles”); |
| (iii) | the Second Amended and Restated By-Laws of the Company, as presently in effect (the “Bylaws”);
and |
| (iv) | the authorization given by the Company’s Board of Directors (the “Board”) via unanimous written consent in lieu of a meeting on May 14, 2024 relating to the authorization for the Registration
Statement, the issuance and sale of the Securities and other related matters. |
Atlanta | Austin | Birmingham | Boston | Century
City | Charlotte | Chattanooga | Chicago | Dallas Denver | Fort Lauderdale |
Houston | Jacksonville | Los Angeles | Miami | Nashville
| Newport Beach | New York | Orlando | Philadelphia | Portland | Richmond |
San Francisco | Stamford | Tallahassee | Tampa | Tysons |
Washington, D.C. | West Palm Beach
We have examined and relied
on originals or copies certified or otherwise identified to our satisfaction of such documents, corporate records, certificates of public
officials and other instruments as we have deemed necessary or appropriate for the purposes of this opinion. In such examination, we have
assumed (a) the authenticity of original documents and the genuineness of all signatures; (b) the conformity to the originals
of all documents submitted to us as copies; (c) the truth, accuracy and completeness of the information, representations and warranties
contained in the records, documents, instruments and certificates we have reviewed; (d) the Registration Statement, and any amendments
thereto (including post-effective amendments), will have become effective under the Securities Act (and will remain effective at the time
of issuance of any Securities thereunder); (e) a prospectus supplement will have been timely filed with the Commission describing
the Securities offered thereby; (f) all Securities will be issued and sold in compliance with applicable federal and state securities
laws and in the manner stated in the Registration Statement and the applicable prospectus supplement; (g) a definitive purchase,
underwriting or similar agreement with respect to any Securities offered will have been duly authorized and validly executed and delivered
by the Company and the other parties thereto; (h) any Securities issuable upon conversion, exchange, redemption or exercise of any
Securities being offered will be duly authorized, created and, if appropriate, reserved for issuance upon such conversion, exchange, redemption
or exercise; and (i) with respect to shares of Common Stock or Preferred Stock offered, there will be sufficient shares of Common
Stock or Preferred Stock authorized under the Company’s organizational documents and not otherwise reserved for issuance. We also
have assumed that the execution and delivery by the Company of, and the performance of its obligations under, the Securities will not
violate, conflict with or constitute a default under (i) any agreement or instrument to which the Company or any of its subsidiaries
is subject; (ii) any law, rule or regulation to which the Company or any of its subsidiaries is subject; (iii) any judicial
or regulatory order or decree of any governmental authority; or (iv) any consent, approval, license, authorization or validation
of, or filing, recording or registration with any governmental authority. As to any facts material to the opinions expressed herein that
we did not independently establish or verify, we have relied upon statements and representations of officers and other representatives
of the Company and others.
Based upon and subject to
the foregoing, we are of the opinion that:
1. With
respect to any shares of Common Stock to be offered by the Company pursuant to the Registration Statement (the “Offered Common
Shares”), when (i) the Registration Statement, as finally amended (including all necessary post-effective amendments),
has become effective under the Securities Act, (ii) an appropriate prospectus supplement or term sheet with respect to the Offered
Common Shares has been prepared, delivered and filed in compliance with the Securities Act and the applicable rules and regulations
thereunder, (iii) the Board, including any appropriate committee appointed thereby, and appropriate officers of the Company have
taken all necessary corporate action to approve the issuance of the Offered Common Shares, the consideration to be received therefor and
related matters (and such action is in full force and effect at all times at which the Offered Common Shares are offered or sold by the
Company), (iv) the terms of the issuance and sale of the Offered Common Shares have been duly established in conformity with the
organizational documents of the Company, do not violate any applicable law or result in a default under or breach of any agreement or
instrument binding upon the Company and comply with any requirement or restriction imposed by any court or governmental body having jurisdiction
over the Company and (v) certificates in the form required under the laws of the State of Maryland representing the Offered Common
Shares are duly executed, countersigned, registered and delivered upon payment of the agreed upon consideration therefor, the Offered
Common Shares (including any shares of Common Stock duly issued upon conversion, exchange or exercise of any Preferred Stock, Debt Securities,
Warrants, Units or Depositary Shares registered on the Registration Statement), when issued and sold in accordance with the applicable
underwriting agreement with respect to the Offered Common Shares or any other duly authorized, executed and delivered valid and binding
purchase or agency agreement, will have been duly authorized, and such shares will be validly issued, fully paid and nonassessable.
2. With
respect to the shares of any series of Preferred Stock to be offered by the Company pursuant to the Registration Statement (the “Offered
Preferred Shares”), when (i) the Registration Statement, as finally amended (including all necessary post-effective amendments),
has become effective under the Securities Act, (ii) an appropriate prospectus supplement or term sheet with respect to the Offered
Preferred Shares has been prepared, delivered and filed in compliance with the Securities Act and the applicable rules and regulations
thereunder, (iii) the Board, including any appropriate committee appointed thereby, and appropriate officers of the Company have
taken all necessary corporate action to approve the issuance, terms and sale of the Offered Preferred Shares, the consideration to be
received therefor and related matters (and such action is in full force and effect at all times at which the Offered Preferred Shares
are offered or sold by the Company), (iv) Articles Supplementary conforming to the laws of the State of Maryland regarding such series
of Preferred Stock has been filed with, and accepted for record by, the Maryland State Department of Assessments and Taxation, (v) the
terms of the Offered Preferred Shares and of their issuance and sale have been duly established in conformity with the terms of the particular
series as established by the Board, so as not to violate any applicable law, the organizational documents of the Company or result in
a default under or breach of any agreement or instrument binding upon the Company and so as to comply with any requirement or restriction
imposed by any court or governmental body having jurisdiction over the Company, and (vi) certificates in the form required under
the laws of the State of Maryland representing the Offered Preferred Shares are duly executed, countersigned, registered and delivered
upon payment of the agreed-upon consideration therefor, the Offered Preferred Shares (including any shares of Preferred Stock duly issued
upon conversion, exchange or exercise of any Preferred Stock, Debt Securities, Warrants, Units or Depositary Shares), when issued or sold
in accordance with the applicable underwriting agreement or any other duly authorized, executed and delivered valid and binding purchase
or agency agreement, will have been duly authorized, and such shares will be validly issued, fully paid and nonassessable.
3. With
respect to any series of Debt Securities to be offered by the Company pursuant to the Registration Statement (the “Offered Debt
Securities”), when (i) the Registration Statement, as finally amended (including all necessary post-effective amendments),
has become effective under the Securities Act and the applicable Indenture, including any applicable supplemental indentures, in respect
to the Offered Debt Securities (the “Applicable Indenture”) has been qualified under the Trust Indenture Act of 1939,
as amended, (ii) an appropriate prospectus supplement or term sheet with respect to the Offered Debt Securities has been prepared,
delivered and filed in compliance with the Securities Act and the applicable rules and regulations thereunder, (iii) the Board,
including any appropriate committee appointed thereby, and appropriate officers of the Company have taken all necessary corporate action
to approve the issuance and terms of the Offered Debt Securities and related matters (and such action is in full force and effect at all
times at which the Offered Debt Securities are offered or sold by the Company), (iv) the Applicable Indenture has been duly authorized,
executed and delivered by each party thereto, (v) the terms of the Offered Debt Securities and of their issuance and sale have been
duly established in conformity with the Applicable Indenture and reflected in appropriate documentation and, if applicable, executed and
delivered by each party thereto, so as not to violate any applicable law, the organizational documents of the Company or result in a default
under or breach of any agreement or instrument binding upon the Company and so as to comply with any requirement or restriction imposed
by any court or governmental body having jurisdiction over the Company, and (vi) the Offered Debt Securities have been issued in
a form that complies with, and have been duly executed and authenticated in accordance with, the provisions of the Applicable Indenture
and duly delivered to the purchasers thereof upon payment of the agreed-upon consideration therefor, the Offered Debt Securities (including
any Debt Securities duly issued upon conversion, exchange or exercise of any Preferred Stock, Debt Securities, Warrants, Units or Depositary
Shares), when issued and sold in accordance with the Applicable Indenture and the applicable underwriting agreement, if any, or any other
duly authorized, executed and delivered valid and binding purchase or agency agreement, will be valid and legally binding obligations
of the Company, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors’ rights and to general equity principles.
4. With
respect to any Warrants to be offered by the Company pursuant to the Registration Statement (the “Offered Warrants”),
when (i) the Registration Statement, as finally amended (including all necessary post-effective amendments), has become effective
under the Securities Act, (ii) an appropriate prospectus supplement or term sheet with respect to the Offered Warrants has been prepared,
delivered and filed in compliance with the Securities Act and the applicable rules and regulations thereunder, (iii) the Board,
including any appropriate committee appointed thereby, and appropriate officers of the Company have taken all necessary corporate action
to approve the issuance of the Offered Warrants, the consideration to be received therefor and related matters (and such action is in
full force and effect at all times at which the Offered Warrants are offered or sold by the Company), (iv) the warrant agreement
with respect to the Offered Warrants (the “Warrant Agreement”) has been duly authorized, executed and delivered by
the Company and the other parties thereto, (v) the terms of the issuance and sale of the Offered Warrants have been duly established
in conformity with the Warrant Agreement, so as not to violate any applicable law, the organizational documents of the Company or result
in a default under or breach of any agreement or instrument binding upon the Company and so as to comply with any requirement or restriction
imposed by any court or governmental body having jurisdiction over the Company, and (vi) the Offered Warrants have been duly executed
and delivered against payment therefore, pursuant to the Warrant Agreement, the Offered Warrants will have been duly authorized, and such
Offered Warrants will be valid and legally binding obligations of the Company, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity
principles.
5. With
respect to any Units to be offered by the Company pursuant to the Registration Statement (the “Offered Units”), when
(i) the Registration Statement, as finally amended (including all necessary post-effective amendments), has become effective under
the Securities Act, (ii) an appropriate prospectus supplement or term sheet with respect to the Offered Units has been prepared,
delivered and filed in compliance with the Securities Act and the applicable rules and regulations thereunder, (iii) the Board,
including any appropriate committee appointed thereby, and appropriate officers of the Company have taken all necessary corporate action
to approve the issuance of the Offered Units, the consideration to be received therefor and related matters (and such action is in full
force and effect at all times at which the Offered Units are offered or sold by the Company), (iv) the unit agreement with respect
to the Offered Units (the “Unit Agreement”) has been duly authorized, executed and delivered by the Company and the
other parties thereto, (v) the terms of the issuance and sale of the Offered Units have been duly established in conformity with
such Unit Agreement, so as not to violate any applicable law, the organizational documents of the Company or result in a default under
or breach of any agreement or instrument binding upon the Company and so as to comply with any requirement or restriction imposed by any
court or governmental body having jurisdiction over the Company, and (vi) the Offered Units have been duly executed and delivered
against payment therefore, pursuant to the Unit Agreement, the Offered Units will have been duly authorized, and such Offered Units will
be valid and legally binding obligations of the Company, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.
6. With
respect to any Depositary Shares to be offered by the Company pursuant to the Registration Statement (the “Offered Depositary
Shares”), when (i) the Registration Statement, as finally amended (including all necessary post-effective amendments),
has become effective under the Securities Act, (ii) an appropriate prospectus supplement or term sheet with respect to the
Offered Depositary Shares has been prepared, delivered and filed in compliance with the Securities Act and the applicable rules and
regulations thereunder, (iii) the Board or a duly authorized committee thereof shall have duly adopted final resolutions in conformity
with the Articles, the Bylaws and the resolutions establishing the designations, preferences, rights, qualifications, limitations or restrictions
of such series of Preferred Stock underlying such Offered Depositary Shares and authorizing the issuance of such series of Preferred Stock,
(iv) a deposit agreement with respect to the Offered Depositary Shares (the “Deposit Agreement”) has been duly
authorized, executed and delivered by the Company and the other parties thereto, (v) Articles Supplementary conforming to the laws
of the State of Maryland regarding such series of Preferred Stock underlying such Offered Depositary Shares has been filed with, and accepted
for record by, the Maryland State Department of Assessments and Taxation, (vi) the terms of the Offered Depositary Shares and of
their issuance and sale have been duly established and are then in conformity with the applicable Deposit Agreement so as not to violate
any applicable law, the Articles or the Bylaws or result in a default under or breach of any agreement or instrument binding upon the
Company and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the
Company, (vii) the depositary receipts evidencing the Offered Depositary Shares have been duly executed, delivered, countersigned,
issued and sold in accordance with the provisions of the applicable Deposit Agreement to be filed as an exhibit to a post-effective amendment
to the Registration Statement or as an exhibit to a Current Report on Form 8-K or other applicable report under the Securities
Exchange Act of 1934, as amended, in the manner contemplated in the Registration Statement or any prospectus supplement relating thereto,
and (viii) the Preferred Stock represented by the Offered Depositary Shares has been duly authorized and validly issued by the Company
and is fully paid and non-assessable and duly delivered to the depositary, the depositary receipts evidencing the Offered Depositary
Shares, when issued and sold or otherwise distributed in accordance with the applicable Deposit Agreement and the applicable underwriting
agreement, if any, or any other duly authorized, executed and delivered valid and binding purchase or agency agreement, will be valid
and binding obligations of the Company entitling the holders thereof to the rights specified in the Offered Depositary Shares and the
Deposit Agreement, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors’ rights and to general equity principles.
To the extent that the obligations
of the Company with respect to the Securities may be dependent upon such matters, we assume for purposes of this opinion that (a) the
other party under the applicable Indenture for any Offered Debt Securities, Warrant Agreement for any of the Offered Warrants, Unit Agreement
for any of the Offered Units and Deposit Agreement for any of the Offered Depositary Shares, in the case of an entity, is duly organized,
validly existing and in good standing under the laws of its jurisdiction of organization; (b) such other party is duly qualified
to engage in the activities contemplated by such Indenture, Warrant Agreement, Unit Agreement, Deposit Agreement or other agreement, as
applicable; (c) such Indenture, Warrant Agreement, Unit Agreement, Deposit Agreement or other agreement, as applicable, has been
duly authorized, executed and delivered by the other party and constitutes the legal, valid and binding obligation of the other party
enforceable against the other party in accordance with its terms; (d) such other party is in compliance with respect to performance
of its obligations under such Indenture, Warrant Agreement, Unit Agreement, Deposit Agreement or other agreement, as applicable, with
all applicable laws and regulations; and that such other party has the requisite organizational and legal power and authority to perform
its obligations under such Indenture, Warrant Agreement, Unit Agreement, Deposit Agreement or other agreement, as applicable.
The opinion letter which we
render herein is limited to those matters governed by the General Corporation Law of the State of Maryland, including all Maryland statutes
and all Maryland court decisions that affect the interpretation of such General Corporation Law, and those matters governed by the laws
of the State of New York, in each case as of the date hereof. Our opinions expressed herein are as of the date hereof, and we assume no
obligation to revise or supplement the opinions rendered herein should the above-referenced laws be changed by legislative or regulatory
action, judicial decision or otherwise. We express no opinion as to compliance with the “blue sky” laws of any jurisdiction
and the opinions set forth herein are qualified in that respect. We express no opinion as to whether, or the extent to which, the laws
of any particular jurisdiction apply to the subject matter hereof, including, without limitation, the enforceability of the governing
law provision contained in any Securities and their governing documents.
This opinion letter is provided
for use solely in connection with the transactions contemplated by the Registration Statement and may not be used, circulated, quoted
or otherwise relied upon for any other purpose without our express written consent. No opinion may be implied or inferred beyond the opinion
expressly stated in the numbered paragraphs above.
We hereby consent to the filing
of this opinion letter as an exhibit to the Registration Statement and to the references to us under the heading “Legal Matters”
in the prospectus forming part of the Registration Statement and any supplement thereto. In giving such consent, we do not thereby admit
that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations
promulgated thereunder.
| |
Sincerely, |
| |
|
| |
/s/ Holland & Knight LLP |
| |
|
| |
Holland & Knight LLP |
Exhibit 23.1
Consent of Independent Registered
Public Accounting Firm
We consent to the incorporation by reference in
this Registration Statement on Form S-3 and related Prospectus of Shore Bancshares, Inc. (the “Company”) of our reports dated
March 15, 2024, relating to the consolidated financial statements, and the effectiveness of internal control over financial reporting
(on which our report expresses an adverse opinion on the effectiveness of the Company’s internal control over financial reporting
because of material weaknesses) of Shore Bancshares, Inc., appearing in the Annual Report on Form 10-K of Shore Bancshares, Inc. for the
year ended December 31, 2023.
We also consent to the reference to our firm under
the heading “Experts” in such Prospectus.
/s/ YOUNT, HYDE & BARBOUR, P.C.
Richmond, Virginia
May 16, 2024
Exhibit 107
Calculation of Filing Fee Table
Form S-3
(Form Type)
SHORE BANCSHARES, INC.
(Exact Name of Registrant as Specified in its Charter)
Table 1 – Newly Registered Securities
and Carry Forward Securities
| |
Security Type |
Security Class
Title |
Fee
Calculation
or Carry
Forward
Rule |
Amount Registered |
Proposed
Maximum
Offering
Price Per
Share |
Maximum Aggregate
Offering Price |
Fee Rate |
Amount of
Registration
Fee |
Carry
Forward
Form
Type |
Carry
Forward
File
Number |
Carry
Forward
Initial
Effective
Date |
Filing Fee
Previously
Paid in
Connection
with Unsold
Securities to
be Carried
Forward |
| Newly Registered Securities |
| Fees to Be Paid |
Equity |
Common Stock, par value $0.01 per share(1) |
457(o) |
(3) |
(4) |
(5) |
|
|
|
|
|
|
| Fees to Be Paid |
Equity |
Preferred Stock, par value $0.01 per share |
457(o) |
(3) |
(4) |
(5) |
|
|
|
|
|
|
| Fees to Be Paid |
Equity |
Depositary Shares |
457(o) |
(3) |
(4) |
(5) |
|
|
|
|
|
|
| Fees to Be Paid |
Debt |
Debt Securities(2) |
457(o) |
(3) |
(4) |
(5) |
|
|
|
|
|
|
| Fees to Be Paid |
Other |
Warrants |
457(o) |
(3) |
(4) |
(5) |
|
|
|
|
|
|
| Fees to Be Paid |
Other |
Units |
457(o) |
(3) |
(4) |
(5) |
|
|
|
|
|
|
| Fees to Be Paid |
Unallocated (Universal Shelf) |
Unallocated (Universal Shelf) |
457(o) |
(3) |
(4) |
$175,000,000(5) |
$0.00014760 |
$25,830.00 |
|
|
|
|
| Fees Previously Paid |
– |
– |
– |
– |
– |
– |
|
– |
|
|
|
|
| Carry Forward Securities |
| Carry Forward Securities |
– |
– |
– |
– |
|
– |
|
|
– |
– |
– |
– |
| |
Total Offering Amounts |
|
$175,000,000 |
|
$25,830.00 |
|
|
|
|
| |
Total Fees Previously Paid |
|
|
|
– |
|
|
|
|
| |
Total Fee Offsets |
|
|
|
– |
|
|
|
|
| |
Net Fee Due |
|
|
|
$25,830.00 |
|
|
|
|
1) Pursuant
to Rule 416 under the Securities Act of 1933, as amended (the “Securities Act”), the shares of common stock being registered
hereunder include an indeterminate number of shares that may be issued in connection with shares splits, share dividends, recapitalizations
or similar events.
2) The debt securities covered by this registration
statement may be senior and/or subordinated debt securities of Shore Bancshares, Inc.
3) The
amount to be registered consists of up to $175,000,000 of an indeterminate amount of debt securities and related guarantees, common stock,
preferred stock, depositary shares warrants and/or units. There is also being registered hereunder such currently indeterminate number
of shares of common stock or other securities of the registrant as may be issued upon conversion of, or in exchange for, convertible or
exchangeable debt securities, preferred stock, warrants and/or units registered hereby. Any securities registered hereunder may be sold
separately or with the other securities registered hereunder.
4) The
proposed maximum aggregate offering price per unit will be determined from time to time by the registrant in connection with the issuance
by the registrant of the securities registered hereunder and is not specified as to each class of security pursuant to Instruction 2(A)(iii)(b) of
Item 16(b) of Form S-3 under the Securities Act.
5) Estimated
pursuant to Rule 457(o) under the Securities Act. In no event will the aggregate offering price of all securities sold by the
registrant from time to time pursuant to this registration statement exceed $175,000,000. No separate consideration will be received for
common stock or other securities of the registrant that may be issued upon conversion of, or in exchange for, convertible or exchangeable
debt securities and/or preferred stock registered hereby.
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