As filed with the Securities and Exchange Commission
on December 22, 2023
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
GLOBAL MEDICAL REIT INC.
(Exact name of registrant as specified in its
charter)
| Maryland |
46-4757266 |
(State or other jurisdiction of
incorporation or organization) |
(I.R.S. Employer
Identification Number) |
7373 Wisconsin Avenue, Suite 800
Bethesda, MD 20814
(202) 524-6851
(Address, including zip code, and telephone
number, including area code, of registrant’s principal executive offices)
Jamie Barber
7373 Wisconsin Avenue, Suite 800
Bethesda, MD 20814
(202) 524-6851
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Copy to:
Daniel M. LeBey, Esq.
Vinson & Elkins L.L.P.
Riverfront Plaza, West Tower
901 East Byrd Street, Suite 1500
Richmond, VA 23219
(804) 327-6310
Approximate date of commencement of proposed
sale to the public: From time to time after this registration statement becomes effective.
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. x
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, smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large Accelerated Filer x |
Accelerated Filer ¨ |
| Non-Accelerated Filer ¨ |
Smaller Reporting Company ¨ |
| |
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. ¨
PROSPECTUS
Common Stock
Preferred Stock
Debt Securities
We may offer, issue and sell from time to time,
together or separately, the securities described in this prospectus.
We will provide the specific terms of any securities
we may offer in supplements to this prospectus. You should read this prospectus and any applicable prospectus supplement carefully before
you invest. This prospectus may not be used to offer and sell any securities unless accompanied by a prospectus supplement describing
the amount of and terms of the offering of those securities.
We may offer and sell these securities to or
through one or more underwriters, dealers or agents, or directly to purchasers on a continuous or delayed basis. We reserve the sole
right to accept, and together with any underwriters, dealers and agents, reserve the right to reject, in whole or in part, any proposed
purchase of securities. The names of any underwriters, dealers or agents involved in the sale of any securities, the specific manner
in which they may be offered and any applicable commissions or discounts will be set forth in the prospectus supplement covering the
sales of those securities.
We elected to be taxed as a real estate investment
trust (“REIT”) for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2016. To assist
us in complying with certain U.S. federal income tax requirements applicable to REITs, among other purposes, our charter generally limits
beneficial and constructive ownership by any person to no more than 9.8% in value or in number of shares, whichever is more restrictive,
of the outstanding shares of any class or series of our capital stock. In addition, our charter contains various other restrictions on
the ownership and transfer of our common stock. See “Description of Capital Stock — Restrictions on Ownership and Transfer.”
Our common stock is listed on the New York Stock
Exchange, or the NYSE, under the symbol “GMRE.” Our 7.50% Series A Cumulative Redeemable Preferred Stock is listed on
the NYSE under the symbol “GMRE PrA,” The last reported sale price of our common stock on the NYSE on December 21, 2023
was $11.33 per share. We have not yet determined whether any of the other securities that may be offered by this prospectus will be listed
on any exchange, inter-dealer quotation system or over-the-counter system. If we decide to seek a listing for any of those securities,
that will be disclosed in a prospectus supplement.
Investing in our securities involves risks.
Before making a decision to invest in our securities, you should carefully consider the risks described under the section entitled “Risk
Factors” on page 6 of this prospectus and included in our most recent Annual Report on Form 10-K, subsequent Quarterly
Reports on Form 10-Q and other documents filed by us with the Securities and Exchange Commission, including any risks described
in any accompanying prospectus supplement.
Neither the U.S. Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or determined if this prospectus or any accompanying
prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is December 22,
2023
TABLE OF CONTENTS
Unless otherwise indicated or unless the context
requires otherwise, all references in this prospectus or any accompanying prospectus supplement to “we,” “our,”
“us” and “our company” refer to Global Medical REIT Inc., a Maryland corporation (the “Company”),
together with its consolidated subsidiaries, including: (1) Global Medical REIT L.P. (the “Operating Partnership”),
a Delaware limited partnership, and (2) Global Medical REIT GP LLC (the “GP”), a Delaware limited liability company,
that is our wholly owned subsidiary and the sole general partner of our Operating Partnership.
You should rely only on the information contained
in or incorporated by reference into this prospectus or any accompanying prospectus supplement. We have not authorized anyone to provide
you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. You should
assume that the information contained in this prospectus and any accompanying prospectus supplement, as well as information that we have
previously filed with the U.S. Securities and Exchange Commission, or the SEC, and incorporated by reference, is accurate only as of
the date of the applicable document. Our business, financial condition, results of operations and prospects may have changed since those
dates.
The distribution of this prospectus and any accompanying
prospectus supplement and the offering of our securities in certain jurisdictions may be restricted by law. If you possess this prospectus
or any accompanying prospectus supplement, you should find out about and observe these restrictions. This prospectus and any accompanying
prospectus supplement are not an offer to sell our securities and are not soliciting an offer to buy our securities in any jurisdiction
where the offer or sale is not permitted or where the person making the offer or sale is not qualified to do so or to any person to whom
it is not permitted to make such offer or sale.
About
This Prospectus
This prospectus is part of a “shelf”
registration statement that we have filed with the SEC. By using a shelf registration statement, we may sell, at any time and from time
to time, in one or more offerings, any combination of the securities described in this prospectus. The exhibits to our registration statement
and documents incorporated by reference contain the full text of certain contracts and other important documents that we have summarized
in this prospectus or that we may summarize in a prospectus supplement. Since these summaries may not contain all the information that
you may find important in deciding whether to purchase the securities we offer, you should review the full text of these documents. The
registration statement and the exhibits and other documents can be obtained from the SEC as indicated under the sections entitled “Where
You Can Find More Information” and “Incorporation by Reference of Information Filed with the SEC.”
This prospectus only provides you with a general
description of the securities we may offer, which is not meant to be a complete description of each security. Each time we sell securities,
we will provide a prospectus supplement that contains specific information about the terms of those securities. The prospectus supplement
may also add, update or change information contained in this prospectus. If there is any inconsistency between the information in this
prospectus and any prospectus supplement, you should rely on the information in the prospectus supplement. You should read carefully
both this prospectus and any prospectus supplement together with the additional information described under the sections entitled “Where
You Can Find More Information” and “Incorporation by Reference of Information Filed with the SEC.”
Incorporation
by Reference of Information Filed with the SEC
The SEC allows us to “incorporate by reference”
the information we file with the SEC, which means that we can disclose important information to you by referring to those documents.
The information incorporated by reference is an important part of this prospectus and any accompanying prospectus supplement. Any statement
contained in a document which is incorporated by reference into this prospectus and any accompanying prospectus supplement is automatically
updated and superseded if information contained in this prospectus or any accompanying prospectus supplement, or information that we
later file with the SEC, modifies or replaces this information. We incorporate by reference the following documents we filed with the
SEC:
| · | Our Quarterly Reports on Form 10-Q for the quarterly periods
ended March 31, 2023, June 30, 2023 and September 30, 2023, filed with the
SEC on May 5, 2023, August 4, 2023 and November 7, 2023, respectively; |
We are also incorporating by reference
additional documents that we file with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), after the date of the initial registration statement of which this prospectus is a
part and prior to termination of the offering of the securities described in this prospectus. We are not, however, incorporating by
reference any documents or portions thereof, whether specifically listed above or filed in the future, that are not deemed
“filed” with the SEC, including any information furnished pursuant to Items 2.02 or 7.01 of Form 8-K or certain
exhibits furnished pursuant to Item 9.01 of Form 8-K.
To receive a free copy of any of the documents
incorporated by reference into this prospectus, including exhibits, if they are specifically incorporated by reference into the documents,
call us at (202) 524-6851 or submit a written request to Global Medical REIT Inc., 7373 Wisconsin Avenue, Suite 800, Bethesda, Maryland
20814.
Where
You Can Find More Information
We file annual, quarterly and current reports,
proxy statements and other information with the SEC. The SEC maintains a website that contains reports, proxy and information statements
and other information regarding registrants that file electronically with the SEC at http://www.sec.gov. You may inspect reports
and other information we file at the offices of the NYSE, 20 Broad Street, New York, New York 10005. In addition, we maintain a website
that contains information about us at http://www.globalmedicalreit.com. The information found on, or otherwise accessible through,
our website is not incorporated by reference into, and does not form a part of, this prospectus or any accompanying prospectus supplement
or any other report or document we file with or furnish to the SEC.
We have filed with the SEC a registration statement
on Form S-3, of which this prospectus is a part, including exhibits, schedules and amendments filed with, or incorporated by reference
into, the registration statement, under the Securities Act of 1933, as amended (the “Securities Act”), with respect to the
securities registered hereby. This prospectus and any accompanying prospectus supplement do not contain all of the information set forth
in the registration statement and exhibits and schedules to the registration statement. For further information with respect to our company
and the securities registered hereby, reference is made to the registration statement, including the exhibits to the registration statement.
Statements contained in this prospectus and any accompanying prospectus supplement as to the contents of any contract or other document
referred to in, or incorporated by reference into, this prospectus and any accompanying prospectus supplement are not necessarily complete
and, where such contract or other document is an exhibit to the registration statement, each statement is qualified in all respects by
the exhibit to which the reference relates. The registration statement of which this prospectus is a part is available to you on the
SEC’s website.
Cautionary
Note Regarding Forward-Looking Statements
When used in this prospectus and any accompanying
prospectus supplement, including the documents that we have incorporated by reference, in future filings with the SEC or in press releases
or other written or oral communications, statements which are not historical in nature, including those containing words such as “believe,”
“expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,”
“should,” “may” or the negative of these words and phrases or similar words or phrases which are predictions
of or indicate future events or trends and which do not relate solely to historical matters, are intended to identify “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities
Act and Section 21E of the Exchange Act). In particular, statements pertaining to our trends, liquidity, capital resources, and
the healthcare industry, the healthcare real estate markets and opportunity, among others, contain forward-looking statements. You can
also identify forward-looking statements by discussions of strategy, plans or intentions.
Forward-looking statements involve numerous risks
and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions,
data or methods which may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions
and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual
results and future events to differ materially from those set forth or contemplated in the forward-looking statements:
| · | difficulties in identifying healthcare facilities to acquire
(due to increased cost of capital, competition or otherwise) and completing such acquisitions; |
| · | defaults on or non-renewal of leases by tenants; |
| · | our ability to collect rents; |
| · | increases in interest rates and increased operating costs; |
| · | macroeconomic and geopolitical factors, including, but not limited
to, inflationary pressures, distress in the banking sector, interest rate volatility, global
supply chain disruptions and ongoing geopolitical conflicts and war; |
| · | the effects of the ongoing coronavirus (“COVID-19”)
pandemic (including any related variants of the COVID-19 virus such as the Delta variant,
Omicron variant, or others), which are highly uncertain, cannot be predicted and will depend
upon future developments, including the severity of COVID-19, the duration of the outbreak
and potential resurgences, plateaued or stagnant vaccination and booster rates, adequate
testing and treatments and the prevalence of widespread immunity to COVID-19; |
| · | our ability to satisfy the covenants in our existing and any
future debt agreements; |
| · | decreased rental rates or increased vacancy rates, including
expected rent levels on acquired properties; |
| · | adverse economic or real estate conditions or developments, either
nationally or in the markets in which our facilities are located; |
| · | our failure to generate sufficient cash flows to service our
outstanding obligations; |
| · | our ability to satisfy our short and long-term liquidity requirements; |
| · | our ability to deploy the debt and equity capital we raise; |
| · | our ability to hedge our interest rate risk; |
| · | our ability to raise additional equity and debt capital on terms
that are attractive or at all; |
| · | our ability to make distributions on shares of our common and
preferred stock or to redeem our preferred stock; |
| · | expectations regarding the timing and/or completion of any acquisition; |
| · | expectations regarding the timing and/or completion of dispositions,
and the expected use of proceeds therefrom; |
| · | general volatility of the market price of our common and preferred
stock; |
| · | changes in our business or our investment or financing strategy; |
| · | our dependence upon key personnel whose continued service is
not guaranteed; |
| · | our ability to identify, hire and retain highly qualified personnel
in the future; |
| · | the degree and nature of our competition; |
| · | changes in healthcare laws, governmental regulations, tax laws
and similar matters; |
| · | changes in current healthcare and healthcare real estate trends; |
| · | changes in expected trends in Medicare, Medicaid and commercial
insurance reimbursement trends; |
| · | competition for investment opportunities; |
| · | our failure to successfully integrate acquired healthcare facilities; |
| · | our expected capital and tenant improvement expenditures; |
| · | changes in accounting policies generally accepted in the United
States of America; |
| · | lack of, or insufficient amounts of, insurance; |
| · | other factors affecting the real estate industry generally; |
| · | changes in the tax treatment of our distributions; |
| · | our failure to maintain our qualification as a REIT for U.S.
federal income tax purposes; |
| · | our ability to qualify for the safe harbor from the 100% prohibited
transactions tax under the REIT rules with respect to our property dispositions; and |
| · | limitations imposed on our business due to, and our ability to
satisfy, complex rules relating to REIT qualification for U.S. federal income tax purposes. |
See Item 1A. Risk Factors in our Annual Report
on Form 10-K for the year ended December 31, 2022 for further discussion of these and other risks, as well as the risks, uncertainties
and other factors discussed in this prospectus and identified in other documents we may file with the SEC from time to time. You should
carefully consider these risks before making any investment decisions in our company. New risks and uncertainties may also emerge from
time to time that could materially and adversely affect us. While forward-looking statements reflect our good faith beliefs, they are
not guarantees of future performance. We disclaim any obligation to update or revise any forward-looking statement to reflect changes
in underlying assumptions or factors, of new information, data or methods, future events or other changes after the date of this prospectus,
except as required by applicable law. You should not place undue reliance on any forward-looking statements that are based on information
currently available to us or the third parties making the forward-looking statements.
Global
MedicaL REIT Inc.
Global Medical REIT Inc. (the “Company,”
“us,” “we,” or “our”) is a Maryland corporation and internally managed REIT that owns and acquires
healthcare facilities and leases those facilities to physician groups and regional and national healthcare systems.
We hold our facilities and conduct our operations
through a Delaware limited partnership subsidiary named Global Medical REIT L.P. (the “Operating Partnership”). Our
wholly owned subsidiary, Global Medical REIT GP LLC, is the sole general partner of our Operating Partnership and, as of September 30,
2023, we owned 92.91% of the outstanding common operating partnership units (“OP Units”) of our Operating Partnership, with
an aggregate of 7.09% of the Operating Partnership owned by holders of long-term incentive plan units (“LTIP Units”) and
third-party limited partners who contributed properties or services to the Operating Partnership in exchange for OP Units.
We elected to be taxed as a REIT for U.S. federal
income tax purposes commencing with our taxable year ended December 31, 2016.
Our common stock is listed on the NYSE under
the symbol “GMRE.” Our Series A Preferred Stock is listed on the NYSE under the symbol “GMRE PrA.” Our principal
executive offices are located at 7373 Wisconsin Avenue, Suite 800, Bethesda Maryland, 20814. Our telephone number is (202) 524-6851.
Our website is located at http://www.globalmedicalreit.com. The information found on, or otherwise accessible through, our website
is not incorporated into, and does not form a part of, this prospectus or any accompanying prospectus supplement or any other report
or document we file with or furnish to the SEC.
Risk
Factors
Before purchasing any securities offered by this
prospectus, you should carefully consider the risk factors incorporated by reference into this prospectus from our most recent Annual
Report on Form 10-K, the risks, uncertainties and additional information set forth in our SEC reports on Forms 10-K, 10-Q and 8-K
and in the other documents incorporated by reference into this prospectus, and any risks described in any accompanying prospectus supplement.
For a description of these reports and documents, and information about where you can find them, see “Where You Can Find More Information”
and “Incorporation by Reference of Information Filed with the SEC.” Additional risks not presently known or that are currently
deemed immaterial could also materially and adversely affect our financial condition, results of operations, business and prospects.
Use
of Proceeds
Unless otherwise set forth in a prospectus supplement,
we intend to use the net proceeds from the offering of securities by us under this prospectus for general corporate purposes, including
funding acquisitions, repayment of indebtedness and working capital. Further details relating to the use of the net proceeds from the
offering of securities under this prospectus will be set forth in the applicable prospectus supplement.
Description
of Capital Stock
Although the following summary describes the
material terms of our capital stock, it is not a complete description of Maryland law or of our charter and bylaws, which are incorporated
herein by reference to the Company’s SEC filings. See “Where You Can Find More Information.”
Description of Common Stock
Our charter provides that we may issue up to
500,000,000 shares of common stock, $0.001 par value per share. As of December 21, 2023, there were 65,564,943 shares of our common
stock issued and outstanding. Our charter authorizes our board of directors to amend our charter to increase or decrease the aggregate
number of authorized shares or the number of shares of any class or series without stockholder approval.
Under Maryland law, stockholders are not personally
liable for the obligations of a corporation solely as a result of their status as stockholders.
Dividends; Liquidation. Subject to the
preferential rights, if any, of holders of any other class or series of stock, including our Series A Preferred Stock, and to the
provisions of our charter regarding the restrictions on ownership and transfer of stock, holders of shares of our common stock are entitled
to receive distributions on such shares out of assets legally available therefor if, as and when authorized by our board of directors
and declared by us, and the holders of our common stock are entitled to share ratably in our assets legally available for distribution
to our stockholders in the event of our liquidation, dissolution or winding up after payment of or adequate provision for all of our
known debts and liabilities, and subject to the rights of holders of our preferred stock, including our Series A Preferred Stock,
if outstanding at such time.
Voting Rights. Subject to the provisions
of our charter regarding the restrictions on ownership and transfer of shares of stock and except as may otherwise be specified in the
terms of any class or series of stock, each outstanding share of common stock entitles the holder to one vote on all matters submitted
to a vote of stockholders, including the election of directors, and, except as provided with respect to any other class or series of
stock, the holder of such share of common stock will possess the exclusive voting power. There is no cumulative voting in the election
of our directors, which means that the stockholders entitled to cast a majority of the votes entitled to be cast in the election of directors
can elect all of the directors then standing for election, and the remaining stockholders will not be able to elect any directors. Directors
are elected by a majority of all the votes cast at a meeting of stockholders duly called and at which a quorum is present if the election
is uncontested.
Other. Holders of our common stock have
no preference, conversion, exchange, sinking fund, redemption or appraisal rights and have no preemptive rights to subscribe for any
of our securities. Subject to the restrictions on ownership and transfer of stock contained in our charter and the terms of any other
class or series of stock, all our shares of common stock have equal dividend, liquidation and other rights.
Under the Maryland General Corporation Law (the
“MGCL”), a Maryland corporation generally cannot dissolve, amend its charter, merge, convert or consolidate with another
entity, sell all or substantially all of its assets or engage in a statutory share exchange, unless the action is advised by our board
of directors and approved by the affirmative vote of stockholders entitled to cast at least two-thirds of the votes entitled to be cast
on the matter, unless a lesser percentage (but not less than a majority) is specified in the corporation’s charter. Our charter
provides that, except for amendments to the provisions of our charter relating to (i) the removal of directors, (ii) the restrictions
on ownership and transfer of our capital stock and (iii) the vote required to amend such provisions (each of which requires the
affirmative vote of stockholders entitled to cast not less than two-thirds of all the votes to be cast on the matter) and certain amendments
that require, pursuant to the MGCL, only approval by our board of directors, these actions may be taken only if advised by our board
of directors and approved by the affirmative vote of stockholders entitled to cast a majority of all the votes entitled to be cast on
the matter.
Listing. Our common stock is currently
listed on the NYSE under the symbol “GMRE.”
Transfer Agent and Registrar. The transfer
agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC.
Description of Series A Preferred Stock
Our charter provides that we may issue up to
10,000,000 shares of preferred stock, $0.001 par value per share. 3,105,000 shares of preferred stock have been designated as shares
of 7.50% Series A Cumulative Redeemable Preferred Stock, par value $0.001 per share. As of December 21, 2023, there were 3,105,000
shares of our Series A Preferred Stock issued and outstanding. Our charter authorizes the board of directors to amend our charter
to increase or decrease the aggregate number of authorized shares or the number of shares of any class or series without stockholder
approval. Our board of directors may authorize the issuance of preferred stock in one or more classes or series and may determine, with
respect to any such class or series, the rights, preferences, privileges and restrictions of the preferred stock of that class or series.
Reopening. The provisions of our charter
establishing our Series A Preferred Stock permit us to “reopen” this series, without the consent of the holders of our
Series A Preferred Stock, in order to issue additional shares of Series A Preferred Stock from time to time. We may in the
future issue additional shares of Series A Preferred Stock without the consent of the holders of Series A Preferred Stock.
Any additional shares of Series A Preferred Stock will have the same terms as our current Series A Preferred Stock. These additional
shares of Series A Preferred Stock will, together with our current Series A Preferred Stock, constitute a single series of
securities.
Maturity. Our Series A Preferred
Stock has no stated maturity and is not subject to any sinking fund or mandatory redemption, and will remain outstanding indefinitely
unless and until (i) we redeem such Series A Preferred Stock at our option as described below in “— Redemption
at Our Option,” or (ii) they are converted by the holder of such Series A Preferred Stock in the event of a Change of
Control as described below in “— Conversion Right upon a Change of Control.”
Ranking. Our Series A Preferred Stock
ranks, with respect to dividend rights and rights upon our voluntary or involuntary liquidation, dissolution or winding up:
| 1) | senior to our common stock and to any other class or series of our
equity shares, currently issued or issued in the future, expressly designated as ranking
junior to the Series A Preferred Stock; |
| 2) | on parity with any preferred or convertible preferred stock ranking
on parity with the Series A Preferred Stock, currently issued or issued in the future;
and |
| 3) | junior to all equity shares issued by us with terms specifically
providing that those equity shares rank senior to the Series A Preferred Stock with
respect to rights of dividend payments and the distribution of assets upon any voluntary
or involuntary liquidation, dissolution or winding up of the Company, which issuance is subject
to the approval of the holders of two-thirds of the outstanding shares of Series A Preferred
Stock and any parity preference shares. |
The term “equity shares” does not
include convertible or exchangeable debt securities, which debt securities would rank senior to the Series A Preferred Stock.
Dividends. Holders of Series A Preferred
Stock are entitled to receive, when, as and if declared by our board of directors or a duly authorized committee of the board of directors,
out of funds legally available for the payment of dividends under Maryland law, cumulative cash dividends from the original issue date
or the immediately preceding dividend payment date, as applicable, quarterly in arrears on January 31, April 30, July 31
and October 31 of each year (each, a “dividend payment date”). These cumulative cash dividends will accrue on the liquidation
preference amount of $25.00 per share at a rate per annum equal to 7.50% of the liquidation preference of $25.00 per share (equivalent
to $1.875 per annum per share) with respect to each dividend period from and including the original issue date. If we issue additional
shares of Series A Preferred Stock after the original issue date, dividends on such shares will accrue from the original issue date
or the most recent dividend payment date at which dividends were paid in full.
Dividends will be payable to holders of record
as of 5:00 p.m., New York time, on the related record date. The record dates for the Series A Preferred Stock are the January 15,
April 15, July 15 or October 15 immediately preceding the relevant dividend payment date (each, a “dividend record
date”). The term “business day” means any day, other than a Saturday or Sunday, that is neither a legal holiday nor
a day on which banking institutions in New York, New York are authorized or required by law, regulation or executive order to close.
A dividend period is the period from and including
a dividend payment date to, but excluding, the next dividend payment date or any earlier redemption date. Dividends payable on the Series A
Preferred Stock will be computed based on a 360-day year consisting of twelve 30-day months and will be calculated from the original
issue date.
Notwithstanding the foregoing, dividends on the
Series A Preferred Stock will accrue whether or not funds are legally available for the payment of those dividends, whether or not
we have earnings and whether or not those dividends are authorized. No interest, or sum of money in lieu of interest, will be payable
in respect of any dividend payment or payments on the Series A Preferred Stock which may be in arrears, and holders of the Series A
Preferred Stock will not be entitled to any dividends, whether payable in cash, property or shares, in excess of full cumulative dividends
on the Series A Preferred Stock described above. Any dividend payment made on the Series A Preferred Stock shall be first credited
against the earliest accumulated but unpaid dividend due with respect to those shares.
If, for any taxable year, we designate as a “capital
gain dividend,” as defined in Section 857 of the Internal Revenue Code of 1986, as amended (the “Code”), which
we refer to as a Capital Gains Amount, any portion of the dividends, as determined for U.S. federal income tax purposes, paid or made
available for that year to holders of all classes of our shares of capital stock, then, except as otherwise required by applicable law,
the portion of the Capital Gains Amount that shall be allocable to the holders of the Series A Preferred Stock will be in proportion
to the amount that the total dividends, as determined for U.S. federal income tax purposes, paid or made available to holders of Series A
Preferred Stock for the year bears to the total dividends paid or made available for that year to holders of all classes of our shares
of capital stock. In addition, except as otherwise required by applicable law, we will make a similar allocation with respect to any
undistributed long-term capital gains that are to be included in our stockholders’ long-term capital gains based on the allocation
of the Capital Gains Amount that would have resulted if those undistributed long-term capital gains had been distributed as “capital
gain dividends” by us to our stockholders.
Our Series A Preferred Stock ranks junior
as to payment of dividends to any class or series of our preferred stock that we may issue in the future that is expressly stated to
be senior as to payment of dividends and the distribution of assets upon liquidation, dissolution or winding up of the Company. If at
any time we have failed to pay, on the applicable payment date, accrued dividends on any shares that rank in priority to the Series A
Preferred Stock with respect to dividends, we may not pay any dividends on the Series A Preferred Stock or redeem or otherwise repurchase
any Series A Preferred Stock until we have paid or set aside for payment the full amount of the unpaid dividends on the shares that
rank in priority with respect to dividends that must, under the terms of such shares, be paid before we may pay dividends on, or redeem
or repurchase, the Series A Preferred Stock.
So long as any shares of Series A Preferred
Stock remain outstanding, no dividend or distribution shall be paid or declared on junior equity securities, and no junior equity securities
shall be purchased, redeemed or otherwise acquired for consideration by us, directly or indirectly, during a dividend period, unless
the full cumulative dividends on all outstanding shares of Series A Preferred Stock have been declared and paid (or declared and
a sum sufficient for the payment thereof has been set aside).
The foregoing limitation does not apply to:
| · | repurchases, redemptions or other acquisitions of junior equity
shares of the Company in connection with any employee incentive or benefit plan; |
| · | an exchange, redemption, reclassification or conversion of any
class or series of the Company’s junior equity shares, or any junior equity shares
or securities of a subsidiary of the Company, for any class or series of the Company’s
junior equity shares; or |
| · | any dividend in the form of shares of capital stock, warrants,
options or other rights where the dividend security or the security issuable upon exercise
of such warrants, options or other rights is the same security as that on which the dividend
is being paid or ranks equal or junior to that security. |
“Junior equity shares” mean any class
or series of shares of capital stock of the Company that ranks junior to the Company as to the payment of dividends and the distribution
of assets upon liquidation, dissolution or winding up of the Company. Junior equity shares include shares of our common stock.
When dividends are not paid (or duly provided
for) on any dividend payment date (or, in the case of parity equity shares (as defined below) having dividend payment dates different
from the dividend payment dates pertaining to the Series A Preferred Stock, on a dividend payment date falling within the related
dividend period for Series A Preferred Stock) in full upon the Series A Preferred Stock and any shares of parity equity shares,
all dividends declared upon the Series A Preferred Stock and all such parity equity shares payable on such dividend payment date
(or, in the case of parity equity shares having dividend payment dates different from the dividend payment dates pertaining to the Series A
Preferred Stock, on a dividend payment date falling within the related dividend period for the Series A Preferred Stock) shall be
declared pro rata so that the respective amounts of such dividends shall bear the same ratio to each other as all accrued but
unpaid dividends per share on the Series A Preferred Stock and all parity equity shares payable on such dividend payment date (or,
in the case of parity equity shares having dividend payment dates different from the dividend payment dates pertaining to the Series A
Preferred Stock, on a dividend payment date falling within the related dividend period for the Series A Preferred Stock) bear to
each other.
Our board of directors will not authorize and
we will not pay or set apart for payment dividends on our Series A Preferred Stock at any time when the terms and provisions of
any agreement of ours, including any agreement relating to our indebtedness, prohibits the authorization, payment or setting apart for
payment or provides that the authorization, payment or setting apart for payment would constitute a breach of the agreement or a default
under the agreement, or if the authorization, payment or setting apart for payment shall be restricted or prohibited by law. We also
have the right to withhold, from any amounts otherwise payable to you, with respect to all distributions (deemed or actual) to the extent
that withholding is or was required for such distributions under applicable tax withholding rules.
Future distributions on our common stock and
preferred stock, including our Series A Preferred Stock, will be at the discretion of our board of directors and will depend on,
among other things, our results of operations, funds from operations, cash flow from operations, financial condition and capital requirements,
the annual distribution requirements under the REIT provisions of the Code, our debt service requirements and any other factors our board
of directors deems relevant. In addition, our revolving credit facility contains provisions that could limit or, in certain cases, prohibit
the payment of distributions on our common stock and preferred stock, including the Series A Preferred Stock. Accordingly, although
we expect to pay quarterly cash distributions on our common stock and scheduled cash dividends on our Series A Preferred Stock,
we cannot guarantee that we will maintain these distributions or what the actual distributions will be for any future period.
Subject to the foregoing, dividends (payable
in cash, shares or otherwise) may be determined by our board of directors (or a duly authorized committee of the board of directors)
and may be declared and paid on our common stock and any shares of capital stock ranking, as to dividends, equally with or junior to
the Series A Preferred Stock from time to time out of any funds legally available for such payment, and the Series A Preferred
Stock shall not be entitled to participate in any such dividend.
Liquidation Rights. Upon any voluntary
or involuntary liquidation, dissolution or winding up of the Company, holders of our Series A Preferred Stock are entitled to receive
out of assets of the Company available for distribution to stockholders, after satisfaction of liabilities to creditors, if any, and
subject to the rights of holders of any shares of capital stock then outstanding ranking senior to the Series A Preferred Stock
in respect of distributions upon liquidation, dissolution or winding up of the Company, and before any distribution of assets is made
to holders of common stock or of any of our other classes or series of stock ranking junior to the Series A Preferred Stock as to
such a distribution, a liquidating distribution in the amount of $25.00 per share, plus accumulated and unpaid dividends (whether or
not authorized or declared) through but excluding the date of the final distribution to such holders. Holders of the Series A Preferred
Stock will not be entitled to any other amounts from us after they have received their full liquidation preference.
In any such distribution, if the assets of the
Company are not sufficient to pay the liquidation preferences in full to all holders of the Series A Preferred Stock and all holders
of any of our other shares of capital stock ranking equally as to such distribution with the Series A Preferred Stock, the amounts
paid to the holders of Series A Preferred Stock and to the holders of all such other shares will be paid ratably in accordance with
the respective aggregate liquidation preferences of those holders. In any such distribution, the “liquidation preference”
of any holder of preferred stock means the amount otherwise payable to such holder in such distribution (assuming no limitation on our
assets available for such distribution), including any accumulated but unpaid dividends (whether or not authorized or declared). If the
liquidation preference has been paid in full to all holders of Series A Preferred Stock and any of our other shares of capital stock
ranking equally as to the liquidation preference, the holders of our shares of capital stock ranking junior as to the liquidation preference
shall be entitled to receive all remaining assets of the Company according to their respective rights and preferences.
For purposes of this section, the merger or consolidation
of the Company with or into any other entity, a statutory share exchange or the sale, transfer or conveyance of all or substantially
all of the assets of the Company, for cash, securities or other property shall not constitute a liquidation, dissolution or winding up
of the Company. See “— Conversion Right upon a Change of Control” below for information about conversion of the Series A
Preferred Stock in the event of a change of control of the Company.
Limited Voting Rights. Holders of the
Series A Preferred Stock generally will have no voting rights. However, if we are in arrears on dividends, whether or not authorized
or declared, on the Series A Preferred Stock for six or more quarterly periods, whether or not consecutive, holders of Series A
Preferred Stock (voting as a single class together with the holders of all other classes or series of parity preferred stock upon which
like voting rights have been conferred and are exercisable) will be entitled to elect two additional directors at a special meeting called
upon the request of at least 10% of such holders or at our next annual meeting and at each subsequent annual meeting of stockholders,
each additional director being referred to as a “Preferred Stock Director,” until all unpaid dividends with respect to the
Series A Preferred Stock and such other classes or series of preferred stock with like voting rights have been paid. Each Preferred
Stock Director will be elected by a plurality of the votes cast by the outstanding shares of Series A Preferred Stock and any other
series of parity equity shares with like voting rights, voting together as a single class. Special meetings called in accordance with
the provisions described in this paragraph shall be subject to the procedures in our bylaws, except that we, rather than the holders
of Series A Preferred Stock or any other class or series of parity preferred stock entitled to vote thereon when they have the voting
rights described above (voting together as a single class), will pay all costs and expenses of calling and holding the meeting.
Any Preferred Stock Director may be removed at
any time with or without cause by the vote of, and may not be removed otherwise than by the vote of, the holders of record of a majority
of the outstanding shares of Series A Preferred Stock and all other classes or series of parity preferred stock entitled to vote
thereon when they have the voting rights described above (voting together as a single class). So long as a dividend arrearage continues,
any vacancy in the office of a Preferred Stock Director may be filled by written consent of the Preferred Stock Director remaining in
office, or if none remains in office, by a plurality of the votes cast by the outstanding shares of Series A Preferred Stock when
they have the voting rights described above (voting as a single class with all other classes or series of parity preferred stock upon
which like voting rights have been conferred and are exercisable).
So long as any shares of Series A Preferred
Stock remain outstanding, we will not, without the affirmative vote or written consent of the holders of at least two-thirds of the then
outstanding shares of Series A Preferred Stock and each other class or series of parity preferred stock with like voting rights
(voting together as a single class), authorize, create, issue or increase the number of authorized or issued shares of any class or series
of equity shares ranking senior to the Series A Preferred Stock with respect to rights of dividend payments and the distribution
of assets upon any voluntary or involuntary liquidation, dissolution or winding up of the Company, or reclassify any of our authorized
equity shares into such equity shares, or create, authorize or issue any obligation or security convertible into or evidencing the right
to purchase such equity shares. However, we may create additional classes of parity equity shares and junior equity shares, amend or
supplement our charter to increase the authorized number of shares of parity equity shares (including the shares of Series A Preferred
Stock) and junior equity shares and issue additional series of parity equity shares and junior equity shares without the consent of any
holder of Series A Preferred Stock.
In addition, the affirmative vote or written
consent of the holders of at least two-thirds of the outstanding shares of Series A Preferred Stock and each other class or series
of parity preferred stock with like voting rights (voting together as a single class) is required for us to amend, alter or repeal any
provision of our charter, whether by merger, consolidation or otherwise, so as to materially and adversely affect the voting rights,
powers or preferences of the Series A Preferred Stock, unless the Series A Preferred Stock remains outstanding without the
terms thereof being materially adversely changed in any way adverse to the holders thereof or is converted into or exchanged for preferred
stock of the surviving entity having preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption thereof that are substantially similar to those of the Series A Preferred
Stock. If such amendment to our charter disproportionately affects the terms of the Series A Preferred Stock relative to the terms
of one or more other classes or series of parity preferred stock, the affirmative vote or written consent of the holders of at least
two-thirds of the outstanding shares of Series A Preferred Stock (voting separately as a class) is required.
In any matter in which holders of Series A
Preferred Stock may vote (as expressly provided in the terms of the Series A Preferred Stock), each holder of Series A Preferred
Stock shall be entitled to one vote per share.
Information Rights. During any period
in which we are not subject to Section 13 or 15(d) of the Exchange Act and any shares of Series A Preferred Stock are
outstanding, we will (i) post to our website or transmit by mail (or other permissible means under the Exchange Act) to all holders
of Series A Preferred Stock, as their names and addresses appear on our record books and without cost to such holders, copies of
the Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, respectively, that we would have been required to file
with the SEC pursuant to Section 13 or 15(d) of the Exchange Act if we were subject thereto (other than any exhibits that would
have been required) and (ii) promptly, upon request, supply copies of such reports to any holders or prospective holder of Series A
Preferred Stock. We will post to our website or mail (or otherwise provide) the information to the holders of the Series A Preferred
Stock within 15 days after the respective dates by which an annual report on Form 10-K or a quarterly report on Form 10-Q,
as the case may be, would have been required to be filed with the SEC if we were subject to Section 13 or 15(d) of the Exchange
Act, in each case, based on the dates on which we would be required to file such periodic reports with the SEC.
Listing. The Series A Preferred Stock
is listed on the NYSE under the symbol “GMRE PrA.”
Transfer Agent, Registrar and Depositary.
American Stock Transfer & Trust Company, LLC is the transfer agent, registrar, dividend disbursing agent, redemption agent and
depositary for the Series A Preferred Stock.
No Maturity, Sinking Fund or Mandatory Redemption.
Our Series A Preferred Stock is perpetual and has no maturity date, and is not subject to any mandatory redemption, sinking fund
or other similar provisions. Accordingly, our Series A Preferred Stock will remain outstanding indefinitely, unless and until we
decide to redeem them or they are converted in connection with a Change of Control (as defined below) by the holders of the Series A
Preferred Stock.
Redemption at Our Option. We may, at our
option, redeem our Series A Preferred Stock for cash in whole or in part, from time to time, at any time, upon not less than 30
days nor more than 60 days’ notice, at a cash redemption price equal to $25.00 per share, plus any accumulated and unpaid dividends
(whether or not authorized or declared), to, but excluding, the date of redemption. Holders of Series A Preferred Stock will have
no right to require the redemption or repurchase of the Series A Preferred Stock. Investors should not expect us to redeem the Series A
Preferred Stock on any particular date in the future or at all.
If Series A Preferred Stock is to be redeemed,
the notice of redemption (which may be contingent upon the occurrence of a future event) shall be mailed, postage pre-paid, not less
than 30 days nor more than 60 days prior to the date of redemption, addressed to the holders of record of the Series A Preferred
Stock at their addresses as they appear on the Company’s share transfer records (provided that, if the shares of Series A
Preferred Stock are held in book-entry form through the Depository Trust Company, or DTC, we may give such notice in any manner permitted
by DTC). A failure to give such notice or any defect in the notice or in its mailing shall not affect the validity of the proceedings
for the redemption of any Series A Preferred Stock except as to the holder to whom notice was defective or not given. In addition
to any information required by law or by the applicable rules of any exchange upon which the Series A Preferred Stock may be
listed for trading, each notice of redemption will include a statement setting forth: (i) the redemption date, (ii) the number
of shares of Series A Preferred Stock to be redeemed and, if less than all the shares held by such holder are to be redeemed, the
number of such shares to be redeemed from such holder, (iii) the redemption price and (iv) the place or places where holders
may surrender certificates evidencing shares of Series A Preferred Stock for payment of the redemption price. If notice of redemption
of any Series A Preferred Stock has been given and if the funds necessary for such redemption have been set aside by us for the
benefit of the holders of any Series A Preferred Stock so called for redemption, then, from and after the redemption date, dividends
will cease to accrue on such Series A Preferred Stock, such Series A Preferred Stock shall no longer be deemed outstanding
and all rights of the holders of such shares will cease, except the right to receive the redemption price, without interest from the
date of such redemption.
In the case of any redemption of only part of
the Series A Preferred Stock at the time outstanding, the shares to be redeemed shall be selected either pro rata or by lot.
We may also redeem the Series A Preferred
Stock in limited circumstances relating to maintaining our qualification as a REIT, as described below in “— Restrictions
on Ownership and Transfer.”
Special Redemption Option upon a Change of
Control. Upon the occurrence of a Change of Control (as defined below), we may redeem for cash, in whole or in part, the Series A
Preferred Stock within 120 days after the date on which such Change of Control occurred, by paying $25.00 per share, plus any accumulated
and unpaid dividends (whether or not authorized or declared), to, but excluding, the date of redemption. If, prior to the Change of Control
Conversion Date (as defined below under the caption “— Conversion Rights upon a Change of Control”), we have provided
or provide notice of redemption with respect to the Series A Preferred Stock (whether pursuant to our optional redemption right
or our special redemption option), the holders of Series A Preferred Stock will not be permitted to exercise the conversion right
described below under “— Conversion Rights upon a Change of Control” with respect to the shares subject to such notice.
We will mail to you, if you are a record holder
of the Series A Preferred Stock, a notice of redemption no fewer than 30 days nor more than 60 days before the redemption date.
We will send the notice to your address shown on our transfer books. A failure to give notice of redemption or any defect in the notice
or in its mailing will not affect the validity of the redemption of any Series A Preferred Stock except as to the holder to whom
notice was defective. Each notice will state the following:
| · | the special redemption price; |
| · | a statement setting forth the calculation of such special redemption
price; |
| · | the number of shares of Series A Preferred Stock to be redeemed; |
| · | the place or places where the certificates, if any, evidencing
the shares of Series A Preferred Stock are to be surrendered for payment of the redemption
price; |
| · | procedures for surrendering noncertificated shares of Series A
Preferred Stock for payment of the redemption price; |
| · | that dividends on the shares of Series A Preferred Stock
to be redeemed will cease to accrue on such redemption date unless we fail to pay the redemption
price on such date; |
| · | that payment of the redemption price and any accrued and unpaid
dividends will be made upon presentation and surrender of such shares of Series A Preferred
Stock; |
| · | that the shares of Series A Preferred Stock are being redeemed
pursuant to our special redemption right in connection with the occurrence of a Change of
Control and a brief description of the transaction or transactions constituting such Change
of Control; and |
| · | that the holders of the shares of Series A Preferred Stock
to which the notice relates will not be able to tender such shares of Series A Preferred
Stock for conversion in connection with the Change of Control and each share of Series A
Preferred Stock tendered for conversion that is selected, prior to the Change of Control
Conversion Date, for redemption will be redeemed on the related date of redemption instead
of converted on the Change of Control Conversion Date. |
A “Change of Control” means, after
the initial issuance of the Series A Preferred Stock, the following have occurred and are continuing:
| · | the acquisition by any person, including any syndicate or group
deemed to be a “person” under Section 13(d)(3) of the Exchange Act,
of beneficial ownership, directly or indirectly, through a purchase, merger, conversion or
other acquisition transaction or series of purchases, mergers, conversions or other acquisition
transactions, of shares of our stock entitling that person to exercise more than 50% of the
total voting power of all outstanding shares of our stock entitled to vote generally in the
election of directors (except that the person will be deemed to have beneficial ownership
of all securities that the person has the right to acquire, whether the right is currently
exercisable or is exercisable only upon the occurrence of a subsequent condition); and |
| · | following the closing of any transaction referred to in the bullet
point above, neither we nor the acquiring or surviving entity has a class of common equity
securities listed on the NYSE, the NYSE American LLC or Nasdaq, or listed or quoted on an
exchange or quotation system that is a successor to the NYSE, NYSE American LLC or Nasdaq. |
Conversion Right Upon a Change of Control.
Upon the occurrence of a Change of Control, each holder of Series A Preferred Stock will have the right (unless, prior to the Change
of Control Conversion Date (as defined below), we have provided or provide notice of our election to redeem, in whole or in part, the
Series A Preferred Stock as described above under “— Redemption at Our Option”) to convert some or all of the
Series A Preferred Stock held by such holder (the “Change of Control Conversion Right”), on the Change of Control Conversion
Date into a number of shares of our common stock per share of Series A Preferred Stock to be converted equal to the lesser of:
| · | the quotient obtained by dividing (i) the sum of (x) the
liquidation preference amount of $25.00 per share of Series A Preferred Stock, plus
(y) any accrued and unpaid dividends thereon (whether or not declared) to, but excluding,
the Change of Control Conversion Date (unless the Change of Control Conversion Date is after
a record date for a Series A Preferred Stock dividend payment for which dividends have
been declared and prior to the corresponding Series A Preferred Stock dividend payment
date, in which case no additional amount for such accrued and unpaid dividend will be included
in this sum and such declared dividend will instead be paid, on such dividend payment date,
to the holder of record of the share of Series A Preferred Stock to be converted as
of 5:00 p.m. New York City time, on such record date) by (ii) the Common Stock
Share Price (as defined below); and |
| · | 5.3419 (the “Share Cap”), subject to certain adjustments; |
subject, in each case, to provisions for the receipt of alternative
consideration as described below.
The Share Cap is subject to pro rata adjustments
for any share splits (including those effected pursuant to a distribution of our common stock), subdivisions or combinations (in each
case, a “Share Split”) with respect to our common stock as follows: the adjusted Share Cap as the result of a Share Split
will be the number of common stock that is equivalent to the product obtained by multiplying (i) the Share Cap in effect immediately
prior to such Share Split by (ii) a fraction, the numerator of which is the number of common stock outstanding after giving effect
to such Share Split and the denominator of which is the number of our common stock outstanding immediately prior to such Share Split.
In the case of a Change of Control pursuant to
which our common stock will be converted into cash, securities or other property or assets (including any combination thereof) (the “Alternative
Form Consideration”), a holder of Series A Preferred Stock will receive upon conversion of such Series A Preferred
Stock the kind and amount of Alternative Form Consideration that such holder would have owned or to which that holder would have
been entitled to receive upon the Change of Control had such holder held a number of shares of our common stock equal to the Common Stock
Conversion Consideration immediately prior to the effective time of the Change of Control (the “Alternative Conversion Consideration,”
and the Common Stock Conversion Consideration or the Alternative Conversion Consideration, as may be applicable to a Change of Control,
is referred to as the “Conversion Consideration”).
If the holders of our common stock have the opportunity
to elect the form of consideration to be received in the Change of Control, the Conversion Consideration will be deemed to be the kind
and amount of consideration actually received by holders of a majority of our common stock that voted for such an election (if electing
between two types of consideration) or holders of a plurality of our common stock that voted for such an election (if electing between
more than two types of consideration), as the case may be, and will be subject to any limitations to which all holders of our common
stock are subject, including, without limitation, pro rata reductions applicable to any portion of the consideration payable in the Change
of Control.
Within 15 days following the occurrence of a
Change of Control, we will provide to holders of Series A Preferred Stock a notice of occurrence of the Change of Control that describes
the resulting Change of Control Conversion Right. This notice will state the following:
| · | the events constituting the Change of Control; |
| · | the date of the Change of Control; |
| · | the last date and time by which the holders of Series A
Preferred Stock may exercise their Change of Control Conversion Right; |
| · | the method and period for calculating the Common Stock Share
Price; |
| · | the Change of Control Conversion Date; |
| · | that if, prior to the Change of Control Conversion Date, we have
provided or provide notice of our election to redeem all or any portion of the Series A
Preferred Stock, holders will not be able to convert Series A Preferred Stock designated
for redemption and such shares will be redeemed on the related redemption date, even if such
shares have already been tendered for conversion pursuant to the Change of Control Conversion
Right; |
| · | if applicable, the type and amount of Alternative Conversion
Consideration entitled to be received per Series A Preferred Stock; |
| · | the name and address of the paying agent and the conversion agent;
and |
| · | the procedures that the holders of Series A Preferred Stock
must follow to exercise the Change of Control Conversion Right. |
We will issue a press release for publication
on the Dow Jones & Company, Inc., Business Wire, PR Newswire or Bloomberg Business News (or, if these organizations are
not in existence at the time of issuance of the press release, such other news or press organization as is reasonably calculated to broadly
disseminate the relevant information to the public), or post a notice on our website, in any event prior to the opening of business on
the first business day following any date on which we provide the notice described above to the holders of Series A Preferred Stock.
To exercise the Change of Control Conversion
Right, the holders of Series A Preferred Stock will be required to deliver, on or before the close of business on the Change of
Control Conversion Date, the certificates (if any) or book entries representing Series A Preferred Stock to be converted, duly endorsed
for transfer (if certificates are delivered), together with a completed written conversion notice to our transfer agent. The conversion
notice must state:
| · | the relevant Change of Control Conversion Date; |
| · | the number of Series A Preferred Stock to be converted;
and |
| · | that the Series A Preferred Stock are to be converted pursuant
to the change of control conversion right held by holders of Series A Preferred Stock. |
We will not issue fractional shares of common
stock upon the conversion of the Series A Preferred Stock. Instead, we will pay the cash value of any fractional share otherwise
due, computed on the basis of the applicable Common Stock Share Price.
The “Change of Control Conversion Date”
is the date on which the shares of Series A Preferred Stock are to be converted, which will be a business day selected by us that
is no fewer than 20 days nor more than 35 days after the date on which we provide the notice described above to the holders of Series A
Preferred Stock.
The “Common Stock Share Price” will
be (i) if the consideration to be received in the Change of Control by the holders of our common stock is solely cash, the amount
of cash consideration per share of common stock or (ii) if the consideration to be received in the Change of Control by holders
of our common stock is other than solely cash (x) the average of the closing sale prices per share of our common stock (or, if no
closing sale price is reported, the average of the closing bid and ask prices or, if more than one in either case, the average of the
average closing bid and the average closing ask prices) for the 10 consecutive trading days immediately preceding, but not including,
the effective date of the Change of Control as reported on the principal U.S. securities exchange on which our common stock is then traded,
or (y) the average of the last quoted bid prices for our common stock in the over-the-counter market as reported by OTC Markets
Group, Inc. or similar organization for the 10 consecutive trading days immediately preceding, but not including, the effective
date of the Change of Control, if our common stock is not then listed for trading on a U.S. securities exchange.
Restrictions on Ownership and Transfer
For us to qualify and maintain our qualification
as a REIT under the Code, our shares of capital stock must be beneficially owned by 100 or more persons during at least 335 days of a
taxable year of 12 months (other than the first year for which an election to be a REIT has been made) or during a proportionate part
of a shorter taxable year. Also, not more than 50% of the value of our outstanding shares of capital stock may be owned, directly or
indirectly, by five or fewer individuals (as defined in the Code to include certain entities) during the last half of a taxable year
(other than the first year for which an election to be a REIT has been made).
To assist us in maintaining our qualification
as a REIT, among other purposes, our charter, subject to certain exceptions, restricts the amount of shares of our stock that a person
may beneficially or constructively own. Our charter provides that, subject to certain exceptions, no person may beneficially or constructively
own more than 9.8% in value or in number of shares, whichever is more restrictive, of the outstanding shares of any class or series of
our capital stock.
Our charter also prohibits any person from (i) beneficially
owning our shares of capital stock to the extent that such beneficial ownership would result in our being “closely held”
within the meaning of Section 856(h) of the Code (without regard to whether the ownership interest is held during the last
half of the taxable year), (ii) transferring our shares of capital stock to the extent that such transfer would result in our shares
of capital stock being beneficially owned by less than 100 persons (determined under the principles of Section 856(a)(5) of
the Code), (iii) beneficially or constructively owning our shares of capital stock to the extent such beneficial or constructive
ownership would cause us to constructively own 10% or more of the ownership interests in a tenant (other than a taxable REIT subsidiary
(“TRS”)) of our real property within the meaning of Section 856(d)(2)(B) of the Code and (iv) beneficially
or constructively owning our shares of capital stock if such beneficial or constructive ownership would otherwise cause us to fail to
qualify as a REIT under the Code, including, but not limited to, as a result of any operator that manages a “qualified healthcare
property” for a TRS of ours failing to qualify as an “eligible independent contractor” under the REIT rules. Any person
who acquires or attempts or intends to acquire beneficial or constructive ownership of our shares of capital stock that will or may violate
any of the foregoing restrictions on transferability and ownership, or any person who would have owned our shares of capital stock that
resulted in a transfer of shares of our capital stock to a charitable trust (as described below), is required to give written notice
immediately to us, or in the case of a proposed or attempted transaction, to give at least 15 days’ prior written notice, and provide
us with such other information as we may request in order to determine the effect of such transfer on our status as a REIT. The foregoing
restrictions on transferability and ownership will not apply if our board of directors determines that it is no longer in our best interests
to continue to qualify as a REIT.
Our board of directors, in its sole discretion,
may prospectively or retroactively exempt a person from the limits described in the paragraph above and may establish or increase an
excepted holder limit (as defined in our charter) for such person. The person seeking an exemption must provide to our board of directors
such representations, covenants and undertakings as our board of directors may deem appropriate in order to conclude that granting the
exemption and establishing or increasing the excepted holder limit will not cause us to lose our status as a REIT. Our board of directors
may require a ruling from the Internal Revenue Service (“IRS”) or an opinion of counsel, in either case in form and substance
satisfactory to the board of directors, in its sole discretion, in order to ensure our status as a REIT.
Any attempted transfer of our shares of capital
stock which, if effective, would violate any of the restrictions described above will result in the number of shares of our capital stock
causing the violation (rounded up to the nearest whole share) to be automatically transferred to a trust for the exclusive benefit of
one or more charitable beneficiaries, except that any transfer that results in the violation of the restriction relating to our shares
of capital stock being beneficially owned by fewer than 100 persons will be void ab initio. In either case, the proposed transferee will
not acquire any rights in such shares. The automatic transfer will be deemed to be effective as of the close of business on the business
day prior to the date of the purported transfer or other event that results in the transfer to the trust. Shares held in the trust will
be issued and outstanding shares. The proposed transferee will not benefit economically from ownership of any shares held in the trust,
will have no rights to dividends or other distributions and will have no rights to vote or other rights attributable to the shares held
in the trust. The trustee of the trust will have all voting rights and rights to dividends or other distributions with respect to shares
held in the trust. These rights will be exercised for the exclusive benefit of the charitable beneficiary. Any dividend or other distribution
paid prior to our discovery that shares have been transferred to the trust will be paid by the recipient to the trustee upon demand.
Any distribution authorized but unpaid will be paid when due to the trustee. Any dividend or other distribution paid to the trustee will
be held in trust for the charitable beneficiary. Subject to Maryland law, the trustee will have the authority (i) to rescind as
void any vote cast by the proposed transferee prior to our discovery that the shares have been transferred to the trust and (ii) to
recast the vote in accordance with the desires of the trustee acting for the benefit of the charitable beneficiary. However, if we have
already taken irreversible corporate action, then the trustee will not have the authority to rescind and recast the vote.
Within 20 days of receiving notice from us that
shares of stock have been transferred to the trust, the trustee will sell the shares to a person designated by the trustee, whose ownership
of the shares will not violate the above ownership and transfer limitations. Upon the sale, the interest of the charitable beneficiary
in the shares sold will terminate and the trustee will distribute the net proceeds of the sale to the proposed transferee and to the
charitable beneficiary as follows: the proposed transferee will receive the lesser of (i) the price paid by the proposed transferee
for the shares or, if the proposed transferee did not give value for the shares in connection with the event causing the shares to be
held in the trust (e.g., a gift, devise or other similar transaction), the market price (as defined in our charter) of the shares on
the day of the event causing the shares to be held in the trust and (ii) the price received by the trustee (net of any commission
and other expenses of sale) from the sale or other disposition of the shares. The trustee may reduce the amount payable to the proposed
transferee by the amount of dividends or other distributions paid to the proposed transferee and owed by the proposed transferee to the
trustee. Any net sale proceeds in excess of the amount payable to the proposed transferee will be paid immediately to the charitable
beneficiary. If, prior to our discovery that our shares of capital stock have been transferred to the trust, the shares are sold by the
proposed transferee, then (i) the shares shall be deemed to have been sold on behalf of the trust and (ii) to the extent that
the proposed transferee received an amount for the shares that exceeds the amount he or she was entitled to receive, the excess shall
be paid to the trustee upon demand.
If a transfer to a charitable trust, as described
above, would be ineffective for any reason to prevent a violation of a restriction, the transfer that would have resulted in such violation
will be void ab initio, and the proposed transferee shall acquire no rights in such shares.
Every owner of more than 5% (or such lower percentage
as required by the Code or the regulations promulgated thereunder) of our shares of capital stock, within 30 days after the end of each
taxable year, is required to give us written notice, stating his or her name and address, the number of shares of each class and series
of our stock that he or she beneficially owns and a description of the manner in which the shares are held. Each such owner will provide
us with such additional information as we may request in order to determine the effect, if any, of his or her beneficial ownership on
our status as a REIT and to ensure compliance with the ownership limits. In addition, each stockholder will upon demand be required to
provide us with such information as we may request in good faith in order to determine our status as a REIT and to comply with the requirements
of any taxing authority or governmental authority or to determine such compliance and to ensure compliance with the stock ownership limit.
These ownership limitations could delay, defer
or prevent a transaction or a change in control that might involve a premium price for our shares of capital stock or otherwise be in
the best interest of our stockholders.
Description
of Debt Securities
General
The debt securities offered by this prospectus
will be our direct unsecured general obligations. This prospectus describes certain general terms of the debt securities offered through
this prospectus. In the following discussion, we refer to any of our direct unsecured general obligations as the “Debt Securities.”
When we offer to sell a particular series of Debt Securities, we will describe the specific terms of that series in a prospectus supplement
or any free writing prospectus. The Debt Securities will be issued under an open-ended Indenture (for Debt Securities) between us and
a trustee to be elected by us at or about the time we offer our Debt Securities. The open-ended Indenture (for Debt Securities) is incorporated
by reference into the registration statement of which this prospectus is a part and is filed as an exhibit to the registration statement.
In this prospectus we refer to the Indenture (for Debt Securities) as the “Debt Securities Indenture.” We refer to the trustee
under any Debt Securities Indenture as the “Debt Securities Trustee.”
The prospectus supplement or any free writing
prospectus applicable to a particular series of Debt Securities may state that a particular series of Debt Securities will be our subordinated
obligations. The form of Debt Securities Indenture referred to above includes optional provisions (designated by brackets (“[ ]”))
that we would expect to appear in a separate indenture for subordinated debt securities in the event we issue subordinated debt securities.
In the following discussion, we refer to any of our subordinated obligations as the “Subordinated Debt Securities.” Unless
the applicable prospectus supplement or any free writing prospectus provides otherwise, we will use a separate Debt Securities Indenture
for any Subordinated Debt Securities that we may issue. Our Debt Securities Indenture will be qualified under the Trust Indenture Act
of 1939, as amended (the “Trust Indenture Act”), and you should refer to the Trust Indenture Act for the provisions that
apply to the Debt Securities.
We have summarized selected provisions of the
Debt Securities Indenture below. Each Debt Securities Indenture will be independent of any other Debt Securities Indenture unless otherwise
stated in a prospectus supplement or any free writing prospectus. The summary that follows is not complete and the summary is qualified
in its entirety by reference to the provisions of the applicable Debt Securities Indenture. You should consult the applicable Debt Securities,
Debt Securities Indenture, any supplemental indentures, officers’ certificates and other related documents for more complete information
on the Debt Securities. These documents appear as exhibits to, or are incorporated by reference into, the registration statement of which
this prospectus is a part, or will appear as exhibits to other documents that we will file with the SEC, which will be incorporated by
reference into this prospectus. In the summary below, we have included references to applicable section numbers of the Debt Securities
Indenture so that you can easily locate these provisions.
Ranking
Our Debt Securities that are not designated Subordinated
Debt Securities will be effectively subordinated to all secured indebtedness that we have outstanding from time to time to the extent
of the value of the collateral securing such secured indebtedness. Our Debt Securities that are designated Subordinated Debt Securities
will be subordinate to all outstanding secured indebtedness as well as Debt Securities that are not designated Subordinated Debt Securities.
The Indenture (for Debt Securities) does not limit the amount of secured indebtedness that we may issue or incur.
We conduct substantially all of our operations,
and make substantially all of our investments, through our operating partnership and its subsidiaries. Our ability to meet our financial
obligations with respect to any future Debt Securities, and cash needs generally, is dependent on our operating cash flow, our ability
to access various sources of short- and long-term liquidity, including our bank facilities, the capital markets and distributions from
our subsidiaries. Holders of our Debt Securities will effectively have a junior position to claims of creditors of our subsidiaries,
including trade creditors, debt holders, secured creditors, taxing authorities and guarantee holders.
Provisions of a Particular Series
The Debt Securities may from time to time be
issued in one or more series. You should consult the prospectus supplement or free writing prospectus relating to any particular series
of Debt Securities for the following information:
| · | the title of the Debt Securities; |
| · | any limit on aggregate principal amount of the Debt Securities
or the series of which they are a part; |
| · | the date(s), or method for determining the date(s), on which
the principal of the Debt Securities will be payable; |
| · | the rate, including the method of determination if applicable,
at which the Debt Securities will bear interest, if any, and |
| · | the date from which any interest will accrue; |
| · | the dates on which we will pay interest; |
| · | our ability to defer interest payments and any related restrictions
during any interest deferral period; and |
| · | the record date for any interest payable on any interest payment
date; |
| · | the principal of, premium, if any, and interest on the Debt Securities
will be payable; |
| · | you may register transfer of the Debt Securities; |
| · | you may exchange the Debt Securities; and |
| · | you may serve notices and demands upon us regarding the Debt Securities; |
| · | the security registrar for the Debt Securities and whether the
principal of the Debt Securities is payable without presentment or surrender of them; |
| · | the terms and conditions upon which we may elect to redeem any
Debt Securities, including any replacement capital or similar covenants limiting our ability
to redeem any Subordinated Debt Securities; |
| · | the denominations in which we may issue Debt Securities, if other
than $1,000 and integral multiples of $1,000; |
| · | the terms and conditions upon which the Debt Securities must
be redeemed or purchased due to our obligations pursuant to any sinking fund or other mandatory
redemption or tender provisions, or at the holder’s option, including any applicable
exceptions to notice requirements; |
| · | the currency, if other than United States currency, in which
payments on the Debt Securities will be payable; |
| · | the terms according to which elections can be made by us or the
holder regarding payments on the Debt Securities in currency other than the currency in which
the Debt Securities are stated to be payable; |
| · | if payments are to be made on the Debt Securities in securities
or other property, the type and amount of the securities and other property or the method
by which the amount shall be determined; |
| · | the manner in which we will determine any amounts payable on
the Debt Securities that are to be determined with reference to an index or other fact or
event ascertainable outside the applicable indenture; |
| · | if other than the entire principal amount, the portion of the
principal amount of the Debt Securities payable upon declaration of acceleration of their
maturity; |
| · | any addition to the events of default applicable to any Debt
Securities and any additions to our covenants for the benefit of the holders of the Debt
Securities; |
| · | the terms applicable to any rights to convert Debt Securities
into or exchange them for other of our securities or those of any other entity; |
| · | whether we are issuing Debt Securities as global securities,
and if so, |
| · | any limitations on transfer or exchange rights or the right to
obtain the registration of transfer; |
| · | any limitations on the right to obtain definitive certificates
for the Debt Securities; and |
| · | any other matters incidental to the Debt Securities; |
| · | whether we are issuing the Debt Securities as bearer securities; |
| · | any limitations on transfer or exchange of Debt Securities or
the right to obtain registration of their transfer, and the terms and amount of any service
charge required for registration of transfer or exchange; |
| · | any exceptions to the provisions governing payments due on legal
holidays, or any variations in the definition of business day with respect to the Debt Securities; |
| · | any collateral security, assurance, guarantee or other credit
enhancement applicable to the Debt Securities; |
| · | any other terms of the Debt Securities not in conflict with the
provisions of the applicable Debt Securities Indenture; and |
| · | the material U.S. federal income tax consequences applicable
to the Debt Securities. |
For more information, see Section 301 of
the applicable Debt Securities Indenture.
Debt Securities may be sold at a substantial
discount below their principal amount. You should consult the applicable prospectus supplement or free writing prospectus for a description
of certain material U.S. federal income tax considerations that may apply to Debt Securities sold at an original issue discount or denominated
in a currency other than dollars.
Unless the applicable prospectus supplement or
free writing prospectus states otherwise, the covenants contained in the applicable indenture will not afford holders of Debt Securities
protection in the event we have a change in control or are involved in a highly-leveraged transaction.
Subordination
The applicable prospectus supplement or free
writing prospectus may provide that a series of Debt Securities will be Subordinated Debt Securities, subordinate and junior in right
of payment to all of our Senior Indebtedness, as defined below. If so, we will issue these securities under a separate Debt Securities
Indenture for Subordinated Debt Securities. For more information, see Article XV of the form of Debt Securities Indenture.
Unless the applicable prospectus supplement or
free writing prospectus states otherwise, no payment of principal of, including redemption and sinking fund payments, or any premium
or interest on, the Subordinated Debt Securities may be made if:
| · | there occur certain acts of bankruptcy, insolvency, liquidation,
dissolution or other winding up of our company; |
| · | any Senior Indebtedness is not paid when due; |
| · | any applicable grace period with respect to other defaults with
respect to any Senior Indebtedness has ended, the default has not been cured or waived and
the maturity of such Senior Indebtedness has been accelerated because of the default; or |
| · | the maturity of the Subordinated Debt Securities of any series
has been accelerated because of a default and Senior Indebtedness is then outstanding. |
Upon any distribution of our assets to creditors
upon any dissolution, winding-up, liquidation or reorganization, whether voluntary or involuntary or in bankruptcy, insolvency, receivership
or other proceedings, all principal of, and any premium and interest due or to become due on, all outstanding Senior Indebtedness must
be paid in full before the holders of the Subordinated Debt Securities are entitled to payment. For more information, see Section 1502
of the applicable Debt Securities Indenture. The rights of the holders of the Subordinated Debt Securities will be subrogated to the
rights of the holders of Senior Indebtedness to receive payments or distributions applicable to Senior Indebtedness until all amounts
owing on the Subordinated Debt Securities are paid in full. For more information, see Section 1504 of the applicable Debt Securities
Indenture.
Unless the applicable prospectus supplement or
free writing prospectus states otherwise, the term “Senior Indebtedness” means all obligations (other than non-recourse obligations
and the indebtedness issued under the Subordinated Debt Securities Indenture) of, or guaranteed or assumed by, us:
| · | for borrowed money (including both senior and subordinated indebtedness
for borrowed money, but excluding the Subordinated Debt Securities); |
| · | for the payment of money relating to any lease that is capitalized
on our consolidated balance sheet in accordance with generally accepted accounting principles;
or |
| · | indebtedness evidenced by bonds, debentures, notes or other similar
instruments. |
In the case of any such indebtedness or obligations,
Senior Indebtedness includes amendments, renewals, extensions, modifications and refundings, whether existing as of the date of the Subordinated
Debt Securities Indenture or subsequently incurred by us.
The Subordinated Debt Securities Indenture does
not limit the aggregate amount of Senior Indebtedness that we may issue.
Form, Exchange and Transfer
Unless the applicable prospectus supplement or
free writing prospectus states otherwise, we will issue Debt Securities only in fully registered form without coupons and in denominations
of $1,000 and integral multiples of that amount. For more information, see Sections 201 and 302 of the applicable Debt Securities Indenture.
Holders may present Debt Securities for exchange
or for registration of transfer, duly endorsed or accompanied by a duly executed instrument of transfer, at the office of the security
registrar or at the office of any transfer agent we may designate. Exchanges and transfers are subject to the terms of the applicable
indenture and applicable limitations for global securities. We may designate ourselves the security registrar.
No charge will be made for any registration of
transfer or exchange of Debt Securities, but we may require payment of a sum sufficient to cover any tax or other governmental charge
that the holder must pay in connection with the transaction. Any transfer or exchange will become effective upon the security registrar
or transfer agent, as the case may be, being satisfied with the documents of title and identity of the person making the request. For
more information, see Section 305 of the applicable Debt Securities Indenture.
The applicable prospectus supplement or free
writing prospectus will state the name of any transfer agent, in addition to the security registrar initially designated by us, for any
Debt Securities. We may at any time designate additional transfer agents or withdraw the designation of any transfer agent or make a
change in the office through which any transfer agent acts. We must, however, maintain a transfer agent in each place of payment for
the Debt Securities of each series. For more information, see Section 602 of the applicable Debt Securities Indenture.
We will not be required to:
| · | issue, register the transfer of, or exchange any Debt Securities
or any tranche of any Debt Securities during a period beginning at the opening of business
15 days before the day of mailing of a notice of redemption of any Debt Securities called
for redemption and ending at the close of business on the day of mailing; or |
| · | register the transfer of, or exchange any Debt Securities selected
for redemption except the unredeemed portion of any Debt Securities being partially redeemed. |
For more information, see Section 305 of
the applicable Debt Securities Indenture.
Payment and Paying Agents
Unless the applicable prospectus supplement or
free writing prospectus states otherwise, we will pay interest on a Debt Security on any interest payment date to the person in whose
name the Debt Security is registered at the close of business on the regular record date for the interest payment. For more information,
see Section 307 of the applicable Debt Securities Indenture.
Unless the applicable prospectus supplement or
free writing prospectus provides otherwise, we will pay principal and any premium and interest on Debt Securities at the office of the
paying agent whom we will designate for this purpose. Unless the applicable prospectus supplement or free writing prospectus states otherwise,
the corporate trust office of the Debt Securities Trustee in New York City will be designated as our sole paying agent for payments with
respect to Debt Securities of each series. Any other paying agents initially designated by us for the Debt Securities of a particular
series will be named in the applicable prospectus supplement or free writing prospectus. We may at any time add or delete paying agents
or change the office through which any paying agent acts. We must, however, maintain a paying agent in each place of payment for the
Debt Securities of a particular series. For more information, see Section 602 of the applicable Debt Securities Indenture.
All money we pay to a paying agent for the payment
of the principal and any premium or interest on any Debt Security that remains unclaimed at the end of two years after payment is due
will be repaid to us. After that date, the holder of that Debt Security shall be deemed an unsecured general creditor and may look only
to us for these payments. For more information, see Section 603 of the applicable Debt Securities Indenture.
Redemption
You should consult the applicable prospectus
supplement or free writing prospectus for any terms regarding optional or mandatory redemption of Debt Securities. Except for any provisions
in the applicable prospectus supplement or free writing prospectus regarding Debt Securities redeemable at the holder’s option,
Debt Securities may be redeemed only upon notice by mail not less than 30 nor more than 60 days prior to the redemption date. Further,
if less than all of the Debt Securities of a series, or any tranche of a series, are to be redeemed, the Debt Securities to be redeemed
will be selected by the method provided for the particular series. In the absence of a selection provision, the Debt Securities Trustee
will select a fair and appropriate method of selection. For more information, see Sections 403 and 404 of the applicable Debt Securities
Indenture.
A notice of redemption we provide may state:
| · | that redemption is conditioned upon receipt by the paying agent
on or before the redemption date of money sufficient to pay the principal of and any premium
and interest on the Debt Securities; and |
| · | that if the money has not been received, the notice will be ineffective
and we will not be required to redeem the Debt Securities. |
For more information, see Section 404 of
the applicable Debt Securities Indenture.
Consolidation, Merger and Sale of Assets
We may not consolidate with or merge into any
other person, nor may we transfer or lease substantially all of our assets and property to any other person, unless:
| · | the corporation formed by the consolidation or into which we
are merged, or the person that acquires by conveyance or transfer, or that leases, substantially
all of our property and assets: |
| · | is organized and validly existing under the laws of any domestic
jurisdiction; |
| · | expressly assumes by supplemental indenture our obligations on
the Debt Securities and under the applicable indentures; |
| · | immediately after giving effect to the transaction, no event of
default, and no event that would become an event of default, has occurred and is continuing;
and |
| · | we have delivered to the Debt Securities Trustee an officer’s
certificate and opinion of counsel as provided in the applicable indentures. |
For more information, see Section 1101 of
the applicable Debt Securities Indenture.
Events of Default
Unless the applicable prospectus supplement or
free writing prospectus states otherwise, “event of default” under the applicable indenture with respect to Debt Securities
of any series means any of the following:
| · | failure to pay any interest due on any Debt Security of that
series within 30 days after it becomes due; |
| · | failure to pay principal or premium, if any, when due on any
Debt Security of that series; |
| · | failure to make any required sinking fund payment on any Debt
Securities of that series; |
| · | breach of or failure to perform any other covenant or warranty
in the applicable indenture with respect to Debt Securities of that series for 60 days (subject
to extension under certain circumstances for another 120 days) after we receive notice from
the Debt Securities Trustee, or we and the Debt Securities Trustee receive notice from the
holders of at least 33% in principal amount of the Debt Securities of that series outstanding
under the applicable indenture according to the provisions of the applicable indenture; |
| · | certain events of bankruptcy, insolvency or reorganization; or |
| · | any other event of default set forth in the applicable prospectus
supplement or free writing prospectus. |
For more information, see Section 801 of
the applicable Debt Securities Indenture.
An event of default with respect to a particular
series of Debt Securities does not necessarily constitute an event of default with respect to the Debt Securities of any other series
issued under the applicable indenture.
If an event of default with respect to a particular
series of Debt Securities occurs and is continuing, either the Debt Securities Trustee or the holders of at least 33% in principal amount
of the outstanding Debt Securities of that series may declare the principal amount of all of the Debt Securities of that series to be
due and payable immediately. If the Debt Securities of that series are discount securities or similar Debt Securities, only the portion
of the principal amount as specified in the applicable prospectus supplement or free writing prospectus may be immediately due and payable.
If an event of default occurs and is continuing with respect to all series of Debt Securities issued under a Debt Securities Indenture,
including all events of default relating to bankruptcy, insolvency or reorganization, the Debt Securities Trustee or the holders of at
least 33% in principal amount of the outstanding Debt Securities of all series issued under that Debt Securities Indenture, considered
together, may declare an acceleration of the principal amount of all series of Debt Securities issued under that Debt Securities Indenture.
There is no automatic acceleration, even in the event of our bankruptcy or insolvency.
The applicable prospectus supplement or free
writing prospectus may provide, with respect to a series of Debt Securities to which a credit enhancement is applicable, that the provider
of the credit enhancement may, if a default has occurred and is continuing with respect to the series, have all or any part of the rights
with respect to remedies that would otherwise have been exercisable by the holder of that series.
At any time after a declaration of acceleration
with respect to the Debt Securities of a particular series, and before a judgment or decree for payment of the money due has been obtained,
the event of default giving rise to the declaration of acceleration will, without further action, be deemed to have been waived, and
the declaration and its consequences will be deemed to have been rescinded and annulled, if:
| · | we have paid or deposited with the Debt Securities Trustee a
sum sufficient to pay: |
| · | all overdue interest on all Debt Securities of the particular
series; |
| · | the principal of and any premium on any Debt Securities of that
series that have become due otherwise than by the declaration of acceleration and any interest
at the rate prescribed in the Debt Securities; |
| · | interest upon overdue interest at the rate prescribed in the Debt
Securities, to the extent payment is lawful; and |
| · | all amounts due to the Debt Securities Trustee under the applicable
indenture; and |
| · | any other event of default with respect to the Debt Securities
of the particular series, other than the failure to pay the principal of the Debt Securities
of that series that has become due solely by the declaration of acceleration, has been cured
or waived as provided in the applicable indenture. |
For more information, see Section 802 of
the applicable Debt Securities Indenture.
The applicable Debt Securities Indenture includes
provisions as to the duties of the Debt Securities Trustee in case an event of default occurs and is continuing. Consistent with these
provisions, the Debt Securities Trustee will be under no obligation to exercise any of its rights or powers at the request or direction
of any of the holders unless those holders have offered to the Debt Securities Trustee reasonable indemnity against the costs, expenses
and liabilities that may be incurred by it in compliance with such request or direction. For more information, see Section 903 of
the applicable Debt Securities Indenture. Subject to these provisions for indemnification, the holders of a majority in principal amount
of the outstanding Debt Securities of any series may direct the time, method and place of conducting any proceeding for any remedy available
to the Debt Securities Trustee, or exercising any trust or power conferred on the Debt Securities Trustee, with respect to the Debt Securities
of that series. For more information, see Section 812 of the applicable Debt Securities Indenture.
No holder of Debt Securities may institute any
proceeding regarding the applicable indenture, or for the appointment of a receiver or a trustee, or for any other remedy under the applicable
indenture unless:
| · | the holder has previously given to the Debt Securities Trustee
written notice of a continuing event of default of that particular series; |
| · | the holders of a majority in principal amount of the outstanding
Debt Securities of all series with respect to which an event of default is continuing have
made a written request to the Debt Securities Trustee, and have offered reasonable indemnity
to the Debt Securities Trustee, to institute the proceeding as trustee; and |
| · | the Debt Securities Trustee has failed to institute the proceeding,
and has not received from the holders of a majority in principal amount of the outstanding
Debt Securities of that series a direction inconsistent with the request, within 60 days
after notice, request and offer of reasonable indemnity. |
For more information, see Section 807 of
the applicable Debt Securities Indenture.
The preceding limitations do not apply, however,
to a suit instituted by a holder of a Debt Security for the enforcement of payment of the principal of or any premium or interest on
the Debt Securities on or after the applicable due date stated in the Debt Securities. For more information, see Section 808 of
the applicable Debt Securities Indenture.
We must furnish annually to the Debt Securities
Trustee a statement by an appropriate officer as to that officer’s knowledge of our compliance with all conditions and covenants
under each of the indentures for Debt Securities. Our compliance is to be determined without regard to any grace period or notice requirement
under the respective indenture. For more information, see Section 606 of the applicable Debt Securities Indenture.
Modification and Waiver
We and the Debt Securities Trustee, without the
consent of the holders of the Debt Securities, may enter into one or more supplemental indentures for any of the following purposes:
| · | to evidence the assumption by any permitted successor of our
covenants in the applicable indenture and the Debt Securities; |
| · | to add one or more covenants or other provisions for the benefit
of the holders of outstanding Debt Securities or to surrender any right or power conferred
upon us by the applicable indenture; |
| · | to add any additional events of default; |
| · | to change or eliminate any provision of the applicable indenture
or add any new provision to it, but if this action would adversely affect the interests of
the holders of any particular series of Debt Securities in any material respect, the action
will not become effective with respect to that series while any Debt Securities of that series
remain outstanding under the applicable indenture; |
| · | to provide collateral security for the Debt Securities; |
| · | to establish the form or terms of Debt Securities according to
the provisions of the applicable indenture; |
| · | to evidence the acceptance of appointment of a successor Debt
Securities Trustee under the applicable indenture with respect to one or more series of the
Debt Securities and to add to or change any of the provisions of the applicable indenture
as necessary to provide for trust administration under the applicable indenture by more than
one trustee; |
| · | to provide for the procedures required to permit the use of a
non-certificated system of registration for any series of Debt Securities; |
| · | to change any place where: |
| · | the principal of and any premium and interest on any Debt Securities
are payable; |
| · | any Debt Securities may be surrendered for registration of transfer
or exchange; or |
| · | notices and demands to or upon us regarding Debt Securities and
the applicable indentures may be served; or |
| · | to cure any ambiguity or inconsistency, but only by means of
changes or additions that will not adversely affect the interests of the holders of Debt
Securities of any series in any material respect. |
For more information, see Section 1201 of
the applicable Debt Securities Indenture.
The holders of at least a majority in aggregate
principal amount of the outstanding Debt Securities of any series may waive:
| · | compliance by us with certain provisions of the applicable indenture
(see Section 607 of the applicable Debt Securities Indenture); and |
| · | any past default under the applicable indenture, except a default
in the payment of principal, premium, or interest and certain covenants and provisions of
the applicable indenture that cannot be modified or amended without consent of the holder
of each outstanding Debt Security of the series affected (see Section 813 of the applicable
Debt Securities Indenture). |
The Trust Indenture Act may be amended after
the date of the applicable indenture to require changes to the indenture. In this event, the indenture will be deemed to have been amended
so as to effect the changes, and we and the Debt Securities Trustee may, without the consent of any holders, enter into one or more supplemental
indentures to evidence or effect the amendment. For more information, see Section 1201 of the applicable Debt Securities Indenture.
Except as provided in this section, the consent
of the holders of a majority in aggregate principal amount of the outstanding Debt Securities issued pursuant to a Debt Securities Indenture,
considered as one class, is required to change in any manner the applicable indenture pursuant to one or more supplemental indentures.
If less than all of the series of Debt Securities outstanding under a Debt Securities Indenture are directly affected by a proposed supplemental
indenture, however, only the consent of the holders of a majority in aggregate principal amount of the outstanding Debt Securities of
all series directly affected, considered as one class, will be required. Furthermore, if the Debt Securities of any series have been
issued in more than one tranche and if the proposed supplemental indenture directly affects the rights of the holders of one or more,
but not all, tranches, only the consent of the holders of a majority in aggregate principal amount of the outstanding Debt Securities
of all tranches directly affected, considered as one class, will be required. In addition, an amendment or modification:
| · | may not, without the consent of the holder of each outstanding
Debt Security affected: |
| · | change the maturity of the principal of, or any installment of
principal of or interest on, any Debt Securities; |
| · | reduce the principal amount or the rate of interest, or the amount
of any installment of interest, or change the method of calculating the rate of interest; |
| · | reduce any premium payable upon the redemption of the Debt Securities; |
| · | reduce the amount of the principal of any Debt Security originally
issued at a discount from the stated principal amount that would be due and payable upon
a declaration of acceleration of maturity; |
| · | change the currency or other property in which a Debt Security
or premium or interest on a Debt Security is payable; or |
| · | impair the right to institute suit for the enforcement of any
payment on or after the stated maturity, or in the case of redemption, on or after the redemption
date, of any Debt Securities; |
| · | may not reduce the percentage of principal amount requirement
for consent of the holders for any supplemental indenture, or for any waiver of compliance
with any provision of or any default under the applicable indenture, or reduce the requirements
for quorum or voting, without the consent of the holder of each outstanding Debt Security
of each series or tranche affected; and |
| · | may not modify provisions of the applicable indenture relating
to supplemental indentures, waivers of certain covenants and waivers of past defaults with
respect to the Debt Securities of any series, or any tranche of a series, without the consent
of the holder of each outstanding Debt Security affected. |
A supplemental indenture will be deemed not to
affect the rights under the applicable indenture of the holders of any series or tranche of the Debt Securities if the supplemental indenture:
| · | changes or eliminates any covenant or other provision of the
applicable indenture expressly included solely for the benefit of one or more other particular
series of Debt Securities or tranches thereof; or |
| · | modifies the rights of the holders of Debt Securities of any
other series or tranches with respect to any covenant or other provision. |
For more information, see Section 1202 of
the applicable Debt Securities Indenture.
If we solicit from holders of the Debt Securities
any type of action, we may at our option by board resolution fix in advance a record date for the determination of the holders entitled
to vote on the action. We shall have no obligation, however, to do so. If we fix a record date, the action may be taken before or after
the record date, but only the holders of record at the close of business on the record date shall be deemed to be holders for the purposes
of determining whether holders of the requisite proportion of the outstanding Debt Securities have authorized the action. For that purpose,
the outstanding Debt Securities shall be computed as of the record date. Any holder action shall bind every future holder of the same
security and the holder of every security issued upon the registration of transfer of or in exchange for or in lieu of the security in
respect of anything done or permitted by the Debt Securities Trustee or us in reliance on that action, whether or not notation of the
action is made upon the security. For more information, see Section 104 of the applicable Debt Securities Indenture.
Defeasance
Unless the applicable prospectus supplement or
free writing prospectus provides otherwise, any Debt Security, or portion of the principal amount of a Debt Security, will be deemed
to have been paid for purposes of the applicable indenture, and, at our election, our entire indebtedness in respect of the Debt Security,
or portion thereof, will be deemed to have been satisfied and discharged, if we have irrevocably deposited with the Debt Securities Trustee
or any paying agent other than us, in trust money, certain eligible obligations, as defined in the applicable indenture, or a combination
of the two, sufficient to pay principal of and any premium and interest due and to become due on the Debt Security or portion thereof.
For more information, see Section 701 of the applicable Debt Securities Indenture. For this purpose, unless the applicable prospectus
supplement or free writing prospectus provides otherwise, eligible obligations include direct obligations of, or obligations unconditionally
guaranteed by, the United States, entitled to the benefit of full faith and credit of the United States, and certificates, depositary
receipts or other instruments that evidence a direct ownership interest in those obligations or in any specific interest or principal
payments due in respect of those obligations.
Resignation, Removal of Debt Securities Trustee; Appointment of
Successor
The Debt Securities Trustee may resign at any
time by giving written notice to us or may be removed at any time by an action of the holders of a majority in principal amount of outstanding
Debt Securities delivered to the Debt Securities Trustee and us. No resignation or removal of the Debt Securities Trustee and no appointment
of a successor trustee will become effective until a successor trustee accepts appointment in accordance with the requirements of the
applicable indenture. So long as no event of default or event that would become an event of default has occurred and is continuing, and
except with respect to a Debt Securities Trustee appointed by an action of the holders, if we have delivered to the Debt Securities Trustee
a resolution of our board of trustees appointing a successor trustee and the successor trustee has accepted the appointment in accordance
with the terms of the applicable indenture, the Debt Securities Trustee will be deemed to have resigned and the successor trustee will
be deemed to have been appointed as trustee in accordance with the applicable indenture. For more information, see Section 910 of
the applicable Debt Securities Indenture.
Notices
We will give notices to holders of Debt Securities
by mail to their addresses as they appear in the Debt Security Register. For more information, see Section 106 of the applicable
Debt Securities Indenture.
Title
The Debt Securities Trustee and its agents, and
we and our agents, may treat the person in whose name a Debt Security is registered as the absolute owner of that Debt Security, whether
or not that Debt Security may be overdue, for the purpose of making payment and for all other purposes. For more information, see Section 308
of the applicable Debt Securities Indenture.
Governing Law
The Debt Securities Indentures and the Debt Securities,
including any Subordinated Debt Securities Indentures and Subordinated Debt Securities, will be governed by, and construed in accordance
with, the law of the State of New York. For more information, see Section 112 of the applicable Debt Securities Indenture.
Legal
Ownership of Securities
We can issue securities in registered form or
in the form of one or more global securities. We describe global securities in greater detail below. We refer to those persons who have
securities registered in their own names on the books that we or any applicable trustee maintain for this purpose as the “holders”
of those securities. These persons are the legal holders of the securities. We refer to those persons who, indirectly through others,
own beneficial interests in securities that are not registered in their own names, as “indirect holders” of those securities.
As we discuss below, indirect holders are not legal holders, and investors in securities issued in book-entry form or in street name
will be indirect holders.
Book-Entry Holders
We may issue securities in book-entry form only,
as we will specify in the accompanying prospectus supplement. This means securities may be represented by one or more global securities
registered in the name of a financial institution that holds them as depositary on behalf of other financial institutions that participate
in the depositary’s book-entry system. These participating institutions, which are referred to as participants, in turn, hold beneficial
interests in the securities on behalf of themselves or their customers.
Only the person in whose name a security is registered
is recognized as the holder of that security. Securities issued in global form will be registered in the name of the depositary or its
participants. Consequently, for securities issued in global form, we will recognize only the depositary as the holder of the securities,
and we will make all payments on the securities to the depositary. The depositary passes along the payments it receives to its participants,
which in turn pass the payments along to their customers who are the beneficial owners. The depositary and its participants do so under
agreements they have made with one another or with their customers; they are not obligated to do so under the terms of the securities.
As a result, investors in a book-entry security
will not own securities directly. Instead, they will own beneficial interests in a global security, through a bank, broker or other financial
institution that participates in the depositary’s book-entry system or holds an interest through a participant. As long as the
securities are issued in global form, investors will be indirect holders, and not holders, of the securities.
Street Name Holders
We may terminate a global security or issue securities
in non-global form. In these cases, investors may choose to hold their securities in their own names or in “street name.”
Securities held by an investor in street name would be registered in the name of a bank, broker or other financial institution that the
investor chooses, and the investor would hold only a beneficial interest in those securities through an account he or she maintains at
that institution.
For securities held in street name, we will recognize
only the intermediary banks, brokers and other financial institutions in whose names the securities are registered as the holders of
those securities, and we will make all payments on those securities to them. These institutions pass along the payments they receive
to their customers who are the beneficial owners, but only because they agree to do so in their customer agreements or because they are
legally required to do so. Investors who hold securities in street name will be indirect holders, not holders, of those securities.
Legal Holders
Our obligations run only to the legal holders
of the securities. We do not have obligations to investors who hold beneficial interests in global securities, in street name or by any
other indirect means. This will be the case whether an investor chooses to be an indirect holder of a security or has no choice because
we are issuing the securities only in global form. For example, once we make a payment or give a notice to the holder, we have no further
responsibility for the payment or notice even if that holder is required, under agreements with depositary participants or customers
or by law, to pass it along to the indirect holders but does not do so. Whether and how the holders contact the indirect holders is up
to the holders.
Special Considerations for Indirect Holders
If you hold securities through a bank, broker
or other financial institution, either in book-entry form or in street name, you should check with your own institution to find out:
| · | how it handles securities payments and notices; |
| · | whether it imposes fees or charges; |
| · | how it would handle a request for the holders’ consent,
if ever required; |
| · | whether and how you can instruct it to send you securities registered
in your own name so you can be a holder, if that is permitted in the future; |
| · | how it would exercise rights under the securities if there were
a default or other event triggering the need for holders to act to protect their interests;
and |
| · | if the securities are in book-entry form, how the depositary’s
rules and procedures will affect these matters. |
Global Securities
A global security is a security held by a depositary
that represents one or any other number of individual securities. Generally, all securities represented by the same global securities
will have the same terms.
Each security issued in book-entry form will
be represented by a global security that we deposit with and register in the name of a financial institution or its nominee that we select.
The financial institution that we select for this purpose is called the depositary. Unless we specify otherwise in the accompanying prospectus
supplement, The Depository Trust Company, New York, New York, or DTC, will be the depositary for all securities issued in book-entry
form.
A global security may not be transferred to or
registered in the name of anyone other than the depositary, its nominee or a successor depositary, unless special termination situations
arise. We describe those situations below under “— Special Situations When a Global Security Will Be Terminated.” As
a result of these arrangements, the depositary, or its nominee, will be the sole registered owner and holder of all securities represented
by a global security, and investors will be permitted to own only beneficial interests in a global security. Beneficial interests must
be held by means of an account with a broker, bank or other financial institution that in turn has an account with the depositary or
with another institution that does. Thus, an investor whose security is represented by a global security will not be a holder of the
security, but only an indirect holder of a beneficial interest in the global security.
If the prospectus supplement for a particular
security indicates that the security will be issued in global form only, then the security will be represented by a global security at
all times unless and until the global security is terminated. If termination occurs, we may issue the securities through another book-entry
clearing system or decide that the securities may no longer be held through any book-entry clearing system.
Special Considerations for Global Securities
As an indirect holder, an investor’s rights
relating to a global security will be governed by the account rules of the investor’s financial institution and of the depositary,
as well as general laws relating to securities transfers. We do not recognize an indirect holder as a holder of securities and instead
deal only with the depositary that holds the global security.
If securities are issued only in the form of
a global security, an investor should be aware of the following:
| · | An investor cannot cause the securities to be registered in his
or her name, and cannot obtain non-global certificates for his or her interest in the securities,
except in the special situations we describe below; |
| · | An investor will be an indirect holder and must look to his or
her own bank or broker for payments on the securities and protection of his or her legal
rights relating to the securities, as we describe under “Legal Ownership of Securities”
above; |
| · | An investor may not be able to sell interests in the securities
to some insurance companies and to other institutions that are required by law to own their
securities in non-book-entry form; |
| · | An investor may not be able to pledge his or her interest in
a global security in circumstances where certificates representing the securities must be
delivered to the lender or other beneficiary of the pledge in order for the pledge to be
effective; |
| · | The depositary’s policies, which may change from time to
time, will govern payments, transfers, exchanges and other matters relating to an investor’s
interest in a global security. We and any applicable trustee have no responsibility for any
aspect of the depositary’s actions or for its records of ownership interests in a global
security. We and the trustee also do not supervise the depositary in any way; |
| · | The depositary may, and we understand that DTC will, require
that those who purchase and sell interests in a global security within its book-entry system
use immediately available funds, and your broker or bank may require you to do so as well;
and |
| · | Financial institutions that participate in the depositary’s
book-entry system, and through which an investor holds its interest in a global security,
may also have their own policies affecting payments, notices and other matters relating to
the securities. There may be more than one financial intermediary in the chain of ownership
for an investor. We do not monitor and are not responsible for the actions of any of those
intermediaries. |
Special Situations When a Global Security Will Be Terminated
In a few special situations described below,
the global security will terminate and interests in it will be exchanged for physical certificates representing those interests. After
that exchange, the choice of whether to hold securities directly or in street name will be up to the investor. Investors must consult
their own banks or brokers to find out how to have their interests in securities transferred to their own name, so that they will be
direct holders. We have described the rights of holders and street name investors above.
The global security will terminate when any of
the following special situations occur:
| · | if the depositary notifies us that it is unwilling, unable or
no longer qualified to continue as depositary for that global security and we do not appoint
another institution to act as depositary within 90 days; |
| · | if we notify any applicable trustee that we wish to terminate
that global security; or |
| · | if an event of default has occurred with regard to securities
represented by that global security and has not been cured or waived. |
The prospectus supplement may also list additional
situations for terminating a global security that would apply only to the particular series of securities covered by the prospectus supplement.
When a global security terminates, the depositary, and not we or any applicable trustee, is responsible for deciding the names of the
institutions that will be the initial direct holders.
Certain
Provisions of Maryland Law and of Our Charter and Bylaws
Although the following summary describes certain
provisions of Maryland law and of our charter and bylaws, which are incorporated herein by reference to the Company’s SEC filings,
it is not a complete description of Maryland law and our charter and bylaws. See “Where You Can Find More Information.”
Number of Directors; Vacancies
Our charter and bylaws provide that the number
of directors of our Company will not be less than the minimum number required under the MGCL, which is one, and, unless our bylaws are
amended, not more than fifteen, and the number of directors of our company may be increased or decreased pursuant to our bylaws by a
vote of the majority of our entire board of directors. Our charter provides for an election to be subject to Title 3, Subtitle 8 of the
MGCL and therefore, subject to the rights of holders of one or more classes or series of preferred stock, any vacancy may be filled only
by a majority of the remaining directors, even if the remaining directors do not constitute a quorum, and any director elected to fill
a vacancy will serve for the full term of the directorship in which such vacancy occurred and until a successor is elected and qualifies.
Pursuant to our charter and bylaws, each member
of our board of directors is elected by our stockholders to serve until the next annual meeting of stockholders and until his or her
successor is duly elected and qualifies. Directors are elected by a majority of votes cast; provided, however, that directors
are elected by a plurality of the votes cast at a meeting of stockholders for which our Secretary determines that the number of nominees
exceeds the number of directors to be elected as of the record date for such meeting of stockholders. Holders of shares of our common
stock have no right to cumulative voting in the election of directors, and directors are elected by a majority of all the votes cast
in the election of directors. Consequently, at each annual meeting of stockholders, the holders of a majority of the shares of our common
stock will be able to elect all of our directors. The presence in person or by proxy of stockholders entitled to cast a majority of all
the votes entitled to be cast at a meeting constitutes a quorum.
Removal of Directors
Our charter provides that, subject to the rights
of holders of any series of preferred stock, a director may be removed only for “cause,” and then only by the affirmative
vote of at least two-thirds of the votes entitled to be cast generally in the election of directors. For this purpose, “cause”
means, with respect to any particular director, conviction of a felony or a final judgment of a court of competent jurisdiction holding
that such director caused demonstrable, material harm to us through bad faith or active and deliberate dishonesty. These provisions,
when coupled with the exclusive power of our board of directors to fill vacancies on our board of directors, generally precludes stockholders
from (i) removing incumbent directors except for “cause” and with a substantial affirmative vote and (ii) filling
the vacancies created by such removal with their own nominees.
Subtitle 8
Subtitle 8 of Title 3 of the MGCL permits a Maryland
corporation with a class of equity securities registered under the Exchange Act and at least three independent directors to elect to
be subject, by provision in its charter or bylaws or a resolution of its board of directors and notwithstanding any contrary provision
in the charter or bylaws, to any or all of the following five provisions.
| · | a two-thirds vote requirement for removing a director; |
| · | a requirement that the number of directors be fixed only by vote
of the directors; |
| · | a requirement that a vacancy on the board be filled only by the
remaining directors and for the remainder of the full term of the class of directors in which
the vacancy occurred; and |
| · | a majority requirement for the calling of a special meeting of
stockholders. |
Through provisions in our charter and bylaws
unrelated to Subtitle 8, we already (1) require the affirmative vote of the holders of not less than two-thirds of all of the votes
entitled to be cast on the matter for the removal of any director from the board of directors, which removal will be allowed only for
cause, (2) vest in the board of directors the exclusive power to fix the number of directors and (3) require, unless called
by our Chairman, Chief Executive Officer, President or board of directors, the request of stockholders entitled to cast not less than
a majority of the votes entitled to be cast at such meeting to call a special meeting of stockholders. Our charter contains a provision
electing to be subject to the provisions of Subtitle 8 such that all vacancies on our board of directors can be filled only by the remaining
directors and for the remainder of the full term of the class of directors in which the vacancy occurred.
Business Combinations
Under certain provisions of the MGCL applicable
to Maryland corporations, certain “business combinations,” including a merger, consolidation, share exchange or, in certain
circumstances, an asset transfer or issuance or reclassification of equity securities, between a Maryland corporation and an “interested
stockholder” or, generally, any person who beneficially owns 10% or more of the voting power of the corporation’s outstanding
voting shares or an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question,
was the beneficial owner of 10% or more of the voting power of the corporation’s then outstanding voting stock, or an affiliate
of such an interested stockholder, are prohibited for five years after the most recent date on which the interested stockholder becomes
an interested stockholder. Thereafter, any such business combination must be recommended by the board of directors of such corporation
and approved by the affirmative vote of at least (a) 80% of the votes entitled to be cast by holders of the corporation’s
outstanding voting stock and (b) two-thirds of the votes entitled to be cast by holders of the corporation’s voting stock
other than stock held by the interested stockholder with whom (or with whose affiliate) the business combination is to be effected or
held by an affiliate or associate of the interested stockholder, unless, among other conditions, the corporation’s stockholders
receive a minimum price (as defined in the MGCL) for their shares and the consideration is received in cash or in the same form as previously
paid by the interested stockholder for its shares. Under the MGCL, a person is not an “interested stockholder” if the board
of directors approved in advance the transaction by which the person otherwise would have become an interested stockholder. A corporation’s
board of directors may provide that its approval is subject to compliance with any terms and conditions determined by it.
These provisions of the MGCL do not apply, however,
to business combinations that are approved or exempted by a board of directors prior to the time that the interested stockholder becomes
an interested stockholder. Pursuant to the MGCL, our board of directors has by resolution exempted business combinations between us and
any other person from these provisions of the MGCL, provided that the business combination is first approved by our board of directors,
including a majority of directors who are not affiliates or associates of such person, and, consequently, the five year prohibition and
the supermajority vote requirements will not apply to such business combinations. As a result, any person may be able to enter into business
combinations with us that may not be in the best interests of our stockholders without compliance by us with the supermajority vote requirements
and other provisions of the statute. This resolution, however, may be altered or repealed in whole or in part at any time. If this resolution
is repealed, or our board of directors does not otherwise approve a business combination, the statute may discourage others from trying
to acquire control of us and increase the difficulty of consummating any offer.
Control Share Acquisitions
The MGCL 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 affirmative vote of two-thirds of the votes entitled to be cast on the matter, excluding shares of stock in a corporation in respect
of which any of the following persons is entitled to exercise or direct the exercise of the voting power of such shares in the election
of directors: (1) a person who makes or proposes to make a control share acquisition, (2) an officer of the corporation or
(3) an employee of the corporation who is also a director of corporation. “Control shares” are voting shares which,
if aggregated with all other such shares owned by the acquirer or in respect of which the acquirer is able to exercise or direct the
exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise voting power in electing
directors within one of the following ranges of voting power: (A) one-tenth or more but less than one-third, (B) one-third
or more but less than a majority or (C) a majority or more of all voting power. Control shares do not include shares that the acquirer
is then entitled to vote as a result of having previously obtained stockholder approval. A “control share acquisition” means
the acquisition of control shares, subject to certain exceptions.
A person who has made or proposes to make a control
share acquisition, upon satisfaction of certain conditions (including an undertaking to pay expenses), may compel our board of directors
to call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights of the shares. If no request
for a meeting is made, the corporation may itself present the question at any stockholders’ meeting.
If voting rights are not approved at the meeting
or if the acquirer does not deliver an acquiring person statement as required by the statute, then, subject to certain conditions and
limitations, the corporation may redeem any or all of the control shares (except those for which voting rights have previously been approved)
for fair value determined, without regard to the absence of voting rights for the control shares, as of the date of the last control
share acquisition by the acquirer or of any meeting of stockholders at which the voting rights of such shares are considered and not
approved. If voting rights for control shares are approved at a stockholders’ meeting and the acquirer becomes entitled to vote
a majority of the shares entitled to vote, all other stockholders may exercise appraisal rights. The fair value of the shares as determined
for purposes of such appraisal rights may not be less than the highest price per share paid by the acquirer in the control share acquisition.
The control share acquisition statute does not
apply to (a) shares acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction or (b) acquisitions
approved or exempted by the charter or bylaws of the corporation.
Our bylaws contain a provision exempting from
the control share acquisition statute any and all acquisitions by any person of our shares. Our bylaws also provide that such provision
may be repealed, in whole or in part, at any time, whether before or after an acquisition of control shares and, upon such repeal, may,
to the extent provided by any successor bylaw, apply to any prior or subsequent control share acquisition. There is no assurance that
such provision will not be amended or eliminated at any time in the future.
Anti-takeover Effect of Certain Provisions of Maryland Law and
of Our Charter and Bylaws
If the applicable exemption in our bylaws is
repealed and the applicable resolution of our board of directors is repealed, the control share acquisition provisions and the business
combination provisions of the MGCL, respectively, as well as the provisions in our charter and bylaws, as applicable, on removal of directors
and the filling of director vacancies and the restrictions on ownership and transfer of stock, together with the advance notice and stockholder-requested
special meeting provisions of our bylaws, alone or in combination, could serve to delay, deter or prevent a transaction or a change in
our control that might involve a premium price for holders of our shares of common stock or otherwise be in their best interests.
Meetings of Stockholders
Pursuant to our charter and bylaws, a meeting
of our stockholders for the purpose of the election of directors and the transaction of any business will be held annually on a date
and at the time and place set by our board of directors. In addition, our Chairman, Chief Executive Officer, President or board of directors
may call a special meeting of our stockholders. Our bylaws provide that a special meeting of our stockholders to act on any matter that
may properly be considered at a meeting of our stockholders must also be called by our Secretary upon the written request of stockholders
entitled to cast not less than a majority of all the votes entitled to be cast on such matter at the meeting complying with our bylaws
and containing the information required by our bylaws.
Mergers; Extraordinary Transactions
Under the MGCL, a Maryland corporation generally
cannot merge with another entity, dissolve, convert into or consolidate with another entity, sell all or substantially all of its assets,
or engage in a statutory share exchange unless advised by its board of directors and approved by the affirmative vote of stockholders
holding at least two-thirds of the shares entitled to vote on the matter unless a lesser percentage (but not less than a majority of
all of the votes entitled to be cast on the matter) is set forth in the corporation’s charter. Our charter provides that these
actions may be taken only if such action is declared advisable by our board of directors and approved by the affirmative vote of stockholders
entitled to cast a majority of all the votes entitled to be cast on the matter.
Amendments to Our Charter and Bylaws
Under the MGCL, a Maryland corporation generally
cannot amend its charter unless advised by its board of directors and approved by the affirmative vote of stockholders entitled to cast
at least two-thirds of the votes entitled to be cast on the matter unless a different percentage (but not less than a majority of all
of the votes entitled to be cast on the matter) is set forth in the company’s charter. Our charter provides that except for amendments
to the provisions of our charter related to (i) the removal of directors, (ii) the restrictions on transferred ownership of
our capital stock and (iii) the vote required to amend such amendment provisions (each of which require the affirmative vote of
the holders of not less than two-thirds of all the votes entitled to be cast on the matter) and certain amendments that pursuant to the
MGCL require only approval by our board of directors, our charter may be amended only with the approval of our board of directors and
the affirmative vote of the holders of shares of not less than a majority of all of the votes entitled to be cast on the matter.
Generally, our board of directors and stockholders
have the power to adopt, alter or repeal any provision of our bylaws and to make new bylaws; provided, however, that certain
bylaws may only be altered or repealed by our board of directors.
Advance Notice of Director Nominations and New Business
Our bylaws provide that, with respect to an annual
meeting of stockholders, nominations of individuals for election to our board of directors at an annual meeting and the proposal of business
to be considered by stockholders may be made only (1) pursuant to our notice of the meeting, (2) by or at the direction of
our board of directors or (3) by a stockholder of record at the record date set by our board of directors for the purpose of determining
stockholders entitled to vote at the annual meeting, at the time of giving of notice by the stockholder and at the time of the annual
meeting (and any postponement or adjournment thereof), and who is entitled to vote at the meeting in the election of each individual
so nominated or on any such other business and has complied with the advance notice provisions set forth in our bylaws.
With respect to special meetings of stockholders,
only the business specified in our notice of meeting may be brought before the meeting. Nominations of individuals for election to our
board of directors at a special meeting may be made only (1) by or at the direction of our board of directors or (2) provided
that our board of directors has determined that directors will be elected at such meeting, by a stockholder of record at the record date
set by our board of directors for the purpose of determining stockholders entitled to vote at the special meeting, at the time of the
giving of notice by the stockholder and at the time of the special meeting (and any postponement or adjournment thereof), who is entitled
to vote at the meeting in the election of each individual so nominated and has complied with the advance notice provisions set forth
in our bylaws.
Limitation of Directors’ and Officers’ Liability and
Indemnification
Maryland law permits a Maryland corporation to
include in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders 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 that is established by a final judgment and is material to the cause of action. Our charter
contains a provision which eliminates our directors’ and officers’ liability to the maximum extent permitted by Maryland
law.
Maryland law requires a Maryland corporation
(unless its charter provides otherwise, which our charter does not) to indemnify a director or officer who has been successful in the
defense of any proceeding to which he or she is made, or threatened to be made, a party by reason of his or her service in that capacity.
Maryland law permits a Maryland corporation to indemnify its present and former directors and officers, among others, against judgments,
penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be
made, or threatened to be made, a party by reason of their service in those or other capacities unless it is established 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.
However, under Maryland law, a Maryland corporation
may not indemnify for an adverse judgment in a suit by or in the right of the corporation or for a judgment of liability on the basis
that personal benefit was improperly received, unless in either case a court orders indemnification and then only for expenses. In addition,
Maryland law permits a Maryland corporation to advance reasonable expenses to a director or officer upon the corporation’s receipt
of (a) a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct
necessary for indemnification by the corporation and (b) a written undertaking by him or her or on his or her behalf to repay the
amount paid or reimbursed by the corporation if it is ultimately determined that the standard of conduct was not met.
Our charter authorizes us, to the maximum extent
permitted by Maryland law, to obligate ourselves, and our bylaws obligate us, to indemnify any present or former director or officer
or any individual who, while a director or officer of our company and at our request, serves or has served as a director, officer, partner,
trustee, member or manager of another corporation, real estate investment trust, limited liability company, partnership, joint venture,
trust, employee benefit plan or other enterprise and who is made or threatened to be made a party to, or witness in, the proceeding by
reason of his or her service in that capacity from and against any claim or liability to which that individual may become subject or
which that individual may incur by reason of his or her service in any of the foregoing capacities and to pay or reimburse his or her
reasonable expenses in advance of final disposition of a proceeding.
We have entered into indemnification agreements
with each of our directors and executive officers that provide for indemnification to the maximum extent permitted by Maryland law and
advancements by us of certain expenses and costs relating to claims, suits or proceedings arising from their service to us. Our charter
and bylaws also permit us to indemnify and advance expenses to any individual who served a predecessor of our company in any of the capacities
described above and any employees or agents of our company or a predecessor of our company.
Exclusive Forum
Our bylaws provide that, unless we consent in
writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland, or, if that court does not have jurisdiction,
the United States District Court for the District of Maryland, Baltimore Division, will be the sole and exclusive forum for (a) any
derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of any duty owed by any of our
directors, officers or other employees to us or to our stockholders, (c) any action asserting a claim against us or any of our directors,
officers or other employees arising pursuant to any provision of the MGCL, our charter or our bylaws or (d) any action asserting
a claim against us or any of our directors, officers or other employees that is governed by the internal affairs doctrine. This provision
does not cover claims made by stockholders pursuant to the securities laws of the United States, or any rules or regulations promulgated
thereunder.
REIT Qualification
Our charter provides that our board of directors
may revoke or otherwise terminate our REIT election, without approval of our stockholders, if it determines that it is no longer in our
best interest to continue to qualify as a REIT.
Material
U.S. Federal Income Tax Considerations
This section summarizes the material U.S. federal
income tax considerations that you, as a prospective holder of our securities, may consider relevant in connection with the purchase,
ownership and disposition of our securities. Vinson & Elkins L.L.P. has acted as our counsel, has reviewed this summary, and
is of the opinion that the discussion contained herein is accurate in all material respects. Because this section is a summary, it does
not address all aspects of taxation that may be relevant to particular holders of our securities in light of their personal investment
or tax circumstances, or to certain types of holders that are subject to special treatment under the U.S. federal income tax laws, such
as:
| · | tax-exempt organizations (except to the limited extent discussed
in “—Taxation of Tax-Exempt Stockholders” below); |
| · | financial institutions or broker-dealers; |
| · | non-U.S. individuals and foreign corporations (except to the
limited extent discussed in “—Taxation of Non-U.S. Stockholders” below); |
| · | persons who mark-to-market our securities; |
| · | subchapter S corporations; |
| · | U.S. stockholders (as defined below) whose functional currency
is not the U.S. dollar; |
| · | regulated investment companies and REITs; |
| · | persons who receive our securities through the exercise of employee
stock options or otherwise as compensation; |
| · | persons holding our securities as part of a “straddle,”
“hedge,” “conversion transaction,” “synthetic security”
or other integrated investment; |
| · | persons subject to the alternative minimum tax provisions of
the Code; |
| · | persons subject to special tax accounting rules as a result
of their use of applicable financial statements within the meaning of Section 451(b)(3) of
the Code; and |
| · | persons holding our securities through a partnership or similar
pass-through entity. |
This summary assumes that holders hold our securities
as capital assets for U.S. federal income tax purposes, which generally means property held for investment.
The statements in this section are not intended
to be, and should not be construed as, tax advice. The statements in this section are based on the Code, final, temporary and proposed
Treasury regulations, the legislative history of the Code, current administrative interpretations and practices of the Internal Revenue
Service (“IRS”), and court decisions. The reference to IRS interpretations and practices includes the IRS practices and policies
endorsed in private letter rulings, which are not binding on the IRS except with respect to the taxpayer that receives the ruling. In
each case, these sources are relied upon as they exist on the date of this discussion. Future legislation, Treasury regulations, administrative
interpretations and court decisions could change the current law or adversely affect existing interpretations of current law on which
the information in this section is based. Any such change could apply retroactively. We have not received any rulings from the IRS concerning
our qualification as a REIT. Accordingly, even if there is no change in the applicable law, no assurance can be provided that the statements
made in the following discussion, which do not bind the IRS or the courts, will not be challenged by the IRS or will be sustained by
a court if so challenged.
WE URGE YOU TO CONSULT YOUR TAX ADVISOR REGARDING
THE SPECIFIC TAX CONSEQUENCES TO YOU OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF OUR SECURITIES AND OF OUR ELECTION TO BE TAXED AS
A REIT. SPECIFICALLY, YOU ARE URGED TO CONSULT YOUR TAX ADVISOR REGARDING THE U.S. FEDERAL, STATE, LOCAL, FOREIGN, AND OTHER TAX CONSEQUENCES
OF SUCH PURCHASE, OWNERSHIP, DISPOSITION, AND ELECTION, AND REGARDING POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
Taxation of Our Company
We were re-domesticated on January 6, 2014
as a Maryland corporation. We elected to be taxed as a REIT for U.S. federal income tax purposes commencing with our taxable year ended
December 31, 2016. We believe that, commencing with such taxable year, we have been organized and have operated in such a manner
as to qualify for taxation as a REIT under the U.S. federal income tax laws, and we intend to continue to operate in such a manner, but
no assurance can be given that we will operate in a manner so as to remain qualified as a REIT. This section discusses the laws governing
the U.S. federal income tax treatment of a REIT and its stockholders. These laws are highly technical and complex.
In the opinion of Vinson & Elkins L.L.P.,
we qualified to be taxed as a REIT under the U.S. federal income tax laws for our taxable years ended December 31, 2016 through
December 31, 2022, and our organization and current and proposed method of operations will enable us to continue to qualify as a
REIT for our taxable years ending December 31, 2023, and thereafter. Investors should be aware that Vinson & Elkins L.L.P.’s
opinion is based upon various customary assumptions relating to our organization and operation, and is conditioned upon certain representations
and covenants made by our management as to factual matters, including representations regarding our organization, the nature of our assets
and income, and the conduct of our business operations. Vinson & Elkins L.L.P.’s opinion is not binding upon the IRS or
any court and speaks as of the date issued. In addition, Vinson & Elkins L.L.P.’s opinion is based on existing U.S. federal
income tax law governing qualification as a REIT, which is subject to change either prospectively or retroactively.
Moreover, our qualification and taxation as a
REIT depends upon our ability to meet, on a continuing basis, through actual annual operating results, certain qualification tests set
forth in the U.S. federal income tax laws. Those qualification tests involve the percentage of income that we earn from specified sources,
the percentage of our assets that fall within specified categories, the diversity of ownership of our stock, and the percentage of our
earnings that we distribute. Vinson & Elkins L.L.P. will not review our compliance with those tests on a continuing basis. Accordingly,
no assurance can be given that our actual results of operations for any particular taxable year will satisfy such requirements. While
we intend to operate so that we will continue to qualify as a REIT, given the highly complex nature of the rules governing REITs,
the ongoing importance of factual determinations, and the possibility of future changes in our circumstances, no assurance can be given
by tax counsel or by us that we will qualify as a REIT for any particular year. Vinson & Elkins L.L.P.’s opinion does
not foreclose the possibility that we may have to use one or more of the REIT savings provisions described below, which could require
us to pay an excise or penalty tax (which could be material) in order for us to maintain our REIT qualification. For a discussion of
the tax consequences of our failure to qualify as a REIT, see “—Failure to Qualify.”
As long as we qualify as a REIT, we generally
will not be subject to U.S. federal income tax on the taxable income that we distribute to our stockholders. The benefit of that tax
treatment is that it avoids the “double taxation,” or taxation at both the corporate and stockholder levels, that generally
applies to distributions by a corporation to its stockholders. However, even if we qualify as a REIT, we will be subject to U.S. federal
tax in the following circumstances:
| · | We will pay U.S. federal income tax on any taxable income, including
net capital gain, that we do not distribute to stockholders during, or within a specified
time period after, the calendar year in which the income is earned. |
| · | We will pay U.S. federal income tax at the highest corporate
rate on: |
| · | net income from the sale or other disposition of property acquired
through foreclosure (“Foreclosure Property”) that we hold primarily for sale
to customers in the ordinary course of business and have elected to treat as Foreclosure
Property, and |
| · | other non-qualifying income from Foreclosure Property. |
| · | We will pay a 100% tax on our net income from sales or other
dispositions of property, other than Foreclosure Property, that we hold primarily for sale
to customers in the ordinary course of business. |
| · | If we fail to satisfy one or both of the 75% gross income test
or the 95% gross income test, as described below under “—Gross Income Tests,”
and nonetheless continue to qualify as a REIT because we meet other requirements, we will
pay a 100% tax on: |
| · | the gross income attributable to the greater of the amount by
which we fail the 75% gross income test or the 95% gross income test, in either case, multiplied
by |
| · | a fraction intended to reflect our profitability. |
| · | If, during a calendar year, we fail to distribute at least the
sum of (1) 85% of our REIT ordinary income for the year, (2) 95% of our REIT capital
gain net income for the year, and (3) any undistributed taxable income required to be
distributed from earlier periods, we will pay a 4% nondeductible excise tax on the excess
of the required distribution over the amount we actually distributed. |
| · | We may elect to retain and pay U.S. federal income tax on our
net long-term capital gain. In that case, a stockholder would be taxed on its proportionate
share of our undistributed long-term capital gain (to the extent that we made a timely designation
of such gain to the stockholders) and would receive a credit or refund for its proportionate
share of the tax we paid. |
| · | We will be subject to a 100% excise tax on transactions with
any TRS we may form in the future that are not conducted on an arm’s-length basis. |
| · | If we fail to satisfy any of the asset tests, other than a de
minimis failure of the 5% asset test, the 10% vote test or 10% value test, as described below
under “—Asset Tests,” as long as the failure was due to reasonable cause
and not to willful neglect, we file a schedule with the IRS describing each asset that caused
such failure, and we dispose of the assets causing the failure or otherwise comply with the
asset tests within six months after the last day of the quarter in which we identify such
failure, we will pay a tax equal to the greater of $50,000 or the highest U.S. federal income
tax rate then applicable to U.S. corporations (currently 21%) on the net income from the
non-qualifying assets during the period in which we failed to satisfy the asset tests. |
| · | If we fail to satisfy one or more requirements for REIT qualification,
other than the gross income tests and the asset tests, and such failure is due to reasonable
cause and not to willful neglect, we will be required to pay a penalty of $50,000 for each
such failure. |
| · | If we acquire any asset from an entity treated as a C corporation
(i.e., a corporation that generally is subject to full corporate-level tax) in a merger or
other transaction in which we acquire a basis in the asset that is determined by reference
either to such entity’s basis in the asset or to another asset, we will pay tax at
the highest applicable regular U.S. federal corporate income tax rate (currently 21%) if
we recognize gain on the sale or disposition of the asset during the five-year period after
we acquire the asset provided no election is made for the transaction to be taxable on a
current basis. The amount of gain on which we will pay tax is the lesser of: |
| · | the amount of gain that we recognize at the time of the sale or
disposition, and |
| · | the amount of gain that we would have recognized if we had sold
the asset at the time we acquired the asset. |
| · | We may be required to pay monetary penalties to the IRS in certain
circumstances, including if we fail to meet recordkeeping requirements intended to monitor
our compliance with rules relating to the composition of a REIT’s stockholders,
as described below in “—Recordkeeping Requirements.” |
| · | The earnings of our lower-tier entities that are treated as C
corporations, including our TRS and any other TRS we may form in the future, will be subject
to U.S. federal corporate income tax. |
In addition, notwithstanding our qualification
as a REIT, we may also have to pay certain state and local income taxes because not all states and localities treat REITs in the same
manner that they are treated for U.S. federal income tax purposes. Moreover, as further described below, our TRS and any other TRS we
may form in the future will be subject to U.S. federal, state and local corporate income tax on its taxable income.
Requirements for Qualification
A REIT is a corporation, trust, or association
that meets each of the following requirements:
| 1. | It is managed by one or more trustees or directors. |
| 2. | Its beneficial ownership is evidenced by transferable shares, or
by transferable certificates of beneficial interest. |
| 3. | It would be taxable as a domestic corporation, but for the REIT provisions
of the U.S. federal income tax laws. |
| 4. | It is neither a financial institution nor an insurance company subject
to special provisions of the U.S. federal income tax laws. |
| 5. | At least 100 persons are beneficial owners of its shares or ownership
certificates. |
| 6. | Not more than 50% in value of its outstanding shares or ownership
certificates is owned, directly or indirectly, by five or fewer individuals, which the Code
defines to include certain entities, during the last half of any taxable year. |
| 7. | It elects to be a REIT, or has made such election for a previous
taxable year, and satisfies all relevant filing and other administrative requirements established
by the IRS that must be met to elect and maintain REIT status. |
| 8. | It meets certain other qualification tests, described below, regarding
the nature of its income and assets and the amount of its distributions to stockholders. |
| 9. | It uses a calendar year for U.S. federal income tax purposes and
complies with the recordkeeping requirements of the U.S. federal income tax laws. |
| 10. | It has not been a party to a spin-off transaction that is tax-deferred
under section 355 of the Code during the applicable period. |
We must meet requirements 1 through 4, 8 and
9 during our entire taxable year and must meet requirement 5 during at least 335 days of a taxable year of 12 months, or during a proportionate
part of a taxable year of less than 12 months. Requirements 5 and 6 applied beginning with our 2017 taxable year. If we comply with all
the requirements for ascertaining the ownership of our outstanding shares in a taxable year and have no reason to know that we violated
requirement 6, we will be deemed to have satisfied requirement 6 for that taxable year. For purposes of determining shares ownership
under requirement 6, an “individual” generally includes a supplemental unemployment compensation benefits plan, a private
foundation, or a portion of a trust permanently set aside or used exclusively for charitable purposes. An “individual,” however,
generally does not include a trust that is a qualified employee pension or profit sharing trust under the U.S. federal income tax laws,
and beneficiaries of such a trust will be treated as holding stock in proportion to their actuarial interests in the trust for purposes
of requirement 6.
Our charter provides restrictions regarding the
transfer and ownership of shares of our outstanding capital stock to assist us in maintaining our qualification as a REIT. See “Description
of Capital Stock—Restrictions on Ownership and Transfer.” We believe that we have issued sufficient stock with sufficient
diversity of ownership to satisfy requirements 5 and 6 above. The restrictions in our charter are intended (among other things) to assist
us in continuing to satisfy requirements 5 and 6 above. These restrictions, however, may not ensure that we will, in all cases, be able
to satisfy such share ownership requirements. If we fail to satisfy these share ownership requirements, our qualification as a REIT may
terminate.
Qualified REIT Subsidiaries. A corporation
that is a “qualified REIT subsidiary” is not treated as a corporation separate from its parent REIT. All assets, liabilities,
and items of income, deduction, and credit of a “qualified REIT subsidiary” are treated as assets, liabilities, and items
of income, deduction, and credit of the REIT. A “qualified REIT subsidiary” is a corporation, all of the shares of which
are owned by the REIT and for which no election has been made to treat such corporation as a TRS. Thus, in applying the requirements
described herein, any “qualified REIT subsidiary” that we own will be ignored, and all assets, liabilities, and items of
income, deduction, and credit of such subsidiary will be treated as our assets, liabilities, and items of income, deduction, and credit.
Other Disregarded Entities and Partnerships.
An unincorporated domestic entity, such as a partnership or limited liability company that has a single owner for U.S. federal income
tax purposes, generally is not treated as an entity separate from its owner for U.S. federal income tax purposes. An unincorporated domestic
entity with two or more owners for U.S. federal income tax purposes is generally treated as a partnership for U.S. federal income tax
purposes. In the case of a REIT that is a partner in a partnership that has other partners, the REIT is treated as owning its proportionate
share of the assets of the partnership and as earning its allocable share of the gross income of the partnership for purposes of the
applicable REIT qualification tests. Our proportionate share for purposes of the 10% value test (see “—Asset Tests”)
is based on our proportionate interest in the equity interests and certain debt securities issued by the partnership. For all of the
other asset and income tests, our proportionate share is based on our proportionate interest in the capital interests in the partnership.
Our proportionate share of the assets, liabilities, and items of income of any partnership, joint venture, or limited liability company
that is treated as a partnership for U.S. federal income tax purposes in which we acquire an equity interest, directly or indirectly,
will be treated as our assets and gross income for purposes of applying the various REIT qualification requirements.
We have control of our Operating Partnership
and intend to control any subsidiary partnerships and limited liability companies, and we intend to operate them in a manner consistent
with the requirements for our qualification as a REIT. We may from time to time be a limited partner or non-managing member in some of
our partnerships and limited liability companies. If a partnership or limited liability company in which we own an interest takes or
expects to take actions that could jeopardize our status as a REIT or require us to pay tax, we may be forced to dispose of our interest
in such entity. In addition, it is possible that a partnership or limited liability company could take an action which could cause us
to fail a gross income or asset test, and that we would not become aware of such action in time to dispose of our interest in the partnership
or limited liability company or take other corrective action on a timely basis. In that case, we could fail to qualify as a REIT unless
we were able to qualify for a statutory REIT “savings” provisions, which could require us to pay a significant penalty tax
to maintain our REIT qualification.
Taxable REIT Subsidiaries. A REIT may
own up to 100% of the shares of one or more TRSs. A TRS is a fully taxable corporation that may earn income that would not be qualifying
income if earned directly by the parent REIT. The subsidiary and the REIT must jointly elect to treat the subsidiary as a TRS. A corporation
of which a TRS directly or indirectly owns more than 35% of the voting power or value of the securities will automatically be treated
as a TRS. We will not be treated as holding the assets of a TRS or as receiving any income that the TRS earns. Rather, the shares issued
by a TRS to us will be an asset in our hands, and we will treat the distributions paid to us from such TRS, if any, as income to the
extent of the TRS’s earnings and profits. This treatment may affect our compliance with the gross income and asset tests. Because
we will not include the assets and gross income of TRSs in determining our compliance with the REIT requirements, we may use such entities
to undertake activities indirectly, such as earning fee income that the REIT rules might otherwise preclude us from doing directly
or through pass-through subsidiaries. Overall, no more than 20% of the value of a REIT’s assets may consist of shares or securities
of one or more TRSs.
Several provisions of the Code regarding the
arrangements between a REIT and its TRSs ensure that a TRS will be subject to an appropriate level of U.S. federal income taxation. For
example, a TRS is limited in its ability to deduct interest payments made to its parent REIT. In addition, a REIT will be subject to
a 100% penalty tax on certain payments received from, or on certain expenses deducted by, a TRS if that IRS were to successfully assert
that the economic arrangements between the REIT and the TRS were not comparable to similar arrangements among unrelated parties. Any
income earned by a TRS that is attributable to services provided to its parent REIT, or on behalf of any of its tenants, that is less
than the amount that would have been charged based upon arm’s-length negotiations, will also be subject to a 100% penalty tax.
A TRS may not directly or indirectly operate
or manage any health care facilities or lodging facilities or provide rights to any brand name under which any health care facility or
lodging facility is operated. A TRS is not considered to operate or manage a “qualified health care property” or “qualified
lodging facility” solely because the TRS directly or indirectly possesses a license, permit, or similar instrument enabling it
to do so.
Rent that we receive from a TRS will qualify
as “rents from real property” under two scenarios. Under the first scenario, rent we receive from a TRS will qualify as “rents
from real property” as long as (1) at least 90% of the leased space in the healthcare facility is leased to persons other
than TRSs and related-party tenants, and (2) the amount paid by the TRS to rent space at the healthcare facility is substantially
comparable to rents paid by other tenants of the healthcare facility for comparable space, as described in further detail below under
“—Gross Income Tests—Rents from Real Property.” If we lease space to a TRS in the future, we will seek to comply
with these requirements.
Under the second scenario, rents that we receive
from a TRS will qualify as “rents from real property” if the TRS leases a healthcare facility from us that is a “qualified
health care property” and such healthcare facility is operated on behalf of the TRS by a person who qualifies as an “independent
contractor” and who is, or is related to a person who is, actively engaged in the trade or business of operating “qualified
health care properties” for any person unrelated to us and the TRS (an “Eligible Independent Contractor”). A “qualified
health care property” includes any real property and any personal property that is, or is necessary or incidental to the use of,
a hospital, nursing facility, assisted living facility, congregate care facility, qualified continuing care facility, or other licensed
facility which extends medical or nursing or ancillary services to patients and which is operated by a provider of such services which
is eligible for participation in the Medicare program with respect to such facility. We do not currently intend to lease our healthcare
facilities to a TRS. However, we may lease healthcare facilities that we currently own or acquire to a TRS in the future, to the extent
such healthcare facilities qualify as “qualified health care properties.”
Gross Income Tests
We must satisfy two gross income tests annually
to maintain our qualification as a REIT. First, at least 75% of our gross income for each taxable year must consist of defined types
of income that we derive, directly or indirectly, from investments relating to real property or mortgages on real property or qualified
temporary investment income. Qualifying income for purposes of the 75% gross income test generally includes:
| · | rents from real property; |
| · | interest on debt secured by mortgages on real property, or on
interests in real property; |
| · | dividends or other distributions on, and gain from the sale of,
shares in other REITs; |
| · | gain from the sale of real estate assets, other than: |
| · | property held primarily for sale to customers in the ordinary
course of business; and |
| · | debt instruments issued by “publicly offered REITs”
(i.e., REITs that are required to file annual and periodic reports with the SEC under the
Exchange Act), unless the debt instrument is secured by real property or an interest in real
property; |
| · | income derived from the operation, and gain from the sale, of
Foreclosure Property; |
| · | amounts (other than amounts the determination of which depends
in whole or in part on the income or profits of any person) received or accrued as consideration
for entering into agreements to make loans secured by mortgages on real property or interests
in real property or to purchase or lease real property (including interests in real property
and interests in mortgages on real property); and |
| · | income derived from the temporary investment of new capital that
is attributable to the issuance of our stock or a public offering of our debt with a maturity
date of at least five years and that we receive during the one-year period beginning on the
date on which we received such new capital. |
Second, in general, at least 95% of our gross
income for each taxable year must consist of income that is qualifying income for purposes of the 75% gross income test, other types
of interest and dividends, gain from the sale or disposition of shares or securities, or any combination of these. Cancellation of indebtedness
income and gross income from our sale of property that we hold primarily for sale to customers in the ordinary course of business are
excluded from both the numerator and the denominator in both gross income tests. In addition, income and gain from “hedging transactions”
that we enter into to hedge indebtedness incurred or to be incurred to acquire or carry real estate assets and that are clearly and timely
identified as such will be excluded from both the numerator and the denominator for purposes of the 75% and 95% gross income tests. See
“—Hedging Transactions.” In addition, certain foreign currency gains will be excluded from gross income for purposes
of one or both of the gross income tests. See “—Foreign Currency Gain.” The following paragraphs discuss the specific
application of the gross income tests to us.
Rents from Real Property. “Rents
from real property” is qualifying income for both 75% and 95% gross income tests. Our leases generally are on a “triple-net”
basis, requiring the tenant-operators to pay substantially all expenses associated with the operation of the healthcare facilities, such
as real estate taxes, insurance, utilities, services, maintenance and other operating expenses and any ground lease payments. Rents under
our leases will constitute “rents from real property” only if the leases are treated as “true leases” for U.S.
federal income tax purposes and are not treated as service contracts, joint ventures, financing arrangements or some other type of arrangement.
The determination of whether a lease is a true lease depends on an analysis of all surrounding facts and circumstances. In making such
a determination, courts have considered a variety of factors, including the following:
| · | the intent of the parties; |
| · | the form of the agreement; |
| · | the degree of control over the property that is retained by the
property owner (e.g., whether the tenant has substantial control over the operation of the
property or whether the tenant was required simply to use its best efforts to perform its
obligations under the agreement); |
| · | the extent to which the property owner retains the risk of loss
with respect to the operation of the property (e.g., whether the tenant bears the risk of
increases in operating expenses or the risk of damage to the property); and |
| · | the extent to which the property owner retains the burdens and
benefits of ownership of the property. |
We believe that each of our leases will be treated
as a “true lease” for U.S. federal income tax purposes. Such belief is based, in part, on the following facts:
| · | we and the tenants intend for each relationship between them
to be that of a lessor and lessee and such relationship will be documented by lease agreements; |
| · | the tenants have the right to exclusive possession and use and
quiet enjoyment of the property during the term of the leases; |
| · | the tenants bear the cost of, and are responsible for, day-to-day
maintenance and repair of the property, and will dictate how the properties are operated,
maintained and improved; |
| · | the tenants bear all of the costs and expenses of operating the
healthcare facilities during the terms of the leases; |
| · | the tenants benefit from any savings in the costs of operating
the property during the terms of the leases; |
| · | the tenants generally are required to indemnify us against all
liabilities imposed on us during the term of the leases by reason of (a) injury to persons
or damage to property occurring at the property, or (b) the use, management, maintenance
or repair of the property; |
| · | the tenants are obligated to pay rent for the period of use of
the property; |
| · | the tenants stand to reap substantial gains (or incur substantial
losses) depending on how successfully they operate the property; |
| · | the useful lives of the property are significantly longer than
the terms of the leases; and |
| · | we will receive the benefit of increases in value, and will bear
the risk of decreases in value, of the properties during the terms of the leases. |
If the IRS were to challenge successfully the
characterization of our leases as true leases, we would not be treated as the owner of the healthcare facility in question for U.S. federal
income tax purposes. There are no controlling Treasury regulations, published rulings, or judicial decisions involving leases with terms
substantially similar to those contained in our leases that address whether such leases constitute true leases for U.S. federal income
tax purposes. If our leases are recharacterized as partnership agreements, rather than true leases, part or all of the payments that
we receive from the tenant-operators may not be considered rent or may not otherwise be treated as qualifying income. In that case, we
likely would not be able to satisfy either the 75% or 95% gross income tests and, as a result, could lose REIT qualification. If any
of our leases from a sale-leaseback transaction is recharacterized as a financing transaction or loan for U.S. federal income tax purposes,
the seller-lessee would be the owner of the healthcare facility and the IRS would disallow our deductions for depreciation and cost recovery
relating to the leased healthcare facilities. As a result, the amount of our REIT taxable income could be recalculated, which might cause
us to fail to meet the distribution requirement required for REIT qualification. See “—Distribution Requirements.”
We will continue to use our best efforts to structure
any leasing transaction, including leasing transactions from our sale-leaseback transactions, so that the lease will be characterized
as a true lease and we will be treated as the owner of the healthcare facility in question for U.S. federal income tax purposes. We will
not seek an advance ruling from the IRS and do not intend to seek opinions of counsel that our leases will be treated as the owner of
any other leased healthcare facilities for U.S. federal income tax purposes, and thus there can be no assurance that our leases will
be treated as true leases for U.S. federal income tax purposes.
In addition, rent received on a lease that is
respected as a true lease will qualify as “rents from real property” only if each of the following conditions is met:
| · | First, the rent must not be based, in whole or in part, on the
income or profits of any person, but may be based on a fixed percentage or percentages of
receipts or sales. |
| · | Second, neither we nor a direct or indirect owner of 10% or more
of our stock may own, actually or constructively, 10% or more of a tenant from whom we receive
rent, other than a TRS. |
| · | Third, if the rent attributable to personal property leased in
connection with a lease of real property is 15% or less of the total rent received under
the lease, then the rent attributable to personal property will qualify as rents from real
property. The allocation of rent between real and personal property is based on the relative
fair market values of the real and personal property. However, if the 15% threshold is exceeded,
the rent attributable to personal property will not qualify as rents from real property. |
| · | Fourth, we generally must not operate or manage our real property
or furnish or render services to our tenants, other than through an “independent contractor”
who is adequately compensated and from whom we do not derive revenue. However, we need not
provide services through an “independent contractor,” but instead may provide
services directly to our tenants, if the services are “usually or customarily rendered”
in connection with the rental of space for occupancy only and are not considered to be provided
for the tenants’ convenience. In addition, we may provide a minimal amount of “non-customary”
services to the tenants of a property, other than through an independent contractor, as long
as our income from the services (valued at not less than 150% of our direct cost of performing
such services) does not exceed 1% of our income from the related property. Furthermore, we
may own up to 100% of the shares of a TRS which may provide customary and non-customary services
to our tenants without tainting our rental income from the related properties. |
If a portion of the rent that we receive from
a property does not qualify as “rents from real property” because the rent attributable to personal property exceeds 15%
of the total rent for a taxable year, the portion of the rent that is attributable to personal property will not be qualifying income
for purposes of either the 75% or 95% gross income test. Thus, if such rent attributable to personal property, plus any other income
that is non-qualifying income for purposes of the 95% gross income test, during a taxable year exceeds 5% of our gross income during
the year, we would lose our REIT qualification. If, however, the rent from a particular healthcare facility does not qualify as “rents
from real property” because either (1) the rent is considered based on the income or profits of the related tenant, (2) the
tenant either is a related party tenant or fails to qualify for the exceptions to the related party tenant rule for TRSs or (3) we
furnish non-customary services to the tenant-operators of the healthcare facility in excess of the one percent threshold, or manage or
operate the healthcare facility, other than through a qualifying independent contractor or a TRS, none of the rent from that healthcare
facility would qualify as “rents from real property.”
Currently, we do not lease significant amounts
of personal property pursuant to our leases nor do we lease our properties to related party tenants. None of the rental provisions of
our lease terms are based, in whole or in part, on the income or profits of any person. Moreover, we do not currently perform any services
other than customary ones for our tenant-operators, unless such services are provided through independent contractors from whom we do
not receive or derive income or a TRS. Accordingly, we believe that our leases generally produce rent that qualifies as “rents
from real property” for purposes of the 75% and 95% gross income tests.
In addition to the rent, the tenant-operators
may be required to pay certain additional charges. To the extent that such additional charges represent reimbursements of amounts that
we are obligated to pay to third parties such charges generally will qualify as “rents from real property.” To the extent
such additional charges represent penalties for nonpayment or late payment of such amounts, such charges should qualify as “rents
from real property.” However, to the extent that late charges do not qualify as “rents from real property,” they instead
will be treated as interest that qualifies for the 95% gross income test.
As described above, we may own up to 100% of
the shares of one or more TRSs. There are two exceptions to the related-party tenant rule described above for TRSs. Under the first
exception, rent that we receive from a TRS will qualify as “rents from real property” as long as (1) at least 90% of
the leased space in the healthcare facility is leased to persons other than TRSs and related-party tenants, and (2) the amount paid
by the TRS to rent space at the healthcare facility is substantially comparable to rents paid by other tenant-operators of the healthcare
facility for comparable space. The “substantially comparable” requirement must be satisfied when the lease is entered into,
when it is extended, and when the lease is modified, if the modification increases the rent paid by the TRS. If the requirement that
at least 90% of the leased space in the related property is rented to unrelated tenants is met when a lease is entered into, extended,
or modified, such requirement will continue to be met as long as there is no increase in the space leased to any TRS or related party
tenant. Any increased rent attributable to a modification of a lease with a TRS in which we own directly or indirectly more than 50%
of the voting power or value of the stock will not be treated as “rents from real property.” If in the future we receive
rent from a TRS, we will seek to comply with this exception.
Under the second exception, a TRS is permitted
to lease properties from the related REIT as long as it does not directly or indirectly operate or manage any health care facilities
or provide rights to any brand name under which any health care facility is operated. Rent that we receive from a TRS will qualify as
“rents from real property” as long as the “qualified health care property” is operated on behalf of the TRS by
an Eligible Independent Contractor. We do not currently intend to lease healthcare facilities to a TRS. However, we may lease healthcare
facilities that we currently own or acquire to a TRS in the future, to the extent such properties qualify as “qualified health
care properties.”
Interest. The term “interest”
generally does not include any amount received or accrued, directly or indirectly, if the determination of such amount depends in whole
or in part on the income or profits of any person. However, interest generally includes the following:
| · | an amount that is based on a fixed percentage or percentages
of gross receipts or sales; and |
| · | an amount that is based on the income or profits of a debtor,
as long as the debtor derives substantially all of its income from the real property securing
the debt by leasing substantially all of its interest in the property, and only to the extent
that the amounts received by the debtor would be qualifying “rents from real property”
if received directly by a REIT. |
If a loan contains a provision that entitles
a REIT to a percentage of the borrower’s gain upon the sale of the real property securing the loan or a percentage of the appreciation
in the property’s value as of a specific date, income attributable to that loan provision will be treated as gain from the sale
of the property securing the loan, which generally is qualifying income for purposes of both gross income tests.
Interest on debt secured by a mortgage on real
property or on interests in real property generally is qualifying income for purposes of the 75% gross income test. Other than to the
extent described below, if a loan is secured by real property and other property and the highest principal amount of a loan outstanding
during a taxable year exceeds the fair market value of the real property securing the loan as of the date the REIT agreed to originate
or acquire the loan (or, if the loan has experienced a “significant modification” since its origination or acquisition by
the REIT, then as of the date of that “significant modification”), a portion of the interest income from such loan will not
be qualifying income for purposes of the 75% gross income test, but will be qualifying income for purposes of the 95% gross income test.
The portion of the interest income that will not be qualifying income for purposes of the 75% gross income test will be equal to the
interest income attributable to the portion of the principal amount of the loan that is not secured by real property, that is, the amount
by which the loan exceeds the value of the real estate that is security for the loan. However, in the case of a loan that is secured
by both real property and personal property, if the fair market value of such personal property does not exceed 15% of the total fair
market value of all property securing the loan, then the personal property securing the loan will be treated as real property for purposes
of determining the interest on such loan is qualifying income for purposes of the 75% gross income test.
Dividends. Our share of any dividends
received from any corporation (including any TRS, but excluding any REIT) in which we own an equity interest will qualify for purposes
of the 95% gross income test but not for purposes of the 75% gross income test. Our share of any dividends received from any other REIT
in which we own an equity interest, if any, will be qualifying income for purposes of both gross income tests.
Prohibited Transactions. A REIT will incur
a 100% tax on the net income (including foreign currency gain) derived from any sale or other disposition of property, other than Foreclosure
Property, that the REIT holds primarily for sale to customers in the ordinary course of a trade or business. We believe that none of
our healthcare facilities have been or will be held primarily for sale to customers and that any sales of our healthcare facilities have
not been and will not be in the ordinary course of our business. Whether a REIT holds a property “primarily for sale to customers
in the ordinary course of a trade or business” depends, however, on the facts and circumstances in effect from time to time, including
those related to a particular property. A safe harbor to the characterization of the sale of real property by a REIT as a prohibited
transaction and the 100% prohibited transaction tax is available if the following requirements are met:
| · | the REIT has held the property for not less than two years; |
| · | the aggregate expenditures made by the REIT, or any partner of
the REIT, during the two-year period preceding the date of the sale that are includable in
the basis of the property do not exceed 30% of the net selling price of the property; |
| · | either (1) during the year in question, the REIT did not
make more than seven sales of property other than Foreclosure Property or sales to which
Section 1033 of the Code applies, (2) the aggregate adjusted bases of all such
properties sold by the REIT during the year did not exceed 10% of the aggregate bases of
all of the assets of the REIT at the beginning of the year, (3) the aggregate fair market
value of all such properties sold by the REIT during the year did not exceed 10% of the aggregate
fair market value of all of the assets of the REIT at the beginning of the year, (4) (i) the
aggregate adjusted bases of all such property sold by the REIT during the year did not exceed
20% of the aggregate adjusted bases of all property of the REIT at the beginning of the year
and (ii) the average annual percentage of properties sold by the REIT compared to all
the REIT’s properties (measured by adjusted bases) in the current and two prior years
did not exceed 10% or (5) (i) the aggregate fair market value of all such property
sold by the REIT during the year did not exceed 20% of the aggregate fair market value of
all property of the REIT at the beginning of the year and (ii) the average annual percentage
of properties sold by the REIT compared to all the REIT’s properties (measured by fair
market value) in the current and two prior years did not exceed 10%; |
| · | in the case of property not acquired through foreclosure or lease
termination, the REIT has held the property for at least two years for the production of
rental income; and |
| · | if the REIT has made more than seven sales of non-Foreclosure
Property during the taxable year, substantially all of the marketing and development expenditures
with respect to the property were made through an independent contractor from whom the REIT
derives no income or a TRS. |
We will attempt to comply with the terms of the
safe-harbor provisions in the U.S. federal income tax laws prescribing when a property sale will not be characterized as a prohibited
transaction. We cannot assure you, however, that we can comply with the safe harbor provisions or that we will avoid owning property
that may be characterized as property that we hold “primarily for sale to customers in the ordinary course of a trade or business.”
The 100% tax will not apply to gains from the sale of property that is held through a TRS or other taxable corporation, although such
income will be taxed to the TRS at regular U.S. federal corporate income tax rates.
Fee Income. Fee income generally will
not be qualifying income for purposes of either the 75% or 95% gross income tests. Any fees earned by any TRS we form, such as fees for
providing asset management and construction management services to third parties, will not be included for purposes of the gross income
tests. In addition, we will be subject to a 100% excise tax on any fees earned by a TRS for services provided to us if such fees were
pursuant to an agreement determined by the IRS to be not on an arm’s-length basis.
Foreclosure Property. We will be subject
to tax at the maximum U.S. federal corporate income tax rate (currently 21%) on any income from Foreclosure Property, which includes
certain foreign currency gains and related deductions, other than income that otherwise would be qualifying income for purposes of the
75% gross income test, less expenses directly connected with the production of that income. However, gross income from Foreclosure Property
will qualify under the 75% and 95% gross income tests. Foreclosure Property is any real property, including interests in real property,
and any personal property incident to such real property:
| · | that is acquired by a REIT as the result of the REIT having bid
on such property at foreclosure, or having otherwise reduced such property to ownership or
possession by agreement or process of law, after there was a default or when default was
imminent on a lease of such property or on indebtedness that such property secured; |
| · | for which the related loan was acquired by the REIT at a time
when the default was not imminent or anticipated; and |
| · | for which the REIT makes a proper election to treat the property
as Foreclosure Property. |
Foreclosure Property also includes certain “qualified
health care properties” (as defined above under “—Taxable REIT Subsidiaries”) acquired by a REIT as a result
of the termination or expiration of a lease of such property (other than by reason of a default, or the imminence of a default, on the
lease).
A REIT will not be considered to have foreclosed
on a property where the REIT takes control of the property as a mortgagee-in-possession and cannot receive any profit or sustain any
loss except as a creditor of the mortgagor. Property generally ceases to be Foreclosure Property at the end of the third taxable year
(or, with respect to qualified health care property, the second taxable year) following the taxable year in which the REIT acquired the
property, or longer if an extension is granted by the Secretary of the Treasury. However, this grace period terminates and Foreclosure
Property ceases to be Foreclosure Property on the first day:
| · | on which a lease is entered into for the property that, by its
terms, will give rise to income that does not qualify for purposes of the 75% gross income
test, or any amount is received or accrued, directly or indirectly, pursuant to a lease entered
into on or after such day that will give rise to income that does not qualify for purposes
of the 75% gross income test; |
| · | on which any construction takes place on the property, other
than completion of a building or any other improvement where more than 10% of the construction
was completed before default became imminent; or |
| · | which is more than 90 days after the day on which the REIT acquired
the property and the property is used in a trade or business which is conducted by the REIT,
other than through an independent contractor from whom the REIT itself does not derive or
receive any income or a TRS. |
Hedging Transactions. From time to time,
we or our Operating Partnership may enter into hedging transactions with respect to one or more of our assets or liabilities. Our hedging
activities may include entering into interest rate swaps, caps, and floors, options to purchase such items, and futures and forward contracts.
Income and gain from “hedging transactions” will be excluded from gross income for purposes of both the 75% and 95% gross
income tests provided we satisfy the identification requirements discussed below. A “hedging transaction” means either (1) any
transaction entered into in the normal course of our or our Operating Partnership’s trade or business primarily to manage the risk
of interest rate, price changes, or currency fluctuations with respect to borrowings made or to be made, or ordinary obligations incurred
or to be incurred, to acquire or carry real estate assets, (2) any transaction entered into primarily to manage the risk of currency
fluctuations with respect to any item of income or gain that would be qualifying income under the 75% or 95% gross income test (or any
property which generates such income or gain), and (3) any transaction entered into to “offset” transactions described
in (1) or (2) if a portion of the hedged indebtedness is extinguished or the related property disposed of. We are required
to clearly identify any such hedging transaction before the close of the day on which it was acquired, originated, or entered into and
to satisfy other identification requirements. We intend to structure any hedging transactions in a manner that does not jeopardize our
qualification as a REIT.
Foreign Currency Gain. Certain foreign
currency gains will be excluded from gross income for purposes of one or both of the gross income tests. “Real estate foreign exchange
gain” will be excluded from gross income for purposes of the 75% and 95% gross income tests. Real estate foreign exchange gain
generally includes foreign currency gain attributable to any item of income or gain that is qualifying income for purposes of the 75%
gross income test, foreign currency gain attributable to the acquisition or ownership of (or becoming or being the obligor under) obligations
secured by mortgages on real property or an interest in real property and certain foreign currency gain attributable to certain “qualified
business units” of a REIT. “Passive foreign exchange gain” will be excluded from gross income for purposes of the 95%
gross income test. Passive foreign exchange gain generally includes real estate foreign exchange gain as described above, and also includes
foreign currency gain attributable to any item of income or gain that is qualifying income for purposes of the 95% gross income test
and foreign currency gain attributable to the acquisition or ownership of (or becoming or being the obligor under) obligations. These
exclusions for real estate foreign exchange gain and passive foreign exchange gain do not apply to any certain foreign currency gain
derived from dealing, or engaging in substantial and regular trading, in securities. Such gain is treated as non-qualifying income for
purposes of both the 75% and 95% gross income tests.
Failure to Satisfy Gross Income Tests.
If we fail to satisfy one or both of the gross income tests for any taxable year, we nevertheless may qualify as a REIT for that year
if we qualify for relief under certain provisions of the U.S. federal income tax laws. Those relief provisions are generally available
if:
| · | our failure to meet those tests is due to reasonable cause and
not to willful neglect; and |
| · | following such failure for any taxable year, we file a schedule
of the sources of our income with the IRS in accordance with regulations prescribed by the
Secretary of the Treasury. |
We cannot predict, however, whether in all circumstances
we would qualify for the relief provisions. In addition, as discussed above in “—Taxation of Our Company,” even if
the relief provisions apply, we would incur a 100% tax on the gross income attributable to the greater of the amount by which we fail
the 75% gross income test or the 95% gross income test multiplied, in either case, by a fraction intended to reflect our profitability.
Asset Tests
To maintain our qualification as a REIT, we also
must satisfy the following asset tests at the end of each quarter of each taxable year. First, at least 75% of the value of our total
assets must consist of:
| · | cash or cash items, including certain receivables and money market
funds and, in certain circumstances, foreign currencies; |
| · | interests in real property, including leaseholds, options to
acquire real property and leaseholds, and personal property, to the extent such personal
property is leased in connection with real property and rents attributable to such personal
property are treated as “rents from real property”; |
| · | interests in mortgage loans secured by real property; |
| · | shares (or transferable certificates of beneficial interest)
in other REITs and debt instruments issued by “publicly offered REITs”; and |
| · | investments in shares or debt instruments during the one-year
period following our receipt of new capital that we raise through equity offerings or public
offerings of debt with at least a five-year term. |
Second, of our investments not included in the
75% asset class, the value of our interest in any one issuer’s securities may not exceed 5% of the value of our total assets (the
“5% asset test”).
Third, of our investments not included in the
75% asset class, we may not own more than 10% of the voting power or 10% of the value of any one issuer’s outstanding securities
(the “10% vote test” and “10% value test,” respectively).
Fourth, no more than 20% of the value of our
total assets may consist of the securities of one or more TRSs.
Fifth, no more than 25% of the value of our total
assets may consist of the securities of TRSs, other non-TRS taxable subsidiaries, and other assets that are not qualifying assets for
purposes of the 75% asset test (the “25% securities test”).
Sixth, no more than 25% of the value of our total
assets may consist of debt instruments issued by “publicly offered REITs” to the extent not secured by real property or interests
in real property.
For purposes of the 5% asset test, the 10% vote
test and the 10% value test, the term “securities” does not include shares in another REIT, debt of “publicly offered
REITs”, equity or debt securities of a qualified REIT subsidiary or a TRS, mortgage loans that constitute real estate assets, or
equity interests in a partnership. The term “securities,” however, generally includes debt securities issued by a partnership
or another REIT (other than a “publicly offered REIT”), except that for purposes of the 10% value test, the term “securities”
does not include:
| · | “Straight debt” securities, which is defined as a
written unconditional promise to pay on demand or on a specified date a sum certain in money
if (1) the debt is not convertible, directly or indirectly, into equity, and (2) the
interest rate and interest payment dates are not contingent on profits, the borrower’s
discretion, or similar factors. “Straight debt” securities do not include any
securities issued by a partnership or a corporation in which we or any controlled TRS (i.e.,
a TRS in which we own directly or indirectly more than 50% of the voting power or value of
the shares) hold non-“straight debt” securities that have an aggregate value
of more than 1% of the issuer’s outstanding securities. However, “straight debt”
securities include debt subject to the following contingencies: |
| · | a contingency relating to the time of payment of interest or principal,
as long as either (1) there is no change to the effective yield of the debt obligation,
other than a change to the annual yield that does not exceed the greater of 0.25% or 5% of
the annual yield, or (2) neither the aggregate issue price nor the aggregate face amount
of the issuer’s debt obligations held by us exceeds $1 million and no more than 12
months of unaccrued interest on the debt obligations can be required to be prepaid; and |
| · | a contingency relating to the time or amount of payment upon a
default or prepayment of a debt obligation, as long as the contingency is consistent with
customary commercial practice. |
| · | Any loan to an individual or an estate; |
| · | Any “Section 467 rental agreement,” other than
an agreement with a related party tenant; |
| · | Any obligation to pay “rents from real property”; |
| · | Certain securities issued by governmental entities; |
| · | Any security issued by a REIT; |
| · | Any debt instrument issued by an entity treated as a partnership
for U.S. federal income tax purposes in which we are a partner to the extent of our proportionate
interest in the equity and debt securities of the partnership; and |
| · | Any debt instrument issued by an entity treated as a partnership
for U.S. federal income tax purposes not described in the preceding bullet points if at least
75% of the partnership’s gross income, excluding income from prohibited transactions,
is qualifying income for purposes of the 75% gross income test described above in “—Gross
Income Tests.” |
For purposes of the 10% value test, our proportionate
share of the assets of a partnership is our proportionate interest in any securities issued by the partnership, without regard to the
securities described in the last two bullet points above.
We will monitor the status of our assets for
purposes of the various asset tests and will manage our portfolio in order to comply at all times with such tests. However, there is
no assurance that we will not inadvertently fail to comply with such tests. If we fail to satisfy the asset tests at the end of a calendar
quarter, we will not lose our REIT qualification if:
| · | we satisfied the asset tests at the end of the preceding calendar
quarter; and |
| · | the discrepancy between the value of our assets and the asset
test requirements arose from changes in the market values of our assets and was not wholly
or partly caused by the acquisition of one or more non-qualifying assets. |
If we did not satisfy the condition described
in the second item, above, we still could avoid disqualification by eliminating any discrepancy within 30 days after the close of the
calendar quarter in which it arose.
If we violate the 5% asset test, the 10% vote
test or the 10% value test described above at the end of any quarter of each taxable year, we will not lose our REIT qualification if
(1) the failure is de minimis (up to the lesser of 1% of the value of our assets or $10 million) and (2) we dispose of assets
causing the failure or otherwise comply with the asset tests within six months after the last day of the quarter in which we identify
such failure. In the event of a failure of any of the asset tests (other than de minimis failures described in the preceding sentence),
as long as the failure was due to reasonable cause and not to willful neglect, we will not lose our REIT qualification if we (1) dispose
of assets causing the failure or otherwise comply with the asset tests within six months after the last day of the quarter in which we
identify the failure, (2) we file a schedule with the IRS describing each asset that caused the failure and (3) pay a tax equal
to the greater of $50,000 or 21% of the net income from the assets causing the failure during the period in which we failed to satisfy
the asset tests.
Currently, we believe that our assets satisfy
the foregoing asset test requirements. However, we will not obtain independent appraisals to support our conclusions as to the value
of our assets. Moreover, the values of some assets may not be susceptible to a precise determination. As a result, there can be no assurance
that the IRS will not contend that our ownership of assets violates one or more of the asset tests applicable to REITs.
Distribution Requirements
Each taxable year, we must distribute dividends,
other than capital gain dividends and deemed distributions of retained capital gain, to our stockholders in an aggregate amount at least
equal to:
| · | 90% of our “REIT taxable income,” computed without
regard to the dividends paid deduction and our net capital gain or loss, and |
| · | 90% of our after-tax net income, if any, from Foreclosure Property,
minus |
| · | the sum of certain items of non-cash income. |
We must pay such distributions in the taxable
year to which they relate, or in the following taxable year if either (1) we declare the distribution before we timely file our
U.S. federal income tax return for the year, pay the distribution on or before the first regular dividend payment date after such declaration
and elect in our tax return to have a specified dollar amount of such distribution treated as if paid during the prior year or (2) we
declare the distribution in October, November or December of the taxable year, payable to stockholders of record on a specified
day in any such month, and we actually pay the dividend before the end of January of the following year. The distributions under
clause (1) are taxable to the stockholders in the year in which paid, and the distributions in clause (2) are treated as paid
on December 31st of the prior taxable year to the extent of our earnings and profits. In both instances, these distributions relate
to our prior taxable year for purposes of the 90% distribution requirement.
Further, to the extent we are not a “publicly
offered REIT,” in order for our distributions to be counted as satisfying the annual distribution requirement for REITs and to
provide us with the REIT-level tax deduction, such distributions must not be “preferential dividends.” A dividend is not
a preferential dividend if that distribution is (1) pro rata among all outstanding shares within a particular class and (2) in
accordance with the preferences among different classes of shares as set forth in our organizational documents. However, the preferential
dividend rule does not apply to “publicly offered REITs.” Currently, we are a “publicly offered REIT.”
In addition to the annual distribution requirement
described above, to continue to qualify as a REIT, we must not have any non-REIT accumulated earnings and profits, as measured for U.S.
federal income tax purposes, at the end of any REIT taxable year. We were required distribute any such non-REIT accumulated earnings
and profits that we had when we elected to be taxable as a REIT prior to the end of our first REIT taxable year, which ended December 31,
2016. We did not have any earnings and profits from prior years and we believe we made sufficient distributions in 2016 such that we
did not have any undistributed non-REIT earnings and profits at the end of 2016. However, no complete assurance can be provided that
we accurately determined our non-REIT earnings and profits or distributed those amounts before the end of our first REIT year. If it
is subsequently determined that we had undistributed non-REIT earnings and profits as of the end of our first REIT taxable year or at
the end of any subsequent taxable year, we could fail to qualify as a REIT.
We will pay U.S. federal income tax on taxable
income, including net capital gain that we do not distribute to stockholders. Furthermore, if we fail to distribute during a calendar
year, or by the end of January following the calendar year in the case of distributions with declaration and record dates falling
in the last three months of the calendar year, at least the sum of:
| · | 85% of our REIT ordinary income for such year, |
| · | 95% of our REIT capital gain income for such year, and |
| · | any undistributed taxable income (ordinary and capital gain)
from all prior periods, |
we will incur a 4% nondeductible excise tax on the excess of such
required distribution over the amounts we actually distribute.
We may elect to retain and pay U.S. federal income
tax on the net long-term capital gain we receive in a taxable year. If we so elect, we will be treated as having distributed any such
retained amount for purposes of the 4% nondeductible excise tax described above. We intend to make timely distributions sufficient to
satisfy the annual distribution requirements and to avoid U.S. federal corporate income tax and the 4% nondeductible excise tax.
Limitations on Deductions. It is possible
that, from time to time, we may experience timing differences between the actual receipt of income and actual payment of deductible expenses
and the inclusion of that income and deduction of such expenses in arriving at our REIT taxable income. For example, we may not deduct
recognized capital losses from our “REIT taxable income.” Further, it is possible that, from time to time, we may be allocated
a share of net capital gain attributable to the sale of depreciated property that exceeds our allocable share of cash attributable to
that sale. Additionally, we generally will be required to recognize certain amounts as income no later than the time such amounts are
reflected on certain financial statements.
A taxpayer’s net interest expense deduction
may be limited to 30% (adjusted, in the absence of an election otherwise, to 50% for non-partnership entities for their 2019 and 2020
taxable years and for partnerships for their 2020 taxable years under the Coronavirus Aid, Relief, and Economic Security Act of 2020
(the “CARES Act”)) of the sum of adjusted taxable income, business interest, and certain other amounts. Adjusted taxable
income does not include items of income or expense not allocable to a trade or business, business interest or expense, the deduction
for qualified business income, net operating losses (“NOLs”), and for years prior to 2022, deductions for depreciation, amortization,
or depletion. Under the CARES Act, a taxpayer may have elected to use its adjusted taxable income from its 2019 taxable year for purposes
of calculating its limitation in its 2020 taxable year. For partnerships, the interest deduction limit is applied at the partnership
level, subject to certain adjustments to the partners for unused deduction limitation at the partnership level. Disallowed interest expense
is carried forward indefinitely (subject to special rules for partnerships, including, under the CARES Act, the ability for a partner
allocated disallowed interest with respect to the partnership’s 2019 taxable year to deduct 50% of such amount in its 2020 taxable
year).
A “real property trade or business”
may elect out of this interest limit so long as it uses a 40-year recovery period for nonresidential real property, a 30-year recovery
period for residential real property, and a 20-year recovery period for related improvements described below. For this purpose, a real
property trade or business is any real property development, redevelopment, construction, reconstruction, acquisition, conversion, rental,
operating, management, leasing, or brokerage trade or business. We believe this definition encompasses our business and thus will have
elected to opt out of the limits on interest deductibility.
In addition, for taxable years beginning after
December 31, 2020, the NOL deduction is generally limited to 80% of taxable income (before the deduction). REITs may indefinitely
carryforward (but not carryback) unused NOLs.
As a result of the foregoing, we may have less
cash than is necessary to distribute taxable income sufficient to avoid U.S. federal corporate income tax and the excise tax imposed
on certain undistributed income or even to meet the 90% distribution requirement. In such a situation, we may need to borrow funds or,
if possible, pay taxable dividends of our stock or debt securities.
Elective Cash/Stock Dividends. We may
satisfy the 90% distribution test with taxable distributions of our stock or debt securities. The IRS has issued Revenue Procedure 2017-45
authorizing elective cash/stock dividends to be made by “publicly offered REITs.” Pursuant to Revenue Procedure 2017-45,
the IRS will treat the distribution of stock pursuant to an elective cash/stock dividend as a distribution of property under Section 301
of the Code (i.e., a dividend), as long as at least 20% of the total dividend is available in cash and certain other parameters detailed
in the Revenue Procedure are satisfied. Although we do not currently intend to pay dividends in our stock, if in the future we choose
to pay dividends in our stock, our stockholders may be required to pay tax in excess of the cash that they receive.
Under certain circumstances, we may be able to
correct a failure to meet the distribution requirement for a year by paying “deficiency dividends” to our stockholders in
a later year. We may include such deficiency dividends in our deduction for dividends paid for the earlier year. Although we may be able
to avoid U.S. federal income tax on amounts distributed as deficiency dividends, we will be required to pay interest to the IRS based
upon the amount of any deduction we take for deficiency dividends.
Recordkeeping Requirements
We must maintain certain records in order to
qualify and maintain our qualification as a REIT. In addition, to avoid a monetary penalty, we must request on an annual basis information
from our stockholders designed to disclose the actual ownership of our outstanding shares. We intend to comply with these requirements.
Failure to Qualify
If we fail to satisfy one or more requirements
for REIT qualification, other than the gross income tests and the asset tests, we could avoid disqualification if our failure is due
to reasonable cause and not to willful neglect and we pay a penalty of $50,000 for each such failure. In addition, there are relief provisions
for a failure of the gross income tests and asset tests, as described in “—Gross Income Tests” and “—Asset
Tests.”
If we fail to qualify as a REIT in any taxable
year, and no relief provision applies, we would be subject to U.S. federal corporate income tax. In addition, we may be required to pay
penalties and/or interest with respect to such tax. In calculating our taxable income in a year in which we fail to qualify as a REIT,
we would not be able to deduct amounts paid out to stockholders. In fact, we would not be required to distribute any amounts to stockholders
in that year. In such event, to the extent of our current and accumulated earnings and profits, distributions to stockholders generally
would be taxable as ordinary dividend income. Subject to certain limitations of the U.S. federal income tax laws, corporate stockholders
may be eligible for the dividends received deduction and stockholders taxed at individual rates may be eligible for the reduced U.S.
federal income tax rate of up to 20% on such dividends. Unless we qualified for relief under specific statutory provisions, we also would
be disqualified from taxation as a REIT for the four taxable years following the year during which we ceased to qualify as a REIT. We
cannot predict whether we would qualify for such statutory relief in all circumstances.
Taxation of Taxable U.S. Stockholders
This section is a summary of the rules governing
the U.S. federal income taxation of U.S. stockholders and is for general information only. We urge you to consult your tax advisors
to determine the impact of U.S. federal, state, and local income tax laws on the purchase, ownership and disposition of our stock.
As used herein, the term “U.S. stockholder”
means a beneficial owner of our capital stock that for U.S. federal income tax purposes is:
| · | a citizen or resident of the United States; |
| · | a corporation (including an entity treated as a corporation for
U.S. federal income tax purposes) created or organized in or under the laws of the United
States, any of its states or the District of Columbia; |
| · | an estate whose income is subject to U.S. federal income taxation
regardless of its source; or |
| · | any trust if (1) a U.S. court is able to exercise primary
supervision over the administration of such trust and one or more United States persons (as
defined in Code Section 7701(a)(30)) have the authority to control all substantial decisions
of the trust or (2) it has a valid election in place to be treated as a United States
person. |
If a partnership, entity or arrangement treated
as a partnership for U.S. federal income tax purposes holds our stock, the U.S. federal income tax treatment of a partner in the partnership
will generally depend on the status of the partner and the activities of the partnership. If you are a partner in a partnership holding
our stock, you should consult your tax advisor regarding the consequences of the ownership and disposition of our stock by the partnership.
As long as we maintain our qualification as a
REIT, a taxable U.S. stockholder must generally take into account as ordinary income distributions made out of our current or accumulated
earnings and profits that we do not designate as capital gain dividends or retained long-term capital gain. For purposes of determining
whether a distribution is made out of our current or accumulated earnings and profits, our earnings and profits will be allocated first
to our preferred stock dividends and then to our common stock dividends. Individuals, trusts, and estates generally may deduct 20% of
the “qualified REIT dividends” (i.e., REIT dividends other than capital gain dividends and portions of REIT dividends designated
as “qualified dividend income,” which in each case are already eligible for capital gain tax rates) they receive. The deduction
for qualified REIT dividends is not subject to the wage and property basis limits that apply to other types of “qualified business
income” eligible for the 20% deduction. However, to qualify for this deduction, the U.S. stockholder receiving such dividends must
hold the dividend-paying REIT stock for at least 46 days (taking into account certain special holding period rules) of the 91-day period
beginning 45 days before the stock becomes ex-dividend and cannot be under an obligation to make related payments with respect to a position
in substantially similar or related property. The 20% deduction for qualified REIT dividends results in a maximum 29.6% U.S. federal
income tax rate on ordinary REIT dividends, not including the 3.8% Medicare tax, discussed below. Without further legislation, this deduction
will sunset after 2025.
A U.S. stockholder will not qualify for the dividends
received deduction generally available to corporations. Additionally, because we are not generally subject to U.S. federal income tax
on the portion of our REIT taxable income distributed to our stockholders (See “—Taxation of Our Company” above), our
dividends generally will not be eligible for the 20% U.S. federal income tax rate on “qualified dividend income” (generally,
dividends paid by domestic C corporations and certain qualified foreign corporations to U.S. stockholders that are taxed at individual
rates). As a result, our ordinary REIT dividends will be taxed at the higher tax rate applicable to ordinary income, reduced by the 20%
deduction described above.
However, the 20% tax rate for qualified dividend
income will apply to our ordinary REIT dividends, if any, that are (1) attributable to dividends received by us from non-REIT corporations,
such as any TRS of ours, and (2) attributable to income upon which we have paid U.S. federal corporate income tax (e.g., to the
extent that we distribute less than 100% of our taxable income). In general, to qualify for the reduced tax rate on qualified dividend
income, a stockholder must hold our stock for more than 60 days during the 121-day period beginning on the date that is 60 days before
the date on which our stock becomes ex-dividend.
Individuals, trusts, and estates whose income
exceeds certain thresholds are also subject to an additional 3.8% Medicare tax on dividends received from us. U.S. stockholders are urged
to consult their tax advisors regarding the implications of the additional Medicare tax resulting from an investment in our shares.
A U.S. stockholder generally will recognize distributions
that we designate as capital gain dividends without regard to how long the U.S. stockholder has held our stock. We generally will designate
our capital gain dividends as either 20% or 25% rate distributions. See “—Capital Gains and Losses.”
We may elect to retain and pay U.S. federal income
tax on the net long-term capital gain that we recognize in a taxable year. In that case, to the extent that we designate such amount
in a timely notice to such stockholder, a U.S. stockholder would be taxed on its proportionate share of our undistributed long-term capital
gain. The U.S. stockholder would receive a credit for its proportionate share of the tax we paid. The U.S. stockholder would increase
the basis in its shares by the amount of its proportionate share of our undistributed long-term capital gain, minus its share of the
tax we paid.
A U.S. stockholder will not incur tax on a distribution
in excess of our current and accumulated earnings and profits if the distribution does not exceed the adjusted basis of the U.S. stockholder’s
stock. Instead, the distribution will reduce the U.S. stockholder’s adjusted basis in such shares. A U.S. stockholder will recognize
a distribution in excess of both our current and accumulated earnings and profits and the U.S. stockholder’s adjusted basis in
his or her shares as long-term capital gain, or short-term capital gain if the shares have been held for one year or less, assuming the
shares are a capital asset in the hands of the U.S. stockholder. In addition, if we declare a distribution in October, November, or December of
any year that is payable to a U.S. stockholder of record on a specified date in any such month, such distribution will be treated as
both paid by us and received by the U.S. stockholder on December 31 of such year, provided that we actually pay the distribution
during January of the following calendar year.
U.S. stockholders may not include in their individual
U.S. federal income tax returns any of our NOLs or capital losses. Instead, these losses are generally carried over by us for potential
offset against our future income. Taxable distributions from us and gain from the disposition of our stock will not be treated as passive
activity income and, therefore, stockholders generally will not be able to apply any “passive activity losses,” such as losses
from certain types of limited partnerships in which the U.S. stockholder is a limited partner, against such income or gain. In addition,
taxable distributions from us and gain from the disposition of our stock generally will be treated as investment income for purposes
of the investment interest limitations. We will notify U.S. stockholders after the close of our taxable year as to the portions of the
distributions attributable to that year that constitute ordinary income, return of capital and capital gain.
Taxation of U.S. Stockholders on the Disposition of Capital Stock
A U.S. stockholder who is not a dealer in securities
must generally treat any gain or loss realized upon a taxable disposition of our stock as long-term capital gain or loss if the U.S.
stockholder has held our stock for more than one year and otherwise as short-term capital gain or loss. In general, a U.S. stockholder
will realize gain or loss in an amount equal to the difference between the sum of the fair market value of any property and the amount
of cash received in such disposition and the U.S. stockholder’s adjusted tax basis. A stockholder’s adjusted tax basis generally
will equal the U.S. stockholder’s acquisition cost, increased by the excess of net capital gains deemed distributed to the U.S.
stockholder (discussed above) less tax deemed paid on such gains and reduced by any returns of capital. However, a U.S. stockholder must
treat any loss upon a sale or exchange of stock held by such stockholder for six months or less as a long-term capital loss to the extent
of capital gain dividends and any other actual or deemed distributions from us that such U.S. stockholder treats as long-term capital
gain. All or a portion of any loss that a U.S. stockholder realizes upon a taxable disposition of our stock may be disallowed if the
U.S. stockholder purchases substantially identical stock within 30 days before or after the disposition.
Taxation of U.S. Stockholders on a Conversion of Preferred Stock
Except as provided below, (i) a U.S. stockholder
generally will not recognize gain or loss upon the conversion of preferred stock into our common stock, and (ii) a U.S. stockholder’s
basis and holding period in our common stock received upon conversion generally will be the same as those of the converted shares of
preferred stock (but the basis will be reduced by the portion of adjusted tax basis allocated to any fractional share exchanged for cash).
Any of our shares of common stock received in conversion that are attributable to accumulated and unpaid dividends on the converted shares
of preferred stock will be treated as a distribution that is potentially taxable as a dividend. Cash received upon conversion in lieu
of a fractional share generally will be treated as payment in exchange for such fractional share, and gain or loss will be recognized
on the receipt of cash in an amount equal to the difference between the amount of cash received and the adjusted tax basis allocable
to the fractional share deemed exchanged. This gain or loss will be long-term capital gain or loss if the U.S. stockholder has held the
preferred stock for more than one year at the time of conversion. U.S. stockholders are urged to consult with their tax advisors regarding
the U.S. federal income tax consequences of any transaction by which such U.S. stockholder exchanges our commons stock received on a
conversion of preferred stock for cash or other property.
Taxation of U.S. Stockholders on a Redemption of Preferred Stock
In general, a redemption of any preferred stock
will be treated under Section 302 of the Code as a distribution that is taxable at ordinary U.S. federal income tax rates as a dividend
(to the extent of our current or accumulated earnings and profits), unless the redemption satisfies certain tests set forth in Section 302(b) of
the Code enabling the redemption to be treated as a sale of the preferred stock (in which case the redemption will be treated in the
same manner as a sale described in “— Taxation of U.S. Stockholders on the Disposition of Capital Stock” above). The
redemption will satisfy such tests and be treated as a sale of the preferred stock if the redemption:
| · | is “substantially disproportionate” with respect
to the U.S. stockholder’s interest in our stock; |
| · | results in a “complete termination” of the U.S. stockholder’s
interest in all classes of our stock; or |
| · | is “not essentially equivalent to a dividend” with
respect to the U.S. stockholder, all within the meaning of Section 302(b) of the
Code. |
In determining whether any of these tests have
been met, stock considered to be owned by the U.S. stockholder by reason of certain constructive ownership rules set forth in the
Code, as well as stock actually owned, generally must be taken into account. Because the determination as to whether any of the three
alternative tests of Section 302(b) of the Code described above will be satisfied with respect to any particular U.S. stockholder
of the preferred stock depends upon the facts and circumstances at the time that the determination must be made, prospective investors
are advised to consult their tax advisors to determine such tax treatment.
If a redemption of preferred stock does not meet
any of the three tests described above, the redemption proceeds will be treated as a distribution, as described in “—Taxation
of Taxable U.S. Stockholders” above. In that case, a U.S. stockholder’s adjusted tax basis in the redeemed preferred stock
will be transferred to such U.S. stockholder’s remaining stock holdings in our company. If the U.S. stockholder does not retain
any of our stock, such basis could be transferred to a related person that holds our stock or it may be lost.
Under previously proposed Treasury regulations,
if any portion of the amount received by a U.S. stockholder on a redemption of any class of our preferred stock is treated as a distribution
with respect to our stock but not as a taxable dividend, then such portion will be allocated to all shares of the redeemed class of stock
held by the redeemed stockholder just before the redemption on a pro-rata, share-by-share, basis. The amount applied to each share will
first reduce the redeemed U.S. stockholder’s basis in that share and any excess after the basis is reduced to zero will result
in taxable gain. If the redeemed stockholder has different bases in its stock, then the amount allocated could reduce some of the basis
in certain shares while reducing all the basis and giving rise to taxable gain in others. Thus, the redeemed U.S. stockholder could have
gain even if such U.S. stockholder’s basis in all its stock of the redeemed class exceeded such portion.
The previously proposed Treasury regulations
would permit the transfer of basis in the redeemed preferred stock to the redeemed U.S. stockholder’s remaining, unredeemed preferred
stock of the same class (if any), but not to any other class of stock held (directly or indirectly) by the redeemed U.S. stockholder.
Instead, any unrecovered basis in the redeemed preferred stock would be treated as a deferred loss to be recognized when certain conditions
are satisfied. On March 28, 2019, these proposed regulations were withdrawn. As a result, the treatment governing adjustments to
the basis of a U.S. holder’s preferred stock with respect to amounts treated as a distribution with respect to preferred stock,
but not as a dividend, as well as the treatment of the basis of any unredeemed shares, may be less certain.
Capital Gains and Losses
A taxpayer generally must hold a capital asset
for more than one year for gain or loss derived from its sale or exchange to be treated as long-term capital gain or loss. The highest
marginal individual U.S. federal income tax rate currently is 37%. The maximum U.S. federal income tax rate on long-term capital gain
applicable to taxpayers taxed at individual rates is 20% for sales and exchanges of assets held for more than one year. The maximum U.S.
federal income tax rate on long-term capital gain from the sale or exchange of “Section 1250 property,” or depreciable
real property, is 25%, which applies to the lesser of the total amount of the gain or the accumulated depreciation on the Section 1250
property.
Individuals, trusts and estates whose income
exceeds certain thresholds are also subject to an additional 3.8% Medicare tax on gain from the sale of our stock. U.S. stockholders
are urged to consult their tax advisors regarding the implications of the additional Medicare tax resulting from an investment in our
stock.
With respect to distributions that we designate
as capital gain dividends and any retained capital gain that we are deemed to distribute, we generally may designate whether such a distribution
is taxable at a 20% or 25% rate to our U.S. stockholders taxed at individual rates. Thus, the tax rate differential between capital gain
and ordinary income for those taxpayers may be significant. In addition, the characterization of income as capital gain or ordinary income
may affect the deductibility of capital losses. A non-corporate taxpayer may deduct capital losses not offset by capital gains against
its ordinary income only up to a maximum annual amount of $3,000 ($1,500 for married individuals filing separate returns). A non-corporate
taxpayer may carry forward unused capital losses indefinitely. A corporate taxpayer must pay tax on its net capital gain at ordinary
corporate rates. A corporate taxpayer may deduct capital losses only to the extent of capital gains, with unused losses being carried
back three years and forward five years.
Taxation of Tax-Exempt Stockholders
This section is a summary of rules governing
the U.S. federal income taxation of U.S. stockholders that are tax-exempt entities and is for general information only. We urge tax-exempt
stockholders to consult their tax advisors to determine the impact of U.S. federal, state, and local income tax laws on the purchase,
ownership and disposition of our stock, including any reporting requirements.
Tax-exempt entities, including qualified employee
pension and profit sharing trusts and individual retirement accounts, generally are exempt from U.S. federal income taxation. However,
they are subject to taxation on their unrelated business taxable income (“UBTI”). Although many investments in real estate
generate UBTI, the IRS has issued a ruling that dividend distributions from a REIT to an exempt employee pension trust do not constitute
UBTI so long as the exempt employee pension trust does not otherwise use the shares of the REIT in an unrelated trade or business of
the pension trust. Based on that ruling, amounts that we distribute to tax-exempt stockholders generally should not constitute UBTI.
However, if a tax-exempt stockholder were to finance (or be deemed to finance) its acquisition of our stock with debt, a portion of the
income that it receives from us would constitute UBTI pursuant to the “debt-financed property” rules. Moreover, social clubs,
voluntary employee benefit associations, supplemental unemployment benefit trusts and qualified group legal services plans that are exempt
from taxation under special provisions of the U.S. federal income tax laws are subject to different UBTI rules, which generally will
require them to characterize distributions that they receive from us as UBTI. Finally, in certain circumstances, a qualified employee
pension or profit sharing trust that owns more than 10% of our shares of stock must treat a percentage of the dividends that it receives
from us as UBTI. Such percentage is equal to the gross income we derive from an unrelated trade or business, determined as if we were
a pension trust, divided by our total gross income for the year in which we pay the dividends. That rule applies to a pension trust
holding more than 10% of our shares of stock only if:
| · | the percentage of our dividends that the tax-exempt trust must
treat as UBTI is at least 5%; |
| · | we qualify as a REIT by reason of the modification of the rule requiring
that no more than 50% of our shares of stock be owned by five or fewer individuals that allows
the beneficiaries of the pension trust to be treated as holding our shares of stock in proportion
to their actuarial interests in the pension trust; and |
| · | one pension trust owns more than 25% of the value of our shares
of stock; or |
| · | a group of pension trusts individually holding more than 10% of
the value of our shares of stock collectively owns more than 50% of the value of our shares
of stock. |
Taxation of Non-U.S. Stockholders
This section is a summary of the rules governing
the U.S. federal income taxation of non-U.S. stockholders. The term “non-U.S. stockholder” means a beneficial owner of our
stock that is not a U.S. stockholder, a partnership (or entity treated as a partnership for U.S. federal income tax purposes) or a tax-exempt
stockholder. The rules governing U.S. federal income taxation of nonresident alien individuals, foreign corporations, foreign partnerships,
and other foreign stockholders are complex, and this summary is for general information only. We urge non-U.S. stockholders to consult
their tax advisors to determine the impact of U.S. federal, state, and local income tax laws on the purchase, ownership and disposition
of our stock, including any reporting requirements.
Distributions
A non-U.S. stockholder that receives a distribution
that is not attributable to gain from our sale or exchange of a “United States real property interest” (“USRPI”),
as defined below, and that we do not designate as a capital gain dividend or retained capital gain will recognize ordinary income to
the extent that we pay such distribution out of our current or accumulated earnings and profits. A withholding tax equal to 30% of the
gross amount of the distribution ordinarily will apply to such distribution unless an applicable tax treaty reduces or eliminates the
tax.
However, if a distribution is treated as effectively
connected with the non-U.S. stockholder’s conduct of a U.S. trade or business, the non-U.S. stockholder generally will be subject
to U.S. federal income tax on the distribution at graduated rates, in the same manner as U.S. stockholders are taxed with respect to
such distribution, and a non-U.S. stockholder that is a corporation also may be subject to a 30% branch profits tax with respect to that
distribution. The branch profits tax may be reduced by an applicable tax treaty. We plan to withhold U.S. federal income tax at the rate
of 30% on the gross amount of any such distribution paid to a non-U.S. stockholder unless either:
| · | a lower treaty rate applies and the non-U.S. stockholder provides
us with an IRS Form W-8BEN or W-8BEN-E, as applicable, evidencing eligibility for that
reduced rate; |
| · | the non-U.S. stockholder provides us with an IRS Form W-8ECI
claiming that the distribution is effectively connected with the conduct of a U.S. trade
or business; or |
| · | the distribution is treated as attributable to a sale of a USRPI
under the Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”) (discussed
below). |
A non-U.S. stockholder will not incur U.S. tax
on a distribution in excess of our current and accumulated earnings and profits if the excess portion of such distribution does not exceed
the adjusted basis of its stock. Instead, the excess portion of such distribution will reduce the adjusted basis of the non-U.S. stockholder
in such shares. A non-U.S. stockholder will be subject to tax on a distribution that exceeds both our current and accumulated earnings
and profits and the adjusted basis of its stock, if the non-U.S. stockholder otherwise would be subject to tax on gain from the sale
or disposition of its stock, as described below. We must withhold 15% of any distribution that exceeds our current and accumulated earnings
and profits. Consequently, although we intend to withhold at a rate of 30% on the entire amount of any distribution, to the extent that
we do not do so, we will withhold at a rate of 15% on any portion of a distribution not subject to withholding at a rate of 30%. Because
we generally cannot determine at the time we make a distribution whether the distribution will exceed our current and accumulated earnings
and profits, we normally will withhold tax on the entire amount of any distribution at the same rate as we would withhold on a dividend.
However, by filing a U.S. tax return, a non-U.S. stockholder may claim a refund of amounts that we withhold if we later determine that
a distribution in fact exceeded our current and accumulated earnings and profits.
For any year in which we qualify as a REIT, a
non-U.S. stockholder may incur tax on distributions that are attributable to gain from our sale or exchange of a USRPI under FIRPTA.
A USRPI includes certain interests in real property and shares in corporations at least 50% of whose assets consist of interests in real
property. Under FIRPTA, subject to the exceptions discussed below for (1) distributions on a class of shares that is regularly traded
on an established securities market to a less-than-10% holder of such shares and (2) distributions to “qualified shareholders”
and a “qualified foreign pension funds,” a non-U.S. stockholder is taxed on distributions attributable to gain from sales
of USRPIs as if such gain were effectively connected with a U.S. business of the non-U.S. stockholder. A non-U.S. stockholder thus would
be taxed on such a distribution at the normal capital gains rates applicable to U.S. stockholders, subject to applicable alternative
minimum tax and a special alternative minimum tax in the case of a nonresident alien individual. A non-U.S. corporate stockholder not
entitled to treaty relief or exemption also may be subject to the 30% branch profits tax on such a distribution. Unless the exception
described in the next paragraph applies, we must withhold 21% of any distribution that we could designate as a capital gain dividend.
A non-U.S. stockholder may receive a credit against its tax liability for the amount we withhold.
However, if the applicable class of our stock
is regularly traded on an established securities market in the United States, capital gain distributions on such class of stock that
are attributable to our sale of a USRPI will be treated as ordinary dividends rather than as gain from the sale of a USRPI, as long as
the non-U.S. stockholder did not own more than 10% of the applicable class of our stock at any time during the one-year period preceding
the distribution or the non-U.S. stockholder was treated as a “qualified shareholder” and “qualified foreign pension
fund.” In such a case, non-U.S. stockholders generally will be subject to withholding tax on such capital gain distributions in
the same manner as they are subject to withholding tax on ordinary dividends. We believe that our common stock is regularly traded on
an established securities market in the United States. If our common stock is not regularly traded on an established securities market
in the United States, capital gain distributions that are attributable to our sale of USRPIs will be subject to tax under FIRPTA, as
described above. In that case, we must withhold 21% of any distribution that we could designate as a capital gain dividend. A non-U.S.
stockholder may receive a credit against its tax liability for the amount we withhold.
Moreover, if a non-U.S. stockholder disposes
of our common stock during the 30-day period preceding a dividend payment, and such non-U.S. stockholder (or a person related to such
non-U.S. stockholder) acquires or enters into a contract or option to acquire our common stock within 61 days of the first day of the
30-day period described above, and any portion of such dividend payment would, but for the disposition, be treated as a USRPI capital
gain to such non-U.S. stockholder, then such non-U.S. stockholder will be treated as having USRPI capital gain in an amount that, but
for the disposition, would have been treated as USRPI capital gain.
Qualified Shareholders. Subject to the
exception discussed below, any distribution to a “qualified shareholder” who holds our stock directly or indirectly (through
one or more partnerships) will not be subject to U.S. federal income tax as income effectively connected with a U.S. trade or business,
and thus will not be subject to FIRPTA withholding as described above. However, while a “qualified shareholder” will not
be subject to FIRPTA withholding on our distributions, non-U.S. persons who hold interests in the “qualified shareholder”
(other than interests solely as a creditor) and hold more than 10% of our stock, either through the “qualified shareholder”
or otherwise, will still be subject to FIRPTA withholding.
A “qualified shareholder” is a foreign
person that (1) either is eligible for the benefits of a comprehensive income tax treaty that includes an exchange of information
program and whose principal class of interests is listed and regularly traded on one or more recognized stock exchanges (as defined in
such income tax treaty), or is a foreign partnership that is created or organized under foreign law as a limited partnership in a jurisdiction
that has an agreement for the exchange of information with respect to taxes with the United States and has a class of limited partnership
units that represents more than 50% of the value of all of the partnership’s units and is regularly traded on the NYSE or NASDAQ
markets, (2) is a “qualified collective investment vehicle” (as defined below), and (3) maintains records of the
identity of each person who, at any time during the foreign person’s taxable year, is the direct owner of 5% or more of the class
of interests or units (as applicable) described in (1), above.
A “qualified collective investment vehicle”
is a foreign person that (1) would be eligible for a reduced rate of withholding under the comprehensive income tax treaty described
above, even if such entity owns more than 10% of the stock of the REIT, (2) is publicly traded, is treated as a partnership under
the Code, is a withholding foreign partnership, and would be treated as “United States real property holding corporation”
under FIRPTA if it were a domestic corporation, or (3) is designated as such by the Secretary of the Treasury and is either (a) “fiscally
transparent” within the meaning of Section 894 of the Code or (b) required to include dividends in its gross income,
but is entitled to a deduction for distributions to its investors.
Qualified Foreign Pension Funds. Any distribution
to a “qualified foreign pension fund” or an entity all of the interests of which are held by a “qualified foreign pension
fund” who holds our stock directly or indirectly (through one or more partnerships) will not be subject to U.S. federal income
tax as income effectively connected with the a U.S. trade or business, and thus will not be subject to FIRPTA withholding as described
above.
A “qualified foreign pension fund”
is any trust, corporation, or other organization or arrangement (1) which is created or organized under the laws of a country other
than the United States, (2) which is established to provide retirement or pension benefits to participants or beneficiaries that
are current or former employees (or persons designated by such employees) of one or more employers in consideration for services rendered,
(3) which does not have a single participant or beneficiary with a right to more than 5% of its assets or income, (4) which
is subject to government regulation and provides annual information reporting about its beneficiaries to the relevant tax authorities
in the country in which it is established or operates, and (5) with respect to which, under the laws of the country in which it
is established or operates, (a) contributions to such organization or arrangement that would otherwise be subject to tax under such
laws are deductible or excluded from the gross income of such entity or taxed at a reduced rate or (b) taxation of any investment
income of such organization or arrangement is deferred or such income is taxed at a reduced rate.
FATCA. Under the Foreign Account Tax Compliance
Act (“FATCA”), a U.S. withholding tax at a 30% rate will be imposed on dividends paid to certain non-U.S. stockholders if
certain disclosure requirements related to U.S. accounts or ownership are not satisfied. If payment of withholding taxes is required,
non-U.S. stockholders that are otherwise eligible for an exemption from, or reduction of, U.S. withholding taxes with respect to such
dividends will be required to seek a refund from the IRS to obtain the benefit of such exemption or reduction. We will not pay any additional
amounts in respect of any amounts withheld.
Dispositions
Subject to the discussion below regarding dispositions
by “qualified shareholders” and “qualified foreign pension funds,” non-U.S. stockholders could incur tax under
FIRPTA with respect to gain realized upon a disposition of our stock if we are a United States real property holding corporation (“USRPHC”)
during a specified testing period. If at least 50% of a REIT’s assets are USRPIs, then the REIT will be a USRPHC. We believe that
we are a USRPHC based on our investment strategy. However, even if we are a USRPHC, a non-U.S. stockholder generally would not incur
tax under FIRPTA on gain from the sale of our stock if we are a “domestically controlled qualified investment entity.”
A “domestically controlled qualified investment
entity” includes a REIT in which, at all times during a specified testing period, less than 50% in value of its shares are held
directly or indirectly by non-U.S. stockholders. We cannot assure you that this test has been or will be met.
If the applicable class of our stock is regularly
traded on an established securities market, an additional exception to the tax under FIRPTA will be available with respect to a non-U.S.
stockholder’s disposition of such stock, even if we do not qualify as a domestically controlled qualified investment entity at
the time the non-U.S. stockholder sells such stock. Under this additional exception, the gain from such a sale by a non-U.S. stockholder
will not be subject to tax under FIRPTA if (1) the applicable class of our stock is treated as being regularly traded on an established
securities market under applicable Treasury Regulations and (2) the non-U.S. stockholder owned, actually or constructively, 10%
or less of that class of stock at all times during a specified testing period. We believe that our common stock is regularly traded on
an established securities market.
In addition, a sale of our stock by a “qualified
shareholder” or a “qualified foreign pension fund” who holds our stock directly or indirectly (through one or more
partnerships) will not be subject to U.S. federal income tax under FIRPTA. However, while a “qualified shareholder” will
not be subject to FIRPTA withholding on a sale of our stock, non-United States persons who hold interests in the “qualified shareholder”
(other than interests solely as a creditor) and hold more than 10% of our stock, either through the “qualified shareholder”
or otherwise, will still be subject to FIRPTA withholding.
If the gain on the sale of our stock were taxed
under FIRPTA, a non-U.S. stockholder would be taxed on that gain in the same manner as U.S. stockholders, subject to applicable alternative
minimum tax and a special alternative minimum tax in the case of nonresident alien individuals. In addition, distributions that are subject
to tax under FIRPTA also may be subject to a 30% branch profits tax when made to a non-U.S. stockholder treated as a corporation (under
U.S. federal income tax principles) that is not otherwise entitled to treaty exemption. Finally, if we are not a domestically controlled
qualified investment entity at the time our shares of stock are sold and the non-U.S. stockholder does not qualify for the exemptions
described in the preceding paragraph, under FIRPTA the purchaser of our stock also may be required to withhold 15% of the purchase price
and remit this amount to the IRS on behalf of the selling non-U.S. stockholder.
With respect to individual non-U.S. stockholders,
even if not subject to FIRPTA, capital gains recognized from the sale of our stock will be taxable to such non-U.S. stockholder if (1) the
gain is effectively connected with a U.S. trade or business of the non-U.S. stockholder, in which case the non-U.S. stockholder will
be subject to the same treatment as U.S. stockholders with respect to such gain, or (2) he or she is a non-resident alien individual
who is present in the United States for 183 days or more during the taxable year and some other conditions apply, in which case the non-resident
alien individual may be subject to a U.S. federal income tax on his or her U.S. source capital gain.
Information Reporting Requirements and Withholding
We will report to our stockholders and to the
IRS the amount of distributions we pay during each calendar year, and the amount of tax we withhold, if any. Under the backup withholding
rules, a stockholder may be subject to backup withholding at a rate of 24% with respect to distributions unless the stockholder:
| · | is a corporation or qualifies for certain other exempt categories
and, when required, demonstrates this fact; or |
| · | provides a taxpayer identification number, certifies as to no
loss of exemption from backup withholding, and otherwise complies with the applicable requirements
of the backup withholding rules. |
A stockholder who does not provide us with its
correct taxpayer identification number also may be subject to penalties imposed by the IRS. Any amount paid as backup withholding will
be creditable against the stockholder’s U.S. federal income tax liability. In addition, we may be required to withhold a portion
of capital gain distributions to any stockholders who fail to certify their non-foreign status to us.
Backup withholding will generally not apply to
payments of dividends made by us or our paying agents, in their capacities as such, to a non-U.S. stockholder provided that the non-U.S.
stockholder furnishes to us or our paying agent the required certification as to its non-U.S. status, such as providing a valid IRS Form W-8BEN,
W-8BEN-E or W-8ECI, or certain other requirements are met. Notwithstanding the foregoing, backup withholding may apply if either we or
our paying agent has actual knowledge, or reason to know, that the holder is a United States person that is not an exempt recipient.
Payments of the proceeds from a disposition or a redemption effected outside the United States by a non-U.S. stockholder made by or through
a foreign office of a broker generally will not be subject to information reporting or backup withholding. However, information reporting
(but not backup withholding) generally will apply to such a payment if the broker has certain connections with the United States unless
the broker has documentary evidence in its records that the beneficial owner is a non-U.S. stockholder and specified conditions are met
or an exemption is otherwise established. Payment of the proceeds from a disposition by a non-U.S. stockholder of stock made by or through
the U.S. office of a broker is generally subject to information reporting and backup withholding unless the non-U.S. stockholder certifies
under penalties of perjury that it is not a United States person and satisfies certain other requirements, or otherwise establishes an
exemption from information reporting and backup withholding.
Backup withholding is not an additional tax.
Any amounts withheld under the backup withholding rules may be refunded or credited against the stockholder’s U.S. federal
income tax liability if certain required information is furnished to the IRS. Stockholders should consult their tax advisors regarding
application of backup withholding to them and the availability of, and procedure for obtaining an exemption from, backup withholding.
Under FATCA, a U.S. withholding tax at a 30%
rate will be imposed on dividends paid to U.S. stockholders who own our shares of stock through foreign accounts or foreign intermediaries
if certain disclosure requirements related to U.S. accounts or ownership are not satisfied. We will not pay any additional amounts in
respect of amounts withheld.
Other Tax Consequences
Tax Aspects of Our Investments in Our Operating Partnership and
Subsidiary Partnerships
The following discussion summarizes certain U.S.
federal income tax considerations applicable to our direct or indirect investments in our Operating Partnership and any subsidiary partnerships
or limited liability companies that we form or acquire (each individually a “Partnership” and, collectively, the “Partnerships”).
The discussion does not cover state or local tax laws or any U.S. federal tax laws other than income tax laws.
Classification as Partnerships. We will
include in our income our distributive share of each Partnership’s income and deduct our distributive share of each Partnership’s
losses only if such Partnership is classified for U.S. federal income tax purposes as a partnership (or an entity that is disregarded
for U.S. federal income tax purposes if the entity is treated as having only one owner for U.S. federal income tax purposes) rather than
as a corporation or an association taxable as a corporation. An unincorporated entity with at least two owners or members will be classified
as a partnership, rather than as a corporation, for U.S. federal income tax purposes if it:
| · | is treated as a partnership under the Treasury Regulations relating
to entity classification (the “Check-the-Box Regulations”); and |
| · | is not a “publicly traded partnership.” |
Under the Check-the-Box Regulations, an unincorporated
entity with at least two owners or members may elect to be classified either as an association taxable as a corporation or as a partnership.
If such an entity does not make an election, it will generally be treated as a partnership (or an entity that is disregarded for U.S.
federal income tax purposes if the entity is treated as having only one owner or member for U.S. federal income tax purposes) for U.S.
federal income tax purposes. Our Operating Partnership intends to be classified as a partnership for U.S. federal income tax purposes
and will not elect to be treated as an association taxable as a corporation under the Check-the-Box Regulations.
A publicly traded partnership is a partnership
whose interests are traded on an established securities market or are readily tradable on a secondary market or the substantial equivalent
thereof. A publicly traded partnership will not, however, be treated as a corporation for any taxable year if, for each taxable year
beginning after December 31, 1987 in which it was classified as a publicly traded partnership, 90% or more of the partnership’s
gross income for such year consists of certain passive-type income, including real property rents, gains from the sale or other disposition
of real property, interest, and dividends. Treasury Regulations provide limited safe harbors from the definition of a publicly traded
partnership. Pursuant to one of those safe harbors (the “Private Placement Exclusion”), interests in a partnership will not
be treated as readily tradable on a secondary market or the substantial equivalent thereof if (1) all interests in the partnership
were issued in a transaction or transactions that were not required to be registered under the Securities Act of 1933, as amended, and
(2) the partnership does not have more than 100 partners at any time during the partnership’s taxable year. In determining
the number of partners in a partnership, a person owning an interest in a partnership, grantor trust, or S corporation that owns an interest
in the partnership is treated as a partner in such partnership only if (1) substantially all of the value of the owner’s interest
in the entity is attributable to the entity’s direct or indirect interest in the partnership and (2) a principal purpose of
the use of the entity is to permit the partnership to satisfy the 100-partner limitation. We believe that our Operating Partnership and
each other Partnership in which we own an interest qualifies for the Private Placement Exclusion.
We have not requested, and do not intend to request,
a ruling from the IRS that our Operating Partnership will be classified as a partnership for U.S. federal income tax purposes. If for
any reason our Operating Partnership were taxable as a corporation, rather than as a partnership, for U.S. federal income tax purposes,
we likely would not be able to qualify as a REIT unless we qualified for certain relief provisions. See “—Gross Income Tests”
and “—Asset Tests.” In addition, any change in a Partnership’s status for U.S. federal income tax purposes might
be treated as a taxable event, in which case we might incur tax liability without any related cash distribution. Further, items of income
and deduction of such Partnership would not pass through to its partners, and its partners would be treated as stockholders for tax purposes.
Consequently, such Partnership would be required to pay U.S. federal income tax at corporate rates on its net income, and distributions
to its partners would constitute dividends that would not be deductible in computing such Partnership’s taxable income.
Income Taxation of the Partnerships and their Partners
Partners, Not the Partnerships, Subject to
Tax. A partnership is generally not a taxable entity for U.S. federal income tax purposes. Rather, we are required to take into account
our allocable share of each Partnership’s income, gains, losses, deductions, and credits for any taxable year of such Partnership
ending within or with our taxable year, without regard to whether we have received or will receive any distribution from such Partnership.
However, as discussed below, the tax liability for adjustments to a partnership’s tax returns made as a result of an audit by the
IRS will be imposed on the partnership itself in certain circumstances absent an election to the contrary.
Partnership Allocations. Although a partnership
agreement generally will determine the allocation of income and losses among partners, such allocations will be disregarded for tax purposes
if they do not comply with the provisions of the U.S. federal income tax laws governing partnership allocations. If an allocation is
not recognized for U.S. federal income tax purposes, the item subject to the allocation will be reallocated in accordance with the partners’
interests in the partnership, which will be determined by taking into account all of the facts and circumstances relating to the economic
arrangement of the partners with respect to such item. Each Partnership’s allocations of taxable income, gain, and loss are intended
to comply with the requirements of the U.S. federal income tax laws governing partnership allocations.
Tax Allocations with Respect to Partnership
Properties. Income, gain, loss, and deduction attributable to appreciated or depreciated property that is contributed to a partnership
in exchange for an interest in the partnership must be allocated in a manner such that the contributing partner is charged with, or benefits
from, respectively, the unrealized gain or unrealized loss associated with the property at the time of the contribution (the “704(c) Allocations”).
The amount of the unrealized gain or unrealized loss (“Built-in Gain” or “Built-in Loss”) is generally equal
to the difference between the fair market value of the contributed property at the time of contribution and the adjusted tax basis of
such property at the time of contribution (a “Book-Tax Difference”). Any property purchased for cash initially will have
an adjusted tax basis equal to its fair market value, resulting in no Book-Tax Difference. A book-tax difference generally is decreased
on an annual basis as a result of depreciation deductions to the contributing partner for book purposes but not for tax purposes. The
704(c) Allocations are solely for U.S. federal income tax purposes and do not affect the book capital accounts or other economic
or legal arrangements among the partners. In the future, our Operating Partnership may acquire property that may have a Built-in Gain
or a Built-in Loss in exchange for OP Units. Our Operating Partnership will have a carryover, rather than a fair market value, adjusted
tax basis in such contributed assets equal to the adjusted tax basis of the contributors in such assets, resulting in a Book-Tax Difference.
As a result of that Book-Tax Difference, we will have a lower adjusted tax basis with respect to that portion of our Operating Partnership’s
assets than we would have with respect to assets having a tax basis equal to fair market value at the time of acquisition. This could
result in lower depreciation deductions with respect to the portion of our Operating Partnership’s assets attributable to such
contributions.
The U.S. Treasury Department has issued regulations
requiring partnerships to use a “reasonable method” for allocating items with respect to which there is a Book-Tax Difference
and outlining several reasonable allocation methods. Under certain available methods, the carryover basis of contributed properties in
the hands of our Operating Partnership (1) could cause us to be allocated lower amounts of depreciation deductions for U.S. federal
income tax purposes than would be allocated to us if all contributed properties were to have a tax basis equal to their fair market value
at the time of the contribution and (2) in the event of a sale of such properties, could cause us to be allocated taxable gain in
excess of the economic or book gain allocated to us as a result of such sale, with a corresponding benefit to the contributing partners.
An allocation described in (2) above might cause us to recognize taxable income in excess of cash proceeds in the event of a sale
or other disposition of property, which may adversely affect our ability to comply with the REIT distribution requirements and may result
in a greater portion of our distributions being taxed as dividends. We have not yet decided what method our Operating Partnership will
use to account for Book-Tax Differences.
Sale of a Partnership’s Property
Generally, any gain realized by a Partnership
on the sale of property held by the Partnership for more than one year will be long-term capital gain, except for any portion of such
gain that is treated as depreciation or cost recovery recapture. Under Section 704(c) of the Code, any gain or loss recognized
by a Partnership on the disposition of contributed properties will be allocated first to the partners of the Partnership who contributed
such properties to the extent of their Built-in Gain or Built-in Loss on those properties for U.S. federal income tax purposes. The partners’
Built-in Gain or Built-in Loss on such contributed properties will equal the difference between the partners’ proportionate share
of the book value of those properties and the partners’ tax basis allocable to those properties at the time of the contribution
as reduced for any decrease in the Book-Tax Difference.” See “—Income Taxation of the Partnerships and their Partners—Tax
Allocations with Respect to Partnership Properties.” Any remaining gain or loss recognized by the Partnership on the disposition
of the contributed properties, and any gain or loss recognized by the Partnership on the disposition of the other properties, will be
allocated among the partners in accordance with their respective percentage interests in the Partnership.
Our share of any gain realized by a Partnership
on the sale of any property held by the Partnership as inventory or other property held primarily for sale to customers in the ordinary
course of the Partnership’s trade or business will be treated as income from a prohibited transaction that is subject to a 100%
penalty tax. Such prohibited transaction income may have an adverse effect upon our ability to satisfy the income tests for REIT status.
See “—Gross Income Tests.” We do not presently intend to acquire or hold or to allow any Partnership to acquire or
hold any property that represents inventory or other property held primarily for sale to customers in the ordinary course of our or such
Partnership’s trade or business.
Partnership Audit Rules
Under the rules applicable to U.S. federal
income tax audits of partnerships, any audit adjustment to items of income, gain, loss, deduction or credit of a partnership (and any
partner’s distributive share thereof) is determined, and taxes, interest or penalties attributable thereto are assessed and collected,
at the partnership level. The partnership itself may be liable for a hypothetical increase in partner-level taxes (including interest
and penalties) resulting from an adjustment of “partnership-related items” on the audit (the “imputed adjustment amount”),
regardless of changes in the composition of the partners (or their relative ownership) between the year under audit and the year of the
adjustment (and thus potentially causing the partners at the time of the audit adjustment to bear taxes attributable to former partners).
The rules also include an elective alternative method under which the additional taxes resulting from the adjustment are assessed
against the affected partners (often referred to as a “push-out election”), subject to a higher rate of interest than otherwise
would apply. These partnership audit rules could increase the U.S. federal income tax, interest, and/or penalties otherwise borne
by us in the event of a U.S. federal income tax audit of any of the Partnerships. Investors are urged to consult their tax advisors with
respect to these changes and their potential impact on their investment in our securities.
Legislative or Other Actions Affecting REITs
The present U.S. federal income tax treatment
of REITs may be modified, possibly with retroactive effect, by legislative, judicial or administrative action at any time, which could
affect the U.S. federal income tax treatment of an investment in us. The REIT rules are constantly under review by persons involved
in the legislative process and by the IRS and the U.S. Treasury Department, which may result in statutory changes as well as revisions
to regulations and interpretations. Additionally, several of the tax considerations described herein are currently under review and are
subject to change. Prospective securityholders are urged to consult their tax advisors regarding the effect of potential changes to the
U.S. federal tax laws on an investment in our securities.
State and Local Taxes
We and/or our securityholders may be subject
to taxation by various states and localities, including those in which we or a securityholder transacts business, owns property or resides.
The state and local tax treatment may differ from the U.S. federal income tax treatment described above. Consequently, prospective securityholders
should consult their tax advisors regarding the effect of state and local tax laws upon an investment in our securities.
Legal
Matters
Certain legal matters in connection with the
offering of securities covered by this prospectus will be passed upon for us by Vinson & Elkins L.L.P. and, with respect to
certain matters of Maryland law, Venable LLP.
Experts
The consolidated financial statements, and the
related financial statement schedule, of the Company as of December 31, 2022 and 2021, and for each of the three years in the period
ended December 31, 2022, incorporated by reference in this Prospectus by reference to the Company’s annual report on Form 10-K
for the year ended December 31, 2022, and the effectiveness of the Company’s internal control over financial reporting have
been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their reports. Such financial
statements and financial statement schedule have been so incorporated in reliance upon the reports of such firm given upon their authority
as experts in accounting and auditing.
Common Stock
Preferred Stock
Debt Securities
PROSPECTUS
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
| Item 14. | Other Expenses of Issuance and Distribution. |
The following table itemizes the expenses incurred
by us in connection with the issuance and registration of the securities being registered hereunder.
| SEC registration fee | |
$ | ** | |
| Printing fees | |
| * | |
| Legal fees and expenses | |
| * | |
| Accountants’ fees and expenses | |
| * | |
| Miscellaneous | |
| * | |
| Total | |
$ | * | |
| * | The amounts of such fees and expenses are based on the securities offered and the number of issuances and accordingly are
presently unknown. An estimate of the aggregate amount of these fees and expenses will be reflected in the applicable prospectus
supplement. |
| ** | In accordance with Rules 456(b) and 457(r) under the Securities Act, we are deferring payment of any filing fees applicable in connection
with the sale of securities pursuant to this registration statement, except for $62,741 of unutilized fees relating to $483,365,010 of
unsold securities previously registered under the Registration Statement on Form S-3 (File No. 333-239043) filed with the SEC on June
9, 2020 and declared effective on June 17, 2020 (the “Prior Registration Statement”). Pursuant to Rule 457(p) under the Securities
Act, such unutilized filing fees may be applied to the filing fees payable pursuant to this registration statement, and the Prior Registration
Statement and the offering of the unsold securities registered under the Prior Registration Statement will be deemed terminated as of
the filing/effective date of this registration statement. |
| Item 15. | Indemnification of Directors and Officers. |
The MGCL permits a Maryland corporation to include
in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders for money damages,
except for liability resulting from (1) actual receipt of an improper benefit or profit in money, property or services or (2) active
and deliberate dishonesty that is established by a final judgment and is material to the cause of action. Our charter contains a provision
that eliminates such liability to the maximum extent permitted by Maryland law.
The MGCL requires a corporation (unless its charter
provides otherwise, which our charter does not) to indemnify a director or officer who has been successful, on the merits or otherwise,
in the defense of any proceeding to which he or she is made, or threatened to be made, a party by reason of his or her service in that
capacity. The MGCL permits a corporation to indemnify its present and former directors and officers, among others, against judgments,
penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be
made, or threatened to be made, a party by reason of their service in those or other capacities unless it is established that:
| · | the act or omission of the director or officer was material to
the matter giving rise to the proceeding and (1) was committed in bad faith or (2) was
the result of active and deliberate dishonesty; |
| · | the director or officer actually received an improper personal
benefit in money, property or services; or |
| · | in the case of any criminal proceeding, the director or officer
had reasonable cause to believe that the act or omission was unlawful. |
However, under the MGCL, a Maryland corporation
may not indemnify for an adverse judgment in a suit by or in the right of the corporation or for a judgment of liability on the basis
that personal benefit was improperly received, unless in either case a court orders indemnification if it determines that the director
or officer is fairly and reasonably entitled to indemnification, and then only for expenses. In addition, the MGCL permits a Maryland
corporation to advance reasonable expenses to a director or officer upon its receipt of:
| · | a written affirmation by the director or officer of his or her
good faith belief that he or she has met the standard of conduct necessary for indemnification
by the corporation; and |
| · | a written undertaking by the director or officer or on the director’s
or officer’s behalf to repay the amount paid or reimbursed by the corporation if it
is ultimately determined that the director or officer did not meet the standard of conduct. |
Our charter authorizes us, and our bylaws obligate
us, to the maximum extent permitted by Maryland law in effect from time to time, to indemnify and, without requiring a preliminary determination
of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of final disposition of such a proceeding
to:
| · | any present or former director or officer of our company who
is made, or threatened to be made, a party to, or witness in, the proceeding by reason of
his or her service in that capacity; or |
| · | any individual who, while a director or officer of our company
and at our request, serves or has served as a director, officer, partner, trustee, member
or manager of another corporation, real estate investment trust, limited liability company,
partnership, joint venture, trust, employee benefit plan or other enterprise and who is made,
or threatened to be made, a party to the proceeding by reason of his or her service in that
capacity. |
Our charter and bylaws also permit us to indemnify
and advance expenses to any individual who served our predecessor in any of the capacities described above and to any employee or agent
of our company or our predecessor.
We have entered into indemnification agreements
with each of our directors and executive officers that provide for indemnification and advance of expenses to the maximum extent permitted
by Maryland law.
Insofar as the foregoing provisions permit indemnification
of directors, officers or persons controlling us for liability arising under the Securities Act, we have been informed that in the opinion
of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
| Item 16. | Index to Exhibits. |
The following exhibits are filed as part of,
or incorporated by reference into, this registration statement on Form S-3:
| * | To be filed by amendment or incorporated by reference in connection with
the offering of a particular class or series of securities. |
| *** | Where applicable, to be incorporated by reference to a subsequent filing
in accordance with Section 305(b)(2) of the Trust Indenture Act of 1939, as amended. |
(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.
(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) above do not apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in 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) That,
for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(A) Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of
the date the filed prospectus was deemed part of and included in the registration statement; and
(B) Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of a 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 the 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 the registration statement relating
to the securities in the 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 the registration statement or made in a document incorporated or deemed incorporated by reference into
the 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 the registration statement or prospectus that was
part of the registration statement or made in any such document immediately prior to such effective date.
(5) 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:
(A) Any
preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(B) 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;
(C) 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
(D) 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 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 shall be deemed to be the initial bona fide
offering thereof.
(c) 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.
(d) The
undersigned registrant hereby further undertakes that:
(1) For
purposes of determining any liability under the Securities Act of 1933 the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant
to Rule 424(b)(1) or (4), or 497(h) under the Securities Act shall be deemed to be part of this registration statement
as of the time it was declared effective.
(2) For
the purposes of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus
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.
(e) The
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 (“Act”) in accordance with the rules and regulations
prescribed by the Commission under Section 305(b)(2) of the Act.
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it has met 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 Bethesda, State of Maryland, on December 22, 2023.
| |
GLOBAL MEDICAL REIT INC. |
| |
|
| |
|
| |
By: |
/s/ Jeffrey Busch |
| |
|
Jeffrey Busch |
| |
|
Chief Executive Officer (Principal Executive Officer) |
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each
person whose signature appears below constitutes and appoints each of Jeffrey Busch, Robert Kiernan and Jamie Barber with full power
to act without the other, as such person’s true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution,
for such person and in such person’s name, place and stead, in any and all capacities, to sign this registration statement and
any and all amendments thereto (including post-effective amendments) and any related registration statement filed pursuant to Rule 462(b) under
the Securities Act of 1933, as amended, and to file the same, with exhibits and schedules thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto each said attorney-in-fact and agent full power and authority to
do and perform each and every act and thing necessary or desirable to be done in and about the premises, as fully to all intents and
purposes as such person might or could do in person, hereby ratifying and confirming all that each said attorney-in-fact and agent or
such person’s substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities
Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
| Signature | |
Title | |
Date |
| | |
| |
|
| /s/ Jeffrey Busch | |
Chief Executive Officer and Director | |
December 22, 2023 |
| Jeffrey Busch | |
(Principal Executive Officer) | |
|
| | |
| |
|
| /s/ Robert Kiernan | |
Chief Financial Officer | |
December 22, 2023 |
| Robert Kiernan | |
(Principal Financial and Accounting Officer) | |
|
| | |
| |
|
| /s/ Henry Cole | |
Director | |
December 22, 2023 |
| Henry Cole | |
| |
|
| | |
| |
|
| /s/ Paula Crowley | |
Director | |
December 22, 2023 |
| Paula Crowley | |
| |
|
| | |
| |
|
| /s/ Matthew Cypher | |
Director | |
December 22, 2023 |
| Matthew Cypher | |
| |
|
| | |
| |
|
| /s/ Zhang Huiqi | |
Director | |
December 22, 2023 |
| Zhang Huiqi | |
| |
|
| | |
| |
|
| /s/ Ronald Marston | |
Director | |
December 22, 2023 |
| Ronald Marston | |
| |
|
| | |
| |
|
| /s/ Lori Wittman | |
Director | |
December 22, 2023 |
| Lori Wittman | |
| |
|
Exhibit 4.5
GLOBAL MEDICAL REIT INC.
TO
,
Trustee
Indenture
(For [Subordinated]* Debt Securities)
Dated as of ,
20
TABLE OF CONTENTS†
| |
|
|
Page |
| |
|
|
|
| RECITAL OF THE COMPANY |
|
1 |
| |
|
|
| Article I |
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION |
|
1 |
| Section 1.01. |
Definitions |
|
1 |
| Section 1.02. |
Compliance Certificates and Opinions |
|
8 |
| Section 1.03. |
Form of Documents Delivered to Trustee |
|
9 |
| Section 1.04. |
Acts of Holders |
|
10 |
| Section 1.05. |
Notices, Etc. to Trustee and Company |
|
11 |
| Section 1.06. |
Notice to Holders of Debt Securities; Waiver |
|
12 |
| Section 1.07. |
Conflict with Trust Indenture Act |
|
13 |
| Section 1.08. |
Effect of Headings and Table of Contents |
|
13 |
| Section 1.09. |
Successors and Assigns |
|
13 |
| Section 1.10. |
Separability Clause |
|
13 |
| Section 1.11. |
Benefits of Indenture |
|
13 |
| Section 1.12. |
Governing Law |
|
13 |
| Section 1.13. |
Legal Holidays |
|
14 |
| |
|
|
|
| Article II |
DEBT SECURITY FORMS |
|
14 |
| Section 2.01. |
Forms Generally |
|
14 |
| Section 2.02. |
Form of Trustee’s Certificate of Authentication |
|
15 |
| Section 2.03. |
Debt Securities Issuable in the Form of a Global Security |
|
15 |
| |
|
|
|
| Article III |
THE DEBT SECURITIES |
|
17 |
| Section 3.01. |
Amount Unlimited; Issuable in Series |
|
17 |
| Section 3.02. |
Denominations |
|
21 |
| Section 3.03. |
Execution, Authentication, Delivery and Dating |
|
21 |
| Section 3.04. |
Temporary Debt Securities |
|
24 |
| Section 3.05. |
Registration, Registration of Transfer and Exchange |
|
24 |
| Section 3.06. |
Mutilated, Destroyed, Lost and Stolen Debt Securities |
|
26 |
| Section 3.07. |
Payment of Interest and Additional Interest; Interest Rights Preserved |
|
26 |
| Section 3.08. |
Persons Deemed Owners |
|
28 |
† This table of contents shall not, for
any purpose, be deemed to be a part of the Indenture.
* Bracketed language will be inserted in the Indenture under which
subordinated Debt Securities will be issued.
| Section 3.09. |
Cancellation by Debt Security Registrar |
|
28 |
| Section 3.10. |
Computation of Interest |
|
28 |
| Section 3.11. |
Payment to be in Proper Currency |
|
29 |
| Section 3.12. |
[Extension of Interest Payment]* |
|
29 |
| |
|
|
|
| Article IV |
REDEMPTION OF DEBT SECURITIES |
|
29 |
| Section 4.01. |
Applicability of Article |
|
29 |
| Section 4.02. |
Election to Redeem; Notice to Trustee |
|
29 |
| Section 4.03. |
Selection of Debt Securities to be Redeemed |
|
30 |
| Section 4.04. |
Notice of Redemption |
|
30 |
| Section 4.05. |
Debt Securities Payable on Redemption Date |
|
32 |
| Section 4.06. |
Debt Securities Redeemed in Part |
|
32 |
| |
|
|
|
| Article V |
SINKING FUNDS |
|
32 |
| Section 5.01. |
Applicability of Article |
|
32 |
| Section 5.02. |
Satisfaction of Sinking Fund Payments with Debt Securities |
|
33 |
| Section 5.03. |
Redemption of Debt Securities for Sinking Fund |
|
33 |
| |
|
|
|
| Article VI |
COVENANTS |
|
34 |
| Section 6.01. |
Payment of Principal, Premium and Interest |
|
34 |
| Section 6.02. |
Maintenance of Office or Agency |
|
34 |
| Section 6.03. |
Money for Debt Securities Payments to be Held in Trust |
|
35 |
| Section 6.04. |
Corporate Existence |
|
36 |
| Section 6.05. |
Maintenance of Properties |
|
36 |
| Section 6.06. |
Annual Officer’s Certificate as to Compliance |
|
37 |
| Section 6.07. |
Waiver of Certain Covenants |
|
37 |
| |
|
|
|
| Article VII |
SATISFACTION AND DISCHARGE |
|
37 |
| Section 7.01. |
Satisfaction and Discharge of Debt Securities |
|
37 |
| Section 7.02. |
Satisfaction and Discharge of Indenture |
|
40 |
| Section 7.03. |
Application of Trust Money |
|
41 |
| |
|
|
|
| Article VIII |
EVENTS OF DEFAULT; REMEDIES |
|
41 |
| Section 8.01. |
Events of Default |
|
41 |
| Section 8.02. |
Acceleration of Maturity; Rescission and Annulment |
|
43 |
| Section 8.03. |
Collection of Indebtedness and Suits for Enforcement by Trustee |
|
44 |
† This table of contents shall not, for
any purpose, be deemed to be a part of the Indenture.
* Bracketed language will be inserted in the Indenture under which
subordinated Debt Securities will be issued.
| Section 8.04. |
Trustee May File Proofs of Claim |
|
45 |
| Section 8.05. |
Trustee May Enforce Claims without Possession of Debt Securities |
|
45 |
| Section 8.06. |
Application of Money Collected |
|
46 |
| Section 8.07. |
Limitation on Suits |
|
46 |
| Section 8.08. |
Unconditional Right of Holders to Receive Principal, Premium and Interest |
|
47 |
| Section 8.09. |
Restoration of Rights and Remedies |
|
47 |
| Section 8.10. |
Rights and Remedies Cumulative |
|
47 |
| Section 8.11. |
Delay or Omission Not Waiver |
|
47 |
| Section 8.12. |
Control by Holders of Debt Securities |
|
48 |
| Section 8.13. |
Waiver of Past Defaults |
|
48 |
| Section 8.14. |
Undertaking for Costs |
|
49 |
| Section 8.15. |
Waiver of Stay or Extension Laws |
|
49 |
| |
|
|
|
| Article IX |
THE TRUSTEE |
|
49 |
| Section 9.01. |
Certain Duties and Responsibilities |
|
49 |
| Section 9.02. |
Notice of Defaults |
|
51 |
| Section 9.03. |
Certain Rights of Trustee |
|
51 |
| Section 9.04. |
Not Responsible for Recitals or Issuance of Debt Securities |
|
52 |
| Section 9.05. |
May Hold Debt Securities |
|
52 |
| Section 9.06. |
Money Held in Trust |
|
52 |
| Section 9.07. |
Compensation and Reimbursement |
|
53 |
| Section 9.08. |
Disqualification; Conflicting Interests |
|
54 |
| Section 9.09. |
Corporate Trustee Required; Eligibility |
|
54 |
| Section 9.10. |
Resignation and Removal; Appointment of Successor |
|
54 |
| Section 9.11. |
Acceptance of Appointment by Successor |
|
56 |
| Section 9.12. |
Merger, Conversion, Consolidation or Succession to Business |
|
57 |
| Section 9.13. |
Preferential Collection of Claims Against Company |
|
58 |
| Section 9.14. |
Co-Trustees and Separate Trustees |
|
58 |
| Section 9.15. |
Appointment of Authenticating Agent |
|
59 |
| |
|
|
|
| Article X |
HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY |
|
61 |
| Section 10.01. |
Lists of Holders |
|
61 |
| Section 10.02. |
Reports by Trustee and Company |
|
62 |
† This table of contents shall not, for
any purpose, be deemed to be a part of the Indenture.
* Bracketed language will be inserted in the Indenture under which
subordinated Debt Securities will be issued.
| Article XI |
CONSOLIDATION, MERGER, CONVEYANCE OR OTHER TRANSFER |
|
62 |
| Section 11.01. |
Company May Consolidate, Etc., Only on Certain Terms |
|
62 |
| Section 11.02. |
Successor Corporation Substituted |
|
63 |
| |
|
|
|
| Article XII |
SUPPLEMENTAL INDENTURES |
|
63 |
| Section 12.01. |
Supplemental Indentures Without Consent of Holders |
|
63 |
| Section 12.02. |
Supplemental Indentures With Consent of Holders |
|
65 |
| Section 12.03. |
Execution of Supplemental Indentures |
|
67 |
| Section 12.04. |
Effect of Supplemental Indentures |
|
67 |
| Section 12.05. |
Conformity With Trust Indenture Act |
|
67 |
| Section 12.06. |
Reference in Debt Securities to Supplemental Indentures |
|
67 |
| Section 12.07. |
Modification without Supplemental Indenture |
|
67 |
| |
|
|
|
| Article XIII |
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING |
|
68 |
| Section 13.01. |
Purposes for which Meetings may be Called |
|
68 |
| Section 13.02. |
Call, Notice and Place of Meetings |
|
68 |
| Section 13.03. |
Persons Entitled to Vote at Meetings |
|
69 |
| Section 13.04. |
Quorum; Action |
|
69 |
| Section 13.05. |
Attendance at Meetings; Determination of Voting Rights; Conduct and Adjournment of Meetings |
|
70 |
| Section 13.06. |
Counting Votes and Recording Action of Meetings |
|
71 |
| Section 13.07. |
Action Without Meeting |
|
71 |
| |
|
|
|
| Article XIV |
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS |
|
71 |
| Section 14.01. |
Liability Solely Corporate |
|
71 |
| |
|
|
|
| Article XV |
[SUBORDINATION OF SECURITIES]* |
|
72 |
| Section 15.01. |
Securities Subordinate to Senior Indebtedness |
|
72 |
| Section 15.02. |
Payment Over of Proceeds of Securities |
|
72 |
| Section 15.03. |
Disputes with Holders of Certain Senior Indebtedness |
|
74 |
| Section 15.04. |
Subrogation |
|
75 |
| Section 15.05. |
Unconditional Obligation of the Company |
|
75 |
| Section 15.06. |
Priority of Senior Indebtedness Upon Maturity |
|
76 |
| Section 15.07. |
Trustee as Holder of Senior Indebtedness |
|
76 |
† This table of contents shall not, for
any purpose, be deemed to be a part of the Indenture.
* Bracketed language will be inserted in the Indenture under which
subordinated Debt Securities will be issued.
| Section 15.08. |
Notice to Trustee to Effectuate Subordination |
|
76 |
| Section 15.09. |
Modification, Extension, Etc. of Senior Indebtedness |
|
77 |
| Section 15.10. |
Trustee Has No Fiduciary Duty to Holders of Senior Indebtedness |
|
77 |
| Section 15.11. |
Paying Agents other than the Trustee |
|
77 |
| Section 15.12. |
Rights of Holders of Senior Indebtedness Not Impaired |
|
77 |
| Section 15.13. |
This Article Not To Prevent Events of Default |
|
77 |
| Section 15.14. |
Effect of Subordination Provisions; Termination |
|
78 |
† This table of contents shall not, for
any purpose, be deemed to be a part of the Indenture.
* Bracketed language will be inserted in the Indenture under which
subordinated Debt Securities will be issued.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE
ACT OF 1939
AND INDENTURE, DATED AS OF , 20
| Trust Indenture |
Indenture |
| Action Section |
Section |
| |
|
| §310 |
(a)(1) |
9.09 |
| |
(a)(2) |
9.09 |
| |
(a)(3) |
9.14 |
| |
(a)(4) |
Not Applicable |
| |
(b) |
9.08, 9.10 |
| §311 |
(a) |
9.13 |
| |
(b) |
9.13 |
| |
(c) |
9.13 |
| §312 |
(a) |
10.01 |
| |
(b) |
10.01 |
| |
(c) |
10.01 |
| §313 |
(a) |
10.02 |
| |
(b) |
10.02 |
| |
(c) |
10.02 |
| |
(d) |
10.02 |
| §314 |
(a) |
10.02 |
| |
(a)(4) |
6.06 |
| |
(b) |
Not Applicable |
| |
(c)(1) |
1.02 |
| |
(c)(2) |
1.02 |
| |
(c)(3) |
Not Applicable |
| |
(d) |
Not Applicable |
| |
(e) |
1.02 |
| §315 |
(a) |
9.01, 9.03 |
| |
(b) |
9.02 |
| |
(c) |
9.01 |
| |
(d) |
9.01 |
| |
(e) |
8.14 |
| §316 |
(a) |
8.12, 8.13 |
| |
(a)(1)(A) |
8.02, 8.12 |
| |
(a)(1)(B) |
813 |
| |
(a)(2) |
Not Applicable |
| |
(b) |
8.08 |
| |
(c) |
1.04(g) |
| §317 |
(a)(1) |
8.03 |
| |
(a)(2) |
8.04 |
| |
(b) |
6.03 |
| §318 |
(a) |
1.07 |
INDENTURE (FOR [SUBORDINATED]*
DEBT SECURITIES), dated as of , 20 , between GLOBAL MEDICAL
REIT INC., a corporation duly organized and existing under the laws of the State of Maryland (herein called the “Company”),
having its principal office at 7373 Wisconsin Avenue, Suite 800, Bethesda, MD 20814, and [TRUSTEE], a ,
having its principal corporate trust office at , as Trustee (herein
called the “Trustee”).
RECITAL 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 certain of its [subordinated]* debentures,
notes or other evidences of indebtedness (herein called the “Debt Securities”), in an unlimited aggregate principal
amount, to be issued in one or more series as contemplated herein; and all acts necessary to make this Indenture a valid agreement of
the Company have been performed.
For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise requires, capitalized terms used herein shall have the meanings
assigned to them in Article I of this Indenture.
NOW, THEREFORE, THIS INDENTURE
WITNESSETH:
For and in consideration of
the premises and the purchase of the Debt Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate
benefit of all Holders of the Debt Securities or of series thereof, as follows:
Article I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions.
For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the
terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;
(b) all
terms used herein without definition that are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) all
accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles
in the United States, 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 in the
United States at the date of such computation or, at the election of the Company from time to time, at the date of the execution and delivery
of this Indenture; provided, however, that in determining generally accepted accounting principles applicable to the Company, the
Company shall, to the extent required, conform to any order, rule or regulation of any administrative agency, regulatory authority
or other governmental body having jurisdiction over the Company; and
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
(d) 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.
Certain terms, used principally
in Article IX, are defined in that Article.
“Act” when used with respect
to any Holder of a Debt Security, has the meaning specified in Section 1.04.
“Additional Interest”
means the interest, if any, that shall accrue on any interest on the Debt Securities of any series, the payment of which has not been
made on the applicable Interest Payment Date and which shall accrue at the rate per annum specified or determined as specified in such
Debt Security.
“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 (other than the Company or an Affiliate of the Company) authorized by the Trustee pursuant to Section 9.15
to act on behalf of the Trustee to authenticate one or more series of Debt Securities or Tranche thereof.
“Authorized Officer” means
the Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, any Vice President, the Treasurer
or any other duly authorized officer of the Company.
“Board of Directors” means
either the board of directors of the Company or any committee thereof duly authorized to act or any director or directors and/or officer
or officers of the Company to whom that board or committee shall have duly delegated its authority in respect of matters relating to this
Indenture.
“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 a Place of Payment or any other particular location specified in the Debt Securities or this Indenture, means any day, other
than a Saturday or Sunday, which is not a day on which banking institutions or trust companies in such Place of Payment or other location
are generally authorized or required by law, regulation or executive order to remain closed, except as may be otherwise specified as contemplated
by Section 3.01.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
“Commission” means the Securities
and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the date of execution
and delivery of this Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body, if any, performing such duties at such time.
“Company” means the Person
named as the “Company” in the first paragraph of this Indenture 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 an Authorized Officer and delivered to the Trustee.
“Corporate Trust Office” means
the office of the Trustee at which at any particular time this Indenture shall be principally administered, which office at the date of
execution and delivery of this Indenture is located at .
“Corporation” means a real
estate investment trust, corporation, association, company, limited liability company, joint stock company or business trust.
“Debt Securities” has the meaning
stated in the first recital of this Indenture and more particularly means any securities authenticated and delivered under this Indenture.
“Debt Security Register” and
“Debt Security Registrar” have the respective meanings specified in Section 3.05.
“Defaulted Interest” has the
meaning specified in Section 3.07.
“Depositary” shall mean, with
respect to Debt Securities of any series, for which the Company shall determine that such Debt Securities will be issued as a Global Security,
The Depository Trust Company, New York, New York, another clearing agency or any successor registered as a clearing agency under the Exchange
Act or other applicable statute or regulation, which, in each case, shall be designated by the Company pursuant to Section 2.03(c).
“Discount Debt Security” means
any Debt Security that 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 8.02.
“Dollar” or “$”
means a dollar or other equivalent unit in such coin or currency of the United States as at the time shall be legal tender for the payment
of public and private debts.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
“Eligible Obligations” means:
(a) with
respect to Debt Securities denominated in Dollars, Government Obligations; or
(b) with
respect to Debt Securities denominated in a currency other than Dollars or in a composite currency, such other obligations or instruments
as shall be specified with respect to such Debt Securities, as contemplated by Section 3.01.
“Event of Default” has the
meaning specified in Section 8.01.
“Exchange Act” means the Securities
Exchange Act of 1934, as amended.
“Global Security” means, with
respect to the Debt Securities, a Debt Security executed by the Company and delivered by the Trustee to the Depositary or pursuant to
the Depositary’s instruction, all in accordance with this Indenture, which shall be registered in the name of the Depositary or
its nominee.
“Governmental Authority” means
the government of the United States or of any state or territory thereof or of the District of Columbia or of any county, municipality
or other political subdivision of any thereof, or any department, agency, authority or other instrumentality of any of the foregoing.
“Government Obligations” means:
(a) direct
obligations of, or obligations the timely payment of principal of and interest on which are unconditionally guaranteed by, the United
States entitled to the benefit of the full faith and credit thereof; and
(b) certificates,
depositary receipts or other instruments that evidence a direct ownership interest in obligations described in clause (a) above
or in any specific interest or principal payments due in respect thereof; provided, however, that the custodian of such obligations
or specific interest or principal payments shall be a bank or trust company (which may include the Trustee or any Paying Agent) subject
to federal or state supervision or examination with a combined capital and surplus of at least $100,000,000; and provided, further,
that except as may be otherwise required by law, such custodian shall be obligated to pay to the holders of such certificates, depositary
receipts or other instruments the full amount received by such custodian in respect of such obligations or specific payments and shall
not be permitted to make any deduction therefrom.
“Holder” means a Person in
whose name a Debt Security is registered in the Debt Security Register.
“Indenture” means this instrument
as originally executed and delivered and as it may from time to time be supplemented or amended by one or more indentures or Officer’s
Certificates supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of particular series
of Debt Securities established as contemplated by Section 3.01.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
“Interest” with respect to
a Discount Debt Security means interest, if any, borne by such Debt Security at a Stated Interest Rate.
“Interest Payment Date,” when
used with respect to any Debt Security, means the Stated Maturity of an installment of interest on such Debt Security.
“Maturity,” when used with
respect to any Debt Security, means the date on which the principal of such Debt Security or an installment of principal becomes due and
payable as provided in such Debt Security or in this Indenture, whether at the Stated Maturity, by declaration of acceleration, upon call
for redemption or otherwise.
“Officer’s Certificate”
means a certificate signed by an Authorized Officer and delivered to the Trustee.
“Opinion of Counsel” means
a written opinion of counsel, who may be counsel for the Company, or other counsel acceptable to the Trustee.
“Outstanding,”
when used with respect to Debt Securities, means, as of the date of determination, all Debt Securities theretofore authenticated and
delivered under this Indenture, except:
(a) Debt
Securities theretofore canceled by the Trustee or the Debt Security Registrar or delivered to the Trustee or the Debt Security Registrar
for cancellation;
(b) Debt
Securities deemed to have been paid in accordance with Section 7.01; and
(c) Debt
Securities that have been paid pursuant to Section 3.06 or in exchange for or in lieu of which other Debt Securities
have been authenticated and delivered pursuant to this Indenture, other than any such Debt Securities in respect of which there shall
have been presented to the Trustee proof satisfactory to it and the Company that such Debt Securities are held by a bona fide purchaser
or purchasers in whose hands such Debt Securities are valid obligations of the Company;
provided, however, that in determining
whether or not the Holders of the requisite principal amount of the Debt Securities Outstanding under this Indenture, or the Outstanding
Debt Securities of any series or Tranche, have given any request, demand, authorization, direction, notice, consent or waiver hereunder
or whether or not a quorum is present at a meeting of Holders of Debt Securities,
(x) Debt Securities
owned by the Company or any other obligor upon the Debt Securities or any Affiliate of the Company or of such other obligor (unless the
Company, such Affiliate or such obligor owns all Debt Securities Outstanding under this Indenture, or all Outstanding Debt Securities
of each such series and each such Tranche, as the case may be, determined without regard to this clause (x)) 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 or waiver or upon any such determination as to the presence of a quorum, only Debt Securities
that the Trustee knows to be so owned shall be so disregarded; provided, however, that Debt Securities so owned that 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 Debt Securities and that the pledgee is not the Company or any other obligor upon the Debt Securities
or any Affiliate of the Company or of such other obligor; and
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
(y) the principal
amount of a Discount Debt Security that shall be deemed to be Outstanding for such purposes shall be the amount of the principal thereof
that would be due and payable as of the date of such determination upon a declaration of acceleration of the Maturity thereof pursuant
to Section 8.02;
provided, further, that, in the case of
any Debt Security the principal of which is payable from time to time without presentment or surrender, the principal amount of such Debt
Security that shall be deemed to be Outstanding at any time for all purposes of this Indenture shall be the original principal amount
thereof less the aggregate amount of principal thereof theretofore paid.
“Paying Agent” means any Person,
including the Company, authorized by the Company to pay the principal of and premium, if any, or interest (including Additional Interest),
if any, on any Debt Securities on behalf of the Company.
“Periodic Offering” means an
offering of Debt Securities of a series from time to time any or all of the specific terms of which Debt Securities, including without
limitation the rate or rates of interest (including Additional Interest), if any, thereon, the Stated Maturity or Maturities thereof and
the redemption provisions, if any, with respect thereto, are to be determined by the Company or its agents upon the issuance of such Debt
Securities.
“Person” means any individual,
Corporation, partnership, joint venture, trust or unincorporated organization or any Governmental Authority.
“Place of Payment,” when used
with respect to the Debt Securities of any series, or Tranche thereof, means the place or places, specified as contemplated by Section 3.01,
at which, subject to Section 6.02, principal of and premium, if any, and interest (including Additional Interest), if any,
on the Debt Securities of such series or Tranche are payable.
“Predecessor Debt Security”
of any particular Debt Security means every previous Debt Security evidencing all or a portion of the same debt as that evidenced by such
particular Debt Security; and, for the purposes of this definition, any Debt Security authenticated and delivered under Section 3.06
in exchange for or in lieu of a mutilated, destroyed, lost or stolen Debt Security shall be deemed (to the extent lawful) to evidence
the same debt as the mutilated, destroyed, lost or stolen Debt Security.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
“Redemption Date,” when used
with respect to any Debt 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 Debt 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 Debt Securities of any series means the date specified for that purpose as contemplated
by Section 3.01.
“Required Currency” has the
meaning specified in Section 3.11.
“Responsible Officer,” when
used with respect to the Trustee, means the officer of the Trustee at its Corporate Trust Office assigned by the Trustee to administer
this Indenture, and any other duly authorized officer of the Trustee to whom a matter arising under this Indenture may be referred.
[“Senior Indebtedness”
means all (i) obligations (other than non-recourse obligations and the indebtedness issued under this Indenture) of, or guaranteed
or assumed by, the Company for borrowed money, including both senior and subordinated indebtedness for borrowed money (other than the
Debt Securities), or for the payment of money relating to any lease that is capitalized on the consolidated balance sheet of the Company
and its subsidiaries in accordance with generally accepted accounting principles as in effect from time to time, (ii) indebtedness
evidenced by bonds, debentures, notes or other similar instruments, (iii) obligations with respect to letters of credit, bankers’
acceptances or similar facilities issued for the account of the Company, (iv) obligations issued or assumed as the deferred purchase
price of property or services, but excluding trade accounts payable or accrued liabilities arising in the ordinary course of business,
(v) obligations for claims, as defined in Section 101(5) of the United States Bankruptcy Code of 1978, as amended, in respect
of derivative products such as interest and foreign exchange rate contracts, commodity contracts and similar arrangements; and (vi) obligations
of the type referred to in each of the preceding clauses (i) through (v) of another Person, the payment of which the
Company has guaranteed or is responsible or liable for directly or indirectly, as obligor or otherwise; and in each case, amendments,
renewals, extensions, modifications and refundings of any such indebtedness or obligations, whether existing as of the date of this Indenture
or subsequently incurred by the Company.]*
“Special Record Date” for the
payment of any Defaulted Interest on the Debt Securities of any series means a date fixed by the Trustee pursuant to Section 3.07.
“Stated Interest Rate” means
a rate (whether fixed or variable) at which an obligation by its terms is stated to bear interest. Any calculation or other determination
to be made under this Indenture by reference to the Stated Interest Rate on a Debt Security shall be made without regard to the effective
interest cost to the Company of such Debt Security and without regard to the Stated Interest Rate on, or the effective cost to the Company
of, any other indebtedness in respect of which the Company’s obligations are evidenced or secured in whole or in part by such Debt
Security.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
“Stated Maturity,” when used
with respect to any obligation or any installment of principal thereof or interest thereon, means the date on which the principal of such
obligation or such installment of principal or interest is stated to be due and payable (without regard to any provisions for redemption,
prepayment, acceleration, purchase or extension).
“Tranche” means a group of
Debt Securities that (a) are of the same series and (b) have identical terms except as to principal amount.
“Trust Indenture Act” means
the Trust Indenture Act of 1939, as amended, as in force and effect as of the date of execution of this Indenture; provided, however,
that in the event the Trust Indenture Act of 1939 is succeeded by another statute or is amended after such date, “Trust Indenture
Act” shall mean such successor statute or the Trust Indenture Act of 1939, as so amended, to the extent such successor statute or
amendment is applicable to this Indenture or to the actions of the Company or the Trustee under or pursuant to this Indenture.
“Trustee” means the Person
named as the “Trustee” in the first paragraph of this Indenture until a successor Trustee shall have become such with
respect to one or more series of Debt Securities 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 Debt Securities of any series shall mean the Trustee with respect to Debt Securities of that series.
“United States” means the United
States of America, its territories, its possessions and other areas subject to its political jurisdiction.
Section 1.02. Compliance
Certificates and Opinions.
Except as otherwise expressly
provided in this Indenture, 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 an Officer’s Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request
as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application
or request, no additional certificate or opinion need be furnished.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Every certificate or opinion
with respect to compliance with a condition or covenant provided for in this Indenture shall include:
(a) a
statement that each Person signing such certificate or opinion has read such covenant or condition and the definitions herein relating
thereto;
(b) a
brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a
statement that, in the opinion of each such Person, such Person has made such examination or investigation as is necessary to enable such
Person to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(d) a
statement as to whether, in the opinion of each such Person, such condition or covenant has been complied with.
Section 1.03. 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 such officer’s certificate or opinion are 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.
Whenever, subsequent to the
receipt by the Trustee of any Board Resolution, Officer’s Certificate, Opinion of Counsel or other document or instrument, a clerical,
typographical or other inadvertent or unintentional error or omission shall be discovered therein, a new document or instrument may be
substituted therefor in corrected form with the same force and effect as if originally filed in the corrected form and, irrespective of
the date or dates of the actual execution and/or delivery thereof, such substitute document or instrument shall be deemed to have been
executed and/or delivered as of the date or dates required with respect to the document or instrument for which it is substituted. Anything
in this Indenture to the contrary notwithstanding, if any such corrective document or instrument indicates that action has been taken
by or at the request of the Company which could not have been taken had the original document or instrument not contained such error or
omission, the action so taken shall not be invalidated or otherwise rendered ineffective but shall be and remain in full force and effect
(except to the extent that such action was a result of willful misconduct or bad faith or had or could be expected to have a material
adverse effect on the Holders of any Debt Securities issued hereunder).
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Without limiting the generality
of the foregoing, any Debt Securities issued under the authority of such defective document or instrument shall nevertheless be the valid
obligations of the Company entitled to the benefits of this Indenture equally and ratably with all other Outstanding Debt Securities.
Section 1.04. Acts
of Holders.
(a) Any
request, demand, authorization, direction, notice, consent, election, waiver or other action provided by this Indenture to be made, given
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 an agent duly appointed in writing or, alternatively, may be embodied in and evidenced by the record of Holders voting
in favor thereof, either in person or by proxies duly appointed in writing, at any meeting of Holders duly called and held in accordance
with the provisions of Article XIII, or a combination of such instruments and any such record. Except as herein otherwise
expressly provided, such action shall become effective when such instrument or instruments or record or both are delivered to the Trustee
and, where it is hereby expressly required, to the Company. Such instrument or instruments and any such record (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument
or instruments and so voting at any such meeting. Proof of execution of any such instrument or of a writing appointing any such agent,
or of the holding by any Person of a Debt Security, shall be sufficient for any purpose of this Indenture and (subject to Section 9.01)
conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section. The record of any meeting of Holders
shall be proved in the manner provided in Section 13.06.
(b) 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 the execution thereof or may be proved in any other manner that the Trustee and
the Company deem sufficient. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate
or affidavit shall also constitute sufficient proof of his authority.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
(c) The
principal amount (except as otherwise contemplated in clause (y) of the proviso to the definition of Outstanding) and serial
numbers of Debt Securities held by any Person, and the date of holding the same, shall be proved by the Debt Security Register.
(d) Any
request, demand, authorization, direction, notice, consent, election, waiver or other Act of a Holder shall bind every future Holder of
the same Debt Security and the Holder of every Debt 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 Debt Security.
(e) Until
such time as written instruments shall have been delivered to the Trustee with respect to the requisite percentage of principal amount
of Debt Securities for the action contemplated by such instruments, any such instrument executed and delivered by or on behalf of a Holder
may be revoked with respect to any or all of such Debt Securities by written notice by such Holder or any subsequent Holder, proven in
the manner in which such instrument was proven.
(f) Debt
Securities of any series, or any Tranche thereof, authenticated and delivered after any Act of Holders may, and shall if required by the
Trustee, bear a notation in form approved by the Trustee as to any action taken by such Act of Holders. If the Company shall so determine,
new Debt Securities of any series, or any Tranche thereof, so modified as to conform, in the opinion of the Trustee and the Company, to
such action may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Debt
Securities of such series or Tranche.
(g) If
the Company shall solicit from Holders any request, demand, authorization, direction, notice, consent, waiver or other Act, the Company
may, at its option, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other Act, but the Company shall have no obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other Act may be given before or after such record date, but only
the Holders of record at the close of business on the record date shall be deemed to be Holders for the purposes of determining whether
Holders of the requisite proportion of the Outstanding Debt Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that purpose the Outstanding Debt Securities shall be computed
as of the record date.
Section 1.05. Notices,
Etc. to Trustee and Company.
Any request, demand, authorization,
direction, notice, consent, election, 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, the Trustee by any Holder or by the Company, or 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 delivered personally to an officer
or other responsible employee of the addressee, or transmitted by facsimile transmission or other direct written electronic means to such
telephone number or other electronic communications address as the parties hereto shall from time to time designate, or transmitted by
certified or registered mail, charges prepaid, to the applicable address set opposite such party’s name below or to such other address
as either party hereto may from time to time designate:
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
|
If to the Trustee, to:
[Trustee]
[Address]
Attention:
Telephone:
Facsimile: |
|
| |
|
|
If to the Company, to:
Global Medical REIT Inc.
7373 Wisconsin Avenue, Suite 800
Bethesda, MD 20814
Attention: Jeffrey Busch
Telephone: (202) 524-6851
Facsimile: (202) 380-0891
|
With a copy to:
Vinson & Elkins L.L.P.
Riverfront Plaza, West Tower
901 East Byrd Street, Suite 1500
Richmond, VA 23219
Attention: Daniel M. LeBey
Telephone: (804) 327-6310
Facsimile: (804) 479-8286 |
Any communication contemplated
herein shall be deemed to have been made, given, furnished and filed if personally delivered, on the date of delivery, if transmitted
by facsimile transmission or other direct written electronic means, upon date of receipt of the transmission, and if transmitted by certified
or registered mail, on the date of receipt.
Section 1.06. Notice
to Holders of Debt Securities; Waiver.
Except as otherwise expressly
provided herein, where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given, and shall
be deemed given, to Holders if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at the address
of such Holder as it appears in the Debt Security Register, not later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice.
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 to Holders by mail, then such notification
as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. 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.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Any notice required by this
Indenture may be waived in writing by the Person entitled to receive such notice, either before or after the event otherwise to be specified
therein, 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.
Section 1.07. Conflict
with Trust Indenture Act.
If any provision of this Indenture
limits, qualifies or conflicts with another provision hereof that is required or deemed to be included in this Indenture by, or is otherwise
governed by, any of the provisions of the Trust Indenture Act, such other provision shall control; and if any provision hereof otherwise
conflicts with the Trust Indenture Act, the Trust Indenture Act shall control.
Section 1.08. Effect
of Headings and Table of Contents.
The Article and Section headings
in this Indenture and the Table of Contents are for convenience only and shall not affect the construction hereof.
Section 1.09. 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 1.10. Separability
Clause.
In case any provision in this
Indenture or the Debt 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 1.11. Benefits
of Indenture.
Nothing in this Indenture
or the Debt Securities, express or implied, shall give to any Person, other than the parties hereto, their successors hereunder, the Holders,
[and so long as the notice described in Section 15.14 hereof has not been given, the holders of Senior Indebtedness,]*
any benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 1.12. Governing
Law.
This Indenture and the Debt
Securities shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of law
principles thereof, except to the extent that the law of any other jurisdiction shall be mandatorily applicable.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 1.13. Legal
Holidays.
In any case where any Interest
Payment Date, Redemption Date or Stated Maturity of any Debt Security shall not be a Business Day at any Place of Payment, then (notwithstanding
any other provision of this Indenture or of the Debt Securities other than a provision in Debt Securities of any series, or any Tranche
thereof, or in the indenture supplemental hereto, Board Resolution or Officer’s Certificate that establishes the terms of the Debt
Securities of such series or Tranche, 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, and, if such payment is made or duly provided for on such Business Day, no interest shall accrue on the amount so payable for
the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be, to such Business Day.
Article II
DEBT SECURITY FORMS
Section 2.01. Forms
Generally.
The definitive Debt Securities
of each series shall be in substantially the form or forms thereof established in the indenture supplemental hereto establishing such
series or in a Board Resolution establishing such series, or in an Officer’s Certificate pursuant to such supplemental indenture
or Board Resolution, 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 as may, consistently herewith, be determined by the officers
executing such Debt Securities, as evidenced by their execution of the Debt Securities. If the form or forms of Debt Securities of any
series are established in a Board Resolution or in an Officer’s Certificate pursuant to an indenture supplement hereto or to a Board
Resolution, such Board Resolution and Officer’s Certificate, if any, shall be delivered to the Trustee at or prior to the delivery
of the Company Order contemplated by Section 3.03 for the authentication and delivery of such Debt Securities.
Unless otherwise specified
as contemplated by Sections 3.01 or 12.01(g), the Debt Securities of each series shall be issuable in registered
form without coupons. The definitive Debt Securities shall be produced in such manner as shall be determined by the officers executing
such Debt Securities, as evidenced by their execution thereof.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 2.02. Form of
Trustee’s Certificate of Authentication.
The Trustee’s certificate
of authentication shall be in substantially the form set forth below:
This is one of the Debt Securities
of the series designated therein referred to in the within-mentioned Indenture.
Dated:
_____________________________, as Trustee
By:___________________________
Authorized Representative
Section 2.03. Debt
Securities Issuable in the Form of a Global Security.
(a) If
the Company shall establish pursuant to Section 3.01 that the Debt Securities of a particular series are to be issued
in whole or in part in the form of one or more Global Securities, then the Company shall execute and the Trustee shall, in accordance
with Section 3.03 and the Company Order delivered to the Trustee thereunder, authenticate and deliver such Global Security
or Securities, which (i) shall represent, and shall be denominated in an amount equal to the aggregate principal amount of the Outstanding
Debt Securities of such series to be represented by such Global Security or Securities, (ii) may provide that the aggregate amount
of Outstanding Debt Securities represented thereby may from time to time be increased or reduced to reflect exchanges, (iii) shall
be registered in the name of the Depositary for such Global Security or Securities or its nominee, (iv) shall be delivered by the
Trustee to the Depositary or pursuant to the Depositary’s instruction and (v) shall bear a legend in accordance with the requirements
of the Depositary. The Trustee shall enter into any agreement with the Depositary related to such Global Securities as the Company may
direct in such Company Order.
(b) Notwithstanding
any other provision of this Section or of Section 3.05, except as contemplated by the provisions of paragraph (c) below,
unless the terms of a Global Security expressly permit such Global Security to be exchanged in whole or in part for individual Debt Securities,
a Global Security may be transferred, in whole but not in part and in the manner provided in Section 3.05, only to a
nominee of the Depositary for such Global Security, or to the Depositary, or to a successor Depositary for such Global Security selected
or approved by the Company, or to a nominee of such successor Depositary.
(c) (1) If
at any time the Depositary for a Global Security notifies the Company that it is unwilling or unable to continue as the Depositary for
such Global Security or if at any time the Depositary for the Debt Securities for such series shall no longer be eligible or in good standing
under the Exchange Act, or other applicable statute or regulation, the Company shall appoint a successor Depositary with respect to such
Global Security. If a successor Depositary for such Global Security is not appointed by the Company within 90 days after the Company receives
such notice or becomes aware of such ineligibility, the Company will execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of Debt Securities of such series in the form of definitive certificates in exchange for such Global Security,
will authenticate and deliver Debt Securities of such series in the form of definitive certificates of like tenor and terms in an aggregate
principal amount equal to the principal amount of the Global Security in exchange for such Global Security. Such Debt Securities will
be issued to and registered in the name of such Person or Persons as are specified by the Depositary.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
(2) To
the extent legally permitted and subject to the rules and regulations of the acting Depositary, the Company may at any time and in
its sole discretion determine that the Debt Securities of any series issued or issuable in the form of one or more Global Securities shall
no longer be represented by such Global Security or Securities. In any such event the Company will execute, and the Trustee, upon receipt
of a Company Request for the authentication and delivery of Debt Securities in the form of definitive certificates in exchange in whole
or in part for such Global Security, will authenticate and deliver without service charge to each Person specified by the Depositary Debt
Securities in the form of definitive certificates of like tenor and terms in an aggregate principal amount equal to the principal amount
of such Global Security representing such series, or the aggregate principal amount of such Global Securities representing such series,
in exchange for such Global Security or Securities.
(3) If
specified by the Company pursuant to Section 3.01 with respect to Debt Securities issued or issuable in the form of a
Global Security, the Depositary for such Global Security may surrender such Global Security in exchange in whole or in part for Debt Securities
in the form of definitive certificates of like tenor and terms on such terms as are acceptable to the Company and such Depositary. Thereupon
the Company shall execute, and the Trustee shall authenticate and deliver, without service charge, (A) to each Person specified by
such Depositary a new Debt Security or Securities of the same series of like tenor and terms and any authorized denomination as requested
by such Person in an aggregate principal amount equal to and in exchange for such Person’s beneficial interest in the Global Security
and (B) to such Depositary a new Global Security of like tenor and terms and in an authorized denomination equal to the difference,
if any, between the principal amount of the surrendered Global Security and the aggregate principal amount of Debt Securities delivered
to Holders thereof.
(4) In
any exchange provided for in any of the preceding three subparagraphs, the Company shall execute and the Trustee shall authenticate and
deliver Debt Securities in the form of definitive certificates in authorized denominations. Upon the exchange of the entire principal
amount of a Global Security for Debt Securities in the form of definitive certificates, such Global Security shall be canceled by the
Trustee. Except as provided in the immediately preceding subparagraph, Debt Securities issued in exchange for a Global Security pursuant
to this Section shall be registered in such names and in such authorized denominations as the Depositary for such Global Security,
acting pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. Provided that the Company
and the Trustee have so agreed, the Trustee shall deliver such Debt Securities to the Persons in whose names the Debt Securities are so
to be registered.
(5) Any
endorsement of a Global Security to reflect the principal amount thereof, or any increase or decrease in such principal amount, or changes
in the rights of Holders of Outstanding Debt Securities represented thereby shall be made in such manner and by such Person or Persons
as shall be specified in or pursuant to any applicable letter of representations or other arrangement entered into with, or procedures
of, the Depositary with respect to such Global Security or in the Company Order delivered or to be delivered pursuant to Section 3.03
with respect thereto. Subject to the provisions of Section 3.03, the Trustee shall deliver and redeliver any such Global
Security in the manner and upon instructions given by the Person or Persons specified in or pursuant to any applicable letter of representations
or other arrangement entered into with, or procedures of, the Depositary with respect to such Global Security or in any applicable Company
Order. If a Company Order pursuant to Section 3.03 is so delivered, any instructions by the Company with respect to such
Global Security contained therein shall be in writing but need not be accompanied by or contained in an Officer’s Certificate and
need not be accompanied by an Opinion of Counsel.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
(6) The
Depositary or, if there be one, its nominee, shall be the Holder of a Global Security for all purposes under this Indenture; and beneficial
owners with respect to such Global Security shall hold their interests pursuant to applicable procedures of such Depositary. The Company,
the Trustee and the Debt Security Registrar shall be entitled to deal with such Depositary for all purposes of this Indenture relating
to such Global Security (including the payment of principal, premium, if any, and interest (including Additional Interest) and the giving
of instructions or directions by or to the beneficial owners of such Global Security as the sole Holder of such Global Security, and shall
have no obligations to the beneficial owners thereof (including any direct or indirect participants in such Depositary). None of the Company,
the Trustee, any Paying Agent or the Debt Security Registrar shall have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests of a Global Security in or pursuant to any applicable letter
of representations or other arrangement entered into with, or procedures of, the Depositary with respect to such Global Security or for
maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
Article III
THE DEBT SECURITIES
Section 3.01. Amount
Unlimited; Issuable in Series.
The aggregate principal amount
of Debt Securities that may be authenticated and delivered under this Indenture is unlimited.
The Debt Securities may be
issued in one or more series. Subject to the last paragraph of this Section, prior to the authentication and delivery of Debt Securities
of any series there shall be established by specification in a supplemental indenture or in a Board Resolution, or in an Officer’s
Certificate pursuant to a supplemental indenture or a Board Resolution:
(a) the
title of the Debt Securities of such series (which shall distinguish the Debt Securities of such series from Debt Securities of all other
series);
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
(b) any
limit upon the aggregate principal amount of the Debt Securities of such series that 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 Debt Securities
of the series pursuant to Section 3.04, 3.05, 3.06, 4.06 or 12.06 and,
except for any Debt Securities that, pursuant to Section 3.03, are deemed never to have been authenticated and delivered
hereunder);
(c) the
Person or Persons (without specific identification) to whom interest on Debt Securities of such series, or any Tranche thereof, shall
be payable on any Interest Payment Date, if other than the Persons in whose names such Debt Securities (or one or more Predecessor Debt
Securities) are registered at the close of business on the Regular Record Date for such interest;
(d) the
date or dates on which the principal of the Debt Securities of such series, or any Tranche thereof, is payable or any formulary or other
method or other means by which such date or dates shall be determined, by reference to an index or other fact or event ascertainable outside
of this Indenture or otherwise (without regard to any provisions for redemption, prepayment, acceleration, purchase or extension);
(e) the
rate or rates at which the Debt Securities of such series, or any Tranche thereof, shall bear interest, if any (including (i) the
rate or rates at which overdue principal shall bear interest, if different from the rate or rates at which such Debt Securities shall
bear interest prior to Maturity, (ii) and, if applicable, the rate or rates at which overdue premium shall bear interest, if any,
and (iii) the rate or rates and the extent to which Additional Interest, if any, shall be payable), the period or periods during
which such rate or rates shall be applicable, or any formulary or other method or other means by which such rate or rates, and any period
or periods, shall be determined, by reference to an index or other fact or event ascertainable outside of this Indenture or otherwise;
the date or dates from which such interest shall accrue; the Interest Payment Dates on which such interest shall be payable and the Regular
Record Date, if any, for the interest payable on such Debt Securities on any Interest Payment Date[; the right of the Company, if any,
to extend the interest payment periods and the duration of any such extension as contemplated by Section 3.12]*; and
the basis of computation of interest, if other than as provided in Section 3.10;
(f) the
place or places at which or methods by which (1) the principal of and premium, if any, and interest (including Additional Interest),
if any, on Debt Securities of such series, or any Tranche thereof, shall be payable, (2) registration of transfer of Debt Securities
of such series, or any Tranche thereof, may be effected, (3) exchanges of Debt Securities of such series, or any Tranche thereof,
may be effected and (4) notices and demands to or upon the Company in respect of the Debt Securities of such series, or any Tranche
thereof, and this Indenture may be served; the Debt Security Registrar for such series; and if such is the case, that the principal of
such Debt Securities shall be payable without presentment or surrender thereof;
(g) the
period or periods within which, or the date or dates on which, the price or prices at which and the terms and conditions upon which the
Debt Securities of such series, or any Tranche thereof, may be redeemed, in whole or in part, at the option of the Company and any restrictions
on such redemptions, including but not limited to a restriction on a partial redemption by the Company of the Debt Securities of any series,
or any Tranche thereof, resulting in delisting of such Debt Securities from any national exchange;
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
(h) the
obligation or obligations, if any, of the Company to redeem or purchase the Debt Securities of such series, or any Tranche thereof, pursuant
to any sinking fund or other mandatory redemption or tender provisions or at the option of a Holder thereof and the period or periods
within which or the date or dates on 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, and applicable exceptions to the requirements of Section 4.04
in the case of mandatory redemption or redemption at the option of the Holder;
(i) the
denominations in which Debt Securities of such series, or any Tranche thereof, shall be issuable if other than denominations of $1,000
and any integral multiple thereof;
(j) the
currency or currencies, including composite currencies, in which payment of the principal of and premium, if any, and interest (including
Additional Interest), if any, on the Debt Securities of such series, or any Tranche thereof, shall be payable (if other than in Dollars);
(k) if
the principal of or premium, if any, or interest (including Additional Interest), if any, on the Debt Securities of such series, or any
Tranche thereof, are to be payable, at the election of the Company or a Holder thereof, in a coin or currency other than that in which
the Debt Securities are stated to be payable, the period or periods within which and the terms and conditions upon which, such election
may be made;
(l) if
the principal of or premium, if any, or interest (including Additional Interest), if any, on the Debt Securities of such series, or any
Tranche thereof, are to be payable, or are to be payable at the election of the Company or a Holder thereof, in securities or other property,
the type and amount of such securities or other property, or the formulary or other method or other means by which such amount shall be
determined, and the period or periods within which, and the terms and conditions upon which, any such election may be made;
(m) if
the amount payable in respect of principal of or premium, if any, or interest, if any, on the Debt Securities of such series, or any Tranche
thereof, may be determined with reference to an index or other fact or event ascertainable outside this Indenture, the manner in which
such amounts shall be determined to the extent not established pursuant to clause (e) of this paragraph;
(n) if
other than the principal amount thereof, the portion of the principal amount of Debt Securities of such series, or any Tranche thereof,
that shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 8.02;
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
(o) any
Events of Default, in addition to those specified in Section 8.01, with respect to the Debt Securities of such series,
and any covenants of the Company for the benefit of the Holders of the Debt Securities of such series, or any Tranche thereof, in addition
to those set forth in Article VI;
(p) the
terms, if any, pursuant to which the Debt Securities of such series, or any Tranche thereof, may be converted into or exchanged for shares
of beneficial interest or other securities of the Company or any other Person;
(q) the
obligations or instruments, if any, that shall be considered to be Eligible Obligations in respect of the Debt Securities of such series,
or any Tranche thereof, denominated in a currency other than Dollars or in a composite currency, and any additional or alternative provisions
for the reinstatement of the Company’s indebtedness in respect of such Debt Securities after the satisfaction and discharge thereof
as provided in Section 7.01;
(r) whether
the Debt Securities of the series shall be issued in whole or in part in the form of a Global Security or Securities; the terms and conditions,
if any, upon which such Global Security or Securities may be exchanged in whole or in part for certificated Debt Securities of such series
and of like tenor of any authorized denomination and the circumstances under which such exchange may occur, if other than in the manner
provided for in Section 2.03; the Depositary for such Global Security or Securities; and the form of any legend or legends
to be borne by any such Global Security in addition to or in lieu of the legend referred to in Section 2.03;
(s) if
the Debt Securities of such series, or any Tranche thereof, are to be issuable in bearer form, any and all matters incidental thereto
that are not specifically addressed in a supplemental indenture as contemplated by Section 12.01(g);
(t) to
the extent not established pursuant to clause (r) of this paragraph, any limitations on the rights of the Holders of the Debt
Securities of such series, or any Tranche thereof, to transfer or exchange such Debt Securities or to obtain the registration of transfer
thereof; and if a service charge will be made for the registration of transfer or exchange of Debt Securities of such series, or any Tranche
thereof, the amount or terms thereof;
(u) any
exceptions to Section 1.13, or variation in the definition of Business Day, with respect to the Debt Securities of such
series, or any Tranche thereof;
(v) any
collateral security, assurance or guarantee for such series of Debt Securities;
(w) any
credit enhancement applicable to the Debt Securities of such series; and
(x) any
other terms of the Debt Securities of such series, or any Tranche thereof, not inconsistent with the provisions of this Indenture.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
[The Debt Securities of each
series, or any Tranche thereof, shall be subordinated in the right of payment to Senior Indebtedness as provided in Article XV.]*
With respect to Debt Securities
of a series subject to a Periodic Offering, the indenture supplemental hereto or the Board Resolution that establishes such series, or
the Officer’s Certificate pursuant to such supplemental indenture or Board Resolution, as the case may be, may provide general terms
or parameters for Debt Securities of such series and provide either that the specific terms of Debt Securities of such series, or any
Tranche thereof, shall be specified in a Company Order or that such terms shall be determined by the Company or its agents in accordance
with procedures specified in a Company Order as contemplated by clause (b) of the third paragraph of Section 3.03.
Section 3.02. Denominations.
Unless otherwise provided
as contemplated by Section 3.01 with respect to any series of Debt Securities, or any Tranche thereof, the Debt Securities
of each series shall be issuable in denominations of $1,000 and any integral multiple thereof.
Section 3.03. Execution,
Authentication, Delivery and Dating.
Unless otherwise provided
as contemplated by Section 3.01 with respect to any series of Debt Securities, or any Tranche thereof, the Debt Securities
shall be executed on behalf of the Company by an Authorized Officer and may have the corporate seal of the Company affixed thereto or
reproduced thereon attested by any other Authorized Officer. The signature of any or all of these officers on the Debt Securities may
be manual or facsimile.
Debt Securities bearing the
manual or facsimile signatures of individuals who were at the time of execution Authorized 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
Debt Securities or did not hold such offices at the date of such Debt Securities.
The Trustee shall authenticate
and deliver Debt Securities of a series, for original issue, at one time or from time to time in accordance with the Company Order referred
to below, upon receipt by the Trustee of:
(a) the
instrument or instruments establishing the form or forms and terms of such series, as provided in Sections 2.01 and 3.01;
(b) a
Company Order requesting the authentication and delivery of such Debt Securities and, to the extent that the terms of such Debt Securities
shall not have been established in an indenture supplemental hereto or in a Board Resolution, or in an Officer’s Certificate pursuant
to a supplemental indenture or Board Resolution, all as contemplated by Sections 2.01 and 3.01, either (i) establishing
such terms or (ii) in the case of Debt Securities of a series subject to a Periodic Offering, specifying procedures, acceptable to
the Trustee, by which such terms are to be established (which procedures may provide, to the extent acceptable to the Trustee, for authentication
and delivery pursuant to oral or electronic instructions from the Company or any agent or agents thereof, which oral instructions are
to be promptly confirmed electronically or in writing), in either case in accordance with the instrument or instruments delivered pursuant
to clause (a) above;
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
(c) the
Debt Securities of such series, executed on behalf of the Company by an Authorized Officer;
(d) an
Opinion of Counsel to the effect that:
(i) the
form or forms of such Debt Securities have been duly authorized by the Company and have been established in conformity with the provisions
of this Indenture;
(ii) the
terms of such Debt Securities have been duly authorized by the Company and have been established in conformity with the provisions of
this Indenture; and
(iii) assuming
authentication and delivery by the Trustee and subject to any conditions specified in such Opinion of Counsel, such Debt Securities will
have been duly issued under this Indenture and will be legal, valid and binding obligations of the Company, enforceable in accordance
with their terms, subject, as to enforcement, to laws relating to or affecting generally the enforcement of creditors’ rights, including,
without limitation, bankruptcy and insolvency laws and to general principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law);
provided, however, that, with respect to
Debt Securities of a series subject to a Periodic Offering, the Trustee shall be entitled to receive such Opinion of Counsel only once
at or prior to the time of the first authentication of such Debt Securities (provided that such Opinion of Counsel addresses the authentication
and delivery of all Debt Securities of such series) and that in lieu of the opinions described in clauses (ii) and (iii) above
Counsel may opine that:
(x) when
the terms of such Debt Securities shall have been established pursuant to a Company Order or Orders or pursuant to such procedures (acceptable
to the Trustee) as may be specified from time to time by a Company Order or Orders, all as contemplated by and in accordance with the
instrument or instruments delivered pursuant to clause (a) above, such terms will have been duly authorized by the Company and
will have been established in conformity with the provisions of this Indenture; and
(y) such
Debt Securities, when authenticated and delivered by the Trustee in accordance with this Indenture and the Company Order or Orders or
specified procedures referred to in paragraph (x) above and issued and delivered by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will have been duly issued under this Indenture and will constitute valid and legally
binding obligations of the Company, entitled to the benefits provided by the Indenture, and enforceable in accordance with their terms,
subject, as to enforcement, to laws relating to or affecting generally the enforcement of creditors’ rights, including, without
limitation, bankruptcy and insolvency laws and to general principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
With respect to Debt Securities
of a series subject to a Periodic Offering, the Trustee may conclusively rely, as to the authorization by the Company of any of such Debt
Securities, the form and terms thereof and the legality, validity, binding effect and enforceability thereof, upon the Opinion of Counsel
and other documents delivered pursuant to Sections 2.01 and 3.01 and this Section, as applicable, at or prior
to the time of the first authentication of Debt Securities of such series unless and until such opinion or other documents have been superseded
or revoked or expire by their terms. In connection with the authentication and delivery of Debt Securities of a series subject to a Periodic
Offering, the Trustee shall be entitled to assume that the Company’s instructions to authenticate and deliver such Debt Securities
do not violate any rules, regulations or orders of any Governmental Authority having jurisdiction over the Company.
If the form or terms of the
Debt Securities of any series have been established by or pursuant to a Board Resolution or an Officer’s Certificate as permitted
by Sections 2.01 and 3.01, the Trustee shall not be required to authenticate such Debt Securities if the issuance
of such Debt Securities pursuant to this Indenture will materially or adversely affect the Trustee’s own rights, duties or immunities
under the Debt Securities and this Indenture or otherwise in a manner that is not reasonably acceptable to the Trustee.
Unless otherwise specified as contemplated by Section 3.01
with respect to any series of Debt Securities, or any Tranche thereof, each Debt Security shall be dated the date of its authentication.
Unless otherwise specified
as contemplated by Section 3.01 with respect to any series of Debt Securities, or any Tranche thereof, no Debt Security
shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Debt Security
a certificate of authentication substantially in the form provided for herein executed by the Trustee or its agent by manual signature,
and such certificate upon any Debt Security shall be conclusive evidence, and the only evidence, that such Debt Security has been duly
authenticated and delivered hereunder and is entitled to the benefits of this Indenture. Notwithstanding the foregoing, if any Debt Security
shall have been authenticated and delivered hereunder to the Company, or any Person acting on its behalf, but shall never have been issued
and sold by the Company, and the Company shall deliver such Debt Security to the Debt Security Registrar for cancellation as provided
in Section 3.09 together with a written statement (which need not comply with Section 1.02 and need
not be accompanied by an Opinion of Counsel) stating that such Debt Security has never been issued and sold by the Company, for all purposes
of this Indenture such Debt Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled
to the benefits hereof.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 3.04. Temporary
Debt Securities.
Pending the preparation of
definitive Debt Securities of any series, or any Tranche thereof, the Company may execute, and upon Company Order the Trustee shall authenticate
and deliver, temporary Debt Securities that are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Debt Securities in lieu of which they are issued, with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such Debt Securities may determine, as evidenced by their execution
of such Debt Securities; provided, however, that temporary Debt Securities need not recite specific redemption, sinking fund, conversion
or exchange provisions.
Unless otherwise specified
as contemplated by Section 3.01 with respect to the Debt Securities of any series, or any Tranche thereof, after the
preparation of definitive Debt Securities of such series or Tranche, the temporary Debt Securities of such series or Tranche shall be
exchangeable, without charge to the Holder thereof, for definitive Debt Securities of such series or Tranche, upon surrender of such temporary
Debt Securities at the office or agency of the Company maintained pursuant to Section 6.02 in a Place of Payment for
such Debt Securities. Upon such surrender of temporary Debt Securities, the Company shall, except as aforesaid, execute and the Trustee
shall authenticate and deliver in exchange therefor definitive Debt Securities of the same series and Tranche, of authorized denominations
and of like tenor and aggregate principal amount.
Until exchanged in full as
hereinabove provided, temporary Debt Securities shall in all respects be entitled to the same benefits under this Indenture as definitive
Debt Securities of the same series and Tranche and of like tenor authenticated and delivered hereunder.
Section 3.05. Registration,
Registration of Transfer and Exchange.
The Company shall cause to
be kept in each office designated pursuant to Section 6.02, with respect to the Debt Securities of each series or any
Tranche thereof, a register (all registers kept in accordance with this Section being collectively referred to as the “Debt
Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the
registration of Debt Securities of such series or Tranche and the registration of transfer thereof. The Company shall designate one Person
to maintain the Debt Security Register for the Debt Securities of each series on a consolidated basis, and such Person is referred to
herein, with respect to such series, as the “Debt Security Registrar.” Anything herein to the contrary notwithstanding,
the Company may designate one or more of its offices as an office in which the Debt Security Register shall be maintained, and the Company
may designate itself the Debt Security Registrar with respect to one or more of such series. The Debt Security Register shall be open
for inspection by the Trustee and the Company at all reasonable times.
Except as otherwise specified
as contemplated by Section 3.01 with respect to the Debt Securities of any series, or any Tranche thereof, upon surrender
for registration of transfer of any Debt Security of such series or Tranche at the office or agency of the Company maintained pursuant
to Section 6.02 in a Place of Payment for such series or Tranche, the Company shall execute, and the Trustee shall authenticate
and deliver, in the name of the designated transferee or transferees, one or more new Debt Securities of the same series and Tranche,
of authorized denominations and of like tenor and aggregate principal amount.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Except as otherwise specified
as contemplated by Section 3.01 with respect to the Debt Securities of any series, or any Tranche thereof, any Debt Security
of such series or Tranche may be exchanged at the option of the Holder for one or more new Debt Securities of the same series and Tranche,
of authorized denominations and of like tenor and aggregate principal amount, upon surrender of the Debt Securities to be exchanged at
any such office or agency. Whenever any Debt Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Debt Securities that the Holder making the exchange is entitled to receive.
All Debt Securities delivered
upon any registration of transfer or exchange of Debt Securities shall be valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Debt Securities surrendered upon such registration of transfer or exchange.
Every Debt Security presented
or surrendered for registration of transfer or for exchange shall (if so required by the Company, the Trustee or the Debt Security Registrar)
be duly endorsed or shall be accompanied by a written instrument of transfer in form satisfactory to the Company, the Trustee or the Debt
Security Registrar, as the case may be, duly executed by the Holder thereof or his attorney duly authorized in writing.
Unless otherwise specified
as contemplated by Section 3.01 with respect to Debt Securities of any series, or any Tranche thereof, no service charge
shall be made for any registration of transfer or exchange of Debt 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 Debt
Securities, other than exchanges pursuant to Section 3.04, 4.06 or 12.06 not involving any transfer.
The Company shall not be required
to execute or to provide for the registration of transfer of or the exchange of (a) Debt Securities of any series, or any Tranche
thereof, during a period of 15 days immediately preceding the day the mailing of a notice of redemption of the Debt Securities of such
series or Tranche is to be made or (b) any Debt Security so selected for redemption in whole or in part, except the unredeemed portion
of any Debt Security being redeemed in part.
None of the Company, the Trustee,
any Paying Agent or the Debt 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 of a Global Security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 3.06. Mutilated,
Destroyed, Lost and Stolen Debt Securities.
If any mutilated Debt Security
is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Debt
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 (a) evidence to their satisfaction of the ownership of and the destruction, loss or theft of any Debt
Security and (b) such security or indemnity as may be reasonably 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 Debt Security is held by a Person purporting to
be the owner of such Debt Security, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed,
lost or stolen Debt Security, a new Debt Security of the same series and Tranche, and of like tenor and principal amount and bearing a
number not contemporaneously outstanding.
Notwithstanding the foregoing,
in case any such mutilated, destroyed, lost or stolen Debt Security has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Debt Security, pay such Debt Security.
Upon the issuance of any new
Debt 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 reasonable expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Debt Security of
any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Debt Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or stolen Debt Security shall be at any time enforceable by
anyone other than the Holder of such new Debt Security, and any such new Debt Security shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Debt Securities of such 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 Debt Securities.
Section 3.07. Payment
of Interest and Additional Interest; Interest Rights Preserved.
Unless otherwise specified
as contemplated by Section 3.01 with respect to the Debt Securities of any series, or any Tranche thereof, interest and
Additional Interest, if any, on any Debt Security that 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 Debt Security (or one or more Predecessor Debt Securities) is registered at the close
of business on the Regular Record Date for such interest.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
[Subject to Section 3.12]*
any interest on any Debt Security of any series that 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 related 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 (a) or (b) below:
(a) The
Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Debt Securities of such series (or their
respective Predecessor Debt Securities) are registered at the close of business on a date (herein called 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 Debt 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 promptly cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor
to be mailed, first-class postage prepaid, to each Holder of Debt Securities of such series at the address of such Holder as it appears
in the Debt Security Register, 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 Debt Securities of such series (or their respective Predecessor Debt Securities) are registered at the close of business on such Special
Record Date.
(b) The
Company may make payment of any Defaulted Interest on the Debt Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Debt 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 and Section 3.05, each Debt Security delivered under this Indenture upon registration of transfer
of or in exchange for or in lieu of any other Debt Security shall carry the rights to interest (including any Additional Interest) accrued
and unpaid, and to accrue, that were carried by such other Debt Security.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 3.08. Persons
Deemed Owners.
Prior to due presentment of
a Debt 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 Debt Security is registered as the absolute owner of such Debt Security for the purpose of receiving payment of principal
of and premium, if any, and (subject to Sections 3.05 and 3.07) interest, if any, on such Debt Security and for
all other purposes whatsoever, whether or not such Debt Security is 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 3.09. Cancellation
by Debt Security Registrar.
All Debt Securities surrendered
for payment, redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Debt Security Registrar,
be delivered to the Debt Security Registrar and, if not theretofore canceled, shall be promptly canceled by the Debt Security Registrar.
The Company may at any time deliver to the Debt Security Registrar for cancellation any Debt Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever or which the Company shall not have issued and sold, and all Debt
Securities so delivered shall be promptly canceled by the Debt Security Registrar. No Debt Securities shall be authenticated in lieu of
or in exchange for any Debt Securities canceled as provided in this Section, except as expressly permitted by this Indenture. All certificates
representing canceled Debt Securities held by the Debt Security Registrar shall be disposed of in accordance with the customary practices
of the Debt Security Registrar at the time in effect, and the Debt Security Registrar shall not be required to destroy any such certificates.
The Debt Security Registrar, if other than the Trustee, shall promptly deliver a certificate of disposition with respect to such disposed
certificates to the Trustee and the Company unless, by a Company Order, similarly delivered, the Company shall direct that canceled Debt
Securities be returned to it. The Debt Security Registrar shall promptly deliver evidence of any cancellation of a Debt Security in accordance
with this Section to the Trustee and the Company. If the Trustee is the entity acting as Debt Security Registrar, it shall promptly
deliver to the Company a certificate of disposition with respect to any certificates disposed of and/or evidence of any cancellation of
a Debt Security, in each case in accordance with this Section, if so requested by a Company Order.
Section 3.10. Computation
of Interest.
Except as otherwise specified
as contemplated by Section 3.01 for Debt Securities of any series, or any Tranche thereof, interest on the Debt Securities
of each series shall be computed on the basis of a 360-day year consisting of twelve 30-day months and on the basis of the actual number
of days elapsed within any month in relation to the deemed 30 days of such month.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 3.11. Payment
to be in Proper Currency.
In the case of the Debt Securities
of any series, or any Tranche thereof, denominated in any currency other than Dollars or in a composite currency (the “Required
Currency”), except as otherwise specified with respect to such Debt Securities as contemplated by Section 3.01,
the obligation of the Company to make any payment of the principal thereof, or the premium or interest thereon, shall not be discharged
or satisfied by any tender by the Company, or recovery by the Trustee, in any currency other than the Required Currency, except to the
extent that such tender or recovery shall result in the Trustee timely holding the full amount of the Required Currency then due and payable.
If any such tender or recovery is in a currency other than the Required Currency, the Trustee may take such actions as it considers appropriate
to exchange such currency for the Required Currency. The costs and risks of any such exchange, including without limitation the risks
of delay and exchange rate fluctuation, shall be borne by the Company, the Company shall remain fully liable for any shortfall or delinquency
in the full amount of Required Currency then due and payable, and in no circumstances shall the Trustee be liable therefor except in the
case of its negligence or willful misconduct.
Section 3.12. [Extension
of Interest Payment]*.
[The Company shall have the
right at any time, so long as the Company is not in default in the payment of interest on the Debt Securities of any series hereunder,
to extend interest payment periods on all Debt Securities of one or more series, or Tranches thereof, if so specified as contemplated
by Section 3.01 with respect to such Debt Securities and upon such terms as may be specified as contemplated by Section 3.01
with respect to such Debt Securities.]*
Article IV
REDEMPTION OF DEBT SECURITIES
Section 4.01. Applicability
of Article.
Debt Securities of any series,
or any Tranche thereof, that are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except
as otherwise specified as contemplated by Section 3.01 for Debt Securities of such series or Tranche) in accordance with
this Article.
Section 4.02. Election
to Redeem; Notice to Trustee.
The election of the Company
to redeem any Debt Securities shall be evidenced by a Board Resolution and/or an Officer’s Certificate. The Company shall, at least
45 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee
in writing of such Redemption Date and of the principal amount of such Debt Securities to be redeemed. In the case of any redemption of
Debt Securities (a) prior to the expiration of any restriction on such redemption provided in the terms of such Debt Securities or
elsewhere in this Indenture or (b) pursuant to an election of the Company that is subject to a condition specified in the terms of
such Debt Securities, the Company shall furnish the Trustee with an Officer’s Certificate evidencing compliance with such restriction
or condition.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 4.03. Selection
of Debt Securities to be Redeemed.
If less than all the Debt
Securities of any series, or any Tranche thereof, are to be redeemed, the particular Debt Securities to be redeemed shall be selected
by the Trustee from the Outstanding Debt Securities of such series or Tranche not previously called for redemption, by such method as
shall be provided for any particular series, or, in the absence of any such provision, by such method of random selection as the Trustee
shall deem fair and appropriate and which may, in any case, provide for the selection for redemption of portions (equal to the minimum
authorized denomination for Debt Securities of such series or Tranche or any integral multiple thereof) of the principal amount of Debt
Securities of such series or Tranche of a denomination larger than the minimum authorized denomination for Debt Securities of such series
or Tranche; provided, however, that if, as indicated in an Officer’s Certificate, the Company shall have offered to purchase
all or any principal amount of the Debt Securities then Outstanding of any series, or any Tranche thereof, and less than all of such Debt
Securities as to which such offer was made shall have been tendered to the Company for such purchase, the Trustee, if so directed by Company
Order, shall select for redemption all or any principal amount of such Debt Securities that have not been so tendered.
If the Debt Securities are
then held in the form of a Global Security, the Debt Securities to be redeemed shall be selected in accordance with the customary procedures
of the Depositary.
The Trustee shall promptly
notify the Company and the Debt Security Registrar in writing of the Debt Securities selected for redemption and, in the case of any Debt
Securities selected to be redeemed in part, the principal amount thereof to be redeemed.
For all purposes of this Indenture,
unless the context otherwise requires, all provisions relating to the redemption of Debt Securities shall relate, in the case of any Debt
Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Debt Securities that has been or is
to be redeemed.
Section 4.04. Notice
of Redemption.
Notice of redemption shall
be given in the manner provided in Section 1.06 to the Holders of the Debt Securities to be redeemed not less than 30
nor more than 60 days prior to the Redemption Date.
All notices of redemption
shall state:
(a) the
Redemption Date,
(b) the
Redemption Price,
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
(c) if
less than all the Debt Securities of any series or Tranche are to be redeemed, the identification of the particular Debt Securities to
be redeemed and the portion of the principal amount of any Debt Security to be redeemed in part,
(d) that
on the Redemption Date, the Redemption Price, together with accrued interest (including Additional Interest), if any, to the Redemption
Date, will become due and payable upon each such Debt Security to be redeemed and, if applicable and provided that the Redemption Price
is received by the Paying Agent or Agents on or prior to the Redemption Date, that interest (including any Additional Interest) thereon
will cease to accrue on and after said date,
(e) the
place or places where such Debt Securities are to be surrendered for payment of the Redemption Price and accrued interest, if any, unless
it shall have been specified as contemplated by Section 3.01 with respect to such Debt Securities that such surrender
shall not be required,
(f) that
the redemption is for a sinking or other fund, if such is the case, and
(g) such
other matters as the Company shall deem desirable or appropriate (including CUSIP numbers with respect to such Debt Securities, if the
Company shall so elect, in which event such notice of redemption may contain a disclaimer as to the correctness of such numbers either
as printed on the Debt Securities or on such notice of redemption).
Unless otherwise specified with respect to any
Debt Securities in accordance with Section 3.01, with respect to any notice of redemption of Debt Securities at the election
of the Company, unless, upon the giving of such notice, such Debt Securities shall be deemed to have been paid in accordance with Section 7.01,
such notice may state that such redemption shall be conditional upon the receipt by the Paying Agent or Agents for such Debt Securities,
on or prior to the date fixed for such redemption, of money sufficient to pay the principal of and premium, if any, and interest (including
Additional Interest), if any, on such Debt Securities and that if such money shall not have been so received such notice shall be of no
force or effect and the Company shall not be required to redeem such Debt Securities. In the event that such notice of redemption contains
such a condition and such money is not so received, the redemption shall not be made and within a reasonable time thereafter notice shall
be given, in the manner in which the notice of redemption was given, that such money was not so received and such redemption was not required
to be made, and the Paying Agent or Agents for the Debt Securities otherwise to have been redeemed shall promptly return to the Holders
thereof any of such Debt Securities that had been surrendered for payment upon such redemption.
Notice of redemption of Debt
Securities to be redeemed at the election of the Company, and any notice of non-satisfaction of a condition for redemption as aforesaid,
shall be given by the Company or, at the Company’s request, by the Debt Security Registrar in the name and at the expense of the
Company. Notice of mandatory redemption of Debt Securities shall be given by the Debt Security Registrar in the name and at the expense
of the Company.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 4.05. Debt
Securities Payable on Redemption Date.
Notice of redemption having
been given as aforesaid, and the conditions, if any, set forth in such notice having been satisfied, the Debt Securities or portions thereof
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, in the case of an unconditional notice of redemption, the Company shall default in the payment of the Redemption Price
and accrued interest (including Additional Interest), if any) such Debt Securities or portions thereof, if interest-bearing, shall cease
to bear interest. Upon surrender of any such Debt Security for redemption in accordance with such notice, such Debt Security or portion
thereof shall be paid by the Company at the Redemption Price, together with accrued interest (including Additional Interest), if any,
to the Redemption Date; provided, however, that no such surrender shall be a condition to such payment if so specified as contemplated
by Section 3.01 with respect to such Debt Security; and provided, further, that except as otherwise specified
as contemplated by Section 3.01 with respect to such Debt Security, any installment of interest on any Debt Security
the Stated Maturity of which installment is on or prior to the Redemption Date shall be payable to the Holder of such Debt Security, or
one or more Predecessor Debt Securities, registered as such at the close of business on the related Regular Record Date according to the
terms of such Debt Security and subject to the provisions of Section 3.07.
Section 4.06. Debt
Securities Redeemed in Part.
Upon the surrender of any
Debt Security that is to be redeemed only in part 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 attorney duly authorized in writing), the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of
such Debt Security, without service charge, a new Debt Security or Debt Securities of the same series and Tranche, of any authorized denomination
requested by such Holder and of like tenor and in aggregate principal amount equal to and in exchange for the unredeemed portion of the
principal of the Debt Security so surrendered.
Article V
SINKING FUNDS
Section 5.01. Applicability
of Article.
The provisions of this Article shall
be applicable to any sinking fund for the retirement of the Debt Securities of any series, or any Tranche thereof, except as otherwise
specified as contemplated by Section 3.01 for Debt Securities of such series or Tranche.
The minimum amount of any sinking
fund payment provided for by the terms of Debt Securities of any series, or any Tranche thereof, 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 Debt Securities of any series,
or any Tranche thereof, is herein referred to as an “optional sinking fund payment.” If provided for by the terms of Debt
Securities of any series, or any Tranche thereof, the cash amount of any sinking fund payment may be subject to reduction as provided
in Section 5.02. Each sinking fund payment shall be applied to the redemption of Debt Securities of the series or Tranche
in respect of which it was made as provided for by the terms of such Debt Securities.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 5.02. Satisfaction
of Sinking Fund Payments with Debt Securities.
The Company (a) may deliver
to the Trustee Outstanding Debt Securities (other than any previously called for redemption) of a series or Tranche in respect of which
a mandatory sinking fund payment is to be made and (b) may apply as a credit Debt Securities of such series or Tranche that have
been purchased by the Company or redeemed either at the election of the Company pursuant to the terms of such Debt Securities or through
the application of permitted optional sinking fund payments pursuant to the terms of such Debt Securities, in each case in satisfaction
of all or any part of such mandatory sinking fund payment; provided, however, that no Debt Securities shall be applied in satisfaction
of a mandatory sinking fund payment if such Debt Securities shall have been previously so applied. Debt Securities so applied shall be
received and credited for such purpose by the Trustee at the Redemption Price specified in such Debt Securities for redemption through
operation of the sinking fund and the amount of such mandatory sinking fund payment shall be reduced accordingly.
Section 5.03. Redemption
of Debt Securities for Sinking Fund.
Not less than 45 days prior
to each sinking fund payment date for the Debt Securities of any series, or any Tranche thereof, the Company shall deliver to the Trustee
an Officer’s Certificate specifying:
(a) the
amount of the next succeeding mandatory sinking fund payment for such series or Tranche;
(b) the
amount, if any, of the optional sinking fund payment to be made together with such mandatory sinking fund payment;
(c) the
aggregate sinking fund payment;
(d) the
portion, if any, of such aggregate sinking fund payment that is to be satisfied by the payment of cash; and
(e) the
portion, if any, of such aggregate sinking fund payment that is to be satisfied by delivering and crediting Debt Securities of such series
or Tranche pursuant to Section 5.02 and stating the basis for such credit and that such Debt Securities have not previously
been so credited, and, if it has not already done so, the Company shall also deliver to the Trustee any Debt Securities to be so delivered.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
If the Company shall not have
delivered such Officer’s Certificate and, to the extent applicable, all such Debt Securities, on or prior to the 45th day prior
to such sinking fund payment date, the sinking fund payment for such series or Tranche in respect of such sinking fund payment date shall
be made entirely in cash in the amount of the mandatory sinking fund payment. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Debt Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 4.03
and the Debt Security Registrar shall 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 4.04. Such notice having been duly given, the redemption of such Debt Securities shall
be made upon the terms and in the manner stated in Sections 4.05 and 4.06.
Article VI
COVENANTS
Section 6.01. Payment
of Principal, Premium and Interest.
The Company shall pay the
principal of and premium, if any, and interest, if any, on the Debt Securities of each series in accordance with the terms of such Debt
Securities and this Indenture.
Section 6.02. Maintenance
of Office or Agency.
The Company shall maintain
in each Place of Payment for the Debt Securities of each series, or any Tranche thereof, an office or agency where payment of such Debt
Securities shall be made, where the registration of transfer or exchange of such Debt Securities may be effected and where notices and
demands to or upon the Company in respect of such Debt Securities and this Indenture may be served. The Company shall give prompt written
notice to the Trustee of the location, and any change in the location, of each such office or agency and prompt notice to the Holders
of any such change in the manner specified in Section 1.06. If at any time the Company shall fail to maintain any such
required office or agency in respect of Debt Securities of any series, or any Tranche thereof, or shall fail to furnish the Trustee with
the address thereof, payment of such Debt Securities shall be made, registration of transfer or exchange thereof may be effected and notices
and demands in respect thereof may be served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee
as its agent for all such purposes in any such event.
The Company may also from
time to time designate one or more other offices or agencies with respect to the Debt Securities of one or more series, or any Tranche
thereof, for any or all of the foregoing purposes and may from time to time rescind such designations; provided, however, that,
unless otherwise specified as contemplated by Section 3.01 with respect to the Debt Securities of such series or Tranche
no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency for such purposes
in each Place of Payment for such Debt Securities in accordance with the requirements set forth above. The Company shall give prompt written
notice to the Trustee, and prompt notice to the Holders in the manner specified in Section 1.06, of any such designation
or rescission and of any change in the location of any such other office or agency.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Anything herein to the contrary
notwithstanding, any office or agency required by this Section may be maintained at an office of the Company, in which event the
Company shall perform all functions to be performed at such office or agency.
Section 6.03. Money
for Debt Securities Payments to be Held in Trust.
If the Company shall at any
time act as its own Paying Agent with respect to the Debt Securities of any series, or any Tranche thereof, it shall, on or before each
due date of the principal of and premium, if any, and interest (including Additional Interest), if any, on any of such Debt Securities,
segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal and premium or interest
(including Additional Interest) so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided.
The Company shall promptly notify the Trustee of any failure by the Company (or any other obligor on such Debt Securities) to make any
payment of principal of or premium, if any, or interest (including Additional Interest), if any, on such Debt Securities.
Whenever the Company shall
have one or more Paying Agents for the Debt Securities of any series, or any Tranche thereof, it shall, on or before each due date of
the principal of and premium, if any, and interest (including Additional Interest), if any, on such Debt Securities, deposit with such
Paying Agents sums sufficient (without duplication) to pay the principal and premium or interest (including Additional Interest) so becoming
due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest (including Additional
Interest), and (unless such Paying Agent is the Trustee) the Company shall promptly notify the Trustee of any failure by it so to act.
The Company shall cause each
Paying Agent for the Debt Securities of any series, or any Tranche thereof, other than the Company or 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 shall:
(a) hold
all sums held by it for the payment of the principal of and premium, if any, or interest (including Additional Interest), if any, on such
Debt Securities in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided;
(b) give
the Trustee notice of any failure by the Company (or any other obligor upon such Debt Securities) to make any payment of principal of
or premium, if any, or interest, (including Additional Interest) if any, on such Debt Securities; and
(c) at
any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent and furnish to the Trustee such information as it possesses regarding the names and addresses of the
Persons entitled to such sums.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
The Company may at any time
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, if
so stated in a Company Order delivered to the Trustee, in accordance with the provisions of Article VII; 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 and premium, if any, or interest
(including Additional Interest), if any, on any Debt Security and remaining unclaimed for two years after such principal and premium,
if any, or interest (including Additional 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, upon such payment or discharge, the Holder of such Debt Security shall,
as an unsecured general creditor and not as a Holder of an Outstanding Debt Security, look only to the Company for payment of the amount
so due and payable and remaining unpaid, 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 payment to the Company, may at the expense of the Company cause to be mailed, on one occasion only, notice
to such Holder 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 mailing, any unclaimed balance of such money then remaining will be paid to the Company.
Section 6.04. Corporate
Existence.
Subject to the rights of the
Company under Article XI, the Company shall do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence.
Section 6.05. Maintenance
of Properties.
The Company shall cause (or,
with respect to property owned in common with others, make reasonable effort to cause) all its properties used or useful in the conduct
of its business to be maintained and kept in good condition, repair and working order and shall cause (or, with respect to property owned
in common with others, make reasonable effort to 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
conducted; provided, however, that nothing in this Section shall prevent the Company from discontinuing, or causing the discontinuance
of, the operation and maintenance of any of its properties if such discontinuance is, in the judgment of the Company, desirable in the
conduct of its business.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 6.06. Annual
Officer’s Certificate as to Compliance.
Not later than in
each year, commencing , the Company shall deliver to the
Trustee an Officer’s Certificate, which need not comply with Section 1.02, executed by the principal executive
officer, the principal financial officer or the principal accounting officer of the Company, stating whether, to such officer’s
knowledge, the Company is in compliance with all conditions and covenants under this Indenture, such compliance to be determined without
regard to any period of grace or requirement of notice under this Indenture, and making any other statements as may be required by the
provisions of Section 314(a)(4) of the Trust Indenture Act.
Section 6.07. Waiver
of Certain Covenants.
The Company may omit in any
particular instance to comply with any term, provision or condition set forth in (a) Section 6.02 or any additional covenant
or restriction specified with respect to the Debt Securities of any series, or any Tranche thereof, as contemplated by Section 3.01
if before the time for such compliance the Holders of at least a majority in aggregate principal amount of the Outstanding Debt Securities
of all series and Tranches with respect to which compliance with Section 6.02 or such additional covenant or restriction
is to be omitted, considered as one class, shall, by Act of such Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition and (b) Sections 6.04, 6.05, 6.06 or Article XI
if before the time for such compliance the Holders of at least a majority in principal amount of Debt Securities Outstanding under this
Indenture shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision
or condition; but, in the case of (a) or (b), 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 VII
SATISFACTION AND DISCHARGE
Section 7.01. Satisfaction
and Discharge of Debt Securities.
Any Debt Security or Debt
Securities, or any portion of the principal amount thereof, shall be deemed to have been paid for all purposes of this Indenture, and
the entire indebtedness of the Company in respect thereof shall be deemed to have been satisfied and discharged, if there shall have been
irrevocably deposited with the Trustee or any Paying Agent (other than the Company), in trust:
(a) money
in an amount that shall be sufficient, or
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
(b) in
the case of a deposit made prior to the Maturity of such Debt Securities or portions thereof, Eligible Obligations, which shall not contain
provisions permitting the redemption or other prepayment thereof at the option of the issuer thereof, the principal of and the interest
on that when due, without any regard to reinvestment thereof, will provide moneys which, together with the money, if any, deposited with
or held by the Trustee or such Paying Agent, shall be sufficient, or
(c) a
combination of (a) or (b) that shall be sufficient,
to pay when due the principal of and premium,
if any, and interest (including Additional Interest), if any, due and to become due on such Debt Securities or portions thereof on or
prior to Maturity; provided, however, that in the case of the provision for payment or redemption of less than all the Debt Securities
of any series or Tranche, such Debt Securities or portions thereof shall have been selected by the Trustee as provided herein and, in
the case of a redemption, the notice requisite to the validity of such redemption shall have been given or irrevocable authority shall
have been given by the Company to the Trustee to give such notice, under arrangements satisfactory to the Trustee; and provided, further,
that the Company shall have delivered to the Trustee and such Paying Agent:
(x) if
such deposit shall have been made prior to the Maturity of such Debt Securities, a Company Order stating that the money and Eligible Obligations
deposited in accordance with this Section shall be held in trust, as provided in Section 7.03;
(y) if
Eligible Obligations shall have been deposited, an Opinion of Counsel that the obligations so deposited constitute Eligible Obligations
and do not contain provisions permitting the redemption or other prepayment at the option of the issuer thereof, and an opinion of an
independent public accountant of nationally recognized standing, selected by the Company, to the effect that the requirements set forth
in clause (b) above have been satisfied; and
(z) if
such deposit shall have been made prior to the Maturity of such Debt Securities, an Officer’s Certificate stating the Company’s
intention that, upon delivery of such Officer’s Certificate, its indebtedness in respect of such Debt Securities or portions thereof
will have been satisfied and discharged as contemplated in this Section.
If the Company shall make
any deposit of money and/or Eligible Obligations with respect to any Debt Securities, or any portion of the principal amount thereof,
as contemplated by this section, the Company shall not deliver an Officer’s Certificate described in clause (z) above
unless the Company shall also deliver to the Trustee, together with such Officer’s Certificate, an Opinion of Counsel to the effect
that, as a result of a change in law occurring after the date of this Indenture, the Holders of such Debt Securities, or portions thereof,
will not recognize income, gain or loss for United States federal income tax purposes as a result of the satisfaction and discharge of
the Company’s indebtedness in respect thereof and will be subject to United States federal income tax on the same amounts, at the
same times and in the same manner as if such satisfaction and discharge had not been effected.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Upon the deposit of money
or Eligible Obligations, or both, in accordance with this Section, together with the documents required by clauses (x), (y) and
(z) above, the Trustee shall, upon receipt of a Company Request, acknowledge in writing that the Debt Security or Debt Securities
or portions thereof with respect to which such deposit was made are deemed to have been paid for all purposes of this Indenture and that
the entire indebtedness of the Company in respect thereof has been satisfied and discharged as contemplated in this Section. In the event
that all of the conditions set forth in the first paragraph of this Section shall have been satisfied in respect of any Debt
Securities or portions thereof except that, for any reason, the Officer’s Certificate specified in clause (z) shall not
have been delivered, such Debt Securities or portions thereof shall nevertheless be deemed to have been paid for all purposes of this
Indenture, and the Holders of such Debt Securities or portions thereof shall nevertheless be no longer entitled to the benefits of this
Indenture or of any of the covenants of the Company under Article VI (except the covenants contained in Sections 6.02
and 6.03) or any other covenants made in respect of such Debt Securities or portions thereof as contemplated by Section 3.01,
but the indebtedness of the Company in respect of such Debt Securities or portions thereof shall not be deemed to have been satisfied
and discharged prior to Maturity for any other purpose, and the Holders of such Debt Securities or portions thereof shall continue to
be entitled to look to the Company for payment of the indebtedness represented thereby; and, upon receipt of a Company Request, the Trustee
shall acknowledge in writing that such Debt Securities or portions thereof are deemed to have been paid for all purposes of this Indenture.
If payment at Stated Maturity
of less than all of the Debt Securities of any series, or any Tranche thereof, is to be provided for in the manner and with the effect
provided in this Section, the Trustee shall select such Debt Securities, or portions of principal amount thereof, in the manner specified
by Section 4.03 for selection for redemption of less than all the Debt Securities of a series or Tranche.
In the event that Debt Securities
that shall be deemed to have been paid for purposes of this Indenture, and, if such is the case, in respect of which the Company’s
indebtedness shall have been satisfied and discharged, all as provided in this Section, do not mature and are not to be redeemed within
the 60 day period commencing with the date of the deposit of moneys or Eligible Obligations, as aforesaid, the Company shall, as promptly
as practicable, give a notice, in the same manner as a notice of redemption with respect to such Debt Securities, to the Holders of such
Debt Securities to the effect that such deposit has been made and the effect thereof.
Notwithstanding that any Debt
Securities shall be deemed to have been paid for purposes of this Indenture, as aforesaid, the obligations of the Company and the Trustee
in respect of such Debt Securities under Sections 3.04, 3.05, 3.06, 4.04, 5.03
(as to notice of redemption), Section 6.02, 6.03, 9.07, 9.14 and 9.15 and this Article shall
survive.
The Company shall pay, and
shall indemnify the Trustee or any Paying Agent with which Eligible Obligations shall have been deposited as provided in this Section against
any tax, fee or other charge imposed on or assessed against such Eligible Obligations or the principal or interest received in respect
of such Eligible Obligations, including, but not limited to, any such tax payable by any entity deemed, for tax purposes, to have been
created as a result of such deposit.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Anything herein to the contrary
notwithstanding, (a) if, at any time after a Debt Security would be deemed to have been paid for purposes of this Indenture, and,
if such is the case, the Company’s indebtedness in respect thereof would be deemed to have been satisfied or discharged, pursuant
to this Section (without regard to the provisions of this paragraph), the Trustee or any Paying Agent, as the case may be, shall
be required to return the money or Eligible Obligations, or combination thereof, deposited with it as aforesaid to the Company or its
representative under any applicable federal or state bankruptcy, insolvency or other similar law, such Debt Security shall thereupon be
deemed retroactively not to have been paid and any satisfaction and discharge of the Company’s indebtedness in respect thereof shall
retroactively be deemed not to have been effected, and such Debt Security shall be deemed to remain Outstanding and (b) any satisfaction
and discharge of the Company’s indebtedness in respect of any Debt Security shall be subject to the provisions of the last paragraph of Section 6.03.
Section 7.02. Satisfaction
and Discharge of Indenture.
This Indenture shall upon
Company Request cease to be of further effect (except as hereinafter expressly provided), and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when
(a) no
Debt Securities remain Outstanding hereunder; and
(b) the
Company has paid or caused to be paid all other sums payable hereunder by the Company;
provided, however, that if, in accordance
with the last paragraph of Section 7.01, any Debt Security, previously deemed to have been paid for purposes of
this Indenture, shall be deemed retroactively not to have been so paid, this Indenture shall thereupon be deemed retroactively not to
have been satisfied and discharged, as aforesaid, and to remain in full force and effect, and the Company shall execute and deliver such
instruments as the Trustee shall reasonably request to evidence and acknowledge the same.
Notwithstanding the satisfaction
and discharge of this Indenture as aforesaid, the obligations of the Company and the Trustee under Sections 3.04, 3.05, 3.06, 4.04, 5.03
(as to notice of redemption), 6.02, 6.03, 9.07, 9.14 and 9.15 and this Article shall
survive.
Upon satisfaction and discharge
of this Indenture as provided in this Section, the Trustee shall assign, transfer and turn over to the Company, subject to the lien provided
by Section 9.07, any and all money, securities and other property then held by the Trustee for the benefit of the Holders
of the Debt Securities other than money and Eligible Obligations held by the Trustee pursuant to Section 7.03.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 7.03. Application
of Trust Money.
Neither the Eligible Obligations
nor the money deposited pursuant to Section 7.01, nor the principal or interest payments on any such Eligible Obligations,
shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal of, and premium, if
any, and interest (including Additional Interest), if any, on, the Debt Securities or portions of principal amount thereof in respect
of which such deposit was made, all subject, however, to the provisions of Section 6.03; provided, however, that,
so long as there shall not have occurred and be continuing an Event of Default, or an event that, with the giving of notice or the passage
of time, would become an Event of Default, any cash received from such principal or interest payments on such Eligible Obligations, if
not then needed for such purpose, shall, to the extent practicable, be invested in Eligible Obligations of the type described Section 7.01(b) maturing
at such times and in such amounts as shall be sufficient to pay when due the principal of and premium, if any, and interest (including
Additional Interest), if any, due and to become due on such Debt Securities or portions thereof on and prior to the Maturity thereof,
and interest earned from such reinvestment shall be paid over to the Company as received, free and clear of any trust, lien or pledge
under this Indenture except the lien provided by Section 9.07; and provided, further, that, so long as there shall
not have occurred and be continuing an Event of Default, or an event that, with the giving of notice or the passage of time, would become
an Event of Default, any moneys held in accordance with this Section on the Maturity of all such Debt Securities in excess of the
amount required to pay the principal of and premium, if any, and interest (including Additional Interest), if any, then due on such Debt
Securities shall be paid over to the Company free and clear of any trust, lien or pledge under this Indenture except the lien provided
by Section 9.07; and provided, further, that if an Event of Default, or an event that, with the giving of notice
or the passage of time, would become an Event of Default, shall have occurred and be continuing, moneys to be paid over to the Company
pursuant to this Section shall be held until such Event of Default, or event that, with the giving of notice or the passage of time,
would become an Event of Default, shall have been waived or cured.
Article VIII
EVENTS OF DEFAULT; REMEDIES
Section 8.01. Events
of Default.
“Event of Default,”
wherever used herein with respect to Debt Securities of any series, means any one of the following events:
(a) failure
to pay interest (including Additional Interest), if any, on any Debt Security of such series within 30 days after the same becomes due
and payable [(whether or not payment is prohibited by the provisions of Article XV hereof);]* [provided, however,
that a valid extension of the interest payment period by the Company as contemplated in Section 3.12 of this Indenture
shall not constitute a failure to pay interest for this purpose] *; or
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
(b) failure
to pay the principal of or premium, if any, on any Debt Security of such series when due and payable under this Indenture [(whether or
not payment is prohibited by the provisions of Article XV hereof)] *; or
(c) failure
to make any sinking fund payment with respect to such series when due; or
(d) failure
to perform or breach of any covenant or warranty of the Company in this Indenture (other than a covenant or warranty a default in the
performance of which or breach of which is elsewhere in this Section specifically dealt with or which has expressly been included
in this Indenture solely for the benefit of one or more series of Debt Securities other than such series) for a period of 60 days after
there has been given, by registered or certified mail, to the Company by the Trustee, or to the Company and the Trustee by the Holders
of at least 33% in principal amount of the Outstanding Debt Securities of such 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, unless the Trustee, or the
Trustee and the Holders of a principal amount of Debt Securities of such series not less than the principal amount of Debt Securities
the Holders of which gave such notice, as the case may be, shall agree in writing to an extension of such period prior to its expiration;
provided, however, that the Trustee, or the Trustee and the Holders of such principal amount of Debt Securities of such series,
as the case may be, shall be deemed to have agreed to an extension of such period for a maximum of one hundred twenty (120) days if corrective
action is initiated by the Company within such period and is being diligently pursued; or
(e) the
entry by a court having jurisdiction in the premises of (1) a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or (2) a decree
or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition by one or more Persons other than the
Company seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable federal or
state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official for the Company
or for any substantial part of its property, or ordering the winding up or liquidation of its affairs, and any such decree or order for
relief or any such other decree or order shall have remained unstayed and in effect for a period of 90 consecutive days; or
(f) the
commencement by the Company of a voluntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization
or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of
a decree or order for relief in respect of the Company in a case or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing
by it of a petition or answer or consent seeking reorganization or relief under any applicable federal or state law, or the consent by
it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Company or of any substantial part of its property, or the making by it of an assignment for the
benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the authorization
of such action by the Board of Directors; or
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
(g) any
other Event of Default specified with respect to Debt Securities of such series.
Section 8.02. Acceleration
of Maturity; Rescission and Annulment.
If an Event of Default due
to the default in payment of principal of, or premium, if any, or interest (including Additional Interest) on, any series of Debt Securities
or due to the default in the performance or breach of any other covenant or warranty of the Company applicable to the Debt Securities
of such series but not applicable to all Outstanding Debt Securities shall have occurred and be continuing, either the Trustee or the
Holders of not less than 33% in principal amount of the Debt Securities of such series may then declare the principal amount (or, if any
of the Debt Securities of such series are Discount Debt Securities, such portion of the principal amount as may be specified in the terms
thereof as contemplated by Section 3.01) of all Debt Securities of such series and premium, if any, and interest (including
Additional Interest) accrued thereon to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given
by the Holders). If an Event of Default due to default in the performance of any other of the covenants or warranties herein applicable
to all Outstanding Debt Securities or an Event of Default specified in Sections 8.01(e) or (f) shall
have occurred and be continuing, either the Trustee or the Holders of not less than 33% in principal amount of all Debt Securities then
Outstanding (considered as one class), and not the Holders of the Debt Securities of any one of such series, may declare the principal
amount (or, if any of the Debt Securities are Discount Debt Securities, such portion of the principal amount of such Debt Securities as
may be specified in the terms thereof as contemplated by Section 3.01) of all Debt Securities and premium, if any, and
interest accrued thereon to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by the
Holders). As a consequence of each such declaration (herein referred to as a declaration of acceleration) with respect to Debt Securities
of any series, the principal amount (or portion thereof in the case of Discount Debt Securities) of such Debt Securities, premium, if
any, and interest (including Additional Interest) accrued thereon shall become due and payable immediately [(provided that the payment
of principal of such Debt Securities shall remain subordinated to the extent provided in Article XV hereof)] *.
With respect to a series of
Debt Securities to which a credit enhancement is applicable, the applicable supplemental indenture may provide that the provider of such
credit enhancement may, if default has occurred and is continuing with respect to such series, and subject to certain conditions, have
all the rights with respect to remedies that would otherwise have been exercisable by the Holders of Debt Securities of that series.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
At any time after such a declaration
of acceleration with respect to Debt Securities of any series shall have been made and before a judgment or decree for payment of the
money due shall have been obtained by the Trustee as hereinafter in this Article provided, the Event or Events of Default giving
rise to such declaration of acceleration shall, without further act, be deemed to have been waived, and such declaration and its consequences
shall, without further act, be deemed to have been rescinded and annulled, if
(a) the
Company shall have paid or deposited with the Trustee a sum sufficient to pay
(1) all
overdue interest on all Debt Securities of such series;
(2) the
principal of and premium, if any, on any Debt Securities of such series that have become due otherwise than by such declaration of acceleration
and interest (including Additional Interest) thereon at the rate or rates prescribed therefor in such Debt Securities;
(3) to
the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Debt
Securities;
(4) all
amounts due to the Trustee under Section 9.07; and
(b) any
other Event or Events of Default with respect to Debt Securities of such series, other than the non-payment of the principal of Debt Securities
of such series that shall have become due solely by reason of such declaration of acceleration, shall have been cured or waived as provided
in Section 8.13.
No such rescission shall affect any subsequent
Event of Default or impair any right consequent thereon.
Section 8.03. Collection
of Indebtedness and Suits for Enforcement by Trustee.
If an Event of Default described
in clause (a), (b) or (c)of Section 8.01 shall have occurred and be continuing, the Company shall,
upon demand of the Trustee, pay to it, for the benefit of the Holders of the Debt Securities of the series with respect to which such
Event of Default shall have occurred, the whole amount then due and payable on such Debt Securities for principal and premium, if any,
and interest, if any, and, to the extent permitted by law, (i) interest on premium, if any, (ii) interest on any overdue principal
and (iii) Additional Interest, at the rate or rates prescribed therefor in such Debt Securities, and, in addition thereto, such further
amount as shall be sufficient to cover any amounts due to the Trustee under Section 9.07.
If the Company shall fail
to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial
proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce
the same against the Company or any other obligor upon such Debt Securities and collect the moneys adjudged or decreed to be payable in
the manner provided by law out of the property of the Company or any other obligor upon such Debt Securities, wherever situated.
If an Event of Default with
respect to Debt Securities of any series shall have occurred and be continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Debt Securities of such series under the Indenture 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.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 8.04. Trustee
May File Proofs of Claim.
In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding
relative to the Company or any other obligor upon the Debt Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Debt Securities shall then be due and payable as therein expressed
or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue
principal or interest (including Additional Interest)) shall be entitled and empowered, by intervention in such proceeding or otherwise,
(a) to
file and prove a claim for the whole amount of principal, premium, if any, and interest (including Additional Interest), if any, owing
and unpaid in respect of the Debt Securities and to file such other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for amounts due to the Trustee under Section 9.07) and of the Holders
allowed in such judicial proceeding, and
(b) 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 amounts due it under Section 9.07.
Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Debt 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.
Section 8.05. Trustee
May Enforce Claims without Possession of Debt Securities.
All rights of action and claims
under this Indenture or the Debt Securities may be prosecuted and enforced by the Trustee without the possession of any of the Debt 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 in respect of which
such judgment has been recovered.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 8.06. Application
of Money Collected.
[Subject to the provisions
of Article XV,]* 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 premium, if any, or
interest (including Additional Interest), if any, upon presentation of the Debt Securities in respect of which or for the benefit of which
such money shall have been collected 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 under Section 9.07;
SECOND: To the payment of
the amounts then due and unpaid upon the Debt Securities for principal of and premium, if any, and interest (including Additional Interest),
if any, 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 Debt Securities for principal, premium, if any, and interest (including Additional
Interest), if any, respectively; and
THIRD: To the payment of the
remainder, if any, to the Company, or to whomsoever may be lawfully entitled to receive the same or as a court of competent jurisdiction
may direct.
Section 8.07. Limitation
on Suits.
No Holder shall have any right
to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless:
(a) such
Holder shall have previously given written notice to the Trustee of a continuing Event of Default with respect to the Debt Securities
of such series;
(b) the
Holders of not less than a majority in aggregate principal amount of the Outstanding Debt Securities of all series in respect of which
an Event of Default shall have occurred and be continuing, considered as one class, 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;
(c) such
Holder or Holders shall have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the
Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute any such proceeding;
and
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
(e) no
direction inconsistent with such written request shall have been given to the Trustee during such 60-day period by the Holders of a majority
in aggregate principal amount of the Outstanding Debt Securities of all series in respect of which an Event of Default shall have occurred
and be continuing, considered as one class;
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 8.08. Unconditional
Right of Holders to Receive Principal, Premium and Interest.
Notwithstanding any other
provision in this Indenture, the Holder of any Debt Security shall have the right, which is absolute and unconditional, to receive payment
of the principal of and premium, if any, and (subject to Section 3.07 [and 3.12] *) interest (including Additional
Interest), if any, on such Debt Security on the Stated Maturity or Maturities expressed in such Debt 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 8.09. 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 shall have been discontinued or
abandoned for any reason, or shall have 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, Trustee and such Holder shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and such Holder shall continue as though no such proceeding
had been instituted.
Section 8.10. Rights
and Remedies Cumulative.
Except as otherwise provided
in the last paragraph of Section 3.06, 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 8.11. Delay
or Omission Not Waiver.
No delay or omission of the
Trustee or of any Holder 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.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 8.12. Control
by Holders of Debt Securities.
If an Event of Default shall
have occurred and be continuing in respect of a series of Debt Securities, the Holders of a majority in principal amount of the Outstanding
Debt Securities of such 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 Debt Securities of such series; provided,
however, that if an Event of Default shall have occurred and be continuing with respect to more than one series of Debt Securities,
the Holders of a majority in aggregate principal amount of the Outstanding Debt Securities of all such series, considered as one class,
shall have the right to make such direction, and not the Holders of the Debt Securities of any one of such series; and provided, further,
that
(a) such
direction shall not be in conflict with any rule of law or with this Indenture, and may not involve the Trustee in personal liability
in circumstances where indemnity would not in the Trustee’s reasonable discretion be adequate, and
(b) the
Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.
Before proceeding to exercise
any right or power hereunder at the direction of such Holders, the Trustee shall be entitled to receive from such Holders reasonable security
or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with any such direction.
Section 8.13. Waiver
of Past Defaults.
The Holders of not less than
a majority in principal amount of the Outstanding Debt Securities of any series may on behalf of the Holders of all the Debt Securities
of such series waive any past default hereunder with respect to such series and its consequences, except a default
(a) in
the payment of the principal of or premium, if any, or interest (including Additional Interest), if any, on any Debt Security of such
series, or
(b) in
respect of a covenant or provision hereof that under Section 12.02 cannot be modified or amended without the consent
of the Holder of each Outstanding Debt Security of such series affected.
Upon any such waiver, such
default shall cease to exist, and any and all Events 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.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 8.14. Undertaking
for Costs.
The Company and the Trustee
agree, and each Holder by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, 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, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall
not apply to any suit instituted by the Company, to any suit instituted by the Trustee, to any suit instituted by any Holder, or group
of Holders, holding in the aggregate more than 10% in aggregate principal amount of the Outstanding Debt Securities of all series in respect
of which such suit may be brought, considered as one class, or to any suit instituted by any Holder for the enforcement of the payment
of the principal of or premium, if any, or interest (including Additional Interest), if any, on any Debt Security on or after the Stated
Maturity or Maturities expressed in such Debt Security (or, in the case of redemption, on or after the Redemption Date).
Section 8.15. Waiver
of 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 stay or extension law wherever enacted, now or at any time hereafter in force, that 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 IX
THE TRUSTEE
Section 9.01. Certain
Duties and Responsibilities.
(a) The
Trustee shall have and be subject to all the duties and responsibilities specified with respect to an indenture trustee in the Trust Indenture
Act, and no implied covenants or obligations shall be read into this Indenture against the Trustee.
(b) The
Trustee, prior to the occurrence of an Event of Default and after the curing or waiving of all Events of Default that may have occurred,
undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In case an Event of Default of
which a Responsible Officer of the Trustee has knowledge has occurred and is continuing, the Trustee shall exercise such of the rights
and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise
or use under the circumstances in the conduct of such person’s own affairs.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
(c) No
provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that prior to the occurrence of an Event of Default and after the curing or waiving of all
Events of Default that may have occurred
(i) the
duties and obligations of the Trustee shall be determined solely by the express provisions of this Indenture, and the Trustee shall not
be liable except for the performance of, or failure to perform, such duties and obligations as are specifically set forth in this Indenture,
and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(ii) in
the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this
Indenture; but, in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of
this Indenture.
(d) The
Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith, in accordance with the direction
of the Holders of Debt Securities pursuant to Section 8.12, relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture.
(e) 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 it is not reasonably assured of receiving (i) repayment of such funds or (ii) indemnity, in an amount deemed
adequate to the Trustee in its reasonable judgment, against such risk or liability.
(f) Notwithstanding
anything contained in this Indenture to the contrary, the duties and responsibilities of the Trustee under this Indenture shall be subject
to the protections, exculpations and limitations on liability afforded to the Trustee under the provisions of the Trust Indenture Act,
including those provisions of such Act deemed by such Act to be included herein.
(g) 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.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 9.02. Notice
of Defaults.
The Trustee shall give the
Holders notice of any default hereunder with respect to the Debt Securities of any series to the Holders of Debt Securities of such series
of which it has knowledge (within the meaning of Section 9.03(h)) in the manner and to the extent required to do so by
the Trust Indenture Act, unless such default shall have been cured or waived; provided, however, that in the case of any default
of the character specified in Section 8.01(d), no such notice to Holders shall be given until at least 60 days after
the occurrence thereof. For the purpose of this Section, the term “default” means any event that is, or after notice or lapse
of time, or both, would become, an Event of Default.
Section 9.03. Certain
Rights of Trustee.
Subject to the provisions
of Section 9.01 and to the applicable provisions of the Trust Indenture Act:
(a) the
Trustee may 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;
(b) any
request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order, or as otherwise
expressly provided herein, and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) 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, rely upon an Officer’s Certificate;
(d) the
Trustee may consult with counsel and the 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;
(e) 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 Holder pursuant to this Indenture, unless such Holder shall have offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction;
(f) 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, in its discretion, 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 (subject to applicable legal requirements) be entitled
to examine, during normal business hours, the books, records and premises of the Company, personally or by agent or attorney;
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
(g) 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; and
(h) the
Trustee shall not be charged with knowledge of any default or Event of Default with respect to the Debt Securities of any series for which
it is acting as Trustee unless either (1) a Responsible Officer of the Trustee shall have knowledge of the default or Event of Default
or (2) written notice of such default or Event of Default shall have been given to the Trustee by the Company, any other obligor
on such Debt Securities or by any Holder of such Debt Securities.
Section 9.04. Not
Responsible for Recitals or Issuance of Debt Securities.
The recitals contained herein
and in the Debt 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 responsibility for their correctness. The Trustee makes no representations
as to the validity or sufficiency of this Indenture or of the Debt Securities. Neither the Trustee nor any Authenticating Agent shall
be accountable for the use or application by the Company of Debt Securities or the proceeds thereof. The Trustee shall not incur any liability
for non-performance or breach of any obligation hereunder to the extent that the Trustee is delayed in performing, unable to perform or
breaches such obligation because of acts of God, war, terrorism, fire, floods, electrical outages or other causes reasonably beyond its
control; provided, however, that the Trustee shall use commercially reasonable efforts consistent with accepted practices for corporate
trustees to maintain performance without delay or resume performance as soon as reasonably practicable under the circumstances.
Section 9.05. May Hold
Debt Securities.
Each of the Trustee, any Authenticating
Agent, any Paying Agent, any Debt Security Registrar or any other agent of the Company, in its individual or any other capacity, may become
the owner or pledgee of Debt Securities and, subject to Sections 9.08 and 9.13, may otherwise deal with the Company
with the same rights it would have if it were not the Trustee, Authenticating Agent, Paying Agent, Debt Security Registrar or such other
agent.
Section 9.06. 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. The Trustee shall be under no liability
for interest on investment of any money received by it hereunder except as expressly provided herein or otherwise agreed with, and for
the sole benefit of, the Company.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 9.07. Compensation
and Reimbursement.
The Company shall
(a) pay
to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an express trust);
(b) except
as otherwise expressly provided herein, reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances
reasonably incurred or made by the Trustee in accordance with any provision of this Indenture, including the costs of collection (including
the reasonable compensation and the expenses and disbursements of its agents and counsel), except to the extent that any such expense,
disbursement or advance may be attributable to its negligence, willful misconduct or bad faith; and
(c) indemnify
the Trustee and hold it harmless from and against any and all losses, demands, claims, liabilities, causes of action or expenses (including
reasonable attorneys’ fees and expenses) incurred by it arising out of or in connection with the acceptance or administration of
the trust or trusts hereunder or the performance of its duties hereunder, including the reasonable 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, except to the
extent any such loss, demand, claim, liability, cause of action or expense may be attributable to its negligence, willful misconduct or
bad faith and may assume the defense of the Trustee with counsel acceptable to the Trustee, unless the Trustee shall have been advised
by counsel that there may be one or more legal defenses available to it that are different from or additional to those available to the
Company, in which case the Trustee may engage separate counsel, and the fees and expenses of such counsel shall be assumed by the Company.
As security for the performance
of the obligations of the Company under this Section, the Trustee shall have a lien prior to the Debt Securities upon all property and
funds held or collected by the Trustee as such other than property and funds held in trust for the payment of principal, premium, if any,
and interest on Debt Securities. “Trustee” for purposes of this Section shall include any predecessor Trustee;
provided, however, that the negligence, willful misconduct or bad faith of any Trustee hereunder shall not affect the rights of
any other Trustee hereunder. When a Trustee incurs expenses or renders services in connection with an Event of Default specified in Sections 8.01(e) or (f),
the expenses (including the reasonable charges and expenses of its counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable federal or state bankruptcy, insolvency or other similar law. The provisions of this Section shall
survive termination of this Indenture and the resignation or removal of the Trustee.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 9.08. Disqualification;
Conflicting Interests.
If the Trustee shall have
or acquire any conflicting interest within the meaning of the Trust Indenture Act, it shall either eliminate such conflicting interest
or resign to the extent, in the manner and with the effect, and subject to the conditions, provided in the Trust Indenture Act and this
Indenture. For purposes of Section 310(b)(1) of the Trust Indenture Act and to the extent permitted thereby, the Trustee shall
not be deemed to have a conflicting interest by virtue of being a Trustee under (i) this Indenture with respect to Debt Securities
of one or more series or (ii) any other indenture to which the Trustee and the Company are a party, if any, or with respect to the
securities issued thereunder, if any.
Section 9.09. Corporate
Trustee Required; Eligibility.
There shall at all times be
a Trustee hereunder which shall be
(a) a
corporation organized and doing business under the laws of the United States, any state or territory thereof or the District of Columbia,
authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $100,000,000 and subject
to supervision or examination by federal or state authority, or
(b) if
and to the extent permitted by the Commission by rule, regulation or order upon application, a corporation or other Person organized and
doing business under the laws of a foreign government, authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $100,000,000 or the Dollar equivalent of the applicable foreign currency and subject to supervision or
examination by authority of such foreign government or a political subdivision thereof substantially equivalent to supervision or examination
applicable to United States institutional trustees,
and, in either case, qualified and eligible under
this Article and the Trust Indenture Act. If such corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of such supervising or examining authority, then for the purposes of this Section, the combined capital and surplus
of such corporation 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 shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
Section 9.10. Resignation
and Removal; Appointment of Successor.
(a) 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 9.11.
(b) The
Trustee may resign at any time with respect to the Debt 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 9.11 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 Debt Securities of such series.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
(c) The
Trustee may be removed at any time with respect to the Debt Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Debt Securities of such series delivered to the Trustee and to the Company.
(d) If
at any time:
(1) the
Trustee shall fail to comply with Section 9.08 after written request therefor by the Company or by any Holder who has
been a bona fide Holder for at least six months, or
(2) the
Trustee shall cease to be eligible under Section 9.09 and shall fail to resign after written request therefor by the
Company or by any such Holder, 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, (x) the Company by
a Board Resolution may remove the Trustee with respect to all Debt Securities or (y) subject to Section 8.14, any
Holder who has been a bona fide Holder 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 Debt Securities and the appointment of a successor
Trustee or Trustees.
(e) 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
(other than as contemplated in clause (y) in Subsection (d) of this Section), with respect to the Debt Securities
of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the
Debt Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Debt
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 Debt Securities
of any particular series) and shall comply with the applicable requirements of Section 9.11. If, within one year after
such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Debt Securities
of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Debt 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 9.11, become the successor Trustee with respect to the Debt
Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect
to the Debt Securities of any series shall have been so appointed by the Company or the Holders and accepted appointment in the manner
required by Section 9.11, any Holder who has been a bona fide Holder of a Debt Security of such series for at least six
months may, on behalf of itself and all others similarly situated, petition any court of competent jurisdiction for the appointment of
a successor Trustee with respect to the Debt Securities of such series.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
(f) So long as no event that is, or after notice or lapse
of time, or both, would become, an Event of Default shall have occurred and be continuing, and except with respect to a Trustee
appointed by Act of the Holders of a majority in principal amount of the Outstanding Debt Securities pursuant to
Subsection (e) of this Section, if the Company shall have delivered to the Trustee (i) a Board Resolution appointing
a successor Trustee, effective as of a date specified therein, and (ii) an instrument of acceptance of such appointment,
effective as of such date, by such successor Trustee in accordance with Section 9.11, the Trustee shall be deemed
to have resigned as contemplated in Subsection (b) of this Section, the successor Trustee shall be deemed to have been
appointed by the Company pursuant to Subsection (e) of this Section and such appointment shall be deemed to have been
accepted as contemplated in Section 9.11, all as of such date, and all other provisions of this
Section and Section 9.11 shall be applicable to such resignation, appointment and acceptance except to the
extent inconsistent with this Subsection (f).
(g) The
Company or, should the Company fail so to act promptly, the successor Trustee, at the expense of the Company, shall give notice of each
resignation and each removal of the Trustee with respect to the Debt Securities of any series and each appointment of a successor Trustee
with respect to the Debt Securities of any series by mailing written notice of such event by first-class mail, postage prepaid, to all
Holders of Debt Securities of such series as their names and addresses appear in the Debt Security Register. Each notice shall include
the name of the successor Trustee with respect to the Debt Securities of such series and the address of its corporate trust office.
Section 9.11. Acceptance
of Appointment by Successor.
(a) In
case of the appointment hereunder of a successor Trustee with respect to the Debt Securities of all series, 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 all sums owed to it, 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.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
(b) In
case of the appointment hereunder of a successor Trustee with respect to the Debt Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to the Debt 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 Debt 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 Debt 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 Debt 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 Debt 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, upon payment of all sums owed to it, shall duly
assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to
the Debt Securities of that or those series to which the appointment of such successor Trustee relates.
(c) Upon
request of any such successor Trustee, the Company shall execute any instruments that fully vest in and confirm to such successor Trustee
all such rights, powers and trusts referred to in Subsection (a) or (b) of this Section, as the case may be.
(d) 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.
Section 9.12. 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 Debt 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 Debt Securities so authenticated with the
same effect as if such successor Trustee had itself authenticated such Debt Securities.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 9.13. Preferential
Collection of Claims Against Company.
If the Trustee shall be or
become a creditor of the Company or any other obligor upon the Debt Securities (other than by reason of a relationship described in Section 311(b) of
the Trust Indenture Act), the Trustee shall be subject to any and all applicable provisions of the Trust Indenture Act regarding the collection
of claims against the Company or such other obligor. For purposes of Section 311(b) of the Trust Indenture Act:
(a) the
term “cash transaction” means any transaction in which full payment for goods or securities sold is made within seven days
after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand;
and
(b) the
term “self-liquidating paper” means any draft, bill of exchange, acceptance or obligation that is made, drawn, negotiated
or incurred by the Company for the purpose of financing the purchase, processing, manufacturing, shipment, storage or sale of goods, wares
or merchandise and that is secured by documents evidencing title to, possession of, or a lien upon, the goods, wares or merchandise or
the receivables or proceeds arising from the sale of the goods, wares or merchandise previously constituting the security, provided the
security is received by the Trustee simultaneously with the creation of the creditor relationship with the Company arising from the making,
drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation.
Section 9.14. Co-Trustees
and Separate Trustees.
At any time or times, for
the purpose of meeting the legal requirements of any applicable jurisdiction, the Company and the Trustee shall have power to appoint,
and, upon the written request of the Trustee or of the Holders of at least 33% in principal amount of the Debt Securities then Outstanding,
the Company shall for such purpose join with the Trustee in the execution and delivery of all instruments and agreements necessary or
proper to appoint, one or more Persons approved by the Trustee either to act as co-trustee, jointly with the Trustee, or to act as separate
trustee, in either case with such powers as may be provided in the instrument of appointment, and to vest in such Person or Persons, in
the capacity aforesaid, any property, title, right or power deemed necessary or desirable, subject to the other provisions of this Section.
If the Company does not join in such appointment within 15 days after the receipt by it of a request so to do, or if an Event of Default
shall have occurred and be continuing, the Trustee alone shall have power to make such appointment.
Should any written instrument
or instruments from the Company be required by any co-trustee or separate trustee so appointed to more fully confirm to such co-trustee
or separate trustee such property, title, right or power, any and all such instruments shall, on request, be executed, acknowledged and
delivered by the Company.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Every co-trustee or separate
trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following conditions:
(a) the
Debt Securities shall be authenticated and delivered, and all rights, powers, duties and obligations hereunder in respect of the custody
of securities, cash and other personal property held by, or required to be deposited or pledged with, the Trustee hereunder, shall be
exercised solely, by the Trustee;
(b) the
rights, powers, duties and obligations hereby conferred or imposed upon the Trustee in respect of any property covered by such appointment
shall be conferred or imposed upon and exercised or performed either by the Trustee or by the Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument appointing such co-trustee or separate trustee, except to the extent that under
any law of any jurisdiction in which any particular act is to be performed, the Trustee shall be incompetent or unqualified to perform
such act, in which event such rights, powers, duties and obligations shall be exercised and performed by such co-trustee or separate trustee;
(c) the
Trustee at any time, by an instrument in writing executed by it, with the concurrence of the Company, may accept the resignation of or
remove any co-trustee or separate trustee appointed under this Section, and, if an Event of Default shall have occurred and be continuing,
the Trustee shall have power to accept the resignation of, or remove, any such co-trustee or separate trustee without the concurrence
of the Company. Upon the written request of the Trustee, the Company shall join with the Trustee in the execution and delivery of all
instruments and agreements necessary or proper to effectuate such resignation or removal. A successor to any co-trustee or separate trustee
so resigned or removed may be appointed in the manner provided in this Section;
(d) no
co-trustee or separate trustee hereunder shall be personally liable by reason of any act or omission of the Trustee, or any other such
trustee hereunder, and the Trustee shall have no liability, personally or in its capacity as Trustee, for any act or omission of any co-trustee
or separate trustee hereunder; and
(e) any
Act of Holders delivered to the Trustee shall be deemed to have been delivered to each such co-trustee and separate trustee.
Section 9.15. Appointment
of Authenticating Agent.
The Trustee may appoint an
Authenticating Agent or Agents with respect to the Debt Securities of one or more series, or any Tranche thereof, which shall be authorized
to act on behalf of the Trustee to authenticate Debt Securities of such series or Tranche issued upon original issuance, exchange, registration
of transfer or partial redemption thereof or pursuant to Section 3.06, and Debt 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 Debt 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,
any state or territory thereof or the District of Columbia or the Commonwealth of Puerto Rico, 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, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
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 45 days 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 that shall be acceptable to the Company.
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.
The provisions of Sections 3.08, 9.04
and 9.05 shall be applicable to each Authenticating Agent.
If an appointment with respect
to the Debt Securities of one or more series, or any Tranche thereof, shall be made pursuant to this Section, the Debt Securities of such
series or Tranche may have endorsed thereon, in addition to the Trustee’s certificate of authentication, an alternate certificate
of authentication substantially in the following form:
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
This is one of the Debt Securities
of the series designated therein referred to in the within-mentioned Indenture.
| Date: |
By: |
|
| |
As Trustee |
| |
|
| |
By: |
|
| |
As Authenticating Agent |
| |
|
| |
By: |
|
| |
Authorized Signatory |
If all of the Debt Securities
of a series may not be originally issued at one time, and if the Trustee does not have an office capable of authenticating Debt Securities
upon original issuance located in a Place of Payment where the Company wishes to have Debt Securities of such series authenticated upon
original issuance, the Trustee, if so requested by the Company in writing (which writing need not comply with Section 1.02
and need not be accompanied by an Opinion of Counsel), shall appoint, in accordance with this Section and in accordance with such
procedures as shall be acceptable to the Trustee, an Authenticating Agent having an office in a Place of Payment designated by the Company
with respect to such series of Debt Securities.
Article X
HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 10.01. Lists
of Holders.
Semiannually, not later than
and in each year, commencing with the year
20 , and at such other times as the Trustee may request in writing, the Company shall furnish or cause to
be furnished to the Trustee information as to the names and addresses of the Holders, and the Trustee shall preserve such information
and similar information received by it in any other capacity and afford to the Holders access to information so preserved by it, all to
such extent, if any, and in such manner as shall be required by the Trust Indenture Act; provided, however, that no such list need
be furnished so long as the Trustee shall be the Debt Security Registrar. Every holder of Debt 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 the disclosure of any such information as to the names and addresses of the Holders of Debt Securities in accordance with
Section 312 of the Trust Indenture Act, or any successor Section of such Act, regardless of the source from which such information
was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under Section 312(b) of
the Trust Indenture Act, or any successor Section of such Act.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 10.02. Reports
by Trustee and Company.
Annually, not later than in
each year, commencing , the
Trustee shall transmit to the Holders, the Commission and each securities exchange upon which any Debt Securities are listed, a report,
dated as of the next preceding , with respect to any
events and other matters described in Section 313(a) of the Trust Indenture Act, in such manner and to the extent required by
the Trust Indenture Act. The Trustee shall transmit to the Holders, the Commission and each securities exchange upon which any Debt Securities
are listed, and the Company shall file with the Trustee (within 30 days after filing with the Commission in the case of reports that pursuant
to the Trust Indenture Act must be filed with the Commission and furnished to the Trustee) and transmit to the Holders, such other information,
reports and other documents, if any, at such times and in such manner, as shall be required by the Trust Indenture Act.
The Company shall notify the
Trustee of the listing of any Debt Securities on any securities exchange. Delivery of such reports, information and documents by the Company
to the Trustee is for informational purposes only, and the Trustee’s receipt of such shall not constitute constructive notice of
any information contained therein or determinable from information contained therein, including the Company’s compliance with any
of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates).
Article XI
CONSOLIDATION, MERGER, CONVEYANCE OR OTHER TRANSFER
Section 11.01. Company
May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate
with or merge into any other corporation, or convey or otherwise transfer or lease its properties and assets substantially as an entirety
to any Person, unless
(a) the
corporation formed by such consolidation or into which the Company is merged or the Person that acquires by conveyance or transfer, or
that leases, the properties and assets of the Company substantially as an entirety shall be a Person organized and existing under the
laws of the United States, any state thereof or the District of Columbia, and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of, and premium,
if any, and interest (including Additional Interest), if any, on all Outstanding Debt Securities and the performance of every covenant
of this Indenture on the part of the Company to be performed or observed;
(b) immediately
after giving effect to such transaction and treating any indebtedness for borrowed money that becomes an obligation of the Company as
a result of such transaction as having been incurred by the Company at the time of such transaction, no Event of Default, and no event
that, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
(c) the
Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, conveyance, or other transfer or lease and such supplemental indenture comply with this Article and that all conditions precedent
herein provided for relating to such transactions have been complied with.
Section 11.02. Successor
Corporation Substituted.
Upon any consolidation by
the Company with or merger by the Company into any other corporation or any conveyance or other transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with Section 11.01, the successor corporation formed
by such consolidation or into which the Company is merged or the Person to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be
relieved of all obligations and covenants under this Indenture and the Debt Securities Outstanding hereunder.
Article XII
SUPPLEMENTAL INDENTURES
Section 12.01. Supplemental
Indentures Without Consent of Holders.
Without the consent of any
Holders, the Company and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in
form satisfactory to the Trustee, for any of the following purposes:
(a) 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 Debt Securities, all as provided in Article XI; or
(b) to
add one or more covenants of the Company or other provisions for the benefit of all Holders or for the benefit of the Holders of, or to
remain in effect only so long as there shall be Outstanding, Debt Securities of one or more specified series, or one or more specified
Tranches thereof, or to surrender any right or power herein conferred upon the Company; or
(c) to
add any additional Events of Default with respect to all or any series of Debt Securities Outstanding hereunder; or
(d) to
change or eliminate any provision of this Indenture or to add any new provision to this Indenture; provided, however, that if such
change, elimination or addition shall adversely affect the interests of the Holders of Debt Securities of any series or Tranche Outstanding
on the date of such indenture supplemental hereto in any material respect, such change, elimination or addition shall become effective
with respect to such series or Tranche only pursuant to the provisions of Section 12.02 hereof or when no Debt Security
of such series or Tranche remains Outstanding; or
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
(e) to
provide collateral security for the Debt Securities of any series or Tranche; or
(f) to
establish the form or terms of Debt Securities of any series or Tranche as contemplated by Sections 2.01 and 3.01;
or
(g) to
provide for the authentication and delivery of bearer securities and coupons appertaining thereto representing interest, if any, thereon
and for the procedures for the registration, exchange and replacement thereof and for the giving of notice to, and the solicitation of
the vote or consent of, the holders thereof, and for any and all other matters incidental thereto; or
(h) to
evidence and provide for the acceptance of appointment hereunder by a separate or successor Trustee with respect to the Debt 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 9.11(b);
or
(i) to
provide for the procedures required to permit the Company to utilize, at its option, a non-certificated system of registration for all,
or any series or Tranche of, the Debt Securities; or to provide for the authentication and delivery of bearer securities and coupons appertaining
thereto representing interest, if any, thereon and for the procedures for the registration, exchange and replacement thereof and for the
giving of notice to, and the solicitation of the vote or consent of, the holders thereof, and for any and all other matters incidental
thereto; or
(j) to
change any place or places where (1) the principal of and premium, if any, and interest (including Additional Interest), if any,
on all or any series of Debt Securities, or any Tranche thereof, shall be payable, (2) all or any series of Debt Securities, or any
Tranche thereof, may be surrendered for registration of transfer, (3) all or any series of Debt Securities, or any Tranche thereof,
may be surrendered for exchange and (4) notices and demands to or upon the Company in respect of all or any series of Debt Securities,
or any Tranche thereof, and this Indenture may be served; or
(k) to
cure any ambiguity or to correct or supplement any provision herein that may be defective or inconsistent with any other provision herein;
provided that no such changes or additions shall adversely affect the interests of the Holders of Debt Securities of any series or Tranche
in any material respect.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Without limiting the generality
of the foregoing, if the Trust Indenture Act as in effect at the date of the execution and delivery of this Indenture or at any time thereafter
shall be amended and
(x) if
any such amendment shall require one or more changes to any provisions hereof or the inclusion herein of any additional provisions, or
shall by operation of law be deemed to effect such changes or incorporate such provisions by reference or otherwise, this Indenture shall
be deemed to have been amended so as to conform to such amendment to the Trust Indenture Act, and the Company and the Trustee may, without
the consent of any Holders, enter into an indenture supplemental hereto to effect or evidence such changes or additional provisions; or
(y) if
any such amendment shall permit one or more changes to, or the elimination of, any provisions hereof that, at the date of the execution
and delivery hereof or at any time thereafter, are required by the Trust Indenture Act to be contained herein, this Indenture shall be
deemed to have been amended to effect such changes or elimination, and the Company and the Trustee may, without the consent of any Holders,
enter into an indenture supplemental hereto to evidence such amendment hereof, provided such amendment does not have a material adverse
effect on any Holders.
Section 12.02. Supplemental
Indentures With Consent of Holders.
With the consent of the Holders
of not less than a majority in aggregate principal amount of the Debt Securities of all series then Outstanding under this Indenture,
considered as one class, 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; provided, however, that if there shall be Debt Securities
of more than one series Outstanding hereunder and if a proposed supplemental indenture shall directly affect the rights of the Holders
of Debt Securities of one or more, but less than all, of such series, then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Debt Securities of all series so directly affected, considered as one class, shall be required; and
provided, further, that if the Debt Securities of any series shall have been issued in more than one Tranche and if the proposed
supplemental indenture shall directly affect the rights of the Holders of Debt Securities of one or more, but less than all, of such Tranches,
then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Debt Securities of all Tranches so
directly affected, considered as one class, shall be required; and provided, further, that no such supplemental indenture shall:
(a) change
the Stated Maturity of the principal of, or any installment of principal of or interest (including Additional Interest) on [(except as
provided in Section 3.12)]* any Debt Security, or reduce the principal amount thereof or the rate of interest thereon
(or the amount of any installment of interest thereon) or change the method of calculating such rate or reduce any premium payable upon
the redemption thereof, or reduce the amount of the principal of a Discount Debt Security that would be due and payable upon a declaration
of acceleration of the Maturity thereof pursuant to Section 8.02, or change the coin or currency (or other property)
in which any Debt Security or any premium or the interest (including Additional Interest) thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Stated Maturity of any Debt Security (or, in the case of redemption, on or
after the Redemption Date), without, in any such case, the consent of the Holder of such Debt Security, or
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
(b) reduce
the percentage in principal amount of the Outstanding Debt Securities of any series or any Tranche thereof, the consent of the Holders
of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance
with any provision of this Indenture or of any default hereunder and its consequences, or reduce the requirements of Section 13.04
for quorum or voting, without, in any such case, the consent of the Holders of each Outstanding Debt Security of such series or Tranche,
or
(c) modify
any of the provisions of this Section, Section 6.07 or Section 8.13 with respect to the Debt Securities
of any series, or any Tranche thereof (except to increase the percentages in principal amount referred to in this Section or such
other Sections or to provide that other provisions of this Indenture cannot be modified or waived without the consent of the Holder of
each Outstanding Debt 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, or the deletion
of this proviso, in accordance with the requirements of Sections 9.11(b), 9.14 and 12.01(h).
A supplemental indenture that
changes or eliminates any covenant or other provision of this Indenture that has expressly been included solely for the benefit of one
or more particular series of Debt Securities, or of one or more Tranches thereof, or that modifies the rights of the Holders of Debt Securities
of such series or Tranches with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture
of the Holders of Debt Securities of any other series or Tranche.
Upon the request of the Company,
accompanied by a copy of the Board Resolution authorizing the execution of any such supplemental indenture, compliance by the Company
with Section 12.03 hereof, and the filing with the Trustee of evidence of the consent of the Holders of the Debt Securities
required hereunder with respect to the proposed supplemental indenture, the Trustee shall join with the Company in the execution of such
supplemental indenture unless the supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture,
or otherwise, in which case the Trustee may in its discretion but shall not be obligated to enter into such supplemental indenture.
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. A waiver by a Holder of such Holder’s right to consent under this Section shall
be deemed to be a consent of such Holder.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 12.03. 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 provided and (subject to Section 9.01) shall be fully protected in relying
upon an Officer’s Certificate and Opinion of Counsel, each stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture.
Section 12.04. 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 Debt Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby. Any supplemental indenture permitted by this Article may restate this Indenture in its entirety,
and, upon the execution and delivery thereof, any such restatement shall supersede this Indenture as theretofore in effect for all purposes.
Section 12.05. Conformity
With Trust Indenture Act.
Every supplemental indenture
executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect.
Section 12.06. Reference
in Debt Securities to Supplemental Indentures.
Debt Securities of any series,
or any Tranche thereof, 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 Debt Securities of any series, or any Tranche thereof, 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 Debt Securities of such series or Tranche.
Section 12.07. Modification
without Supplemental Indenture.
If the terms of any particular
series of Debt Securities shall have been established in a Board Resolution or an Officer’s Certificate pursuant to a Board Resolution
as contemplated by Section 3.01, and not in an indenture supplemental hereto, additions to, changes in or the elimination
of any of such terms may be effected by means of a supplemental Board Resolution or Officer’s Certificate, as the case may be, delivered
to, and accepted by, the Trustee; provided, however, that such supplemental Board Resolution or Officer’s Certificate shall
not be accepted by the Trustee or otherwise be effective unless all conditions set forth in this Indenture that would be required to be
satisfied if such additions, changes or elimination were contained in a supplemental indenture shall have been appropriately satisfied.
Upon the acceptance thereof by the Trustee, any such supplemental Board Resolution or Officer’s Certificate shall be deemed to be
a “supplemental indenture” for purposes of Sections 12.04 and 12.06.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Article XIII
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING
Section 13.01. Purposes
for which Meetings may be Called.
A meeting of Holders of Debt
Securities of one or more, or all, series, or any Tranche or Tranches thereof, may be called at any time and from time to time pursuant
to this Article to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other action provided
by this Indenture to be made, given or taken by Holders of Debt Securities of such series or Tranches.
Section 13.02. Call,
Notice and Place of Meetings.
(a) The
Trustee may at any time call a meeting of Holders of Debt Securities of one or more, or all, series, or any Tranche or Tranches thereof,
for any purpose specified in Section 13.01, to be held at such time and at such place in the Borough of Manhattan, The
City of New York, as the Trustee shall determine, or, with the approval of the Company, at any other place. Notice of every such meeting,
setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given,
in the manner provided in Section 1.06, not less than 21 nor more than 180 days prior to the date fixed for the meeting.
(b) If
the Trustee shall have been requested to call a meeting of the Holders of Debt Securities of one or more, or all, series, or any Tranche
or Tranches thereof, by the Company or by the Holders of at least 33% in aggregate principal amount of all of such series and Tranches,
considered as one class, for any purpose specified in Section 13.01, by written request setting forth in reasonable detail
the action proposed to be taken at the meeting, and the Trustee shall not have given the notice of such meeting within 21 days after receipt
of such request or shall not thereafter proceed to cause the meeting to be held as provided herein, then the Company or the Holders of
Debt Securities of such series and Tranches in the amount above specified, as the case may be, may determine the time and the place in
the Borough of Manhattan, The City of New York, or in such other place as shall be determined or approved by the Company, for such meeting
and may call such meeting for such purposes by giving notice thereof as provided in Subsection (a) of this Section.
(c) Any
meeting of Holders of Debt Securities of one or more, or all, series, or any Tranche or Tranches thereof, shall be valid without notice
if the Holders of all Outstanding Debt Securities of such series or Tranches are present in person or by proxy and if representatives
of the Company and the Trustee are present, or if notice is waived in writing before or after the meeting by the Holders of all Outstanding
Debt Securities of such series, or by such of them as are not present at the meeting in person or by proxy, and by the Company and the
Trustee.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 13.03. Persons
Entitled to Vote at Meetings.
To be entitled to vote at
any meeting of Holders of Debt Securities of one or more, or all, series, or any Tranche or Tranches thereof, a Person shall be (a) a
Holder of one or more Outstanding Debt Securities of such series or Tranches, or (b) a Person appointed by an instrument in writing
as proxy for a Holder or Holders of one or more Outstanding Debt Securities of such series or Tranches by such Holder or Holders. The
only Persons who shall be entitled to attend any meeting of Holders of Debt Securities of any series or Tranche shall be the Persons entitled
to vote at such meeting and their counsel, any representatives of the Trustee and its counsel and any representatives of the Company and
its counsel.
Section 13.04. Quorum;
Action.
The Persons entitled to vote
a majority in aggregate principal amount of the Outstanding Debt Securities of the series and Tranches with respect to which a meeting
shall have been called as hereinbefore provided, considered as one class, shall constitute a quorum for a meeting of Holders of Debt Securities
of such series and Tranches; provided, however, that if any action is to be taken at such meeting that this Indenture expressly
provides may be taken by the Holders of a specified percentage, which is less than a majority, in principal amount of the Outstanding
Debt Securities of such series and Tranches, considered as one class, the Persons entitled to vote such specified percentage in principal
amount of the Outstanding Debt Securities of such series and Tranches, considered as one class, shall constitute a quorum. In the absence
of a quorum within one hour of the time appointed for any such meeting, the meeting shall, if convened at the request of Holders of Debt
Securities of such series and Tranches, be dissolved. In any other case the meeting may be adjourned for such period as may be determined
by the chairman of the meeting prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for such period as may be determined by the chairman of the meeting prior to the adjournment
of such adjourned meeting. Except as provided by Section 13.05(e), notice of the reconvening of any meeting adjourned
for more than 30 days shall be given as provided Section 13.02(a) not less than ten days prior to the date on which
the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly the percentage, as
provided above, of the principal amount of the Outstanding Debt Securities of such series and Tranches that shall constitute a quorum.
Except as limited by Section 12.02,
any resolution presented to a meeting or adjourned meeting duly reconvened at which a quorum is present as aforesaid may be adopted only
by the affirmative vote of the Holders of a majority in aggregate principal amount of the Outstanding Debt Securities of the series and
Tranches with respect to which such meeting shall have been called, considered as one class; provided, however, that, except as
so limited, any resolution with respect to any action that this Indenture expressly provides may be taken by the Holders of a specified
percentage, which is less than a majority, in principal amount of the Outstanding Debt Securities of such series and Tranches, considered
as one class, may be adopted at a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid by the
affirmative vote of the Holders of such specified percentage in principal amount of the Outstanding Debt Securities of such series and
Tranches, considered as one class.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Any resolution passed or decision
taken at any meeting of Holders of Debt Securities duly held in accordance with this Section shall be binding on all the Holders
of Debt Securities of the series and Tranches with respect to which such meeting shall have been held, whether or not present or represented
at the meeting.
Section 13.05. Attendance
at Meetings; Determination of Voting Rights; Conduct and Adjournment of Meetings.
(a) Attendance
at meetings of Holders of Debt Securities may be in person or by proxy; and, to the extent permitted by law, any such proxy shall remain
in effect and be binding upon any future Holder of the Debt Securities with respect to which it was given unless and until specifically
revoked by the Holder or future Holder of such Debt Securities before being voted.
(b) Notwithstanding
any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders
of Debt Securities in regard to proof of the holding of such Debt Securities and of the appointment of proxies and in regard to the appointment
and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and
such other matters concerning the conduct of the meeting as it shall deem appropriate. Except as otherwise permitted or required by any
such regulations, the holding of Debt Securities shall be proved in the manner specified in Section 1.04 and the appointment
of any proxy shall be proved in the manner specified in Section 1.04. Such regulations may provide that written instruments
appointing proxies, regular on their face, may be presumed valid and genuine without the proof specified in Section 1.04
or other proof.
(c) The
Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders as provided in Section 13.02(b), in which case the Company or the Holders of Debt Securities
of the series and Tranches calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman
and a permanent secretary of the meeting shall be elected by vote of the Persons entitled to vote a majority in aggregate principal amount
of the Outstanding Debt Securities of all series and Tranches represented at the meeting, considered as one class.
(d) At
any meeting each Holder or proxy shall be entitled to one vote for each $1 principal amount of Debt Securities held or represented by
him; provided, however, that no vote shall be cast or counted at any meeting in respect of any Debt Security challenged as not
Outstanding and ruled by the chairman of the meeting to be not Outstanding. The chairman of the meeting shall have no right to vote, except
as a Holder of a Debt Security or proxy.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
(e) Any
meeting duly called pursuant to Section 13.02 at which a quorum is present may be adjourned from time to time by Persons
entitled to vote a majority in aggregate principal amount of the Outstanding Debt Securities of all series and Tranches represented at
the meeting, considered as one class; and the meeting may be held as so adjourned without further notice.
Section 13.06. Counting
Votes and Recording Action of Meetings.
The vote upon any resolution
submitted to any meeting of Holders shall be by written ballots on which shall be subscribed the signatures of the Holders or of their
representatives by proxy and the principal amounts and serial numbers of the Outstanding Debt Securities, of the series and Tranches with
respect to which the meeting shall have been called, held or represented by them. The permanent chairman of the meeting shall appoint
two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports of all votes cast at the meeting. A record of the proceedings of each meeting
of Holders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors
of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy
of the notice of the meeting and showing that said notice was given as provided in Section 13.02 and, if applicable, Section 13.04.
Each copy shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one such copy shall
be delivered to the Company, and another to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots
voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated.
Section 13.07. Action
Without Meeting.
In lieu of a vote of Holders
at a meeting as hereinbefore contemplated in this Article, any request, demand, authorization, direction, notice, consent, waiver or other
action may be made, given or taken by Holders by written instruments as provided in Section 1.04.
Article XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 14.01. Liability
Solely Corporate.
No recourse shall be had for
the payment of the principal of or premium, if any, or interest (including Additional Interest), if any, on any Debt Securities, or any
part thereof, or for any claim based thereon or otherwise in respect thereof, or of the indebtedness represented thereby, or upon any
obligation, covenant or agreement under this Indenture, against any incorporator, stockholder, officer or director, as such, past, present
or future, of the Company or of any predecessor or successor corporation (either directly or through the Company or a predecessor or successor
corporation), whether by virtue of any constitutional provision, statute or rule of law, or by the enforcement of any assessment
or penalty or otherwise; it being expressly agreed and understood that this Indenture and all the Debt Securities are solely corporate
obligations, and that no personal liability whatsoever shall attach to, or be incurred by, any incorporator, stockholder, officer or director,
past, present or future, of the Company or of any predecessor or successor corporation, either directly or indirectly through the Company
or any predecessor or successor corporation, because of the indebtedness hereby authorized or under or by reason of any of the obligations,
covenants or agreements contained in this Indenture or in any of the Debt Securities or to be implied herefrom or therefrom, and that
any such personal liability is hereby expressly waived and released as a condition of, and as part of the consideration for, the execution
of this Indenture and the issuance of the Debt Securities.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Article XV
[SUBORDINATION OF SECURITIES]*
Section 15.01. Securities
Subordinate to Senior Indebtedness.
[The Company, for itself,
its successors and assigns, covenants and agrees, and each Holder of the Debt Securities of each series, by its acceptance thereof, likewise
covenants and agrees, that the payment of the principal of and premium, if any, and interest, if any, on each and all of the Debt Securities
is hereby expressly subordinated, to the extent and in the manner set forth in this Article, in right of payment to the prior payment
in full of all Senior Indebtedness.
Each Holder of the Debt Securities
of each series, by its acceptance thereof, authorizes and directs the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in this Article, and appoints the Trustee its attorney-in-fact for any and all
such purposes.
Without limiting the generality
of the foregoing, nothing contained in this Article shall restrict the right of the Trustee or the Holders of Debt Securities to
take any action to declare the Debt Securities to be due and payable prior to their stated maturity pursuant to Section 8.02
or to pursue any rights or remedies hereunder; provided, however, that all Senior Indebtedness then due and payable shall first
be paid in full before the Holders of the Debt Securities or the Trustee are entitled to receive any direct or indirect payment from the
Company of principal of, or premium, if any, or interest on the Debt Securities.
Section 15.02. Payment
Over of Proceeds of Securities.
In the event (a) of any
insolvency or bankruptcy proceedings or any receivership, liquidation, reorganization or other similar proceedings in respect of the Company
or a substantial part of its property, or of any proceedings for liquidation, dissolution or other winding up of the Company, whether
or not involving insolvency or bankruptcy, whether voluntary or involuntary or (b) subject to the provisions of Section 15.03,
that (i) a default shall have occurred with respect to the payment of principal of or interest on or other monetary amounts due and
payable on any Senior Indebtedness, or (ii) there shall have occurred a default (other than a default in the payment of principal
or interest or other monetary amounts due and payable) in respect of any Senior Indebtedness, as defined therein or in the instrument
under which the same is outstanding, permitting the holder or holders thereof to accelerate the maturity thereof (with notice or lapse
of time, or both), and such default shall have continued beyond the period of grace, if any, in respect thereof, and, in the cases of
subclauses (i) and (ii) of this clause (b), such default shall not have been cured or waived or shall not have
ceased to exist, and, in the case of subclause (ii) of this clause (b), the maturity of such Senior Indebtedness shall
have been accelerated in accordance with the default provisions thereof or (c) that the principal of and accrued interest on the
Debt Securities of any series shall have been declared due and payable pursuant to Section 8.01 and such declaration
shall not have been rescinded and annulled as provided in Section 8.02, then:
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
(1) the
holders of all Senior Indebtedness shall first be entitled to receive payment of the full amount due thereon, or provision shall be made
for such payment in money or money’s worth, before the Holders of any of the Debt Securities are entitled to receive a payment on
account of the principal of or interest on the indebtedness evidenced by the Debt Securities, including, without limitation, any payments
made pursuant to Articles IV and V;
(2) any
payment by, or distribution of assets of, the Company of any kind or character, whether in cash, property or securities, to which any
Holder or the Trustee would be entitled except for the provisions of this Article, shall be paid or delivered by the person making such
payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or otherwise, directly to the holders of such
Senior Indebtedness or their representative or representatives or to the trustee or trustees under any indenture under which any instruments
evidencing any of such Senior Indebtedness may have been issued, ratably according to the aggregate amounts remaining unpaid on account
of such Senior Indebtedness held or represented by each, to the extent necessary to make payment in full of all Senior Indebtedness remaining
unpaid after giving effect to any concurrent payment or distribution (or provision therefor) to the holders of such Senior Indebtedness,
before any payment or distribution is made to the Holder of the indebtedness evidenced by the Debt Securities or to the Trustee under
this Indenture; and
(3) in
the event that, notwithstanding the foregoing, any payment by, or distribution of assets of, the Company of any kind or character, whether
in cash, property or securities, in respect of principal of or interest on the Debt Securities or in connection with any repurchase by
the Company of the Debt Securities, shall be received by the Trustee or any Holder before all Senior Indebtedness is paid in full to the
extent required by Subsection (1) of this Section 15.02, or provision is made for such payment in money or
money’s worth, such payment or distribution in respect of principal of or interest on the Debt Securities or in connection with
any repurchase by the Company of the Debt Securities shall be paid over to the holders of such Senior Indebtedness or their representative
or representatives or to the trustee or trustees under any indenture under which any instruments evidencing any such Senior Indebtedness
may have been issued, ratably as aforesaid, for application to the payment of all Senior Indebtedness remaining unpaid until all such
Senior Indebtedness shall have been paid in full, after giving effect to any concurrent payment or distribution (or provision therefor)
to the holders of such Senior Indebtedness.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Notwithstanding the foregoing,
at any time after the 123rd day following the date of deposit of cash or Eligible Obligations pursuant to Section 7.01
(provided all conditions set out in such Section shall have been satisfied), the funds so deposited and any interest thereon will
not be subject to any rights of holders of Senior Indebtedness, including, without limitation, those arising under this Article; provided
that no event described in clauses (e) and (f) of Section 8.01 with respect to the Company has occurred
during such 123-day period.
For purposes of this Article only,
the words “cash, property or securities” shall not be deemed to include shares of beneficial interest of the Company as reorganized
or readjusted, or securities of the Company or any other corporation provided for by a plan of reorganization or readjustment that are
subordinate in right of payment to all Senior Indebtedness that may at the time be outstanding to the same extent as, or to a greater
extent than, the Debt Securities are so subordinated as provided in this Article. The consolidation of the Company with, or the merger
of the Company into, another corporation or the liquidation or dissolution of the Company following the conveyance or transfer of its
property as an entirety, or substantially as an entirety, to another corporation upon the terms and conditions provided for in Article XI
hereof shall not be deemed a dissolution, winding-up, liquidation or reorganization for the purposes of this Section 15.02
if such other corporation shall, as a part of such consolidation, merger, conveyance or transfer, comply with the conditions stated in Article XI
hereof. Nothing in Section 15.01 or in this Section 15.02 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 9.07.
Section 15.03. Disputes
with Holders of Certain Senior Indebtedness.
Any failure by the Company
to make any payment on or perform any other obligation in respect of Senior Indebtedness, other than any indebtedness incurred by the
Company or assumed or guaranteed, directly or indirectly, by the Company for money borrowed (or any deferral, renewal, extension or refunding
thereof) or any other obligation as to which the provisions of this Section shall have been waived by the Company in the instrument
or instruments by which the Company incurred, assumed, guaranteed or otherwise created such indebtedness or obligation, shall not be deemed
a default under clause (b) of Section 15.02 if (i) the Company shall be disputing its obligation to make
such payment or perform such obligation and (ii) either (A) no final judgment relating to such dispute shall have been issued
against the Company that is in full force and effect and is not subject to further review, including a judgment that has become final
by reason of the expiration of the time within which a party may seek further appeal or review, or (B) in the event that a judgment
that is subject to further review or appeal has been issued, the Company shall in good faith be prosecuting an appeal or other proceeding
for review and a stay of execution shall have been obtained pending such appeal or review.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 15.04. Subrogation.
Senior Indebtedness shall
not be deemed to have been paid in full unless the holders thereof shall have received cash (or securities or other property satisfactory
to such holders) in full payment of such Senior Indebtedness then outstanding. Upon the payment in full of all Senior Indebtedness, the
Holders of the Debt Securities shall be subrogated to the rights of the holders of Senior Indebtedness to receive any further payments
or distributions of cash, property or securities of the Company applicable to the holders of the Senior Indebtedness until all amounts
owing on the Debt Securities shall be paid in full; and such payments or distributions of cash, property or securities received by the
Holders of the Debt Securities, by reason of such subrogation, which otherwise would be paid or distributed to the holders of such Senior
Indebtedness shall, as between the Company, its creditors other than the holders of Senior Indebtedness, and the Holders, be deemed to
be a payment by the Company to or on account of Senior Indebtedness, it being understood that the provisions of this Article are
and are intended solely for the purpose of defining the relative rights of the Holders, on the one hand, and the holders of the Senior
Indebtedness, on the other hand.
If any payment or distribution
to which the Holders of the Debt Securities would otherwise have been entitled but for the provisions of this Article shall have
been applied, pursuant to the provisions of this Article, to the payment of amounts payable under Senior Indebtedness, then and in such
case, the Holders of the Debt Securities shall be entitled to receive from the holders of such Senior Indebtedness any payments or distributions
received by such holders of Senior Indebtedness in excess of the amount required to make payment to the extent required by Section 15.02,
or provision for payment, of such Senior Indebtedness.
Section 15.05. Unconditional
Obligation of the Company.
Nothing contained in this
Article or elsewhere in this Indenture or in the Debt Securities is intended to or shall impair, as among the Company, its creditors
other than the holders of Senior Indebtedness and the Holders, the obligation of the Company, which is absolute and unconditional, to
pay to the Holders the principal of and interest on the Debt Securities as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative rights of the Holders and creditors of the Company other than the holders
of Senior Indebtedness, nor shall anything herein or therein prevent the Trustee or any Holder from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article of the holders of
Senior Indebtedness in respect of cash, property or securities of the Company received upon the exercise of any such remedy.
Upon any payment or distribution
of assets or securities of the Company referred to in this Article, the Trustee and the Holders shall be entitled to rely upon any order
or decree of a court of competent jurisdiction in which such bankruptcy, dissolution, winding up, liquidation or reorganization proceedings
are pending or upon a certificate of the receiver, trustee in bankruptcy, liquidating trustee agent or other person making such payment
or distribution delivered to the Trustee or to the Holders for the purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon, and all other facts pertinent thereto or to this Article.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 15.06. Priority
of Senior Indebtedness Upon Maturity.
Upon the maturity of the principal
of any Senior Indebtedness by lapse of time, acceleration or otherwise, all matured principal of Senior Indebtedness and interest and
premium, if any, thereon shall first be paid in full before any payment of principal or premium or interest, if any, is made upon the
Debt Securities or before any Debt Securities can be acquired by the Company or any sinking fund payment is made with respect to the Debt
Securities (except that required sinking fund payments may be reduced by Debt Securities acquired before such maturity of such Senior
Indebtedness).
Section 15.07. Trustee
as Holder of Senior Indebtedness.
The Trustee shall be entitled
to all rights set forth in this Article with respect to any Senior Indebtedness at any time held by it, to the same extent as any
other holder of Senior Indebtedness. Nothing in this Article shall deprive the Trustee of any of its rights as such holder.
Section 15.08. Notice
to Trustee to Effectuate Subordination.
The Company shall give prompt
written notice to the Trustee of any fact known to the Company that would prohibit the making of any payment to or by the Trustee in respect
of the Debt Securities pursuant to the provisions of this Article. Notwithstanding the provisions of this Article or any other provision
of the Indenture, the Trustee shall not be charged with knowledge of the existence of any facts that would prohibit the making of any
payment of moneys to or by the Trustee unless and until the Trustee shall have received written notice thereof from the Company, from
a Holder or from a holder of any Senior Indebtedness or from any representative or representatives of such holder and, prior to the receipt
of any such written notice, the Trustee shall be entitled, subject to Section 9.01, in all respects to assume that no
such facts exist; provided, however, that, if prior to the fifth Business Day preceding the date upon which by the terms hereof
any such moneys may become payable for any purpose, or in the event of the execution of an instrument pursuant to Section 7.02
acknowledging satisfaction and discharge of this Indenture, then if prior to the second Business Day preceding the date of such execution,
the Trustee shall not have received with respect to such moneys the notice provided for in this Section, then, anything herein contained
to the contrary notwithstanding, the Trustee may, in its discretion, receive such moneys and/or apply the same to the purpose for which
they were received, and shall not be affected by any notice to the contrary, which may be received by it on or after such date; provided,
however, that no such application shall affect the obligations under this Article of the persons receiving such moneys from the
Trustee.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 15.09. Modification,
Extension, Etc. of Senior Indebtedness.
The holders of Senior Indebtedness
may, without affecting in any manner the subordination of the payment of the principal of and premium, if any, and interest, if any, on
the Debt Securities, at any time or from time to time and in their absolute discretion, agree with the Company to change the manner, place
or terms of payment, change or extend the time of payment of, or renew or alter, any Senior Indebtedness, or amend or supplement any instrument
pursuant to which any Senior Indebtedness is issued, or exercise or refrain from exercising any other of their rights under the Senior
Indebtedness, including, without limitation, the waiver of default thereunder, all without notice to or assent from the Holders or the
Trustee.
Section 15.10. Trustee
Has No Fiduciary Duty to Holders of Senior Indebtedness.
With respect to the holders
of Senior Indebtedness, the Trustee undertakes to perform or to observe only such of its covenants and objectives as are specifically
set forth in this Article, and no implied covenants or obligations with respect to the holders of Senior Indebtedness shall be read into
this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness, and
shall not be liable to any such holders if it shall mistakenly pay over or deliver to the Holders or the Company or any other Person,
cash, property or securities to which any holders of Senior Indebtedness shall be entitled by virtue of this Article or otherwise.
Section 15.11. Paying
Agents other than the Trustee.
In case at any time any Paying
Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term “Trustee” as
used in this Article shall in such case (unless the context shall otherwise require) be construed as extending to and including such
Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article in addition
to or in place of the Trustee; provided, however, that Sections 15.07, 15.08 and 15.10 shall
not apply to the Company if it acts as Paying Agent.
Section 15.12. Rights
of Holders of Senior Indebtedness Not Impaired.
No right of any present or
future holder of Senior Indebtedness to enforce the subordination herein shall at any time or in any way be prejudiced or impaired by
any act or failure to act on the part of the Company or by any noncompliance by the Company with the terms, provisions and covenants of
this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with.
Section 15.13. This
Article Not To Prevent Events of Default.
The failure to make a payment
on account of principal of, or premium, if any, or interest on the Debt Securities by reason of any provision of this Article shall
not be construed as preventing the occurrence of an Event of Default specified in paragraph (a) or (b) of Section 8.01.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
Section 15.14. Effect
of Subordination Provisions; Termination.
Notwithstanding anything contained
herein to the contrary, other than as provided in the immediately succeeding sentence, all the provisions of this Indenture shall be subject
to the provisions of this Article, so far as the same may be applicable thereto.
Notwithstanding anything contained
herein to the contrary, the provisions of this Article XV shall be of no further effect, and the Debt Securities shall
no longer be subordinated in right of payment to the prior payment of Senior Indebtedness, if the Company shall have delivered to the
Trustee a notice to such effect. Any such notice delivered by the Company shall not be deemed to be a supplemental indenture for purposes
of Article XII.]*
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.
| * | Bracketed language throughout this Indenture will be inserted in the Indenture in the event that subordinated
Debt Securities are issued. |
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.
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GLOBAL MEDICAL REIT INC. |
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By: |
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Name: |
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Title: |
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| [SEAL] |
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| [ATTEST] |
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| By: |
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| Name: |
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| Title: |
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[Trustee’s signature page follows.]
, Trustee
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By: |
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Authorized Representative |
| [SEAL] |
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| [ATTEST] |
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| Authorized Representative |
Exhibit 5.1
December 22, 2023
Global Medical REIT Inc.
7373 Wisconsin Avenue
Suite 800
Bethesda, MD 20814
| Re: | Global Medical REIT Inc.
Registration Statement on Form S-3 |
Ladies and Gentlemen:
We have served as Maryland counsel
to Global Medical REIT Inc., a Maryland corporation (the “Company”), in connection with certain matters of Maryland law arising
out of the registration by the Company of the following securities (collectively, the “Securities”): (i) shares of common
stock, $0.001 par value per share (“Common Stock”), of the Company; (ii) shares of preferred stock, $0.001 par value per share
(“Preferred Stock”), of the Company; and (iii) debt securities (“Debt Securities”) of the Company, each covered
by the Registration Statement on Form S-3, and all amendments thereto (the “Registration Statement”), as filed with the U.S.
Securities and Exchange Commission (the “Commission”) by the Company on or about the date hereof under the Securities Act
of 1933, as amended (the “1933 Act”).
In connection with our representation
of the Company, and as a basis for the opinion hereinafter set forth, we have examined originals, or copies certified or otherwise identified
to our satisfaction, of the following documents (hereinafter collectively referred to as the “Documents”):
1. The Registration Statement, and the related form of prospectus contained therein, in the form in which it was transmitted to the Commission
under the 1933 Act;
2. The charter of the Company (the “Charter”), certified by the State Department of Assessments and Taxation of Maryland (the
“SDAT”);
3. The Fourth Amended and Restated Bylaws of the Company (the “Bylaws”), certified as of the date hereof by an officer of the
Company;
4. A certificate of the SDAT as to the good standing of the Company, dated as of a recent date;
5. Resolutions
adopted by the Board of Directors of the Company (the “Board”), or a duly authorized committee thereof, relating to the registration
of the Securities (the “Resolutions”), certified as of the date hereof by an officer of the Company;
Global Medical REIT Inc.
December 22, 2023
Page 2
6. A
certificate executed by an officer of the Company, dated as of the date hereof; and
7. Such
other documents and matters as we have deemed necessary or appropriate to express the opinion set forth in this letter, subject to the
assumptions, limitations and qualifications stated herein.
In expressing the opinion set
forth below, we have assumed the following:
1. Each
individual executing any of the Documents, whether on behalf of such individual or another person, is legally competent to do so.
2. Each
individual executing any of the Documents on behalf of a party (other than the Company) is duly authorized to do so.
3. Each
of the parties (other than the Company) executing any of the Documents has duly and validly executed and delivered each of the Documents
to which such party is a signatory, and such party’s obligations set forth therein are legal, valid and binding and are enforceable
in accordance with all stated terms.
4. All Documents submitted to us as originals are authentic. The form and content of all Documents submitted to us as unexecuted drafts
do not differ in any respect relevant to this opinion from the form and content of such Documents as executed and delivered. All Documents
submitted to us as certified or photostatic copies conform to the original documents. All signatures on all Documents are genuine. All
public records reviewed or relied upon by us or on our behalf are true and complete. All representations, warranties, statements and information
contained in the Documents are true and complete. There has been no oral or written modification of or amendment to any of the Documents,
and there has been no waiver of any provision of any of the Documents, by action or omission of the parties or otherwise.
5. Upon the issuance of any Securities that are Common Stock (“Common Securities”), including Common Securities that may
be issued upon conversion or exchange of any other Securities convertible into or exchangeable for Common Securities, the total number
of shares of Common Stock issued and outstanding will not exceed the total number of shares of Common Stock that the Company is then authorized
to issue under the Charter.
6. Upon the issuance of any Securities that are Preferred Stock (“Preferred Securities”), including Preferred Securities
that may be issued upon conversion or exchange of any other Securities convertible into or exchangeable for Preferred Securities, the
total number of shares of Preferred Stock issued and outstanding and the total number of issued and outstanding shares of the applicable
class or series of Preferred Stock designated pursuant to the Charter will not exceed the total number of shares of Preferred Stock or
the number of shares of such class or series of Preferred Stock that the Company is then authorized to issue under the Charter.
Global Medical REIT Inc.
December 22, 2023
Page 3
7. Any Securities convertible into or exchangeable for other Securities will be duly converted or exchanged in accordance with their
terms.
8. The issuance of, and certain terms of, the Securities will be approved by the Board, or a duly authorized committee thereof, in
accordance with the Maryland General Corporation Law, the Charter, the Bylaws and the Registration Statement (with such approvals referred
to hereinafter as the “Corporate Proceedings”) prior to the issuance thereof.
9. Articles Supplementary creating and designating the number of shares and terms of any class or series of Preferred Securities to
be issued by the Company will be filed with and accepted for record by the SDAT prior to the issuance of such Preferred Securities.
10. None
of the Securities will be issued, sold or transferred in violation of the restrictions on ownership and transfer set forth in Article
VII of the Charter.
Based upon the foregoing, and
subject to the assumptions, limitations and qualifications stated herein, it is our opinion that:
1. The Company is a corporation duly incorporated and existing under and by virtue of the laws of the State of Maryland and is in good standing
with the SDAT.
2. Upon
the completion of all Corporate Proceedings relating to the Common Securities, the Common Securities will be duly authorized for issuance
and, when and if issued and delivered against payment therefor and otherwise in accordance with the Corporate Proceedings, will be validly
issued, fully paid and nonassessable.
3. Upon
completion of all Corporate Proceedings relating to the Preferred Securities, the Preferred Securities will be duly authorized for issuance
and, when and if issued and delivered against payment therefor and otherwise in accordance with the Corporate Proceedings, will be validly
issued, fully paid and nonassessable.
4. Upon
the completion of all Corporate Proceedings relating to the Debt Securities, the Debt Securities will be duly authorized for issuance.
The foregoing opinion is limited
to the laws of the State of Maryland and we do not express any opinion herein concerning United States federal law or the laws of any
other jurisdiction. We express no opinion as to the applicability or effect of federal or state securities laws, including the securities
laws of the State of Maryland, or as to federal or state laws regarding fraudulent transfers. To the extent that any matter as to which
our opinion is expressed herein would be governed by any jurisdiction other than the State of Maryland, we do not express any opinion
on such matter. The opinion expressed herein is subject to the effect of judicial decisions which may permit the introduction of parol
evidence to modify the terms or the interpretation of agreements.
Global Medical REIT Inc.
December 22, 2023
Page 4
The opinion expressed herein
is limited to the matters specifically set forth herein and no other opinion shall be inferred beyond the matters expressly stated. We
assume no obligation to supplement this opinion if any applicable law changes after the date hereof or if we become aware of any fact
that might change the opinion expressed herein after the date hereof.
This opinion is being furnished
to you for submission to the Commission as an exhibit to the Registration Statement. We hereby consent to the filing of this opinion as
an exhibit to the Registration Statement and to the use of the name of our firm therein. In giving this consent, we do not admit that
we are within the category of persons whose consent is required by Section 7 of the 1933 Act.
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Very truly yours, |
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/s/ Venable LLP |
Exhibit 5.2
December 22, 2023
Global Medical REIT Inc.
7373 Wisconsin Avenue, Suite 800
Bethesda, MD 20814
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as special counsel
to Global Medical REIT Inc., a Maryland corporation (the “Company”), in connection with the Registration Statement
on Form S-3 (the “Registration Statement”) of the Company filed with the Securities and Exchange Commission (the “Commission”)
on the date hereof pursuant to the Securities Act of 1933, as amended (the “Securities Act”), in connection with the
registration of (i) shares of common stock, par value $0.001 per share, of the Company (the “Common Stock”), (ii) shares
of preferred stock, par value $0.001 per share, of the Company (the “Preferred Stock”), and (iii) debt securities of
the Company (the “Debt Securities,” and, together with the Common Stock and the Preferred Stock, the “Offered
Securities”), having an indeterminate maximum aggregate offering price. All capitalized terms that are not defined herein have
the meanings assigned to them in the Registration Statement.
The Debt Securities will be
issued pursuant to one or more indentures between the Company and trustees yet to be named in the form of the Indenture filed as Exhibit
4.5 to the Registration Statement (collectively, the “Indentures”).
As special counsel for the
Company, in addition to participating in the preparation of the Registration Statement, we have examined the following documents:
(a) the
Registration Statement, including the form of Indenture filed as Exhibit 4.5 to the Registration Statement;
(b) the
resolutions adopted by the Board of Directors of the Company (the “Board”) relating to, among other things, the preparation
and filing of the Registration Statement and the due authorization of the Offered Securities, certified on the date hereof by an officer
of the Company; and
(c) an
executed copy of the certificate of the Secretary of the Company, dated the date hereof, as to certain factual matters.
For purposes of the opinion
expressed below, we have assumed (i) the authenticity of all documents submitted to us as originals, (ii) the conformity to the originals
of all documents submitted as certified or photostatic copies and the authenticity of the originals thereof, (iii) the legal capacity
of natural persons, (iv) the genuineness of all signatures and (v) the due authorization, execution and delivery of all documents by all
parties and the validity and binding effect and, with the exception of the Indentures, enforceability thereof upon the Company. We have
also assumed that at the time of execution, authentication, issuance and delivery of the Debt Securities, the Indentures will be valid
and legally binding obligations of the applicable trustees thereunder.
Vinson &
Elkins LLP Attorneys at Law
Austin Dallas Dubai Houston London Los Angeles New
York
Richmond San Francisco Tokyo Washington |
901 East Byrd
Street, Suite 1500
Richmond, VA 23219
Tel +1.804.327.6300 Fax +1.804.327.6301 velaw.com |
 |
Global
Medical REIT Inc. December 22, 2023 Page 2 |
As to factual matters, we
have relied upon representations included in certificates of officers of the Company and in certificates of public officials.
Based upon the foregoing and
such other information and documents as we have considered necessary for the purposes hereof, we are of the opinion that:
1. With
respect to the Debt Securities, when (a) the applicable Indenture relating to the Debt Securities has been duly authorized and validly
executed and delivered by the Company, (b) the terms of the Debt Securities and their issuance and sale have been duly established in
conformity with the applicable Indenture so as not to violate any applicable law or result in a default under or breach of any agreement
or instrument binding upon the Company, if applicable, and so as to comply with any requirement or restriction imposed by any court or
governmental body having jurisdiction over the Company, if applicable, and (c) the Debt Securities have been duly executed, authenticated
in accordance with the applicable Indenture and issued and sold as contemplated by the Registration Statement, the prospectus contained
therein and any applicable prospectus supplement, and if (i) all the foregoing actions are taken pursuant to the authority granted by
the Board, or a duly authorized committee thereof, and (ii) the Company has received full payment therefor in accordance with the authorization
of the Board, or a duly authorized committee thereof, then the Debt Securities will constitute binding obligations of the Company, enforceable
against the Company in accordance with the terms of such Debt Securities, except as the enforceability thereof may be limited or otherwise
affected by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other laws affecting the rights of creditors
generally and principles of equity, whether considered at law or equity.
In expressing the opinion
set forth above, we have assumed that (i) the applicable trustee will have been qualified under the Trust Indenture Act of 1939, as amended,
and a Statement of Eligibility of the Trustee on Form T-1 will have been properly filed with the Commission and (ii) each of the applicable
Debt Securities and Indentures will be governed by and construed in accordance with the laws of the State of New York.
We do not purport to express
an opinion on any laws other than the laws of the State of New York.
|
Global
Medical REIT Inc. December 22, 2023 Page 3 |
This opinion letter is being
furnished to you for submission to the Commission as an exhibit to the Registration Statement in accordance with the requirements of Item
16 of Form S-3 and Item 601(b)(5)(i) of Regulation S-K promulgated under the Securities Act. We consent to the filing of this opinion
letter as Exhibit 5.2 to the Registration Statement and to the reference to this firm under the heading “Legal Matters” therein.
In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the Securities
Act or the rules and regulations promulgated thereunder by the Commission.
The opinion expressed in this
letter is limited to the matters set forth in this letter, and no other opinions should be inferred beyond the matters expressly stated
in this letter. This opinion letter speaks only as of its date and we do not undertake to advise you of any changes in the opinion expressed
herein from matters that might hereafter arise or be brought to our attention.
| |
Very truly yours, |
| |
|
| |
/s/ Vinson & Elkins L.L.P. |
Exhibit 8.1
December 22, 2023
Global Medical REIT Inc.
7373 Wisconsin Avenue
Suite 800
Bethesda, MD 20814
| Re: | Global Medical REIT Inc. Qualification as Real Estate Investment Trust |
Ladies and Gentlemen:
We have acted as counsel to Global Medical REIT
Inc., a Maryland corporation (the “Company”), in connection with the preparation of a Registration Statement
on Form S-3 filed with the Securities and Exchange Commission on December 22, 2023 (the “Registration Statement”)
with respect to the offer and sale from time to time of common stock, par value $0.001 per share, preferred stock, par value $0.001 per
share, and debt securities of the Company. You have requested our opinion regarding certain U.S. federal income tax matters.
In connection with the opinions rendered in (a)
and (b) below (together, the “Tax Opinion”), we have examined the following:
| | 1. | the Registration Statement and the prospectus (the “Prospectus”) filed as part
of the Registration Statement; |
| | | |
| | 2. | the Company’s Articles of Incorporation, filed with the Department of Assessments and Taxation of
the State of Maryland and effective as of January 15, 2014, as amended and corrected through the date hereof; |
| | | |
| | 3. | the Third Amended and Restated Bylaws of the Company, effective as of August 13, 2019; |
| | | |
| | 4. | the Agreement of Limited Partnership of Global Medical REIT L.P., a Delaware limited partnership (the
“Operating Partnership”); and |
| | | |
| | 5. | such other documents as we have deemed necessary or appropriate for purposes of this opinion. |
In connection with the opinions rendered below,
we have assumed, with your consent, that:
| | 1. | each of the documents referred to above is authentic, if an original, or is accurate, if a copy; and has
not been amended; |
| | | |
| | 2. | during its taxable year ending December 31, 2023, and future taxable years, the Company has operated
and will operate in a manner that will make the factual representations contained in a certificate, dated the date hereof and executed
by a duly appointed officer of the Company (the “Officer’s Certificate”), true for such years; |
Vinson & Elkins LLP Attorneys at Law
Austin Dallas Dubai Houston London Los Angeles
New York Richmond San Francisco Tokyo Washington |
2200 Pennsylvania Avenue NW, Suite 500
West
Washington, DC 20037
Tel +1.202.639.6500 Fax +1.202.639.6604 www.velaw.com |
 | December 22, 2023 Page 2 |
| | 3. | the Company will not make any amendments to its organizational documents or the organizational documents
of the Operating Partnership after the date of this opinion that would affect the Company’s qualification as a real estate investment
trust (a “REIT”) for any taxable year; and |
| | | |
| | 4. | no action will be taken by the Company or the Operating Partnership after the date hereof that would have
the effect of altering the facts upon which the opinions set forth below are based. |
In connection with the opinions rendered below,
we also have relied upon the correctness of the factual representations contained in the Officer’s Certificate. No facts have come
to our attention that would cause us to question the accuracy and completeness of such factual representations. Furthermore, where such
factual representations involve terms defined in the Internal Revenue Code of 1986, as amended (the “Code”),
the Treasury regulations thereunder (the “Regulations”), published rulings of the Internal Revenue Service (the
“Service”), or other relevant authority, we have reviewed with the individuals making such representations the
relevant provisions of the Code, the applicable Regulations and published administrative interpretations thereof.
Based solely on the documents and assumptions
set forth above, the representations set forth in the Officer’s Certificate, and the discussion in the Prospectus under the caption
“Material U.S. Federal Income Tax Considerations” (which is incorporated herein by reference), we are of the opinion that:
| | (a) | the Company qualified to be taxed as a REIT pursuant to sections 856 through 860 of the Code for its taxable
years ended December 31, 2016 through December 31, 2022, and the Company’s organization and current and proposed method of operation
will enable it to continue to qualify as a REIT under the Code for its taxable years ending December 31, 2023, and thereafter; and |
| | | |
| | (b) | the descriptions of the law and the legal conclusions in the Prospectus under the caption “Material
U.S. Federal Income Tax Considerations” are correct in all material respects. |
We will not review on a continuing basis the Company’s
compliance with the documents or assumptions set forth above, or the factual representations set forth in the Officer’s Certificate.
Accordingly, no assurance can be given that the actual results of the Company’s operations for any given taxable year will satisfy
the requirements for qualification and taxation as a REIT. Although we have made such inquiries and performed such investigations as we
have deemed necessary to fulfill our professional responsibilities as counsel, we have not undertaken an independent investigation of
all of the facts referred to in this letter or the Officer’s Certificate.
| December 22, 2023 Page 3 |
The foregoing Tax Opinion is based on current
provisions of the Code, the Regulations, published administrative interpretations thereof, and published court decisions. The Service
has not issued Regulations or administrative interpretations with respect to various provisions of the Code relating to REIT qualification.
No assurance can be given that the law will not change in a way that will prevent the Company from qualifying as a REIT.
The foregoing Tax Opinion is limited to the U.S.
federal income tax matters addressed herein, and no other opinions are rendered with respect to other U.S. federal tax matters or to any
issues arising under the tax laws of any other country, or any state or locality. We undertake no obligation to update the Tax Opinion
expressed herein after the date of this letter. This opinion letter speaks only as of the date hereof. Except as provided in the next
paragraph, this opinion letter may not be distributed, quoted in whole or in part or otherwise reproduced in any document, or filed with
any governmental agency without our express written consent.
We hereby consent to the filing of this opinion
as an exhibit to the Registration Statement and to the use of our name under the captions “Material U.S. Federal Income Tax Considerations”
and “Legal Matters” in the Prospectus. In giving this consent, we do not admit that we are in the category of persons whose
consent is required by Section 7 of the Securities Act of 1933, as amended, or the rules and regulations promulgated thereunder by the
Securities and Exchange Commission.
| |
Very truly yours, |
| |
|
| |
/s/ Vinson & Elkins L.L.P. |
| |
|
| |
Vinson & Elkins 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 of our report dated March 1, 2023 relating to the consolidated financial statements
of Global Medical REIT Inc. and the effectiveness of Global Medical REIT Inc.'s internal control over financial reporting, appearing in
the Annual Report on Form 10-K of Global Medical REIT Inc. for the year ended December 31, 2022. We also consent to the reference to us
under the heading "Experts" in such Registration Statement.
/s/ Deloitte & Touche LLP
McLean, Virginia
December 22, 2023
Exhibit 107
Calculation of Filing Fee Tables
FORM S-3
(Form Type)
Global Medical REIT Inc.
(Exact Name of Registrant as Specified in its Charter)
Table 1: Newly Registered and Carry Forward
Securities
| |
|
Security
Type |
|
Security
Class Title |
|
Fee
Calculation
or Carry
Forward
Rule (1) |
|
|
Amount
Registered |
|
Proposed
Maximum
Offering
Price Per
Unit |
|
|
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 |
|
457 |
(r) |
|
|
(2) |
|
|
(2) |
|
|
(2) |
|
|
(1) |
|
|
|
(1) |
|
|
|
|
|
|
|
|
|
|
| Fees to Be Paid |
|
Equity |
|
Preferred Stock |
|
457 |
(r) |
|
|
(2) |
|
|
(2) |
|
|
(2) |
|
|
(1) |
|
|
|
(1) |
|
|
|
|
|
|
|
|
|
|
| Fees to Be Paid |
|
Debt |
|
Debt Securities |
|
457 |
(r) |
|
|
(2) |
|
|
(2) |
|
|
(2) |
|
|
(1) |
|
|
|
(1) |
|
|
|
|
|
|
|
|
|
|
| Fees Previously Paid |
|
- |
|
- |
|
- |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
| Total Offering Amounts |
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
| Total Fees Previously Paid |
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
| Total Fee Offsets |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
62,741 |
(3) |
|
|
|
|
|
|
|
|
|
| Net Fee Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
|
|
|
|
|
|
|
|
Table 2: Fee Offset Claims and Sources
| |
Registrant
or Filer Name |
Form
or Filing Type |
File
Number |
Initial
Filing Date |
Filing
Date |
Fee
Offset Claimed |
Security
Type Associated with Fee Offset Claimed |
Security
Title Associated with Fee Offset Claimed |
Unsold
Securities Associated with Fee Offset Claimed |
Unsold
Aggregate Offering Amount Associated with Fee Offset Claimed |
Fee
Paid with Fee Offset Source |
| Rules 457(b)
and 0-11(a)(2) |
| Fee
Offset Claims |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
| Fee
Offset Sources |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
| Rule 457(p) |
| Fee Offset Claims |
Global Medical REIT Inc. |
S-3 |
333-239043 |
June 9, 2020 |
- |
$62,741(3) |
Unallocated (Universal) Shelf |
Unallocated (Universal) Shelf |
(3) |
$483,365,010 |
- |
| Fee Offset Sources |
Global Medical REIT Inc. |
S-3 |
333-239043 |
- |
June 9, 2020 |
- |
- |
- |
- |
- |
(1) |
| |
(1) |
In reliance upon Rules 456(b) and 457(r) under the
Securities Act of 1933, as amended (the “Securities Act”), the Registrant is deferring payment of the registration fees
relating to securities that are registered and available for sale under this Registration Statement. Registration fees will be paid
subsequently in advance or on a pay-as-you-go basis. |
| |
(2) |
An unspecified number or amount of the securities of
each identified class of securities is being registered as may be offered and sold from time to time at indeterminate prices. There
is also being registered hereunder an indeterminate amount of each identified class of securities as may be issued upon conversion
of, or in exchange for, or upon exercise of, or pursuant to, convertible or exchangeable securities that provide for exercise or
conversion into or purchase of such securities of the Registrant. Separate consideration may or may not be received for securities
that are issuable on exercise, conversion or exchange of other securities. |
| |
(3) |
The Registrant previously registered $750,000,000 in
aggregate offering price of securities in a primary offering pursuant to the universal shelf Registration Statement on Form S-3 (No.
333-239043) filed with the Securities and Exchange Commission on June 9, 2020 and declared effective on June 17, 2020 (the “Prior
Registration Statement”). The Registrant sold an aggregate of $266,634,990 of such securities under the Prior Registration
Statement, leaving the balance of $483,365,010, representing $62,741 in registration fees, of such unsold securities under the Prior
Registration Statement. Pursuant to Rule 457(p) under the Securities Act, the registration fee of $62,741 that has already been paid
and remains unused with respect to the unsold securities that were previously registered pursuant to the Prior Registration Statement
will be available to offset any filing fees payable pursuant to this Registration Statement, and the Prior Registration Statement
and the offering of the unsold securities under the Prior Registration Statement will be deemed terminated as of filing/effective
date of this Registration Statement. |
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