As filed with the Securities and Exchange
Commission on January 12, 2015
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
FRANKLIN STREET PROPERTIES CORP.
(Exact name of registrant as specified
in its charter)
Maryland |
04-3578653 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
401 Edgewater Place, Suite 200
Wakefield, MA 01880
(781) 557-1300
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant’s Principal Executive Offices)
______________________________
George J. Carter
President and Chief Executive Officer
Franklin Street Properties Corp.
401 Edgewater Place, Suite 200
Wakefield, MA 01880
(781) 557-1300
(Name, Address, Including Zip Code, and Telephone
Number, Including Area Code, of Agent for Service)
______________________________
Copy to:
Kenneth A. Hoxsie, Esq.
Thomas S. Ward, Esq.
Wilmer Cutler Pickering Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Telephone: (617) 526-6000
Telecopy: (617) 526-5000 |
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. ☑
If this
Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check
the following box and list the Securities Act registration statement number of the earlier effective registration statement for
the same offering. ☐
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this
Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective
upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☑
If this
Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional
securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ☑ |
Accelerated filer ☐ |
Non-accelerated filer ☐ |
Smaller reporting company ☐ |
CALCULATION OF REGISTRATION FEE
Title of each class of
securities to be registered(1) |
Amount to be
Registered(1) |
Proposed
Maximum Offering
Price Per
Unit(1) |
Maximum
Aggregate
Offering Price(1) |
Amount of
Registration Fee(1) |
|
|
|
|
|
Debt Securities |
|
|
|
|
Common Stock, par value $0.0001 per share |
|
|
|
|
Preferred Stock |
|
|
|
|
Depositary Shares(2) |
|
|
|
|
| (1) | Pursuant to Form S-3 General Instructions II.E information is not required to be included. An indeterminate amount of the securities
of each identified class is being registered as may from time to time be offered hereunder at indeterminate prices, along with
an indeterminate number of securities that may be issued upon exercise, settlement, exchange or conversion of securities offered
or sold hereunder or that are represented by depositary shares. Pursuant to Rule 416 under the Securities Act of 1933, as amended
(the “Securities Act”), this registration statement also covers any additional securities that may be offered or issued
in connection with any stock split, stock dividend or pursuant to anti-dilution provisions of any of the securities. Separate consideration
may or may not be received for securities that are issuable upon conversion, exercise or exchange of other securities. In accordance
with Rules 456(b) and 457(r) under the Securities Act, the registrant is deferring payment of all registration fees and will pay
the registration fees subsequently in advance or on a “pay-as-you-go” basis. |
| (2) | Each depositary share will be issued under a deposit agreement, will represent an interest in a fractional share or multiple
shares of preferred stock and will be evidenced by a depositary receipt. |
PROSPECTUS
FRANKLIN STREET PROPERTIES CORP.
Debt Securities
Common Stock
Preferred Stock
Depositary Shares
We may issue securities from time to
time in one or more offerings. This prospectus describes the general terms of these securities and the general manner in which
these securities will be offered. We will provide the specific terms of these securities in supplements to this prospectus. The
prospectus supplements will also describe the specific manner in which these securities will be offered and may also supplement,
update or amend information contained in this document. You should read this prospectus and any applicable prospectus supplement
before you invest. The shares of common stock, $0.0001 par value per share, of Franklin Street Properties Corp., or FSP Corp.,
covered by this prospectus may be offered and sold from time to time by FSP Corp. or certain selling stockholders of FSP Corp.
in one or more offerings.
We may offer and sell our securities,
and any selling stockholder may offer and sell shares of our common stock, independently or together to or through one or more
underwriters, dealers and agents, or directly to purchasers, on a continuous or delayed basis. If any underwriters, dealers or
agents are involved in the sale of any shares of our securities, the applicable prospectus supplement will name them and describe
their compensation. Unless otherwise set forth in a prospectus supplement, we will not receive any proceeds from the sale of shares
of our common stock by any selling stockholders.
Our common stock is listed on the NYSE
MKT under the symbol “FSP”.
The last sale price of our common stock
on the NYSE MKT on January 9, 2015 was $12.55 per share.
Investing in these securities involves
certain risks. See “Risk Factors” included in any accompanying prospectus supplement and in the documents incorporated
by reference in this prospectus for a discussion of the factors you should carefully consider before deciding to purchase these
securities.
Neither the Securities and Exchange
Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy
of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is January
12, 2015
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS |
1 |
WHERE YOU CAN FIND MORE INFORMATION |
2 |
INCORPORATION BY REFERENCE |
2 |
FORWARD-LOOKING STATEMENTS |
3 |
FRANKLIN STREET PROPERTIES CORP. |
4 |
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES AND RATIOS OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS |
5 |
USE OF PROCEEDS |
6 |
SELLING STOCKHOLDERS |
6 |
DESCRIPTION OF DEBT SECURITIES |
7 |
DESCRIPTION OF CAPITAL STOCK |
16 |
DESCRIPTION OF DEPOSITARY SHARES |
25 |
FORMS OF SECURITIES |
28 |
PLAN OF DISTRIBUTION |
30 |
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS |
33 |
LEGAL MATTERS |
53 |
EXPERTS |
53 |
ABOUT THIS PROSPECTUS
This prospectus is part of a registration
statement that we filed with the Securities and Exchange Commission, which we refer to as the “SEC,” utilizing a “shelf”
registration process. Under this shelf registration process, we may from time to time sell any combination of the securities described
in this prospectus in one or more offerings, and certain selling stockholders may from time to time sell shares of our common stock
in one or more offerings.
This prospectus provides you with a
general description of the securities we may offer. Each time we sell securities, we will provide one or more prospectus supplements
that will contain specific information about the terms of the offering. The prospectus supplement may also add, update or change
information contained in this prospectus. You should read both this prospectus and the accompanying prospectus supplement together
with the additional information described under the heading “Where You Can Find More Information” beginning on page
2 of this prospectus.
You should rely only on the information
contained in or incorporated by reference in this prospectus, any accompanying prospectus supplement or in any related free writing
prospectus filed by us with the SEC. We have not authorized anyone to provide you with different information. This prospectus and
any accompanying prospectus supplement do not constitute an offer to sell or the solicitation of an offer to buy any securities
other than the securities described in this prospectus and any accompanying prospectus supplement or an offer to sell or the solicitation
of an offer to buy such securities in any circumstances in which such offer or solicitation is unlawful. You should assume that
the information appearing in this prospectus, any prospectus supplement, the documents incorporated by reference and any related
free writing prospectus is accurate only as of their respective dates. Our business, financial condition, results of operations
and prospects may have changed materially since those dates.
Unless the context otherwise indicates,
references in this prospectus to “FSP Corp.,” the “company,” “we,” “our” and “us”
refer, collectively, to Franklin Street Properties Corp., a Maryland corporation, and its consolidated subsidiaries.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current
reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at
the SEC’s website at http://www.sec.gov. Copies of certain information filed by us with the SEC are also available on our
website at www.franklinstreetproperties.com. Our website is not a part of this prospectus and is not incorporated by reference
in this prospectus. You may also read and copy any document we file at the SEC’s Public Reference Room, 100 F Street, N.E.,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference
Room.
This prospectus is part of a registration
statement we filed with the SEC. This prospectus omits some information contained in the registration statement in accordance with
SEC rules and regulations. You should review the information and exhibits in the registration statement for further information
about us and our consolidated subsidiaries and the securities we are offering. Statements in this prospectus concerning any document
we filed as an exhibit to the registration statement or that we otherwise filed with the SEC are not intended to be comprehensive
and are qualified by reference to these filings. You should review the complete document to evaluate these statements.
INCORPORATION BY REFERENCE
The SEC allows us to incorporate by
reference much of the information we file with the SEC, which means that we can disclose important information to you by referring
you to those publicly available documents. The information that we incorporate by reference in this prospectus is considered to
be part of this prospectus. Because we are incorporating by reference future filings with the SEC, this prospectus is continually
updated and those future filings may modify or supersede some of the information included or incorporated in this prospectus. This
means that you must look at all of the SEC filings that we incorporate by reference to determine if any of the statements in this
prospectus or in any document previously incorporated by reference have been modified or superseded. This prospectus incorporates
by reference the documents listed below (File No. 001-32470) and any future filings we make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act (in each case, other than those documents
or the portions of those documents not deemed to be filed) until the offering of the securities under the registration statement
is terminated or completed:
| · | Annual Report on Form 10-K for the fiscal year ended December 31, 2013 filed with the SEC on February 18, 2014, including the
information specifically incorporated by reference into the Annual Report on Form 10-K from our definitive proxy statement for
the 2014 Annual Meeting of Stockholders; |
| · | Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2014, June 30, 2014 and September 30, 2014 filed with
the SEC on April 29, 2014, July 29, 2014 and October 28, 2014, respectively; |
| · | Current Reports on Form 8-K filed with the SEC on May 16, 2014, May 29, 2014, July 25, 2014 and October 29, 2014; and |
| · | The description of our common stock contained in our Form 8-A, filed with the SEC on April 5, 2005. |
You may request a copy of these filings,
at no cost, by writing or telephoning us at the following address or telephone number:
Franklin Street
Properties Corp.
401 Edgewater Place, Suite 200
Wakefield, MA 01880
(781) 557-1300
Attention: Investor Relations
FORWARD-LOOKING STATEMENTS
This prospectus and the information incorporated
by reference in this prospectus include “forward-looking statements” within the meaning of Section 27A of the Securities
Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange
Act. The forward-looking statements may contain information which is based on current judgments and current knowledge of management,
which are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those indicated
in such forward-looking statements. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements.
You are cautioned that our forward-looking statements involve risks and uncertainty, including without limitation, economic conditions
in the United States, disruptions in the debt markets, economic conditions in the markets in which we own properties, risks of
a lessening of demand for the types of real estate owned by us, uncertainties relating to fiscal policy, changes in government
regulations and regulatory uncertainty, and expenditures that cannot be anticipated such as utility rate and usage increases, unanticipated
repairs, additional staffing, insurance increases and real estate tax valuation reassessments. Although we believe the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. We may not update any of the forward-looking statements after the date this prospectus is filed to conform them
to actual results or to changes in our expectations that occur after such date, other than as required by law.
FRANKLIN STREET PROPERTIES CORP.
Our company, Franklin Street Properties
Corp., or FSP Corp., is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust,
or REIT, for federal income tax purposes. Our common stock is traded on the NYSE MKT under the symbol “FSP”. FSP Corp.
is the successor to Franklin Street Partners Limited Partnership, or the FSP Partnership, which was originally formed as a Massachusetts
general partnership in January 1997 as the successor to a Massachusetts general partnership that was formed in 1981. On January
1, 2002, the FSP Partnership converted into FSP Corp., which we refer to as the conversion. As a result of this conversion, the
FSP Partnership ceased to exist and we succeeded to the business of the FSP Partnership. In the conversion, each unit of both general
and limited partnership interests in the FSP Partnership was converted into one share of our common stock. As a result of the conversion,
we hold, directly and indirectly, 100% of the interest in three former subsidiaries of the FSP Partnership: FSP Investments LLC,
FSP Property Management LLC, and FSP Holdings LLC. We operate some of our business through these subsidiaries.
We are a REIT that makes commerical real
estate investments in U.S. office properties. We derive our revenue from real estate rental operations, leasing, secured financing
of real estate and services provided for asset management, property management, property acquisitions, dispositions and development.
Our current strategy is to invest in select urban infill and central business district properties, with primary emphasis on our
top five markets of Atlanta, Dallas, Denver, Houston and Minneapolis. We believe that our top five markets have macro-economic
drivers that have the potential to increase occupancies and rents. We will also monitor San Diego, Silicon Valley, Greater
Boston, Raleigh-Durham, and Greater Washington, DC, as well as other markets, for opportunistic investments. We seek
value-oriented investments with an eye towards long-term growth and appreciation, as well as current income.
As of September 30, 2014, the company
owned and operated a portfolio of real estate consisting of 39 properties, managed 11 real estate investment trusts that we previously
organized and syndicated, which we refer to as Sponsored REITs, and held six promissory notes secured by mortgages on real estate
owned by Sponsored REITs, including one mortgage loan, one construction loan and four revolving lines of credit. From time-to-time
we may acquire real estate or invest in real estate by making secured loans on real estate or by acquiring our Sponsored REITs,
although we have no legal or any other enforceable obligation to acquire or to offer to acquire any Sponsored REIT. We may also
pursue on a selective basis the sale of our properties to take advantage of the value creation and demand for our properties, or
for geographic or property specific reasons.
Our principal executive offices are located
at 401 Edgewater Place, Suite 200, Wakefield, Massachusetts 01880. The telephone number of our principal executive office is (781)
557-1300. Our website address is www.franklinstreetproperties.com.
For additional information about FSP
Corp. and our business, see “Where You Can Find More Information”, below.
CONSOLIDATED RATIOS OF EARNINGS
TO FIXED CHARGES
AND RATIOS OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth our ratio
of earnings to fixed charges and the ratio of earnings to combined fixed charges and preferred stock dividends for each of the
periods indicated. You should read this table in conjunction with the consolidated financial statements and notes incorporated
by reference in this prospectus.
|
Nine Months
Ended |
Fiscal Year Ended |
|
September 30,
2014 |
December 31,
2013 |
December 31,
2012 |
December 31,
2011 |
December 31,
2010 |
December 31,
2009 |
|
|
|
|
|
|
|
Consolidated ratios of earnings to fixed charges |
1.52 |
1.91 |
2.50 |
2.66 |
4.00 |
5.71 |
|
|
|
|
|
|
|
Consolidated ratios of earnings to combined fixed charges and preferred stock dividends |
1.52 |
1.91 |
2.50 |
2.66 |
4.00 |
5.71 |
For purposes of calculating the ratios above and in accordance with
Item 503(d) of Regulation S-K, earnings consist of net income from continuing operations plus provision for income taxes, (earnings)
loss of equity investees, distributions of income from equity investees and fixed charges. Fixed charges include interest expense.
USE OF PROCEEDS
We anticipate that we will use the net
proceeds from the sale of any securities offered under this prospectus by us for general corporate purposes, which may include
the repayment of debt, the financing of potential acquisitions, the provision of lines of credit and other loans to our Sponsored
REITs, the funding of capital improvements on our portfolio companies’ properties, the funding of working capital and other
purposes described in any prospectus supplement. We have not determined the amount of net proceeds to be used specifically for
such purposes. As a result, management will retain broad discretion over the allocation of net proceeds. Unless otherwise set forth
in a prospectus supplement, to the extent any shares of our common stock registered under this registration statement are for the
account of selling stockholders, we will not receive any of the proceeds of the sale of such shares by such stockholders.
SELLING STOCKHOLDERS
We may register shares of our common
stock covered by this prospectus for re-offers and resales by any selling stockholders to be named in a prospectus supplement.
Because we are a well-known seasoned issuer, as defined in Rule 405 of the Securities Act, we may add secondary sales of shares
of our common stock by any selling stockholders by filing a prospectus supplement with the SEC. We may register these shares to
permit selling stockholders to resell their shares when they deem appropriate. A selling stockholder may resell all, a portion
or none of its shares at any time and from time to time. Selling stockholders may also sell, transfer or otherwise dispose of some
or all of their shares of our common stock in transactions exempt from the registration requirements of the Securities Act. We
do not know when or in what amounts the selling stockholders may offer shares for sale under this prospectus and any prospectus
supplement. We may pay all expenses incurred with respect to the registration of the shares of our common stock owned by the selling
stockholders, other than underwriting fees, discounts or commissions, which will be borne by the selling stockholders. A prospectus
supplement for any selling stockholders will name the selling stockholder, the amount of shares to be registered and sold and any
other terms of the shares of our common stock being sold by such selling stockholder.
DESCRIPTION OF DEBT SECURITIES
We may offer debt securities which may
be senior or subordinated. We refer to the senior debt securities and the subordinated debt securities collectively as debt securities.
The following description summarizes the general terms and provisions of the debt securities. We will describe the specific terms
of the debt securities and the extent, if any, to which the general provisions summarized below apply to any series of debt securities
in the prospectus supplement relating to the series and any applicable free writing prospectus that we authorize to be delivered.
When we refer to “FSP Corp.,” the “company,” “we,” “our” and “us” in
this section, we mean Franklin Street Properties Corp. excluding, unless the context otherwise requires or as otherwise expressly
stated, our subsidiaries.
We may issue senior debt securities
from time to time, in one or more series under a senior indenture to be entered into between us and a senior trustee to be named
in a prospectus supplement, which we refer to as the senior trustee. We may issue subordinated debt securities from time to time,
in one or more series under a subordinated indenture to be entered into between us and a subordinated trustee to be named in a
prospectus supplement, which we refer to as the subordinated trustee. The forms of senior indenture and subordinated indenture
are filed as exhibits to the registration statement of which this prospectus forms a part. Together, the senior indenture and the
subordinated indenture are referred to as the indentures and, together, the senior trustee and the subordinated trustee are referred
to as the trustees. This prospectus briefly outlines some of the provisions of the indentures. The following summary of the material
provisions of the indentures is qualified in its entirety by the provisions of the indentures, including definitions of certain
terms used in the indentures. Wherever we refer to particular sections or defined terms of the indentures, those sections or defined
terms are incorporated by reference in this prospectus or the applicable prospectus supplement. You should review the indentures
that are filed as exhibits to the registration statement of which this prospectus forms a part for additional information.
None of the indentures will limit the
amount of debt securities that we may issue. The applicable indenture will provide that debt securities may be issued up to an
aggregate principal amount authorized from time to time by us and may be payable in any currency or currency unit designated by
us or in amounts determined by reference to an index.
General
The senior debt securities will constitute
our unsecured and unsubordinated general obligations and will rank pari passu with our other unsecured and unsubordinated obligations.
The subordinated debt securities will constitute our unsecured and subordinated general obligations and will be junior in right
of payment to our senior indebtedness (including senior debt securities), as described under the heading “—Certain
Terms of the Subordinated Debt Securities—Subordination.” The debt securities will be structurally subordinated to
all existing and future indebtedness and other liabilities of our subsidiaries unless such subsidiaries expressly guarantee such
debt securities.
The debt securities will be our unsecured
obligations. Any secured debt or other secured obligations will be effectively senior to the debt securities to the extent of the
value of the assets securing such debt or other obligations.
The applicable prospectus supplement
and/or free writing prospectus will include any additional or different terms of the debt securities of any series being offered,
including the following terms:
| · | the title and type of the debt securities; |
| · | whether the debt securities will be senior or subordinated debt securities, and, with respect to debt securities issued under
the subordinated indenture the terms on which they are subordinated; |
| · | the aggregate principal amount of the debt securities; |
| · | the price or prices at which we will sell the debt securities; |
| · | the maturity date or dates of the debt securities and the right, if any, to extend such date or dates; |
| · | the rate or rates, if any, per year, at which the debt securities will bear interest, or the method of determining such rate
or rates; |
| · | the date or dates from which such interest will accrue, the interest payment dates on which such interest will be payable or
the manner of determination of such interest payment dates and the related record dates; |
| · | the right, if any, to extend the interest payment periods and the duration of that extension; |
| · | the manner of paying principal and interest and the place or places where principal and interest will be payable; |
| · | provisions for a sinking fund, purchase fund or other analogous fund, if any; |
| · | any redemption dates, prices, obligations and restrictions on the debt securities; |
| · | the currency, currencies or currency units in which the debt securities will be denominated and the currency, currencies or
currency units in which principal and interest, if any, on the debt securities may be payable; |
| · | any conversion or exchange features of the debt securities; |
| · | whether and upon what terms the debt securities may be defeased; |
| · | any events of default or covenants in addition to or in lieu of those set forth in the indenture; |
| · | whether the debt securities will be issued in definitive or global form or in definitive form only upon satisfaction of certain
conditions; |
| · | whether the debt securities will be guaranteed as to payment or performance; |
| · | any special tax implications of the debt securities; and |
| · | any other material terms of the debt securities. |
When we refer to “principal”
in this section with reference to the debt securities, we are also referring to “premium, if any.”
We may from time to time, without notice
to or the consent of the holders of any series of debt securities, create and issue further debt securities of any such series
ranking equally with the debt securities of such series in all respects (or in all respects other than (1) the payment of interest
accruing prior to the issue date of such further debt securities or (2) the first payment of interest following the issue date
of such further debt securities). Such further debt securities may be consolidated and form a single series with the debt securities
of such series and have the same terms as to status, redemption or otherwise as the debt securities of such series.
You may present debt securities for
exchange and you may present debt securities for transfer in the manner, at the places and subject to the restrictions set forth
in the debt securities and the applicable prospectus supplement. We will provide you those services without charge, although you
may have to pay any tax or other governmental charge payable in connection with any exchange or transfer, as set forth in the indenture.
Debt securities may bear interest at
a fixed rate or a floating rate. Debt securities bearing no interest or interest at a rate that at the time of issuance is below
the prevailing market rate (original issue discount securities) may be sold at a discount below their stated principal amount.
U.S. federal income tax considerations applicable to any such discounted debt securities or to certain debt securities issued at
par which are treated as having been issued at a discount for U.S. federal income tax purposes will be described in the applicable
prospectus supplement.
We may issue debt securities with the
principal amount payable on any principal payment date, or the amount of interest payable on any interest payment date, to be determined
by reference to one or more currency exchange rates, securities or baskets of securities, commodity prices or indices. You may
receive a payment of principal on any principal payment date, or a payment of interest on any interest payment date, that is greater
than or less than the amount of principal or interest otherwise payable on such dates, depending on the value on such dates of
the applicable currency, security or basket of securities, commodity or index. Information as to the methods for determining the
amount of principal or interest payable on any date, the currencies, securities or baskets of securities, commodities or indices
to which the amount payable on such date is linked and certain related tax considerations will be set forth in the applicable prospectus
supplement.
Certain Terms of the Senior Debt Securities
Covenants. Unless we indicate
otherwise in a prospectus supplement, the senior debt securities will not contain any financial or restrictive covenants, including
covenants restricting either us or any of our subsidiaries from incurring, issuing, assuming or guaranteeing any indebtedness secured
by a lien on any of our or our subsidiaries’ property or capital stock, or restricting either us or any of our subsidiaries
from entering into sale and leaseback transactions.
Consolidation, Merger and Sale of
Assets. Unless we indicate otherwise in a prospectus supplement, we may not consolidate with or merge into any other person,
in a transaction in which we are not the surviving corporation, or convey, transfer or lease our properties and assets substantially
as an entirety to any person, in either case, unless:
| · | the successor entity, if any, is a U.S. corporation, limited liability company, partnership or trust (subject to certain exceptions
provided for in the senior indenture); |
| · | the successor entity assumes our obligations on the senior debt securities and under the senior indenture; |
| · | immediately after giving effect to the transaction, no default or event of default shall have occurred and be continuing; and |
| · | certain other conditions are met. |
No Protection in the Event of a Change
in Control. Unless we indicate otherwise in a prospectus supplement with respect to a particular series of senior debt securities,
the senior debt securities will not contain any provisions that may afford holders of the senior debt securities protection in
the event we have a change in control or in the event of a highly leveraged transaction (whether or not such transaction results
in a change in control).
Events of Default. Unless we
indicate otherwise in a prospectus supplement with respect to a particular series of senior debt securities, the following are
events of default under the senior indenture for any series of senior debt securities:
| · | failure to pay interest on any senior debt securities of such series when due and payable, if that default continues for a
period of 30 days (or such other period as may be specified for such series); |
| · | failure to pay principal on the senior debt securities of such series when due and payable whether at maturity, upon redemption,
by declaration or otherwise (and, if specified for such series, the continuance of such failure for a specified period); |
| · | default in the performance of or breach of any of our covenants or agreements in the senior indenture applicable to senior
debt securities of such series, other than a covenant breach which is specifically dealt with elsewhere in the senior indenture,
and that default or breach continues for a period of 90 days after we receive written notice from the trustee or from the holders
of 25% or more in aggregate principal amount of the senior debt securities of such series; |
| · | certain events of bankruptcy or insolvency, whether or not voluntary; and |
| · | any other event of default provided for in such series of senior debt securities as may be specified in the applicable prospectus
supplement. |
The default by us under any other debt,
including any other series of debt securities, is not a default under the senior indenture.
If an event of default other than an
event of default specified in the fourth bullet point above occurs with respect to a series of senior debt securities and is continuing
under the senior indenture, then, and in each such case, either the trustee or the holders of not less than 25% in aggregate principal
amount of such series then outstanding under the senior indenture (each such series voting as a separate class) by written notice
to us and to the trustee, if such notice is given by the holders, may, and the trustee at the request of such holders shall, declare
the principal amount of and accrued interest on such series of senior debt securities to be immediately due and payable, and upon
this declaration, the same shall become immediately due and payable.
If an event of default specified in
the fourth bullet point above occurs and is continuing, the entire principal amount of and accrued interest on each series of senior
debt securities then outstanding shall become immediately due and payable.
Unless otherwise specified in the prospectus
supplement relating to a series of senior debt securities originally issued at a discount, the amount due upon acceleration shall
include only the original issue price of the senior debt securities, the amount of original issue discount accrued to the date
of acceleration and accrued interest, if any.
Upon certain conditions, declarations
of acceleration may be rescinded and annulled and past defaults may be waived by the holders of a majority in aggregate principal
amount of all the senior debt securities of such series affected by the default, each series voting as a separate class. Furthermore,
subject to various provisions in the senior indenture, the holders of a majority in aggregate principal amount of a series of senior
debt securities, by notice to the trustee, may waive an existing default or event of default with respect to such senior debt securities
and its consequences, except a default in the payment of principal of or interest on such senior debt securities or in respect
of a covenant or provision of the senior indenture which cannot be modified or amended without the consent of the holders of each
such senior debt security. Upon any such waiver, such default shall cease to exist, and any event of default with respect to such
senior debt securities shall be deemed to have been cured, for every purpose of the senior indenture; but no such waiver shall
extend to any subsequent or other default or event of default or impair any right consequent thereto.
The holders of a majority in aggregate
principal amount of a series of senior debt securities may 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 such senior debt securities.
However, the trustee may refuse to follow any direction that conflicts with law or the senior indenture, that may involve the trustee
in personal liability or that the trustee determines in good faith may be unduly prejudicial to the rights of holders of such series
of senior debt securities not joining in the giving of such direction and may take any other action it deems proper that is not
inconsistent with any such direction received from holders of such series of senior debt securities. A holder may not pursue any
remedy with respect to the senior indenture or any series of senior debt securities unless:
| · | the holder gives the trustee written notice of a continuing event of default; |
| · | the holders of at least 25% in aggregate principal amount of such series of senior debt securities make a written request to
the trustee to pursue the remedy in respect of such event of default; |
| · | the requesting holder or holders offer the trustee indemnity satisfactory to the trustee against any costs, liability or expense; |
| · | the trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and |
| · | during such 60-day period, the holders of a majority in aggregate principal amount of such series of senior debt securities
do not give the trustee a direction that is inconsistent with the request. |
These limitations, however, do not apply
to the right of any holder of a senior debt security to receive payment of the principal of and interest on such senior debt security
in accordance with the terms of such debt security, or to bring suit for the enforcement of any such payment in accordance with
the terms of such debt security, on or after the due date for the senior debt securities, which right shall not be impaired or
affected without the consent of the holder.
The senior indenture requires certain
of our officers to certify, on or before a fixed date in each year in which any senior debt security is outstanding, as to their
knowledge of our compliance with all covenants, agreements and conditions under the senior indenture.
Satisfaction and Discharge. We
can satisfy and discharge our obligations to holders of any series of debt securities if:
| · | we pay or cause to be paid, as and when due and payable, the principal of and any interest on all senior debt securities of
such series outstanding under the senior indenture; or |
| · | all senior debt securities of such series have become due and payable or will become due and payable within one year (or are
to be called for redemption within one year) and we deposit in trust a combination of cash and U.S. government or U.S. government
agency obligations that will generate enough cash to make interest, principal and any other payments on the debt securities of
that series on their various due dates. |
Under current U.S. federal income tax
law, the deposit and our legal release from the debt securities would be treated as though we took back your debt securities and
gave you your share of the cash and debt securities or bonds deposited in trust. In that event, you could recognize gain or loss
on the debt securities you give back to us. Purchasers of the debt securities should consult their own advisers with respect to
the tax consequences to them of such deposit and discharge, including the applicability and effect of tax laws other than the U.S. federal
income tax law.
Defeasance. Unless the applicable
prospectus supplement provides otherwise, the following discussion of legal defeasance and discharge and covenant defeasance will
apply to any series of debt securities issued under the indentures.
Legal Defeasance. We can legally
release ourselves from any payment or other obligations on the debt securities of any series (called “legal defeasance”)
if certain conditions are met, including the following:
| · | We deposit in trust for your benefit and the benefit of all other direct holders of the debt securities of the same series
a combination of cash and U.S. government or U.S. government agency obligations that will generate enough cash to make interest,
principal and any other payments on the debt securities of that series on their various due dates. |
| · | There is a change in current U.S. federal income tax law or an IRS ruling that lets us make the above deposit without causing
you to be taxed on the debt securities any differently than if we did not make the deposit and instead repaid the debt securities
ourselves when due. Under current U.S. federal income tax law, the deposit and our legal release from the debt securities would
be treated as though we took back your debt securities and gave you your share of the cash and debt securities or bonds deposited
in trust. In that event, you could recognize gain or loss on the debt securities you give back to us. |
| · | We deliver to the trustee a legal opinion of our counsel confirming the tax law change or ruling described above. |
If we accomplish legal defeasance, as
described above, you would have to rely solely on the trust deposit for repayment of the debt securities. You could not look to
us for repayment in the event of any shortfall.
Covenant Defeasance. Without
any change of current U.S. federal tax law, we can make the same type of deposit described above and be released from some of the
covenants in the debt securities (called “covenant defeasance”). In that event, you would lose the protection of those
covenants but would gain the protection of having money and securities set aside in trust to repay the debt securities. In order
to achieve covenant defeasance, we must do the following (among other things):
| · | We must deposit in trust for your benefit and the benefit of all other direct holders of the debt securities of the same series
a combination of cash and U.S. government or U.S. government agency obligations that will generate enough cash to make interest,
principal and any other payments on the debt securities of that series on their various due dates. |
| · | We must deliver to the trustee a legal opinion of our counsel confirming that under current U.S. federal income tax law we
may make the above deposit without causing you to be taxed on the debt securities any differently than if we did not make the deposit
and instead repaid the debt securities ourselves when due. |
If we accomplish covenant defeasance,
you could still look to us for repayment of the debt securities if there were a shortfall in the trust deposit. In fact, if one
of the events of default occurred (such as our bankruptcy) and the debt securities become immediately due and payable, there may
be such a shortfall. Depending on the events causing the default, you may not be able to obtain payment of the shortfall.
Modification and Waiver. We and
the trustee may amend or supplement the senior indenture or the senior debt securities without the consent of any holder:
| · | to convey, transfer, assign, mortgage or pledge any assets as security for the senior debt securities of one or more series; |
| · | to evidence the succession of a corporation, limited liability company, partnership or trust to us, and the assumption by such
successor of our covenants, agreements and obligations under the senior indenture or to otherwise comply with the covenant relating
to mergers, consolidations and sales of assets; |
| · | to comply with requirements of the SEC in order to effect or maintain the qualification of the senior indenture under the Trust
Indenture Act of 1939, as amended; |
| · | to add to our covenants such new covenants, restrictions, conditions or provisions for the protection of the holders, and to
make the occurrence, or the occurrence and continuance, of a default in any such additional covenants, restrictions, conditions
or provisions an event of default; |
| · | to cure any ambiguity, defect or inconsistency in the senior indenture or in any supplemental indenture or to conform the senior
indenture or the senior debt securities to the description of senior debt securities of such series set forth in this prospectus
or any applicable prospectus supplement; |
| · | to provide for or add guarantors with respect to the senior debt securities of any series; |
| · | to establish the form or forms or terms of the senior debt securities as permitted by the senior indenture; |
| · | to evidence and provide for the acceptance of appointment under the senior indenture by a successor trustee, or to make such
changes as shall be necessary to provide for or facilitate the administration of the trusts in the senior indenture by more than
one trustee; |
| · | to add to, delete from or revise the conditions, limitations and restrictions on the authorized amount, terms, purposes of
issue, authentication and delivery of any series of senior debt securities; |
| · | to make any change to the senior debt securities of any series so long as no senior debt securities of such series are outstanding;
or |
| · | to make any change that does not adversely affect the rights of any holder in any material respect. |
Other amendments and modifications of
the senior indenture or the senior debt securities issued may be made, and our compliance with any provision of the senior indenture
with respect to any series of senior debt securities may be waived, with the consent of the holders of a majority of the aggregate
principal amount of the outstanding senior debt securities of all series affected by the amendment or modification (voting together
as a single class); provided, however, that each affected holder must consent to any modification, amendment or waiver that:
| · | extends the final maturity of any senior debt securities of such series; |
| · | reduces the principal amount of any senior debt securities of such series; |
| · | reduces the rate or extends the time of payment of interest on any senior debt securities of such series; |
| · | reduces the amount payable upon the redemption of any senior debt securities of such series; |
| · | changes the currency of payment of principal of or interest on any senior debt securities of such series; |
| · | reduces the principal amount of original issue discount securities payable upon acceleration of maturity or the amount provable
in bankruptcy; |
| · | waives an uncured default in the payment of principal of or interest on the senior debt securities (except in the case of a
rescission of acceleration as described above); |
| · | changes the provisions relating to the waiver of past defaults or changes or impairs the right of holders to receive payment
or to institute suit for the enforcement of any payment or conversion of any senior debt securities of such series on or after
the due date therefor; |
| · | modifies any of the provisions of these restrictions on amendments and modifications, except to increase any required percentage
or to provide that certain other provisions cannot be modified or waived without the consent of the holder of each senior debt
security of such series affected by the modification; or |
| · | reduces the above-stated percentage of outstanding senior debt securities of such series whose holders must consent to a supplemental
indenture or modifies, amends or waives certain provisions of or defaults under the senior indenture. |
It shall not be necessary for the holders
to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if the holders’
consent approves the substance thereof. After an amendment, supplement or waiver of the senior indenture in accordance with the
provisions described in this section becomes effective, the trustee must give to the holders affected thereby certain notice briefly
describing the amendment, supplement or waiver. Any failure by the trustee to give such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amendment, supplemental indenture or waiver.
No Personal Liability of Incorporators,
Stockholders, Officers, Directors. The senior indenture provides that no recourse shall be had under any obligation, covenant
or agreement of ours in the senior indenture or any supplemental indenture, or in any of the senior debt securities or because
of the creation of any indebtedness represented thereby, against any of our incorporators, stockholders, officers or directors,
past, present or future, or of any predecessor or successor entity thereof under any law, statute or constitutional provision or
by the enforcement of any assessment or by any legal or equitable proceeding or otherwise. Each holder, by accepting the senior
debt securities, waives and releases all such liability.
Concerning the Trustee. The senior
indenture provides that, except during the continuance of an event of default, the trustee will not be liable except for the performance
of such duties as are specifically set forth in the senior indenture. If an event of default has occurred and is continuing, the
trustee will exercise such rights and powers vested in it under the senior indenture and will use the same degree of care and skill
in its exercise as a prudent person would exercise under the circumstances in the conduct of such person’s own affairs.
The senior indenture and the provisions
of the Trust Indenture Act of 1939 incorporated by reference therein contain limitations on the rights of the trustee thereunder,
should it become a creditor of ours or any of our subsidiaries, to obtain payment of claims in certain cases or to realize on certain
property received by it in respect of any such claims, as security or otherwise. The trustee is permitted to engage in other transactions,
provided that if it acquires any conflicting interest (as defined in the Trust Indenture Act), it must eliminate such conflict
or resign.
We may have normal banking relationships
with the senior trustee in the ordinary course of business.
Unclaimed Funds. All funds deposited
with the trustee or any paying agent for the payment of principal, premium, interest or additional amounts in respect of the senior
debt securities that remain unclaimed for two years after the date upon which such principal, premium or interest became due and
payable will be repaid to us. Thereafter, any right of any holder of senior debt securities to such funds shall be enforceable
only against us, and the trustee and paying agents will have no liability therefor.
Governing Law. The senior indenture
and the senior debt securities will be governed by, and construed in accordance with, the internal laws of the State of New York.
Certain Terms of the Subordinated Debt Securities
Other than the terms of the subordinated
indenture and subordinated debt securities relating to subordination or otherwise as described in the prospectus supplement relating
to a particular series of subordinated debt securities, the terms of the subordinated indenture and subordinated debt securities
are identical in all material respects to the terms of the senior indenture and senior debt securities.
Additional or different subordination
terms may be specified in the prospectus supplement applicable to a particular series.
Subordination. The indebtedness
evidenced by the subordinated debt securities is subordinate to the prior payment in full of all of our senior indebtedness, as
defined in the subordinated indenture. During the continuance beyond any applicable grace period of any default in the payment
of principal, premium, interest or any other payment due on any of our senior indebtedness, we may not make any payment of principal
of or interest on the subordinated debt securities (except for certain sinking fund payments). In addition, upon any payment or
distribution of our assets upon any dissolution, winding-up, liquidation or reorganization, the payment of the principal of and
interest on the subordinated debt securities will be subordinated to the extent provided in the subordinated indenture in right
of payment to the prior payment in full of all our senior indebtedness. Because of this subordination, if we dissolve or otherwise
liquidate, holders of our subordinated debt securities may receive less, ratably, than holders of our senior indebtedness. The
subordination provisions do not prevent the occurrence of an event of default under the subordinated indenture.
The term “senior indebtedness”
of a person means with respect to such person the principal of, premium, if any, interest on, and any other payment due pursuant
to any of the following, whether outstanding on the date of the subordinated indenture or incurred by that person in the future:
| · | all of the indebtedness of that person for money borrowed; |
| · | all of the indebtedness of that person evidenced by notes, debentures, bonds or other securities sold by that person for money; |
| · | all of the lease obligations that are capitalized on the books of that person in accordance with generally accepted accounting
principles; |
| · | all indebtedness of others of the kinds described in the first two bullet points above and all lease obligations of others
of the kind described in the third bullet point above that the person, in any manner, assumes or guarantees or that the person
in effect guarantees through an agreement to purchase, whether that agreement is contingent or otherwise; and |
| · | all renewals, extensions or refundings of indebtedness of the kinds described in the first, second or fourth bullet point above
and all renewals or extensions of leases of the kinds described in the third or fourth bullet point above; |
unless, in the case of any particular indebtedness, renewal,
extension or refunding, the instrument creating or evidencing it or the assumption or guarantee relating to it expressly provides
that such indebtedness, renewal, extension or refunding is not superior in right of payment to the subordinated debt securities.
Our senior debt securities constitute senior indebtedness for purposes of the subordinated debt indenture.
DESCRIPTION OF CAPITAL STOCK
The following description of our capital
stock is intended as a summary only and therefore is not a complete description of our capital stock. This description is based
upon, and is qualified by reference to, our Articles of Incorporation, our Bylaws and applicable provisions of Maryland corporate
law. You should read our Articles of Incorporation and Bylaws, which are filed as exhibits to the registration statement of which
this prospectus forms a part, for the provisions that are important to you.
Our authorized capital stock consists
of 200,000,000 shares of capital stock, consisting of 180,000,000 shares of common stock, par value $0.0001 per share, and 20,000,000
shares of preferred stock, par value $0.0001 per share. Our Articles of Incorporation authorize our board of directors to amend
our Articles of Incorporation to increase or decrease the aggregate number of shares of capital stock or the number of shares of
stock of any class without stockholder approval.
Common Stock
Voting Rights. Subject
to the provisions of our Articles of Incorporation regarding the restrictions on transfer and ownership of shares of our common
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. Subject to the provisions of our Articles of Incorporation regarding the restrictions on transfer
and ownership of shares of our common stock and except as provided with respect to any class or classes of our preferred stock
that may be issued in the future, the holders of shares of our common stock will possess the exclusive voting power. There is no
cumulative voting in the election of directors.
Pursuant to the Maryland General Corporation
Law, or the MGCL, a corporation generally cannot dissolve, amend its articles of incorporation, merge, sell all or substantially
all of its assets, engage in a share exchange or consolidate or engage in similar transactions outside the ordinary course of business
unless such action is advised by the board of directors and approved by the affirmative vote of holders of at least two-thirds
of the shares of stock entitled to vote on the matter unless a lesser percentage (but not less than a majority of all of the votes
to be cast on the matter) is set forth in the corporation’s articles of incorporation. Our Articles of Incorporation provide
that we may amend the Articles of Incorporation (with several exceptions), merge, sell all or substantially all of our assets,
engage in a share exchange or consolidate or engage in similar transactions outside the ordinary course of business, with the approval
of the holders of a majority of the shares of stock entitled to vote on the matter. However, the MGCL permits a corporation to
transfer all or substantially all of its assets without the approval of the stockholders of the corporation to one or more persons
if all of the equity interests of the person or persons are owned, directly or indirectly, by the corporation. We may use the merger
or sale of subsidiaries to which we have transferred all or substantially all of our assets without the approval of the holders
of our common stock to transfer all or substantially all of our assets without the approval of the holders of our common stock.
Our Articles of Incorporation provide
that in addition to any vote of the holders required by the terms of any then outstanding shares of preferred stock, the affirmative
vote of at least 80% of the shares of our capital stock entitled to vote shall be required to:
| · | add, amend or repeal any term or provision of our Articles of Incorporation in any respect that would, in the determination
of our board of directors, cause us not to qualify as a REIT under the Internal Revenue Code of 1986, as amended, unless our board
of directors has determined that such qualification is no longer in our best interests; |
| · | amend or repeal, or adopt any provision inconsistent with, the provisions of our Articles of Incorporation: establishing our
classified board of directors; establishing the standards and procedures for the removal of a director; eliminating the personal
liability of a director or officer to us or our stockholders for monetary damages; requiring us to indemnify our directors, officers,
employees, agents and other persons acting on behalf of or at the request of us to the fullest extent permitted from time to time
by Maryland law; or establishing this super-majority voting requirement; and |
| · | adding to our Articles of Incorporation any provision imposing cumulative voting in the election of directors. |
Dividends, Liquidation and Other Rights.
Subject to the preferential rights of any other class or series of our stock and to the provisions of our Articles of Incorporation
regarding the restrictions on ownership and transfer of shares of stock, holders of shares of common stock are entitled to receive
dividends on such shares of common stock if, as and when authorized by our board of directors, and declared by us out of assets
legally available therefor. Such holders are also entitled to share ratably in the assets of our company legally available for
distribution to our stockholders in the event of our liquidation, dissolution or winding up after payment or establishment of reserves
or other adequate provision for all debts and liabilities of our company and any stock with preferential rights related thereto.
Under Maryland law, stockholders generally are not liable for the corporation’s debts or obligations.
Holders of shares of common stock have
no preference, conversion, exchange or sinking fund rights, have no preemptive rights to subscribe for any of our securities and
generally have no appraisal rights. Subject to the provisions of our Articles of Incorporation regarding the restrictions on ownership
and transfer of shares of stock, shares of common stock will have equal dividend, liquidation and other rights.
Power to Reclassify Our Unissued Shares
of Stock. Our board of directors is authorized by our Articles of Incorporation to classify and reclassify any of our
unissued shares of capital stock by, among other alternatives, setting, altering or eliminating in any one or more respects, from
time to time before the issuance of such shares, any feature of such shares, including but not limited to the designation, preferences,
conversion or other rights, voting powers, qualifications and terms and conditions of redemption of, limitations as to dividends
and any other restrictions on such shares, without the approval of the holders of our common stock. As a result, our board of directors
could authorize, without further action by the holders of our common stock, the issuance of shares of preferred stock that have
priority over the shares of our common stock with respect to dividends, distributions and rights upon liquidation and with other
terms and conditions that could have the effect of delaying, deterring or preventing a transaction or a change in control that
might involve a premium price for holders of shares of our common stock or otherwise might be in their best interest.
Transfer Agent. The registrar
and transfer agent for shares of our common stock is American Stock Transfer and Trust Company.
Preferred Stock
Currently, no shares of our preferred
stock are issued or outstanding. Our board of directors may authorize from time to time, without further action by our stockholders,
the issuance of shares of preferred stock in one or more separately designated classes. Our board of directors may set the preferences,
conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and
terms and conditions of redemption of the shares of each class of our preferred stock. The authorized shares of our preferred stock
are available for issuance without further action by our stockholders, unless such action is required by applicable law or the
rules of any stock exchange on which our securities may be listed. If the approval of our stockholders is not required for the
issuance of shares of our preferred stock, our board may determine not to seek stockholder approval. The specific terms of any
class of preferred stock offered pursuant to this prospectus will be described in the prospectus supplement relating to that class
of preferred stock.
A class of our preferred stock could,
depending on the terms of such class, impede the completion of a merger, tender offer or other takeover attempt. Our board of directors
will make any determination to issue preferred shares based upon its judgment as to the best interests of our stockholders. Our
directors, in so acting, could issue preferred stock having terms that could discourage an acquisition attempt through which an
acquirer may be able to change the composition of our board of directors, including a tender offer or other transaction that some,
or a majority, of our stockholders might believe to be in their best interests or in which stockholders might receive a premium
for their stock over the then-current market price of the stock.
The preferred stock has the terms described
below unless otherwise provided in the prospectus supplement relating to a particular class of preferred stock. You should read
the prospectus supplement relating to the particular class of preferred stock being offered for specific terms, including:
| · | the designation and stated value per share of the preferred stock and the number of shares offered; |
| · | the amount of liquidation preference per share; |
| · | the price at which the preferred stock will be issued; |
| · | the dividend rate, or method of calculation of dividends, the dates on which dividends will be payable, whether dividends will
be cumulative or noncumulative and, if cumulative, the dates from which dividends will commence to accumulate; |
| · | any redemption or sinking fund provisions; |
| · | if other than the currency of the United States, the currency or currencies including composite currencies in which the preferred
stock is denominated and/or in which payments will or may be payable; |
| · | any conversion provisions; |
| · | whether we have elected to offer depositary shares as described under “Description of Depositary Shares;” and |
| · | any other rights, preferences, privileges, limitations and restrictions on the preferred stock. |
The preferred stock will, when issued,
be fully paid and non-assessable. Unless otherwise specified in the prospectus supplement, each class of preferred stock will rank
equally as to dividends and liquidation rights in all respects with each other class of preferred stock. The rights of holders
of shares of each class of preferred stock will be subordinate to those of our general creditors.
As described under “Description
of Depositary Shares,” we may, at our option, with respect to any class of preferred stock, elect to offer fractional interests
in shares of preferred stock, and provide for the issuance of depositary receipts representing depositary shares, each of which
will represent a fractional interest in a share of the class of preferred stock. The fractional interest will be specified in the
prospectus supplement relating to a particular class of preferred stock.
Rank. Unless otherwise specified
in the prospectus supplement, the preferred stock will, with respect to dividend rights and rights upon our liquidation, dissolution
or winding up of our affairs, rank:
| · | senior to our common stock and to all equity securities ranking junior to such preferred stock with respect to dividend rights
or rights upon our liquidation, dissolution or winding up of our affairs; |
| · | on a parity with all equity securities issued by us, the terms of which specifically provide that such equity securities rank
on a parity with the preferred stock with respect to dividend rights or rights upon our liquidation, dissolution or winding up
of our affairs; and |
| · | junior to all equity securities issued by us, the terms of which specifically provide that such equity securities rank senior
to the preferred stock with respect to dividend rights or rights upon our liquidation, dissolution or winding up of our affairs. |
The term “equity securities”
does not include convertible debt securities.
Dividends. Holders of the preferred
stock of each class will be entitled to receive, when, as and if declared by our board of directors, cash dividends at such rates
and on such dates described in the prospectus supplement. Different classes of preferred stock may be entitled to dividends at
different rates or based on different methods of calculation. The dividend rate may be fixed or variable or both. Dividends will
be payable to the holders of record as they appear on our stock books on record dates fixed by our board of directors, as specified
in the applicable prospectus supplement.
Dividends on any class of preferred
stock may be cumulative or noncumulative, as described in the applicable prospectus supplement. If our board of directors does
not declare a dividend payable on a dividend payment date on any class of noncumulative preferred stock, then the holders of that
noncumulative preferred stock will have no right to receive a dividend for that dividend payment date, and we will have no obligation
to pay the dividend accrued for that period, whether or not dividends on that class are declared payable on any future dividend
payment dates. Dividends on any class of cumulative preferred stock will accrue from the date we initially issue shares of such
class or such other date specified in the applicable prospectus supplement.
No dividends may be declared or paid
or funds set apart for the payment of any dividends on any parity securities unless full dividends have been paid or set apart
for payment on the preferred stock. If full dividends are not paid, the preferred stock will share dividends pro rata with the
parity securities.
No dividends may be declared or paid
or funds set apart for the payment of dividends on any junior securities unless full dividends for all dividend periods terminating
on or prior to the date of the declaration or payment will have been paid or declared and a sum sufficient for the payment set
apart for payment on the preferred stock.
Liquidation Preference. Upon
any voluntary or involuntary liquidation, dissolution or winding up of our affairs, then, before we make any distribution or payment
to the holders of any common stock or any other class or series of our capital stock ranking junior to the preferred stock in the
distribution of assets upon any liquidation, dissolution or winding up of our affairs, the holders of each class of preferred stock
shall be entitled to receive out of assets legally available for distribution to stockholders, liquidating distributions in the
amount of the liquidation preference per share set forth in the prospectus supplement, plus any accrued and unpaid dividends thereon.
Such dividends will not include any accumulation in respect of unpaid noncumulative dividends for prior dividend periods. Unless
otherwise specified in the prospectus supplement, after payment of the full amount of their liquidating distributions, the holders
of preferred stock will have no right or claim to any of our remaining assets. Upon any such voluntary or involuntary liquidation,
dissolution or winding up, if our available assets are insufficient to pay the amount of the liquidating distributions on all outstanding
preferred stock and the corresponding amounts payable on all other classes or series of our capital stock ranking on parity with
the preferred stock and all other such classes or series of shares of capital stock ranking on parity with the preferred stock
in the distribution of assets, then the holders of the preferred stock and all other such classes or series of capital stock will
share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise
be entitled.
Upon any such liquidation, dissolution
or winding up and if we have made liquidating distributions in full to all holders of preferred stock, we will distribute our remaining
assets among the holders of any other classes or series of capital stock ranking junior to the preferred stock according to their
respective rights and preferences and, in each case, according to their respective number of shares. For such purposes, our consolidation
or merger with or into any other corporation, trust or entity, or the sale, lease or conveyance of all or substantially all of
our property or assets will not be deemed to constitute a liquidation, dissolution or winding up of our affairs.
Redemption. If so provided in
the applicable prospectus supplement, the preferred stock will be subject to mandatory redemption or redemption at our option,
as a whole or in part, in each case upon the terms, at the times and at the redemption prices set forth in such prospectus supplement.
The prospectus supplement relating to
a class of preferred stock that is subject to mandatory redemption will specify the number of shares of preferred stock that shall
be redeemed by us in each year commencing after a date to be specified, at a redemption price per share to be specified, together
with an amount equal to all accrued and unpaid dividends thereon to the date of redemption. Unless the shares have a cumulative
dividend, such accrued dividends will not include any accumulation in respect of unpaid dividends for prior dividend periods. We
may pay the redemption price in cash or other property, as specified in the applicable prospectus supplement. If the redemption
price for preferred stock of any class is payable only from the net proceeds of the issuance of shares of our capital stock, the
terms of such preferred stock may provide that, if no such shares of our capital stock shall have been issued or to the extent
the net proceeds from any issuance are insufficient to pay in full the aggregate redemption price then due, such preferred stock
shall automatically and mandatorily be converted into the applicable shares of our capital stock pursuant to conversion provisions
specified in the applicable prospectus supplement. Notwithstanding the foregoing, we will not redeem any preferred stock of a class
unless:
| · | if that class of preferred stock has a cumulative dividend, we have declared and paid or contemporaneously declare and pay
or set aside funds to pay full cumulative dividends on the preferred stock for all past dividend periods and the then current dividend
period; or |
| · | if such class of preferred stock does not have a cumulative dividend, we have declared and paid or contemporaneously declare
and pay or set aside funds to pay full dividends for the then current dividend period. |
In addition, we will not acquire any
preferred stock of a class unless:
| · | if that class of preferred stock has a cumulative dividend, we have declared and paid or contemporaneously declare and pay
or set aside funds to pay full cumulative dividends on all outstanding shares of such class of preferred stock for all past dividend
periods and the then current dividend period; or |
| · | if that class of preferred stock does not have a cumulative dividend, we have declared and paid or contemporaneously declare
and pay or set aside funds to pay full dividends on the preferred stock of such sclass for the then current dividend period. |
However, at any time we may purchase
or acquire preferred stock of that class (1) pursuant to a purchase or exchange offer made on the same terms to holders of all
outstanding preferred stock of such class or (2) by conversion into or exchange for shares of our capital stock ranking junior
to the preferred stock of such class as to dividends and upon liquidation.
If fewer than all of the outstanding
shares of preferred stock of any class are to be redeemed, we will determine the number of shares that may be redeemed pro rata
from the holders of record of such shares in proportion to the number of such shares held or for which redemption is requested
by such holder or by any other equitable manner that we determine. Such determination will reflect adjustments to avoid redemption
of fractional shares.
Unless otherwise specified in the prospectus
supplement, we will mail notice of redemption at least 30 days but not more than 60 days before the redemption date to each holder
of record of preferred stock to be redeemed at the address shown on our stock transfer books. Each notice shall state:
| · | the number of shares and class of preferred stock to be redeemed; |
| · | the place or places where certificates for such preferred stock are to be surrendered for payment of the redemption price; |
| · | that dividends on the shares to be redeemed will cease to accrue on such redemption date; |
| · | the date on which the holder’s conversion rights, if any, as to such shares shall terminate; and |
| · | the specific number of shares to be redeemed from each such holder if fewer than all the shares of any class are to be redeemed. |
If notice of redemption has been given
and we have set aside the funds necessary for such redemption in trust for the benefit of the holders of any shares called for
redemption, then from and after the redemption date, dividends will cease to accrue on such shares, and all rights of the holders
of such shares will terminate, except the right to receive the redemption price.
Voting Rights. Holders of preferred
stock will not have any voting rights, except as required by law or as indicated in the applicable prospectus supplement.
Unless otherwise provided for under
the terms of any class of preferred stock, no consent or vote of the holders of shares of preferred stock or any class thereof
shall be required for any amendment to our Articles of Incorporation that would increase the number of authorized shares of preferred
stock or the number of authorized shares of any class thereof or decrease the number of authorized shares of preferred stock or
the number of authorized shares of any class thereof (but not below the number of authorized shares of preferred stock or such
class, as the case may be, then outstanding).
Conversion Rights. The terms
and conditions, if any, upon which any class of preferred stock is convertible into our common stock will be set forth in the applicable
prospectus supplement relating thereto. Such terms will include the number of shares of common stock into which the shares of preferred
stock are convertible, the conversion price, rate or manner of calculation thereof, the conversion period, provisions as to whether
conversion will be at our option or at the option of the holders of the preferred stock, the events requiring an adjustment of
the conversion price and provisions affecting conversion in the event of the redemption.
Transfer Agent and Registrar.
The transfer agent and registrar for the preferred stock will be set forth in the applicable prospectus supplement.
Restrictions on Ownership
To maintain our qualification as a REIT,
among other things, not more than 50% in value of our outstanding shares of stock may be owned, directly or indirectly (taking
into account certain constructive ownership rules under the Internal Revenue Code of 1986, as amended, or the tax code), by five
or fewer individuals. Our Articles of Incorporation provide that no person may beneficially or constructively own more
than 9.8% of the number or value of our outstanding shares, unless exempted by our Board in its sole and absolute discretion. Our
Articles of Incorporation also provide that no person may transfer or acquire our shares to the extent that doing so would result
in our outstanding shares being beneficially owned by fewer than 100 persons, and that no person may transfer, acquire or beneficially
or constructively own shares to the extent that doing so would result in our violating the 50% ownership limitation described in
the first sentence of this paragraph or would otherwise result in our failing to qualify as a REIT.
Our Articles of Incorporation also provide
that on an annual basis we will use our best efforts to redeem any shares of our common stock from holders who desire to sell them.
The purchase price paid by us will be 90% of the fair market value of the shares purchased, as determined by our Board of Directors
in its sole and absolute discretion after consultation with an adviser selected by our Board. We have no obligation to redeem shares
of our common stock during any period that our common stock is listed for trading on a national securities exchange.
Provisions of our Articles of Incorporation, Bylaws and
Maryland Law that may have Anti-Takeover Effects
Board of Directors. Our Articles
of Incorporation and Bylaws provide that our board of directors may establish the number of directors as long as the number is
not fewer than the minimum required under the MGCL. Our Articles of Incorporation and Bylaws provide for a board of directors divided
as nearly equally as possible into three classes. Each director is elected to a term expiring at the annual meeting of stockholders
held in the third year following the year of such election and shall hold office until his successor is elected and qualifies.
Except as may be provided by our board of directors in setting the terms of any class of preferred stock, any vacancy on our board
of directors occurring for any reason, other than an increase in the number of directors, may be filled only by a vote a majority
of the remaining directors, even if the remaining directors do not constitute a quorum, and any vacancy on our board of directors
created by an increase in the number of directors may be filled only by a vote a majority of our board of directors. Any director
elected to fill a vacancy will serve for the remainder of the full term of the directorship in which the vacancy occurred and until
a successor is elected and qualifies.
Removal of Directors by Stockholders.
Our Articles of Incorporation and Bylaws provide that members of our board of directors may only be removed for cause, and then
only by the affirmative vote of the holders of at least two-thirds of the outstanding shares entitled to vote on the election of
the directors. This provision, when coupled with the provision in our Bylaws authorizing our board of directors to fill vacant
directorships, precludes stockholders from removing incumbent directors and filling the vacancies created by such removal with
their own nominees.
Stockholder Nomination of Directors.
Our Bylaws provide that a stockholder must notify us in writing of any stockholder nomination of a director not earlier than the
120th day and not later than the 90th day prior to the first anniversary of the mailing date of the notice
of the preceding year’s annual meeting.
Business Combinations. Under the
MGCL, certain “business combinations” (including a merger, consolidation, share exchange or, in certain circumstances
specified under the statute, an asset transfer or issuance or reclassification of equity securities) between a Maryland corporation
and any interested stockholder, 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. Maryland law defines an interested stockholder
as:
| · | any person who beneficially owns, directly or indirectly, 10% or more of the voting power of the corporation’s voting
stock; 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 then outstanding voting stock of the corporation. |
A person is not an interested stockholder
under the statute if the board of directors approves in advance the transaction by which the person otherwise would have become
an interested stockholder. In approving a transaction, however, the board of directors may provide that its approval is subject
to compliance, at or after the time of the approval, with any terms and conditions determined by the board of directors.
After the five-year prohibition, any
business combination between the company and an interested stockholder generally must be recommended by the board of directors
and approved by the affirmative vote of at least:
| · | 80% of the votes entitled to be cast by holders of outstanding shares of voting stock of corporation; and |
| · | two-thirds of the votes entitled to be cast by holders of shares of voting stock of the corporation other than shares held
by the interested stockholder with whom (or with whose affiliate) the business combination is to be effected or by an affiliate
or associate of the interested stockholder. |
These super-majority vote requirements
do not apply if, among other conditions, the corporation’s common stockholders receive a minimum price (as described under
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.
These provisions of the MGCL do not apply,
however, to business combinations that are approved or exempted by a corporation’s board of directors prior to the time that
the interested stockholder becomes an interested stockholder.
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 at a special meeting of stockholders by the affirmative vote of two-thirds
of the votes entitled to be cast on the matter. Votes entitled to be cast on the matter exclude votes of shares of stock in the
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 or 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 the corporation.
“Control shares” are voting
shares of stock that, if aggregated with all other such shares of stock previously acquired 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 rages of voting power:
| · | one-tenth or more but less than one-third; |
| · | one-third or more but less than a majority; or |
| · | a- majority or more of all voting power. |
Control shares do not include shares
the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. A “control
share acquisition” means the acquisition, directly or indirectly, of ownership of, or the power to direct the exercise of
voting power with respect to, issued and outstanding 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 and making
an “acquiring person statement” as described in the MGCL), 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 control shares. If no request for a special
meeting is made, we may present the question at any stockholders meeting.
If voting rights of control shares are
not approved at the meeting or if the acquiring person does not deliver an “acquiring person statement” as required
by the MGCL, 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. Fair value is determined without regard to the absence
of voting rights for the control shares and 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 the 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 (1) to shares acquired in a merger, consolidation or share exchange if we are a party to the transaction
or (2) to acquisitions approved or exempted by the articles of incorporation or bylaws of the corporation.
Our bylaws contain a provision exempting
from the control share acquisition statute all shares of our capital stock to the fullest extent permitted by Maryland law. We
can provide no assurance that our board of directors will not amend or eliminate such provision at any time in the future. Our
board of directors has the power to determine that the amendment or elimination of such provision applies to a control share acquisition
that occurred prior or subsequent to such amendment or elimination.
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 articles of incorporation or bylaws or a resolution of its board
of directors and notwithstanding any contrary provision in the articles of incorporation or bylaws, to any or all of the following
five provisions:
| · | a two-thirds stockholder 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 requirement that requires the request of the holders of at least a majority of all votes entitled to be cast to call a special
meeting of stockholders. |
To date, we have not made any of the
elections described above, although, independent of these elections, our Articles of Incorporation and Bylaws contain provisions
that the board of directors is divided into three classes, that special meetings of stockholders are only required to be held upon
the request of a majority of the stockholders, that the board has the exclusive power to fix the number of directors, that directors
may be removed only for cause and by the vote of two-third of the votes entitled to be cast and that, generally, vacancies may
be filled only by our board of directors.
Amendment of Our Bylaws. Our board of directors
has the exclusive power to adopt, alter or repeal any provision of our bylaws and to make new bylaws.
Directors’ Liability
Our Articles of Incorporation contain
a provision eliminating the personal liability of a director or officer to us or our stockholders for monetary damages to the fullest
extent permitted by Maryland statutory or decisional law, as amended or interpreted. The MGCL currently permits the liability of
directors and officers to a corporation or its stockholders for money damages to be limited, except (i) to the extent that a judgment
or other final adjudication is entered adverse to the director or officer in a proceeding based on a finding that the director’s
or officer’s action, or failure to act, was the result of active and deliberate dishonesty and was material to the cause
of action adjudicated in the proceeding or (ii) to the extent it is proved that the director or officer actually received an improper
benefit or profit in money, property or services.
Our Articles of Incorporation require
us to indemnify our directors, officers, employees, agents and other persons acting on behalf of or at the request of us to the
fullest extent permitted from time to time by Maryland law. The MGCL permits a corporation to indemnify its directors, officers
and certain other parties against judgments, penalties, fines, settlements and reasonable expenses, including attorneys’
fees, actually incurred by them in connection with any proceeding to which they may be made a party by reason of their services
to or at the request of the corporation, unless it is established that (i) the act or omission of the indemnified party was material
to the matter giving rise to the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty,
(ii) the indemnified party actually received an improper personal benefit, or (iii) in the case of any criminal proceeding, the
indemnified party had reasonable cause to believe that the act or omission was unlawful. Indemnification may be made against judgments,
penalties, fines, settlements and reasonable expenses actually incurred by the director or officer in connection with the proceeding;
provided, however, that if the proceeding is one by or in the right of the corporation, indemnification may not be made with respect
to any proceeding in which the director of officer has been adjudged to be liable to the corporation. In addition, a director or
officer may not be indemnified with respect to any proceeding charging improper personal benefit to the director or officer in
which the director or officer was adjudged to be liable on the basis that personal benefit was improperly received. It is the position
of the Securities and Exchange Commission that indemnification of directors and officers for liabilities arising under the Securities
Act is against public policy and is unenforceable pursuant to Section 14 of the Securities Act.
DESCRIPTION OF DEPOSITARY SHARES
General
We may, at our option, elect to offer
fractional shares of preferred stock, which we call depositary shares, rather than full shares of preferred stock. If we do, we
will issue to the public receipts, called depositary receipts, for depositary shares, each of which will represent a fraction,
to be described in the applicable prospectus supplement, of a share of a particular class of preferred stock. Unless otherwise
provided in the prospectus supplement, each owner of a depositary share will be entitled, in proportion to the applicable fractional
interest in a share of preferred stock represented by the depositary share, to all the rights and preferences of the preferred
stock represented by the depositary share. Those rights include dividend, voting, redemption, conversion and liquidation rights.
The shares of preferred stock underlying
the depositary shares will be deposited with a bank or trust company selected by us to act as depositary under a deposit agreement
between us, the depositary and the holders of the depositary receipts. The depositary will be the transfer agent, registrar and
dividend disbursing agent for the depositary shares.
The depositary shares will be evidenced
by depositary receipts issued pursuant to the deposit agreement. Holders of depositary receipts agree to be bound by the deposit
agreement, which requires holders to take certain actions such as filing proof of residence and paying certain charges.
The summary of terms of the depositary
shares contained in this prospectus is not a complete description of the terms of the depository shares. You should refer to the
form of the deposit agreement and our Articles of Incorporation that are, or will be, filed with the SEC.
Dividends and Other Distributions
The depositary will distribute all cash
dividends or other cash distributions, if any, received in respect of the preferred stock underlying the depositary shares to the
record holders of depositary shares in proportion to the numbers of depositary shares owned by those holders on the relevant record
date. The relevant record date for depositary shares will be the same date as the record date for the underlying preferred stock.
If there is a distribution other than
in cash, the depositary will distribute property (including securities) received by it to the record holders of depositary shares,
unless the depositary determines that it is not feasible to make the distribution. If this occurs, the depositary may, with our
approval, adopt another method for the distribution, including selling the property and distributing the net proceeds from the
sale to the holders.
Liquidation Preference
If a class of preferred stock underlying
the depositary shares has a liquidation preference, in the event of the voluntary or involuntary liquidation, dissolution or winding
up of us, holders of depositary shares will be entitled to receive the fraction of the liquidation preference accorded each share
of the applicable class of preferred stock, as set forth in the applicable prospectus supplement.
Withdrawal of
Stock
Unless the related depositary shares
have been previously called for redemption, upon surrender of the depositary receipts at the office of the depositary, the holder
of the depositary shares will be entitled to delivery, at the office of the depositary to or upon his or her order, of the number
of whole shares of the preferred stock and any money or other property represented by the depositary shares. If the depositary
receipts delivered by the holder evidence a number of depositary shares in excess of the number of depositary shares representing
the number of whole shares of preferred stock to be withdrawn, the depositary will deliver to the holder at the same time a new
depositary receipt evidencing the excess number of depositary shares. In no event will the depositary deliver fractional shares
of preferred stock upon surrender of depositary receipts. Holders of preferred stock thus withdrawn may not thereafter deposit
those shares under the deposit agreement or receive depositary receipts evidencing depositary shares therefor.
Redemption of
Depositary Shares
Whenever we redeem shares of preferred
stock held by the depositary, the depositary will redeem as of the same redemption date the number of depositary shares representing
shares of the preferred stock so redeemed, so long as we have paid in full to the depositary the redemption price of the preferred
stock to be redeemed plus an amount equal to any accumulated and unpaid dividends on the preferred stock to the date fixed for
redemption. The redemption price per depositary share will be equal to the redemption price and any other amounts per share payable
on the preferred stock multiplied by the fraction of a share of preferred stock represented by one depositary share. If less than
all the depositary shares are to be redeemed, the depositary shares to be redeemed will be selected by lot or pro rata or by any
other equitable method as may be determined by the depositary.
After the date fixed for redemption,
depositary shares called for redemption will no longer be deemed to be outstanding and all rights of the holders of depositary
shares will cease, except the right to receive the monies payable upon redemption and any money or other property to which the
holders of the depositary shares were entitled upon redemption upon surrender to the depositary of the depositary receipts evidencing
the depositary shares.
Voting the
Preferred Stock
Upon receipt of notice of any meeting
at which the holders of the preferred stock are entitled to vote, the depositary will mail the information contained in the notice
of meeting to the record holders of the depositary receipts relating to that preferred stock. The record date for the depositary
receipts relating to the preferred stock will be the same date as the record date for the preferred stock. Each record holder of
the depositary shares on the record date will be entitled to instruct the depositary as to the exercise of the voting rights pertaining
to the number of shares of preferred stock represented by that holder’s depositary shares. The depositary will endeavor,
insofar as practicable, to vote the number of shares of preferred stock represented by the depositary shares in accordance with
those instructions, and we will agree to take all action that may be deemed necessary by the depositary in order to enable the
depositary to do so. The depositary will not vote any shares of preferred stock except to the extent it receives specific instructions
from the holders of depositary shares representing that number of shares of preferred stock.
Charges of Depositary
We will pay all transfer and other taxes
and governmental charges arising solely from the existence of the depositary arrangements. We will pay charges of the depositary
in connection with the initial deposit of the preferred stock and any redemption of the preferred stock. Holders of depositary
receipts will pay transfer, income and other taxes and governmental charges and such other charges (including those in connection
with the receipt and distribution of dividends, the sale or exercise of rights, the withdrawal of the preferred stock and the transferring,
splitting or grouping of depositary receipts) as are expressly provided in the deposit agreement to be for their accounts. If these
charges have not been paid by the holders of depositary receipts, the depositary may refuse to transfer depositary shares, withhold
dividends and distributions and sell the depositary shares evidenced by the depositary receipt.
Amendment and Termination of the Deposit Agreement
The form of depositary receipt evidencing
the depositary shares and any provision of the deposit agreement may be amended by agreement between us and the depositary. However,
any amendment that materially and adversely alters the rights of the holders of depositary shares, other than fee changes, will
not be effective unless the amendment has been approved by the holders of a majority of the outstanding depositary shares. The
deposit agreement may be terminated by the depositary or us only if:
| · | all outstanding depositary shares have been redeemed; or |
| · | there has been a final distribution of the preferred stock in connection with our dissolution and such distribution has been
made to all the holders of depositary shares. |
Resignation and Removal of Depositary
The depositary may resign at any time
by delivering to us notice of its election to do so, and we may remove the depositary at any time. Any resignation or removal of
the depositary will take effect upon our appointment of a successor depositary and its acceptance of such appointment. The successor
depositary must be appointed within 60 days after delivery of the notice of resignation or removal and must be a bank or trust
company having its principal office in the United States and having the requisite combined capital and surplus as set forth in
the applicable agreement.
Notices
The depositary will forward to holders
of depositary receipts all notices, reports and other communications, including proxy solicitation materials received from us,
that are delivered to the depositary and that we are required to furnish to the holders of the preferred stock. In addition, the
depositary will make available for inspection by holders of depositary receipts at the principal office of the depositary, and
at such other places as it may from time to time deem advisable, any reports and communications we deliver to the depositary as
the holder of preferred stock.
Limitation of
Liability
Neither we nor the depositary will be
liable if either we or it is prevented or delayed by law or any circumstance beyond its control in performing its obligations.
Our obligations and those of the depositary will be limited to performance in good faith of our and their duties thereunder. We
and the depositary will not be obligated to prosecute or defend any legal proceeding in respect of any depositary shares or preferred
stock unless satisfactory indemnity is furnished. We and the depositary may rely upon written advice of counsel or accountants,
on information provided by persons presenting preferred stock for deposit, holders of depositary receipts or other persons believed
to be competent to give such information and on documents believed to be genuine and to have been signed or presented by the proper
party or parties.
FORMS OF SECURITIES
Each debt security and depositary share
will be represented either by a certificate issued in definitive form to a particular investor or by one or more global securities
representing the entire issuance of securities. Unless the applicable prospectus supplement provides otherwise, certificated securities
in definitive form and global securities will be issued in registered form. Definitive securities name you or your nominee as the
owner of the security, and in order to transfer or exchange these securities or to receive payments other than interest or other
interim payments, you or your nominee must physically deliver the securities to the trustee, registrar, paying agent or other agent,
as applicable. Global securities name a depositary or its nominee as the owner of the debt securities or depositary shares represented
by these global securities. The depositary maintains a computerized system that will reflect each investor’s beneficial ownership
of the securities through an account maintained by the investor with its broker/dealer, bank, trust company or other representative,
as we explain more fully below.
Global Securities
We may issue the debt securities or
depositary shares in the form of one or more fully registered global securities that will be deposited with a depositary or its
nominee identified in the applicable prospectus supplement and registered in the name of that depositary or nominee. In those cases,
one or more global securities will be issued in a denomination or aggregate denominations equal to the portion of the aggregate
principal or face amount of the securities to be represented by global securities. Unless and until it is exchanged in whole for
securities in definitive registered form, a global security may not be transferred except as a whole by and among the depositary
for the global security, the nominees of the depositary or any successors of the depositary or those nominees.
If not described below, any specific
terms of the depositary arrangement with respect to any securities to be represented by a global security will be described in
the prospectus supplement relating to those securities. We anticipate that the following provisions will apply to all depositary
arrangements.
Ownership of beneficial interests in
a global security will be limited to persons, called participants, that have accounts with the depositary or persons that may hold
interests through participants. Upon the issuance of a global security, the depositary will credit, on its book-entry registration
and transfer system, the participants’ accounts with the respective principal or face amounts of the securities beneficially
owned by the participants. Any dealers, underwriters or agents participating in the distribution of the securities will designate
the accounts to be credited. Ownership of beneficial interests in a global security will be shown on, and the transfer of ownership
interests will be effected only through, records maintained by the depositary, with respect to interests of participants, and on
the records of participants, with respect to interests of persons holding through participants. The laws of some states may require
that some purchasers of securities take physical delivery of these securities in definitive form. These laws may impair your ability
to own, transfer or pledge beneficial interests in global securities.
So long as the depositary, or its nominee,
is the registered owner of a global security, that depositary or its nominee, as the case may be, will be considered the sole owner
or holder of the securities represented by the global security for all purposes under the applicable indenture or deposit agreement.
Except as described below, owners of beneficial interests in a global security will not be entitled to have the securities represented
by the global security registered in their names, will not receive or be entitled to receive physical delivery of the securities
in definitive form and will not be considered the owners or holders of the securities under the applicable indenture or deposit
agreement. Accordingly, each person owning a beneficial interest in a global security must rely on the procedures of the depositary
for that global security and, if that person is not a participant, on the procedures of the participant through which the person
owns its interest, to exercise any rights of a holder under the applicable indenture or deposit agreement. We understand that under
existing industry practices, if we request any action of holders or if an owner of a beneficial interest in a global security desires
to give or take any action that a holder is entitled to give or take under the applicable indenture or deposit agreement, the depositary
for the global security would authorize the participants holding the relevant beneficial interests to give or take that action,
and the participants would authorize beneficial owners owning through them to give or take that action or would otherwise act upon
the instructions of beneficial owners holding through them.
Principal, premium, if any, and interest
payments on debt securities, and any payments to holders with respect to depositary shares, represented by a global security registered
in the name of a depositary or its nominee will be made to the depositary or its nominee, as the case may be, as the registered
owner of the global security. None of us, or any trustee or other agent of ours, or any agent of any trustee will have any responsibility
or liability for any aspect of the records relating to payments made on account of beneficial ownership interests in the global
security or for maintaining, supervising or reviewing any records relating to those beneficial ownership interests.
We expect that the depositary for any
of the securities represented by a global security, upon receipt of any payment to holders of principal, premium, interest or other
distribution of underlying securities or other property on that registered global security, will immediately credit participants’
accounts in amounts proportionate to their respective beneficial interests in that global security as shown on the records of the
depositary. We also expect that payments by participants to owners of beneficial interests in a global security held through participants
will be governed by standing customer instructions and customary practices, as is now the case with the securities held for the
accounts of customers or registered in “street name,” and will be the responsibility of those participants.
If the depositary for any of the securities
represented by a global security is at any time unwilling or unable to continue as depositary or ceases to be a clearing agency
registered under the Exchange Act, and a successor depositary registered as a clearing agency under the Exchange Act is not appointed
by us within 90 days, we will issue securities in definitive form in exchange for the global security that had been held by the
depositary. Any securities issued in definitive form in exchange for a global security will be registered in the name or names
that the depositary gives to the relevant trustee or other relevant agent of ours or theirs. It is expected that the depositary’s
instructions will be based upon directions received by the depositary from participants with respect to ownership of beneficial
interests in the global security that had been held by the depositary.
PLAN OF DISTRIBUTION
We and any selling securityholders may
sell securities:
| · | directly to purchasers; or |
| · | through a combination of any of these methods of sale. |
In addition, we may issue the securities as a dividend or
distribution or in a subscription rights offering to our existing security holders. This prospectus may be used in connection with
any offering of our securities through any of these methods or other methods described in the applicable prospectus supplement.
We or any selling securityholder may
directly solicit offers to purchase securities, or agents may be designated to solicit such offers. We will, in the prospectus
supplement relating to such offering, name any agent that could be viewed as an underwriter under the Securities Act, and describe
any commissions that we or any selling securityholder must pay. Any such agent will be acting on a best efforts basis for the period
of its appointment or, if indicated in the applicable prospectus supplement, on a firm commitment basis.
The distribution of the securities may
be effected from time to time in one or more transactions:
| · | at a fixed price, or prices, which may be changed from time to time; |
| · | at market prices prevailing at the time of sale; |
| · | at prices related to such prevailing market prices; or |
Each prospectus supplement will describe
the method of distribution of the securities and any applicable restrictions.
The prospectus supplement with respect
to the securities of a particular series will describe the terms of the offering of the securities, including the following:
| · | the name of the agent or any underwriters; |
| · | the public offering or purchase price and the proceeds we will receive from the sale of the securities; |
| · | any discounts and commissions to be allowed or re-allowed or paid to the agent or underwriters; |
| · | all other items constituting underwriting compensation; |
| · | any discounts and commissions to be allowed or re-allowed or paid to dealers; and |
| · | any exchanges on which the securities will be listed. |
If any underwriters or agents are utilized
in the sale of the securities in respect of which this prospectus is delivered, we, and, if applicable, any selling securityholder
will enter into an underwriting agreement or other agreement with them at the time of sale to them, and we will set forth in the
prospectus supplement relating to such offering the names of the underwriters or agents and the terms of the related agreement
with them.
If a dealer is utilized in the sale
of the securities in respect of which this prospectus is delivered, we will sell such securities to the dealer, as principal. The
dealer may then resell such securities to the public at varying prices to be determined by such dealer at the time of resale.
If we offer securities in a subscription
rights offering to our existing security holders, we may enter into a standby underwriting agreement with dealers, acting as standby
underwriters. We may pay the standby underwriters a commitment fee for the securities they commit to purchase on a standby basis.
If we do not enter into a standby underwriting arrangement, we may retain a dealer-manager to manage a subscription rights offering
for us.
Remarketing firms, agents, underwriters,
dealers and other persons may be entitled under agreements which they may enter into with us and by any selling securityholder
to indemnification by us against certain civil liabilities, including liabilities under the Securities Act, and may be customers
of, engage in transactions with or perform services for us or any selling securityholder in the ordinary course of business.
If so indicated in the applicable prospectus
supplement, we will authorize underwriters or other persons acting as our agents to solicit offers by certain institutions to purchase
securities from us pursuant to delayed delivery contracts providing for payment and delivery on the date stated in the prospectus
supplement. Each contract will be for an amount not less than, and the aggregate amount of securities sold pursuant to such contracts
shall not be less nor more than, the respective amounts stated in the prospectus supplement. Institutions with whom the contracts,
when authorized, may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational
and charitable institutions and other institutions, but shall in all cases be subject to our approval. Delayed delivery contracts
will not be subject to any conditions except that:
| · | the purchase by an institution of the securities covered under that contract shall not at the time of delivery be prohibited
under the laws of the jurisdiction to which that institution is subject; and |
| · | if the securities are also being sold to underwriters acting as principals for their own account, the underwriters shall have
purchased such securities not sold for delayed delivery. The underwriters and other persons acting as our agents will not have
any responsibility in respect of the validity or performance of delayed delivery contracts. |
Certain agents, underwriters and dealers,
and their associates and affiliates may be customers of, have borrowing relationships with, engage in other transactions with,
and/or perform services, including investment banking services, for us and/or any selling securityholder or one or more of our
respective affiliates in the ordinary course of business.
In order to facilitate the offering
of the securities, any underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of the securities
or any other securities the prices of which may be used to determine payments on such securities. Specifically, any underwriters
may overallot in connection with the offering, creating a short position for their own accounts. In addition, to cover overallotments
or to stabilize the price of the securities or of any such other securities, the underwriters may bid for, and purchase, the securities
or any such other securities in the open market. Finally, in any offering of the securities through a syndicate of underwriters,
the underwriting syndicate may reclaim selling concessions allowed to an underwriter or a dealer for distributing the securities
in the offering if the syndicate repurchases previously distributed securities in transactions to cover syndicate short positions,
in stabilization transactions or otherwise. Any of these activities may stabilize or maintain the market price of the securities
above independent market levels. Any such underwriters are not required to engage in these activities and may end any of these
activities at any time.
Under Rule 15c6-1 of the Exchange Act,
trades in the secondary market generally are required to settle in three business days, unless the parties to any such trade expressly
agree otherwise. The applicable prospectus supplement may provide that the original issue date for your securities may be more
than three scheduled business days after the trade date for your securities. Accordingly, in such a case, if you wish to trade
securities on any date prior to the third business day before the original issue date for your securities, you will be required,
by virtue of the fact that your securities initially are expected to settle more than three scheduled business days after the trade
date for your securities, to make alternative settlement arrangements to prevent a failed settlement.
The securities may be new issues of
securities and may have no established trading market. The securities may or may not be listed on a national securities exchange.
We can make no assurance as to the liquidity of or the existence of trading markets for any of the securities.
MATERIAL UNITED STATES FEDERAL INCOME
TAX CONSIDERATIONS
The following is a general summary of
the material United States federal income tax considerations associated with the ownership and disposition of our stock and debt
securities. The following summary is not exhaustive of all possible tax considerations. Moreover, the summary contained herein
does not address all aspects of taxation that may be relevant to particular stockholders and holders of our debt securities in
light of their personal tax circumstances, or to certain types of stockholders and holders of debt securities subject to special
treatment under federal income tax laws, including insurance companies, tax-exempt organizations (except to the extent discussed
below under the headings “Taxation of Tax-Exempt Stockholders” and “Taxation of Tax-Exempt U.S. Holders”),
financial institutions, broker-dealers, and foreign corporations and persons who are not subject to United States taxation on their
worldwide income (except to the extent discussed below under the headings “Taxation of Non-U.S. Stockholders”
and “Taxation of Non-U.S. Holders”).
We have elected to be taxed as a real
estate investment trust under the Internal Revenue Code of 1986, as amended, which we refer to as the tax code. Generally, a company
that meets the eligibility requirements for treatment as a real estate investment trust and that elects to be so treated is not
subject to federal income tax on the income it distributes to its stockholders. We believe that we have been organized and have
operated in a manner so as to meet these eligibility requirements; however, there can be no assurance that we have qualified or
will remain qualified as a REIT. Our counsel, Wilmer Cutler Pickering Hale and Dorr LLP, has rendered its opinion, based upon various
assumptions specified therein and upon our representations as to, among other things, our organization, ownership and operations
that we qualified to be taxed as a real estate investment trust for each taxable year beginning with our taxable year ending December
31, 2002 and that our organization, ownership and proposed method of operation, will enable us to continue to qualify as a real
estate investment trust. Qualification as a REIT, however, depends upon our ability to meet, through actual annual (or in some
cases quarterly) operating results, requirements (discussed in greater detail below) relating to, among other things, the sources
of our income, the nature of our assets, the level of our distributions and the diversity of our share ownership. Wilmer Cutler
Pickering Hale and Dorr LLP has not reviewed and will not review these results on an independent or ongoing basis. Given the complex
nature of the REIT qualification requirements, the ongoing importance of factual determinations and the possibility of future changes
in our circumstances, there can be no assurance that our actual operating results will satisfy the requirements for taxation as
a REIT under the tax code for any particular taxable year.
The statements in this summary are, and
the opinion of Wilmer Cutler Pickering Hale and Dorr LLP is, based on the provisions of the tax code, applicable United States
Treasury regulations promulgated thereunder, and judicial and administrative decisions and rulings all as in effect on the date
rendered. Neither the statements below nor the opinion is binding on the Internal Revenue Service or the courts, and there can
be no assurance that the Internal Revenue Service or the courts will not take a contrary view. No ruling from the Internal Revenue
Service has been or will be sought. Future legislative, judicial or administrative changes or interpretations could alter the statements
and conclusions set forth herein, possibly adversely.
EACH STOCKHOLDER, HOLDER OF DEPOSITARY SHARES AND
HOLDER OF DEBT SECURITIES IS URGED TO CONSULT HIS, HER, OR ITS OWN TAX ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES TO THE STOCKHOLDER,
HOLDER OF DEPOSITARY SHARES AND HOLDER OF DEBT SECURITIES OF THE OWNERSHIP AND DISPOSITION OF STOCK, DEPOSITARY SHARES OR DEBT
SECURITIES IN AN ENTITY ELECTING TO BE TAXED AS A REAL ESTATE INVESTMENT TRUST, INCLUDING FEDERAL, STATE, LOCAL, FOREIGN AND OTHER
TAX CONSEQUENCES, AS WELL AS POTENTIAL CHANGES IN THE APPLICABLE TAX LAWS.
Tax Consequences of REIT Election
Introduction. We have elected
under Section 856 of the tax code to be taxed as a REIT. Subject to the risks described above, we intend to continue to be taxed
as a REIT.
Taxation of FSP Corp.
General. If we continue to qualify
as a REIT, we generally will not be subject to federal corporate income taxes on our net income to the extent that the income is
currently distributed to our stockholders. The benefit of this tax treatment is that it substantially eliminates the “double
taxation” resulting from the taxation at both the corporate and stockholder levels that generally results from owning stock
in a corporation. Accordingly, our income generally will be subject to taxation solely at the stockholder level upon a distribution
by us. We will, however, be required to pay certain federal income taxes, including in the following circumstances:
| · | We will be subject to federal income tax at regular corporate rates on 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 such income is earned. |
| · | We will be subject to the “alternative minimum tax” with respect to our undistributed alternative minimum taxable
income. |
| · | We will be subject to a 100% tax on net income from certain sales or other dispositions of property that we hold primarily
for sale to customers in the ordinary course of business, also known as “prohibited transactions.” |
| · | If we fail to satisfy the 75% gross income test or the 95% gross income test, both described below, but nevertheless qualify
as a real estate investment trust, we will be subject to a 100% tax on an amount equal to (i) the gross income attributable
to the greater of the amount by which we fail the 75% or 95% gross income test multiplied by (ii) a fraction intended to reflect
our profitability. |
| · | If we fail to satisfy the asset tests (other than certain de minimis failures), described below, then we must dispose
of the non-qualifying assets and we will be subject to a tax equal to the greater of $50,000 and the highest corporate tax rate
multiplied by the income generated by the non-qualifying assets for the period beginning with the first date of the failure and
ending on the date that we disposed of the assets. |
| · | If we fail to distribute during the calendar year at least the sum of (i) 85% of our real estate investment trust ordinary
income for such year, (ii) 95% of our real estate investment trust capital gain net income for such year, and (iii) any
undistributed taxable income from prior periods, we will pay a 4% excise tax on the excess of such required distribution over the
amount actually distributed to our stockholders. |
| · | We may elect to retain and pay income tax on some or all of our long-term capital gain, as described below. |
| · | We may be subject to a 100% excise tax on transactions with any of our taxable REIT subsidiaries that are not conducted on
an arm’s-length basis. |
| · | If we fail to satisfy one or more of certain other requirements for real estate investment trust qualification for reasonable
cause and not due to willful neglect, then in order to avoid disqualification as a real estate investment trust, we would be required
to pay a penalty of $50,000 for each such failure. |
Requirements for Qualification as a Real Estate Investment
Trust
Introduction. In order to qualify
as a real estate investment trust for federal income tax purposes, a REIT must elect (or have elected, and have not revoked its
election) to be treated as a REIT and must satisfy certain statutory tests relating to, among other things, (i) the sources
of its income, (ii) the nature of its assets, (iii) the amount of its distributions, and (iv) the ownership of its stock.
We have elected to be treated as a REIT and have endeavored, and we will continue to endeavor, to satisfy the tests for REIT qualification.
A real estate investment trust may own
a “qualified REIT subsidiary.” A qualified REIT subsidiary is a corporation, all of the capital stock of which is owned
by a real estate investment trust, and for which no election has been made to treat it as a “taxable REIT subsidiary”
(as discussed below). A corporation that is a qualified REIT subsidiary is not treated as a corporation separate from its parent
REIT for federal income tax purposes. All assets, liabilities, and items of income, deduction, and credit of a qualified REIT subsidiary
are treated as the assets, liabilities, and items of income, deduction and credit of the parent REIT. Thus, in applying the requirements
described herein, any qualified REIT subsidiary of ours 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. Similar treatment
will apply with respect to any other entities owned by us that are disregarded as separate entities for federal income tax purposes.
In the event that we are or become a
partner in a partnership, for purposes of determining our qualification as a REIT under the tax code, we will be deemed to own
a proportionate share (based upon our share of the capital of the partnership) of the assets of the partnership and will be deemed
to be entitled to the income of the partnership attributable to such share. In addition, the assets and income of the partnership
so attributed to us will retain their same character as in the hands of the partnership.
A real estate investment trust may own
up to 100% of the stock of one or more taxable REIT subsidiaries. A taxable REIT subsidiary may earn income that would not be qualifying
income, as described below, if earned directly by the parent real estate investment trust and may own assets that would not be
qualifying assets, as described below, if owned directly by a REIT. Both the subsidiary and the parent real estate investment trust
must jointly elect to treat the subsidiary as a taxable REIT subsidiary. Overall, not more than 25% (20% for taxable years beginning
on or before July 30, 2008) of the value of a REIT’s assets may consist of securities of one or more taxable REIT subsidiaries.
A taxable REIT subsidiary will pay tax at regular corporate rates on any income that it earns. There is a 100% excise tax imposed
on a portion of any income generated from certain transactions or arrangements involving a taxable REIT subsidiary and its parent
real estate investment trust that are not conducted on an arm’s-length basis. An election has been made to treat FSP Investments
LLC and FSP Protective TRS Corp., both wholly owned subsidiaries of ours, as taxable REIT subsidiaries. Such subsidiaries pay corporate
income tax on their respective amounts of taxable income and their after-tax net income will be available for distribution to us,
generally as a dividend.
Income Tests – General.
We must satisfy annually two tests regarding the sources of our gross income in order to maintain our real estate investment trust
status. First, at least 75% of our gross income, excluding gross income from certain “dealer” sales and certain foreign
currency exchange gains, for each taxable year generally 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 temporary investment income, also known as the “75%
gross income test.” Qualifying income for purposes of the 75% gross income test generally includes:
| · | “rents from real property” (as described below); |
| · | interest from 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 real estate investment trusts; |
| · | gain from the sale or other disposition of real property or mortgages on real property; |
| · | amounts (other than amounts the determination of which depends in whole or in part on the income or profits of any person)
received as consideration for entering into agreements to make loans secured by mortgages on real property or on interests in real
property or agreements to purchase or lease real property; and |
| · | certain investment income attributable to temporary investment of capital that we raise. |
Second, at least 95% of our gross income,
excluding gross income from certain “dealer” sales and certain foreign currency exchange gains, for each taxable year
generally must consist of income that is qualifying income for purposes of the 75% gross income test, as well as dividends, other
types of interest, and gain from the sale or disposition of stock or securities, also known as the “95% gross income test.”
Income Tests – Rents from Real
Property. Rent that we receive from real property that we own and lease to tenants will qualify as “rents from real property”
if the following conditions are satisfied:
| · | First, the rent must not be based, in whole or in part, on the income or profits of any person. An amount will not fail to
qualify as rent from real property solely by reason of its being based on a fixed percentage (or percentages) of sales or receipts. |
| · | Second, neither we nor any direct or indirect owner of 10% or more of our stock may own, actually or constructively, 10% (by
vote or value) or more of the tenant from which we collect the rent. |
| · | Third, any rent received under a lease that is attributable to personal property will not qualify as rents from real property
unless the rent attributable to the personal property leased in connection with the real property constitutes no more than 15%
of the total rent received under the lease. |
| · | Finally, 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 or through
a taxable REIT subsidiary. We may provide services directly, however, if the services are “usually or customarily rendered”
in connection with the rental of space for occupancy only and are not otherwise considered rendered “primarily for the occupant’s
convenience.” In addition, we may render, other than through an independent contractor or taxable REIT subsidiary, a de minimis
amount of “non-customary” services to the tenants of a property as long as our income from such services does not exceed
1% of our gross income from the property. |
Although no assurances can be given that
either of the gross income tests have been or will be satisfied in any given year, we believe that our operations have allowed
and will allow us to meet both the 75% gross income test and the 95% gross income test. Such belief as to future years is premised
in large part on our expectation that substantially all of the amounts that we receive with respect to our properties will qualify
as “rents from real property.” There are a variety of circumstances, as described above, however, in which rent received
from a tenant will not be treated as rents from real property.
Income Tests – Failure to Satisfy
Gross Income Tests. If we fail to satisfy either or both of the 75% or 95% gross income tests for a taxable year, we could
nevertheless qualify as a real estate investment trust for that year if we are eligible for relief under certain provisions of
the federal income tax laws. Those relief provisions generally will be available if:
| · | Following our identification of the failure to meet the gross income test for the taxable year, a description of each item
of our gross income included in the 75% and 95% gross income tests is set forth in a schedule for such taxable year filed in accordance
with regulations to be prescribed by the Treasury Secretary; and |
| · | Our failure to meet the gross income test was due to reasonable cause and not due to willful neglect. |
It is not possible to state whether we
would be entitled to the benefit of the above relief provisions in a particular circumstance that might arise in the future. Furthermore,
as discussed above under “Taxation of FSP Corp. – General,” even if the relief provisions apply, we would incur
a 100% tax on the gross income attributable to the greater of the amounts by which we fail the 75% and 95% gross income tests,
multiplied by a fraction that reflects our profitability.
Asset Tests. We also must satisfy
the following four tests relating to the nature of our assets at the close of each quarter of our taxable year.
| · | First, at least 75% of the value of our total assets must consist of cash or cash items (including receivables), government
securities, “real estate assets,” or qualifying temporary investments, also known as the “75% asset test”; |
| · | Second, no more than 25% of the value of our total assets may be represented by securities other than those that are qualifying
assets for purposes of the 75% asset test, also known as the “25% asset test”; |
| · | Third, of the investments included in the 25% asset test, the value of any one issuer’s securities that we own may not
exceed 5% of the value of our total assets, and we may not own 10% or more of the total combined voting power or 10% or more of
the total value of the securities of any issuer, unless we and such issuer make an election to treat the issuer as a taxable REIT
subsidiary or the issuer is a “disregarded entity” or partnership for federal income tax purposes or is itself a REIT
(the “securities asset test”); and |
| · | Fourth, while we may own up to 100% of the stock of a corporation that elects to be treated as a taxable REIT subsidiary for
federal income tax purposes, the total value of our stock ownership in one or more taxable REIT subsidiaries may not exceed 25%
(20% for taxable years beginning on or before July 30, 2008) of the value of our gross assets. |
We intend to operate so that we will
not acquire any assets that would cause us to violate any of the asset tests. If, however, we should fail to satisfy any of the
asset tests at the end of a calendar quarter, we would not lose our real estate investment trust status if (1) we satisfied
the asset tests at the close of the preceding calendar quarter, and (2) 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 nonqualifying assets. If we did not satisfy the condition described in clause (2) of the preceding sentence,
we could still avoid disqualification as a real estate investment trust by eliminating any discrepancy within 30 days after the
close of the calendar quarter in which the discrepancy arose.
We may also be able to avoid disqualification
as a real estate investment trust as a result of a failure of the asset tests if:
| · | Such failure is a failure to meet the securities asset test and is due to the ownership of securities the total value of which
does not exceed the lesser of $10 million and 1% of the total value of our assets at the end of the quarter, which is referred
to as the de minimis threshold, and we dispose of the securities in order to satisfy the securities asset test within six
months after the last day of the quarter in which we identified the failure or such other time period prescribed by the Treasury
Secretary and in the manner prescribed by the Treasury Secretary; or |
| · | In the case of any other failure, (1) we prepare a schedule that sets forth each asset that causes us to fail the asset
test and file such schedule in accordance with regulations to be prescribed by the Treasury Secretary, (2) the failure to
satisfy the asset test is due to reasonable cause and is not due to willful neglect, (3) we dispose of the assets set forth
on the schedule within six months after the last day of the quarter in which we identified the failure or such other time period
prescribed by the Treasury Secretary and in the manner prescribed by the Treasury Secretary and (4) we pay a tax equal to
the greater of $50,000 or an amount equal to the highest corporate tax rate multiplied by the net income generated by the non-qualifying
asset for the period beginning on the first date of the failure and ending on the date that we disposed of the asset. |
Distribution Requirements. Each
taxable year, we must distribute dividends to our stockholders in an amount at least equal to:
| · | Ninety percent (90%) of our “real estate investment trust taxable income,” computed without regard to the dividends
paid deduction and our net capital gain or loss; minus |
| · | Certain items of noncash income. |
We must make such distributions in the
taxable year to which they relate, or in the following taxable year if we declare the distribution before we timely file our federal
income tax return for such year and pay the distribution on or before the first regular distribution date after such declaration.
Further, if we fail to meet the 90% distribution requirement as a result of an adjustment to our tax returns, we may, if the deficiency
is not due to fraud with intent to evade tax or a willful failure to file a timely tax return, and if certain other conditions
are met, retroactively cure the failure by paying a deficiency dividend (plus interest to the IRS) to our stockholders.
We will be subject to federal income
tax on our taxable income, including net capital gain that we do not distribute to our stockholders. Furthermore, if we fail to
distribute during a calendar year, or, in the case of distributions with declaration and record dates falling within the last three
months of the calendar year, by the end of the January following such calendar year, at least the sum of:
| · | Eighty-five percent (85%) of our real estate investment trust ordinary income for such year; |
| · | Ninety-five percent (95%) of our real estate investment trust capital gain net income for such year; and |
| · | Any of our undistributed taxable income from prior periods, |
we will be subject to a 4% nondeductible excise tax on the
excess of such required distribution over the amount actually distributed. If we elect to retain and pay income tax on the net
capital gain that we receive in a taxable year, we will be deemed to have distributed any such amount for the purposes of the 4%
excise tax described in the preceding sentence.
We intend to make distributions to holders
of our stock in a manner that will allow us to satisfy the distribution requirements described above. It is possible that, from
time to time, our pre-distribution taxable income may exceed our cash flow and that we may have difficulty satisfying the distribution
requirements. We intend to monitor closely the relationship between our pre-distribution taxable income and our cash flow and intend
to borrow funds or liquidate assets in order to overcome any cash flow shortfalls if necessary to satisfy the distribution requirements
imposed by the tax code. It is possible, although unlikely, that we may decide to terminate our real estate investment trust status
as a result of any such cash shortfall. Such a termination would have adverse tax consequences to our stockholders. See “Taxation
of FSP Corp. – General.”
Recordkeeping Requirements. We
must maintain records of information specified in applicable Treasury Regulations in order to maintain our qualification as a real
estate investment trust. In addition, in order to avoid monetary penalties, we must request on an annual basis certain information
from our stockholders designed to disclose the actual ownership of our outstanding stock. We intend to comply with these recordkeeping
requirements.
Ownership Requirements. For us
to qualify as a real estate investment trust, shares of our stock must be held by a minimum of 100 persons for at least 335 days
in each taxable year. Further, at no time during the second half of any taxable year may more than 50% of our shares be owned,
actually or constructively, by five or fewer “individuals” (which term is defined for this purpose to include certain
tax-exempt entities including pension trusts). Our stock will be held by 100 or more persons. We intend to continue to comply with
these ownership requirements. Also, our charter contains ownership and transfer restrictions designed to prevent violation of these
requirements.
Failure to Qualify. If we fail
to satisfy any of the above requirements (other than the income and asset tests) for a taxable year and no relief provisions in
effect for such years applied, then we could nevertheless qualify as a real estate investment trust if:
| · | Such failures are due to reasonable cause and not due to willful neglect, and |
| · | We pay (in the manner prescribed by the Treasury Secretary in regulations) a penalty of $50,000 for each such failure. |
It is not possible to state whether we
would be entitled to the benefit of the relief provisions in a particular circumstance. If such relief is not available, we would
fail to qualify as a real estate investment trust.
If we do fail to qualify as a real estate
investment trust in any taxable year, we would be subject to federal income tax, including any applicable alternative minimum tax,
on our taxable income at regular corporate rates. In calculating our taxable income in a year in which we did not qualify as a
real estate investment trust, we would not be able to deduct amounts paid out to our stockholders. We would not be required to
distribute any amounts to our stockholders in such taxable year. In such event, to the extent of our current and accumulated earnings
and profits, all distributions to stockholders would be characterized as dividends and would be taxable as ordinary income. Non-corporate
stockholders, however, could qualify for a lower maximum tax rate on such dividends in most circumstances. Moreover, subject to
certain limitations under the tax code, corporate stockholders might be eligible for the dividends received deduction. Unless we
qualified for relief under specific statutory provisions, we would be disqualified from taxation as a real estate investment trust
for the four taxable years following the year in which we ceased to qualify as a real estate investment trust. We cannot predict
whether we would qualify for such statutory relief in a particular circumstance that might arise in the future.
Taxation of Taxable U.S. Stockholders
For purposes of this discussion, the
term “U.S. stockholder” means a stockholder of common or preferred shares that, for United States federal income
tax purposes, is a “U.S. person.” The term “U.S. person,” as used herein, means a beneficial
owner of our securities that, for United States federal income tax purposes, is:
| · | a citizen or resident of the United States; |
| · | a corporation created or organized under the laws of U.S., any State thereof or the District of Columbia; |
| · | a trust if it (1) is subject to the primary supervision of a court within the U.S. and one or more U.S. persons
have the authority to control all substantial decisions of the trust, or (2) has a valid election in effect under applicable
U.S. Treasury regulations to be treated as a U.S. person; or |
| · | an estate the income of which is subject to U.S. federal income tax regardless of its source. |
If a partnership (or other entity treated
as a partnership for U.S. federal income tax purposes) holds our securities, the tax treatment of a partner in the partnership
as a U.S. person or otherwise will generally depend upon the status of the partner and the activities of the partnership.
If you are a partnership or a partner of a partnership holding our securities, you should consult your tax advisor regarding the
tax consequences of the ownership and disposition of our securities.
A U.S. stockholder is a “taxable
U.S. stockholder” if the stockholder is subject to U.S. federal income tax. For any taxable year in which we qualify
as a real estate investment trust, amounts distributed to taxable U.S. stockholders will be taxed as follows.
Distributions Generally. Distributions
made to our taxable U.S. stockholders out of current or accumulated earnings and profits (and not designated as a capital
gain dividend) will be taken into account by such stockholder as ordinary income and will not, in the case of a corporate taxable
U.S. stockholder, be eligible for the dividends-received deduction. In addition, such dividends will not qualify for the lower
maximum tax rate currently applicable to dividends received by non-corporate taxpayers except to the extent that they were attributable
to qualified dividend income we received from other corporations during the taxable year or to certain income previously taxed
to us. To the extent that we make a distribution with respect to our stock that is in excess of our current or accumulated earnings
and profits, the distribution will be treated by a taxable U.S. stockholder first as a tax-free return of capital, reducing
the taxable U.S. stockholder’s tax basis in our stock, and any portion of the distribution in excess of the stockholder’s
tax basis in our stock will then be treated as gain from the sale of such stock. For purposes of determining the portion of distributions
on separate classes of shares that will be treated as dividends for federal income tax purposes, current and accumulated earnings
and profits will be allocated to distributions attributable to priority rights of shares of preferred stock before being allocated
to other distributions. Dividends that we declare in October, November, or December of any year payable to a taxable U.S. stockholder
of record on a specified date in any such month shall be treated as both paid by us and received by stockholders on December 31
of such year, provided that the dividend is actually paid by us during January of the following calendar year. Taxable U.S. stockholders
may not include on their federal income tax returns any of our tax losses.
Capital Gain Dividends. Dividends
to taxable U.S. stockholders that properly are designated by us as capital gain dividends will be treated by such stockholders
as long-term capital gain, to the extent that such dividends do not exceed our actual net capital gain, without regard to the period
for which the taxable U.S. stockholders have held our stock. If we properly designate any portion of a dividend as a capital
gain dividend, except as otherwise provided by law, we intend to allocate such capital gain dividends in accordance with Revenue
Ruling 89-81, which requires that distributions made to different classes of shares be composed proportionately of dividends of
a particular type. Taxable U.S. stockholders that are corporations may be required, however, to treat up to 20% of particular
capital gain dividends as ordinary income. Capital gain dividends, like regular dividends from a real estate investment trust,
are not eligible for the dividends-received deduction for corporations.
For taxable U.S. stockholders who
are taxable at the rates applicable to individuals, we will classify portions of any capital gain dividend as either (1) a
“regular” capital gain dividend taxable to the taxable U.S. stockholder at a maximum rate generally lower than
that applicable to ordinary income or (2) an “unrecaptured Section 1250 gain” dividend taxable to the taxable
U.S. stockholder at a maximum rate that is between the rate applicable to “regular” capital gain and the rate
applicable to ordinary income.
Retained Capital Gains. We may
elect to retain, rather than distribute, our net long-term capital gain received during the tax year. If we so elect, we will be
required to pay tax on the retained amounts. To the extent designated in a notice to the taxable U.S. stockholders, the taxable
U.S. stockholders will be required to include their proportionate shares of the undistributed net long-term capital gain so
designated in their income for the tax year, but will be permitted a credit or refund, as the case may be, for their respective
shares of any tax paid on such gains by us. In addition, each taxable U.S. stockholder will be entitled to increase the tax
basis in his or her shares of our stock by an amount equal to the amount of net long-term capital gain the taxable U.S. stockholder
was required to include in income, reduced by the amount of any tax paid by us for which the taxable U.S. stockholder was
entitled to receive a credit or refund.
Passive Activity Loss and Investment
Interest Limitations. Distributions, including deemed distributions of undistributed net long-term capital gain, from us and
gain from the disposition of our stock will not be treated as passive activity income, and therefore taxable U.S. stockholders
will not be able to apply any passive activity losses against such income. Distributions from us, to the extent they do not constitute
a return of capital, generally will be treated as investment income for purposes of the investment income limitation on deductibility
of investment interest. However, dividends attributable to income that was subject to tax at our level as well as net capital gain
from the disposition of our stock or capital gain dividends, including deemed distributions of undistributed net long-term capital
gains, generally will be excluded from investment income.
Sale of FSP Stock. Upon the sale
of our stock, a taxable U.S. stockholder generally will recognize gain or loss equal to the difference between the amount
realized on such sale and the holder’s tax basis in the stock sold. To the extent that our stock is held as a capital asset
by the taxable U.S. stockholder, the gain or loss will be a long-term capital gain or loss if the stock has been held for
more than a year, and will be a short-term capital gain or loss if the stock has been held for a shorter period. In general, however,
any loss upon a sale of our stock by a taxable U.S. stockholder who has held such stock for six months or less (after applying
certain holding period rules) will be treated as a long-term capital loss to the extent that distributions from us were required
to be treated as long-term capital gain by that holder.
Redemption of Preferred Stock. Preferred
stock may be redeemable under certain circumstances described in the applicable prospectus supplement. Any redemption of preferred
stock for cash will, to the extent of our current and accumulated earnings and profits, be treated as a distribution taxable as
a dividend at ordinary income tax rates, unless the redemption satisfies one of the tests set forth in Section 302(b) of the tax
code, in which case it will be treated as a sale or exchange of the redeemed shares. The redemption will be treated as a sale or
exchange if it (1) is “substantially disproportionate” with respect to the U.S. stockholder, (2) results in a “complete
termination” of the U.S. stockholder’s interest in all classes of our stock, or (3) is “not essentially a dividend”
with respect to the U.S. stockholder, all within the meaning of Section 302(b) of the tax code. In determining whether any of these
tests have been met, there must be taken into account not only ownership in the series or class of the stock being redeemed, but
also the U.S. stockholder’s ownership of other classes of our stock and other equity interests in us considered to be owned
by the U.S. stockholder by reason of certain constructive ownership rules set forth in the tax code. Because the determination
as to whether any of the alternative tests of Section 302(b) of the tax code will be satisfied with respect to the U.S. stockholder
depends on the facts and circumstances at the time the determination is made, U.S. stockholders are urged to consult their tax
adviser to determine such treatment. If the redemption is treated as a sale or exchange of the redeemed shares, it will be treated
in the same manner as a sale described above in “Taxation of Taxable U.S. Stockholders-Sale of FSP Stock.”
If a redemption of preferred stock does
not meet any of the tests under Section 302 of the tax code, the redemption proceeds received from our preferred stock will be
treated as a distribution on our stock as described under “Taxation of Taxable U.S. Stockholders- Distributions Generally.”
If the redemption of a U.S. stockholder’s preferred stock is taxed as a dividend, the adjusted basis of such stockholder’s
redeemed shares will be transferred to any other stock held by the stockholder. If the U.S. stockholder owns no other shares, under
certain circumstances, such basis may be transferred to a related person, or it may be lost entirely.
With respect to a redemption of our preferred
stock that is treated as a distribution with respect to our stock, which is not otherwise taxable as a dividend, the Internal Revenue
Service has proposed Treasury regulations that would require any basis reduction associated with such a redemption to be applied
on a share-by-share basis which could result in taxable gain with respect to some shares, even though the stockholder’s aggregate
basis for the shares would be sufficient to absorb the entire amount of the redemption distribution (in excess of any amount of
such distribution treated as a dividend). Additionally, the proposed Treasury regulations would not permit the transfer of basis
in the redeemed shares of the preferred stock to the remaining shares held (directly or indirectly) by the redeemed stockholder.
Instead, the unrecovered basis in our preferred stock would be treated as deferred loss to be recognized when certain conditions
are satisfied. These proposed Treasury regulations would be effective for transactions that occur after the date the regulations
are published as final Treasury regulations. There can, however, be no assurance as to whether, when and in what particular form
such proposed Treasury regulation may ultimately be finalized.
Conversion of Preferred Stock into
Common Stock. Except as provided below, (i) a U.S. stockholder generally will not recognize gain or loss upon the conversion
of our preferred stock into our common stock, and (ii) a U.S. stockholder’s basis and holding period in the common stock
received upon conversion generally will be the same as those of the converted preferred stock (but the basis will be reduced by
the portion of adjusted tax basis allocated to any fractional share of common stock exchanged for cash). Any common stock received
in a conversion that is attributable to accumulated and unpaid dividends on the converted preferred stock will be treated as a
distribution on our shares as described above in “Taxation of Taxable U.S. Stockholders-Distributions Generally.” Cash
received upon conversion in lieu of a fractional share of common stock generally will be treated as a payment in a taxable exchange
for such fractional share of common stock, 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 factional share of common stock 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. See “Taxation of Taxable U.S. Stockholders- Sale of FSP Stock.” U.S. stockholders should consult with
their tax advisers regarding the U.S. federal income tax consequences of any transaction in which such stockholder exchanges common
stock received on a conversion of preferred stock for cash or other property.
Taxation of Owners of Depositary Shares
Owners of depositary shares generally
will be treated for United States federal income tax purposes as if they were direct owners of fractional shares of the preferred
stock to which the depositary shares relate. Accordingly, such owners will take into account, for United States federal income
tax purposes, income to which they would be entitled if they were the direct owners of the fractional interests in such preferred
stock and will be subject to other tax considerations in the same manner as if they owned fractional interests directly. See “Taxation
of Taxable U.S. Stockholders” and “Other Tax Considerations or Stockholders and Debt Securities.”
Taxation of Tax-Exempt Stockholders
Tax-exempt entities, including qualified
employee pension and profit sharing trusts and individual retirement accounts, collectively known as “exempt organizations,”
generally are exempt from federal income taxation. Exempt organizations are subject to tax, however, on their unrelated business
taxable income, or “UBTI.” UBTI is defined as the gross income derived by an exempt organization from an unrelated
trade or business, less the deductions directly connected with that trade or business, subject to certain exceptions. While many
investments in real estate generate UBTI, the Internal Revenue Service has issued a ruling that dividend distributions from a real
estate investment trust to an exempt employee pension trust do not constitute UBTI, provided that the shares of the real estate
investment trust are not otherwise used in an unrelated trade or business of the exempt employee pension trust. Based on that ruling,
amounts distributed to exempt organizations generally should not constitute UBTI. However, if an exempt organization finances its
acquisition of our stock with debt, a portion of its income from us will constitute UBTI pursuant to the “debt-financed property”
rules.
In addition, in certain circumstances,
a pension trust that owns more than 10% of our stock will be required to treat a percentage of the dividends paid by us as UBTI
based upon the percentage of our income that would constitute UBTI to the stockholder if received directly by it. This rule applies
to a pension trust holding more than 10% (by value) of our stock only if (1) the percentage of our income that would be UBTI
if we were a pension trust is at least 5% and (2) we are treated as a “pension-held REIT.” We do not expect to
qualify as a “pension-held REIT.”
Taxation of Non-U.S. Stockholders
General. The rules governing United
States federal income taxation of nonresident alien individuals, foreign corporations, foreign partnerships, foreign trusts and
certain other foreign stockholders, collectively known as “non-U.S. stockholders,” are complex and no attempt
is made herein to provide more than a general summary of such rules. This discussion does not consider the tax rules applicable
to all non-U.S. stockholders and, in particular, does not consider the special rules applicable to U.S. branches of foreign
banks or insurance companies or certain intermediaries. NON-U.S. STOCKHOLDERS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS
TO DETERMINE THE IMPACT OF FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS WITH REGARD TO THE OWNERSHIP AND DISPOSITION OF OUR STOCK,
INCLUDING ANY REPORTING AND WITHHOLDING REQUIREMENTS.
Ordinary Dividends – General.
Distributions to non-U.S. stockholders that are not attributable to gain from sales or exchanges by us of United States real
property interests and are not designated by us as capital gain dividends (or deemed distributions of retained capital gains) will
be treated as ordinary dividends to the extent that they are made out of our current or accumulated earnings and profits. Any portion
of a distribution in excess of our current and accumulated earnings and profits will not be taxable to a non-U.S. stockholder
to the extent that such distribution does not exceed the adjusted basis of the stockholder in our stock, but rather will reduce
the adjusted basis of such stock. To the extent that the portion of the distribution in excess of current and accumulated earnings
and profits exceeds the adjusted basis of a non-U.S. stockholder for our stock, such excess generally will be treated as gain
from the sale or disposition of the stock and will be taxed as described below.
Ordinary Dividends – Withholding.
Dividends paid to non-U.S. stockholders may be subject to U.S. withholding tax. If an income tax treaty does not apply
and the non-U.S. stockholder’s investment in our stock is not effectively connected with a trade or business conducted
by the non-U.S. stockholder in the United States (or if a tax treaty does apply and the investment in our stock is not attributable
to a United States permanent establishment maintained by the non-U.S. stockholder), ordinary dividends (i.e., distributions
out of current and accumulated earnings and profits) will be subject to a U.S. withholding tax at a 30% rate, or, if an income
tax treaty applies, at a lower treaty rate. Because we generally cannot determine at the time that a distribution is made whether
or not such a distribution will be in excess of earnings and profits, we intend to withhold on the gross amount of each distribution
at the 30% rate (or lower treaty rate) (other than distributions subject to the 35% FIRPTA withholding rules described below).
To receive a reduced treaty rate, a non-U.S. stockholder must furnish us or our paying agent with a duly completed Form W-8BEN
(or authorized substitute form) certifying such holder’s qualification for the reduced rate. Generally, a non-U.S. stockholder
will be entitled to a refund from the Internal Revenue Service to the extent the amount withheld by us from a distribution exceeds
the amount of United States tax owed by such stockholder.
In the case of a non-U.S. stockholder
that is a partnership or a trust, the withholding rules for a distribution to such a partnership or trust will be dependent on
numerous factors, including (1) the classification of the type of partnership or trust, (2) the status of the partner
or beneficiary, and (3) the activities of the partnership or trust. Non-U.S. stockholders that are partnerships or trusts
are urged to consult their tax advisors regarding the withholding rules applicable to them based on their particular circumstances.
If an income tax treaty does not apply,
ordinary dividends that are effectively connected with the conduct of a trade or business within the U.S. by a non-U.S. stockholder
(and, if a tax treaty applies, ordinary dividends that are attributable to a United States permanent establishment maintained by
the non-U.S. stockholder) are exempt from U.S. withholding tax. In order to claim such exemption, a non-U.S. stockholder
must provide us or our paying agent with a duly completed Form W-8ECI (or authorized substitute form) certifying such holder’s
exemption. However, ordinary dividends exempt from U.S. withholding tax because they are effectively connected or are attributable
to a United States permanent establishment maintained by the non-U.S. stockholder generally are subject to U.S. federal
income tax on a net income basis at regular graduated rates. In the case of non-U.S. stockholders that are corporations, any
effectively connected ordinary dividends or ordinary dividends attributable to a United States permanent establishment maintained
by the non-U.S. stockholder may, in certain circumstances, be subject to branch profits tax at a 30% rate, or at such lower
rate as may be provided in an applicable income tax treaty.
Capital Gain Dividends – General.
For any year in which we qualify as a real estate investment trust, distributions that are attributable to gain from sales or exchanges
by us of United States real property interests will be taxed to a non-U.S. stockholder under the provisions of the Foreign
Investment in Real Property Tax Act of 1980, also known as “FIRPTA.” Under FIRPTA, except as described below, distributions
attributable to gain from sales of United States real property are taxed to a non-U.S. stockholder as if such gain were effectively
connected with a United States trade or business. Non-U.S. stockholders thus would be taxed at the regular capital gain rates
applicable to taxable U.S. stockholders (subject to the applicable alternative minimum tax and a special alternative minimum
tax in the case of nonresident alien individuals). Distributions subject to FIRPTA also may be subject to a 30% branch profits
tax in the hands of a corporate non-U.S. stockholder not otherwise entitled to treaty relief or exemption.
A distribution attributable to gain from
sales of United States real property is not treated as effectively connected with a United States trade or business provided that
(1) the distribution is received with respect to stock that is publicly traded on an established securities market in the
United States and (2) the non-U.S. stockholder does not own more than five percent of the stock at any time during the
one-year period ending on the date of such distribution. If these requirements are satisfied, the distribution is treated in the
manner described above for ordinary dividends rather than being treated as a capital gain dividend, and the distribution is not
subject to the branch profits tax.
Capital Gain Dividends – Withholding.
Under FIRPTA, we are required to withhold 35% (or a lower rate set forth in the regulations) of any distribution to a non-U.S. stockholder
that is designated as a capital gain dividend or which could be designated as a capital gain dividend. Moreover, if we designate
previously made distributions as capital gain dividends, subsequent distributions (up to the amount of the prior distributions
so designated) will be treated as capital gain dividends for purposes of FIRPTA withholding. The foregoing withholding requirement
will not apply, however, if the distribution qualifies for the exception described above for distributions with respect to stock
that is publicly traded on an established securities market in the United States if the recipient has not owned more than five
percent of our stock during the prior year.
Sale of Our Stock. A non-U.S stockholder
generally will not be subject to United States federal income tax under FIRPTA with respect to gain recognized upon a sale of our
stock, provided that we are a “domestically-controlled REIT.” A domestically-controlled REIT generally is defined as
a real estate investment trust in which at all times during a specified testing period less than 50% in value of the stock was
held directly or indirectly by non-U.S. persons. Although currently it is anticipated that we will be a domestically-controlled
REIT, and, therefore, that the sale of our stock will not be subject to taxation under FIRPTA, there can be no assurance that we
will, at all relevant times, be a domestically-controlled REIT.
Tax also would not apply to any gain
recognized by a non-U.S. stockholder upon the sale of our stock as long as our stock is publicly traded and the stockholder
held 5% or less of our stock during the preceding five years (taking into account complicated attribution rules). If the gain on
the sale of our stock were subject to taxation under FIRPTA, a non-U.S. stockholder would be subject to the same treatment
as taxable U.S. stockholders with respect to such gain (subject to the applicable alternative minimum tax and a special alternative
minimum tax in the case of nonresident alien individuals). In addition, a purchaser of our stock from a non-U.S. stockholder
subject to taxation under FIRPTA generally would be required to deduct and withhold a tax equal to 10% of the amount realized by
a non-U.S. stockholder on the disposition. Any amount withheld would be creditable against the non-U.S. stockholder’s
FIRPTA tax liability.
Even if gain recognized by a non-U.S. stockholder
upon the sale of our stock is not subject to FIRPTA, such gain generally will subject such stockholder to U.S. tax if:
| · | An income tax treaty does not apply and the gain is effectively connected with a trade or business conducted by the non-U.S. stockholder
in the United States (or, if an income tax treaty applies and the gain is attributable to a United States permanent establishment
maintained by the non-U.S. stockholder), in which case a non-U.S. stockholder will be taxed on his or her net gain from
the sale at regular graduated U.S. federal income tax rates. In the case of a non-U.S. stockholder that is a corporation,
such stockholder may be subject to a branch profits tax at a 30% rate, unless an applicable income tax treaty provides for a lower
rate and the stockholder demonstrates its qualification for such rate; or |
| · | The non-U.S. stockholder is a nonresident alien individual who holds our stock as a capital asset and was present in the
United States for 183 days or more during the taxable year (as determined under the tax code) and certain other conditions apply,
in which case the non-U.S. stockholder will be subject to a 30% tax on capital gains. |
Estate Tax Considerations. The
value of our stock owned, or treated as owned, by a non-U.S. stockholder who is a nonresident alien individual at the time
of his or her death will be included in the individual’s gross estate for United States federal estate tax purposes, unless
otherwise provided in an applicable estate tax treaty.
Taxation of Holders of Our Debt Securities
This discussion is of a general nature
only. Our debt securities may have terms, such as conversion rights, adjustments to conversion ratios, provision for additional
interest upon certain contingencies, or other features, that are not discussed herein and that may materially affect the U.S. federal
income tax treatment of such debt security. You should carefully examine the applicable prospectus supplement or supplements and
consult your own tax advisors with respect to debt securities with such features.
Taxation of Taxable U.S. Holders
For purposes of this discussion, a
“taxable U.S. holder” is a “U.S. holder” that is subject to U.S. federal income tax.
The term “U.S. holder” as used herein means a beneficial owner of our debt securities that is a
U.S. person as defined in “Taxation of Taxable U.S. Stockholders” above. A
“non-U.S. holder” is a beneficial owner (other than a partnership or other pass-through entity) of our
debt securities that does not meet the definition of a U.S. holder.
Interest. The stated interest
on debt securities generally will be taxable to a U.S. holder as ordinary income at the time that it is paid or accrued, in
accordance with the U.S. holder’s method of accounting for United States federal income tax purposes.
Original Issue Discount. U.S. holders
that own debt securities issued with original issue discount (“OID”) will be subject to special tax accounting rules,
as described in greater detail below. Those holders generally will be required to include OID in gross income in advance of the
receipt of cash that corresponds to that income. However, such holders generally will not be required to include separately in
income cash payments received on the debt securities, even if denominated as interest, to the extent those payments do not constitute
“qualified stated interest,” as defined below. If we determine that a particular debt security will be an OID debt
security, we will disclose that determination in the prospectus supplement or supplements relating to those debt securities.
A debt security will generally be treated
as issued with OID if it has a “stated redemption price at maturity” (the sum of all payments to be made on the debt
security other than “qualified stated interest”) that exceeds its “issue price,” provided that excess is
not considered as “de minimis” as a result of being less than 0.25% of the stated redemption price at maturity
multiplied by the number of complete years to maturity. The “issue price” of each debt security in a particular offering
will be the first price at which a substantial amount of that particular offering is sold to the public. The term “qualified
stated interest” means stated interest that is unconditionally payable in cash or in property (other than debt instruments
of the issuer), and that meets all of the following conditions:
| · | it is payable at least once per year; |
| · | it is payable over the entire term of the debt security; and |
| · | it is payable at a single fixed rate or, subject to certain conditions, based on one or more indices. |
If we determine that particular debt securities will bear
interest that is not qualified stated interest, we will disclose that determination in the prospectus supplement or supplements
relating to those debt securities.
If a U.S. holder owns a debt security
issued with “de minimis” OID as previously described, such holder generally must include the de minimis
OID in income at the times principal payments on the debt securities are made in proportion to the amounts paid. De minimis
OID that is so included in income will be treated as capital gain.
Debt securities may contain provisions
permitting them to be redeemed prior to their stated maturity at our option and/or at the option of the holder. OID debt securities
containing those features may be subject to rules that differ from the general rules discussed herein. Persons who are considering
the purchase of OID debt securities with those features should carefully examine the applicable prospectus supplement or supplements
and should consult their own tax advisors with respect to those features since the tax consequences to them with respect to OID
will depend, in part, on the particular terms of the debt securities relating to such redemptions.
U.S. holders that own OID debt securities
with a term of more than one year generally must include OID in income in advance of the receipt of some or all of the related
cash payments using the “constant yield method” based upon compound interest principles as described in the following
paragraphs.
The amount of OID that U.S. holders
must include in income if they are the initial holders of an OID debt security is the sum of the “daily portions” of
OID with respect to the debt security for each day during the taxable year or portion of the taxable year in which they held the
debt security (“accrued OID”). The daily portion is determined by allocating to each day in any “accrual period”
a pro rata portion of the OID allocable to that accrual period. The “accrual period” for an OID debt security may be
of any length and may vary in length over the term of the debt security, provided that each accrual period is no longer than one
year and each scheduled payment of principal or interest occurs on the first day or the final day of the accrual period.
The amount of OID allocable to any accrual
period is determined by first calculating the debt security’s “yield to maturity.” A debt security’s yield
to maturity is the discount rate that would cause the present value of all payments to be made on the debt security to equal the
security’s issue price. The OID allocable to an accrual period is then computed as the excess, if any, of:
| · | the debt security’s “adjusted issue price” at the beginning of the accrual period (generally, the security’s
issue price increased by the cumulative amount of accrued OID and decreased by the cumulative amount of payments other than of
qualified stated interest) multiplied by the debt security’s yield to maturity, over |
| · | the aggregate of all qualified stated interest allocable to the accrual period. |
Special rules apply for calculating OID
for an initial or final short accrual period. We are required to provide information returns stating the amount of OID accrued
on debt securities held of record by persons other than corporations and other exempt holders.
Variable Rate Debt Securities.
Variable rate debt securities that provide for the payment of interest based on certain types of floating rates or so-called “objective”
rates based on objective financial data are subject to special OID rules under which both the “yield to maturity” and
“qualified stated interest” are determined as though the debt security bore interest in all periods at a fixed rate
generally equal to the value of the floating rate or objective rate (as applicable) on the date that the debt security was issued
or, in the case of certain debt securities, the rate that reflects the yield to maturity that is reasonably expected for the debt
security. To the extent that the actual rate paid on the debt security for an accrual period differs from the assumed initial rate,
appropriate adjustments are made to the amount of “qualified stated interest” or OID required to be included in income
by the U.S. holder for such period. Additional rules may apply if either:
| · | the interest on a variable rate debt security is based on more than one interest index; or |
| · | the principal amount of the debt security is indexed in any manner. |
This discussion does not address the
tax rules applicable to debt securities with an indexed principal amount. In the event that we were to offer debt securities with
indexed principal amounts, persons considering the purchase of those securities should carefully examine the applicable prospectus
supplement or supplements and should consult their own tax advisors regarding the United States federal income tax consequences
to them of holding and disposing of those debt securities.
If we determine that particular debt securities will be variable debt securities, we will disclose that determination in the prospectus
supplement or supplements relating to those debt securities, and the U.S. federal income tax treatment of such debt securities
will be more fully described in the relevant prospectus supplement or supplements.
Contingent Payment Debt Securities.
If debt securities provide for variable rates of interest or other contingent payments but fail to qualify as variable rate debt
securities under the rules described above, then the debt securities may become subject to the Treasury Regulations governing “contingent
payment debt instruments” (“contingent payment debt securities”). Under these Treasury Regulations, a U.S. holder
of contingent payment debt securities generally would be required to accrue interest income each taxable year based upon a “comparable
yield” for a hypothetical fixed-rate debt instrument with no contingent payments but with terms and conditions otherwise
similar to the contingent payment debt securities. We would be required to determine the comparable yield and prepare, solely for
U.S. federal income tax purposes, a projected payment schedule that (i) includes all non-contingent payments and estimates
of the amount and timing of all contingent payments on the debt securities and (ii) produces the comparable yield.
If the actual contingent payments made
on the contingent payment debt securities in a taxable year differ from the projected contingent payments set forth on the projected
payment schedule, adjustments will be made for such differences. A net positive adjustment for the amount by which actual contingent
payments during the taxable year exceed the projected contingent payments for such taxable year will be treated as additional interest
income. A net negative adjustment for the amount by which actual contingent payments during the taxable year are less than the
projected contingent payments for such taxable year will reduce the amount of interest required to be accrued in the current taxable
year. The balance of any net negative adjustment will be treated first as an ordinary loss to the extent that the total interest
inclusions previously accrued in respect of the contingent payment debt securities exceed the total amount of net negative adjustments
treated as ordinary losses in prior taxable years and then as a negative adjustment in the succeeding taxable year.
Upon the sale, retirement or other disposition
of contingent payment debt securities, any gain recognized by a U.S. holder generally would be treated as interest income.
Any loss arising from such a disposition would be treated as an ordinary loss to the extent of any prior interest inclusions not
previously reversed by net negative adjustments as described above. The balance of such loss generally would constitute a capital
loss.
The U.S. federal income tax treatment
of any debt securities treated as contingent payment debt securities subject to these Treasury Regulations will be more fully described
in the relevant prospectus supplement or supplements. The rules regarding contingent payment debt securities are complex. U.S. debt
holders should carefully examine the relevant prospectus supplement or supplements for any such debt securities and should consult
their own tax advisors regarding the U.S. federal income tax consequences of the ownership and disposition of such debt securities
before deciding to purchase such debt securities.
Market Discount. If debt securities
are purchased for an amount that is less than their stated redemption price at maturity (or, in the case of OID debt securities,
for an amount that is less than their adjusted issue price), the difference will be treated as “market discount” for
United States federal income tax purposes unless that difference is less than a specified de minimis amount. Under
the market discount rules, any principal payment on, or any gain on the sale, exchange, retirement or other disposition of, the
debt securities must be treated as ordinary income to the extent of the market discount that the holder has not previously included
in income. Generally, market discount is considered to accrue ratably over the remaining term of the debt security, although taxpayers
may elect to accrue the discount using a constant yield methodology similar to that applicable to OID debt securities.
U.S. holders also may be required
to defer, until the maturity of the debt securities or their earlier disposition in a taxable transaction, the annual deduction
of all or a portion of the interest expense on any indebtedness which is incurred or continued to purchase or carry the debt securities
to the extent of the market discount that is considered to accrue on those securities for that year. U.S. holders may elect,
on a debt security-by-debt security basis, to deduct any previously deferred interest expense in a tax year prior to the year of
disposition to the extent that the aggregate amount of interest on the debt security (including OID) exceeds the amount of interest
expense on debt incurred or continued to purchase or carry the debt security. U.S. holders should consult their own tax advisors
before making this election.
U.S. holders may elect to include
market discount in income currently as it accrues, on either a ratable or constant yield basis, in which case the rule described
above regarding deferral of interest deductions will not apply. An election to include market discount in income currently, once
made, applies to all market discount obligations acquired by the taxpayer on or after the first day of the first taxable year to
which the election applies and may not be revoked without the consent of the IRS. Interested persons should consult their own tax
advisors before making this election.
Acquisition Premium. If a U.S. holder
acquires OID debt securities for an amount greater than their adjusted issue price but less than the sum of all amounts (other
than qualified stated interest) payable with respect to the OID debt securities after the date of acquisition, the OID debt securities
will be treated as acquired at an acquisition premium. For OID debt securities acquired with acquisition premium, the amount of
OID that the U.S. holder must include in gross income with respect to the OID debt securities for any taxable year will be
reduced by the portion of acquisition premium properly allocable to such taxable year.
Amortizable Bond Premium. If a
U.S. holder purchases debt securities for an amount in excess of the sum of all amounts payable on the debt securities after
the purchase date other than payments of qualified stated interest, the U.S. holder will be considered to have purchased the
debt securities at a “premium” for U.S. federal income tax purposes. In such case, the U.S. holder generally
may elect to amortize the premium over the remaining term of the debt securities, using a constant yield method, as an offset to
interest includible in gross income with respect to the debt securities, and the U.S. holder would not be required to include
OID, if any, in gross income in respect of the debt securities. In the case of debt securities that provide for alternative payment
schedules, the amount of premium generally would be determined by assuming that a holder will exercise or not exercise options
in a manner that maximizes the holder’s yield, and that the issuer will exercise or not exercise options in a manner that
minimizes the holder’s yield. Any election to amortize premium would apply to all debt securities (other than debt securities
the interest on which is excludable from gross income) held or subsequently acquired by a U.S. holder on or after the first
day of the first taxable year to which the election applies and is irrevocable without the consent of the IRS. Prospective investors
should consult their own tax advisors before making this election.
Election to Treat All Interest as
OID. U.S. holders may elect to treat all interest in respect of debt securities as OID and to calculate the amount includible
in gross income for any taxable year under the constant yield method described above. For purposes of this election, interest includes
stated interest, acquisition discount, OID, de minimis OID, market discount, de minimis market discount
and unstated interest, as adjusted by any amortizable bond premium or acquisition premium. If a U.S. holder makes this election
for debt securities with amortizable bond premium, the election is treated as an election under the amortizable bond premium rules
described above, and the electing U.S. holder will be required to amortize bond premium for all other debt instruments with
amortizable bond premium held or subsequently acquired by the U.S. holder. The election to treat all interest as OID must
be made for the taxable year in which the U.S. holder acquires the debt securities, and the election may not be revoked without
the consent of the IRS. Prospective investors should consult their own tax advisors before making this election.
Sale, Exchange or Retirement of Debt
Securities. A U.S. holder of our debt securities will recognize gain or loss upon the sale, exchange, retirement,
redemption or other taxable disposition of the debt securities in an amount equal to the difference between:
| · | the amount of cash and the fair market value of other property received in exchange for such debt securities, other than amounts
attributable to accrued but unpaid stated interest, which will be subject to tax as ordinary income to the extent not previously
included in income; and |
| · | the U.S. Holder’s adjusted basis of the debt securities. |
The adjusted basis of the debt securities
will, in general, be the U.S. holder’s cost for the debt securities, increased by OID and any accrued market discount
previously included in income and reduced by any amortizable bond premium previously allowable as a deduction and any cash payments
on the debt securities other than qualified stated interest. Subject to the rules regarding market discount discussed above, any gain in excess of accrued interest not previously included in income by the holder
or loss recognized will generally be capital gain or loss, and such capital gain or any loss will generally be long-term capital
gain or loss if debt securities have been held by the U.S. holder for more than one year. Long-term capital gain for non-corporate
taxpayers is subject to reduced rates of United States federal income taxation. The deductibility of capital losses is subject
to certain limitations.
Taxation of Tax-Exempt U.S. Holders
Exempt organizations are subject to tax
on their unrelated business taxable income, or “UBTI.” UBTI is defined as the gross income derived by an exempt organization
from an unrelated trade or business less the deductions directly connected with that trade or business, subject to certain exceptions.
Two of those exceptions are for interest (including OID) and gains and losses from the sale or exchange of property held for investment.
Accordingly, income and loss attributable to holding our debt securities generally should not be treated as UBTI. However, if an
exempt organization finances its acquisition of our debt securities with debt, a portion of any income or loss attributable to
the debt securities will be includable in the organization’s computation of UBTI pursuant to the “debt-financed property”
rules. Prospective tax-exempt investors should consult their own tax advisors regarding these rules.
Taxation of Non-U.S. Holders
The following is a discussion of the
material U.S. federal income and estate tax consequences that generally will apply to a non-U.S. holder of our debt securities.
The rules governing the U.S. federal income taxation of a non-U.S. holder of debt securities are complex and no attempt
will be made herein to provide more than a general summary of such rules. Non-U.S. holders should consult their tax advisors
to determine the effect of U.S. federal, state, local and foreign tax laws, as well as tax treaties, with regard to an investment
in our debt securities.
Interest. In general,
payments of interest on our debt securities to a non-U.S. holder will be considered “portfolio interest”
and, subject to the discussions below of income effectively connected with a U.S. trade or business, backup withholding,
and FATCA will not be subject to U.S. federal income or withholding tax, provided that:
| · | the non-U.S. holder does not directly or indirectly, actually or constructively, own 10% or more of the total combined
voting power of all classes of our stock entitled to vote within the meaning of Section 871(h)(3) of the Code; |
| · | the non-U.S. holder is not, for U.S. federal income tax purposes, a controlled foreign corporation that is related
to us (actually or constructively) through stock ownership; |
| · | the non-U.S. holder is not a bank whose receipt of interest on our debt securities is described in Section 881(c)(3)(a) of
the Code; and |
| · | (a) the non-U.S. holder provides its name, address, and taxpayer identification number, if any, and certifies, under
penalties of perjury, that it is not a U.S. person (which certification may be made on an IRS Form W-8BEN or other applicable
form) or (b) the non-U.S. holder holds our debt securities through certain foreign intermediaries or certain foreign
partnerships, and the non-U.S. holder and the foreign intermediary or foreign partnership satisfy the certification requirements
of applicable Treasury Regulations. Special certification rules apply to non-U.S. holders that are pass-through entities. |
If a non-U.S. holder cannot satisfy
the requirements described above, payments of interest generally will be subject to the 30% U.S. federal withholding tax,
unless the non-U.S. holder provides us with a properly executed (i) IRS Form W-8BEN (or other applicable form) claiming
an exemption from or reduction in withholding under an applicable income tax treaty or (ii) IRS Form W-8ECI (or other applicable
form) stating that interest paid on the debt securities is not subject to withholding tax because it is effectively connected with
the non-U.S. holder’s conduct of a trade or business in the United States and includable in the non-U.S. holder’s
gross income.
If (i) a non-U.S. holder is
engaged in a trade or business in the United States, (ii) interest on the debt securities is effectively connected with the
conduct of that trade or business and (iii) if required by an applicable income tax treaty, such interest is attributable
to a U.S. permanent establishment or fixed base, then, although the non-U.S. holder will be exempt from the 30% withholding
tax (provided the certification requirements discussed above are satisfied), the non-U.S. holder will be subject to U.S. federal
income tax on the interest on a net income basis at regular graduated U.S. federal income tax rates, generally in the same
manner as if the non-U.S. holder were a U.S. holder. In addition, if a non-U.S. holder is a foreign corporation,
it may be subject to a branch profits tax equal to 30% (or a lesser rate under an applicable income tax treaty) of its effectively
connected earnings and profits for the taxable year, subject to certain adjustments.
Sale, Exchange or Retirement of Debt
Securities. Gain realized by a non-U.S. holder on the sale, redemption or other taxable disposition of our debt securities
will not be subject to U.S. income tax unless:
| · | that gain is effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States
(and, if required by an applicable income tax treaty, is attributable to a U.S. permanent establishment or fixed base); or |
| · | the non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of that
disposition and certain other conditions are met. |
If a non-U.S. holder is described
in the first bullet point above, it will be subject to tax on the net gain derived from the sale, redemption, or other taxable
disposition of the debt securities, generally in the same manner as if the non-U.S. holder were a U.S. holder. In addition,
if a non-U.S. holder is a foreign corporation, it may be subject to the branch profits tax equal to 30% (or a lesser rate
under an applicable income tax treaty) of its effectively connected earnings and profits for the taxable year, subject to certain
adjustments. If a non-U.S. holder is an individual described in the second bullet point above, such holder will be subject
to a flat 30% tax (or a lesser rate under an applicable income tax treaty) on the gain derived from the sale, redemption, or other
taxable disposition, which may be offset by certain U.S. source capital losses, even though such holder is not considered
a resident of the United States.
Other Tax Considerations of Stockholders and Holders of
Debt Securities
Medicare Tax on Net Investment Income
U.S. Stockholders and U.S. Holders of Debt
Securities
A 3.8% Medicare contribution tax generally
is imposed on the net investment income of U.S. individuals, estates and trusts (other than certain exempt trusts) whose income
exceeds certain threshold amounts. For this purpose, net investment income generally will include dividends on our stock (including
capital gain dividends), interest payments on our debt securities and net gain from the sale of shares of our stock and of our
debt securities. U.S. stockholders and U.S. holders of debt securities that are individuals, estates or trusts should
consult their tax advisors regarding the applicability of the Medicare tax to any of their income or gains in respect of shares
of our stock and our debt securities.
Non-U.S. Stockholders and Non-U.S. Holders
of Debt Securities
The Internal Revenue Service has indicated
in Treasury regulations that this Medicare tax applies to non-U.S. stockholders and non-U.S. holders that are estates
or trusts and have one or more U.S. beneficiaries. Non-U.S. stockholders and non-U.S. holders that are estates or
trusts also should consult their tax advisors about the possible application of the 3.8% Medicare tax.
Information Reporting and Backup Withholding
U.S. Stockholders and U.S. Holders
of Debt Securities
Information returns may be filed with
the Internal Revenue Service in connection with payments of dividends on our stock, payments on our debt securities, and proceeds
from a sale or other disposition of our stock or debt securities. These requirements apply even if withholding was not required
with respect to payments made to a stockholder or holder of debt securities.
If you are a U.S. stockholder or
U.S. holder of debt securities, you will be subject to U.S. backup withholding at a rate of 28% on these payments if
you fail to provide your taxpayer identification number to the paying agent or to comply with certain certification procedures
or otherwise establish an exemption from backup withholding. U.S. stockholders and U.S. holders of debt securities should
consult their own tax advisors regarding their qualification for an exemption from backup withholding and the procedure for obtaining
an exemption. The amount of any backup withholding from a payment will be allowed as a credit against your U.S. federal income
tax liability and may entitle you to a refund, provided that the required information is timely furnished to the Internal Revenue
Service.
Non-U.S. Stockholders and Non-U.S. Holders
of Debt Securities
In general, a non-U.S. stockholder
and a non-U.S. holder will not be subject to backup withholding with respect to payments of dividends or interest that we
make, provided that (a) the non-U.S. stockholder or non-U.S. holder provides its name, address, and taxpayer identification
number, if any, and certifies, under penalties of perjury, that it is not a U.S. person (which certification may be made on
an IRS Form W-8BEN or other applicable form) or (b) the non-U.S. stockholder holds shares of our stock or the non-U.S. holder
holds our debt securities through certain foreign intermediaries or certain foreign partnerships, and the non-U.S. stockholder
or non-U.S. holder and the foreign intermediary or foreign partnership satisfy the certification requirements of applicable
Treasury Regulations and we do not have actual knowledge or reason to know that the holder is a U.S. person, as defined above under
“Taxation of Taxable U.S. Stockholders,” who is not an exempt recipient.
However, a non-U.S. stockholder
and a non-U.S. holder will be subject to information reporting and, depending on the circumstances, backup withholding at
the applicable rate with respect to the proceeds of the sale of shares of our stock and debt securities within the United States
or conducted through certain U.S.-related financial intermediaries, unless the certification described above has been received,
and the payor does not have actual knowledge or reason to know that a holder is a U.S. person, as defined above under “Taxation
of Taxable U.S. Stockholders,” who is not an exempt recipient, or the holder otherwise establishes an exemption.
Backup withholding is not an additional
tax. Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against a non-U.S. stockholder’s
or non-U.S. holder’s U.S. federal income tax liability, provided that the required information is furnished timely to
the IRS. The backup withholding and information reporting rules are complex, and non-U.S. stockholders and non-U.S. holders
are urged to consult their own tax advisors regarding application of these rules to their particular circumstances.
U.S. Federal Income Tax Withholding Under FATCA
Under the Foreign Account
Tax Compliance Act (“FATCA”), we may be required to withhold 30% from payments of dividends on our stock,
interest on our debt securities and gross proceeds from the sale of shares of our stock and debt securities to
(i) certain foreign financial institutions unless they agree to collect and disclose to the Internal Revenue Service (or
in certain cases to their country of residence) information regarding their direct and indirect U.S. account holders,
and (ii) certain other foreign entities unless they certify certain information about their direct and indirect
U.S. owners. This withholding tax generally will apply currently to payments of dividends on our stock and interest on
our debt securities and commencing on January 1, 2017, will apply to payments of gross proceeds from the sale of shares of
our stock and debt securities. Under certain circumstances, a non-U.S. stockholder or non-U.S. holder might
be eligible for refunds or credits of such taxes.
In order to avoid this withholding, non-exempt
foreign financial institutions will have to enter into an agreement with the Internal Revenue Service (unless they are resident
in a country that has entered into an intergovernmental agreement with the U.S. that provides for an alternative regime) stipulating
that they will (1) provide the Internal Revenue Service with certain information about direct and indirect U.S. account
holders (such as the name, address and taxpayer identification number of the holders), (2) will comply with verification and
due diligence procedures with respect to the identification of U.S. accounts, (3) report to the Internal Revenue Service
certain additional information with respect to U.S. accounts maintained by them, and (4) agree to withhold tax on certain
payments made to non-compliant foreign financial institutions or to account holders who fail to provide the required information.
Certain other foreign entities will need to provide the name, address, and taxpayer identification number of each substantial U.S. owner
or a certification of no substantial U.S. ownership, unless certain exceptions apply.
A non-U.S. stockholder or non-U.S. holder
of debt securities resident in a country that has entered into an intergovernmental agreement with the U.S. with respect to
FATCA will be exempt from FATCA withholding provided the holder and applicable foreign government comply with the terms of the
agreement and the holder provides us with the appropriate documentation certifying the holder’s status under FATCA. The scope
of these requirements is potentially subject to material change and stockholders and holders of debt securities are urged to consult
their tax advisers regarding the potential applicability of FATCA to their own situation.
State and Local Tax
The discussion herein concerns only the
United States federal income tax treatment likely to be accorded to us and our stockholders and holders of debt securities. No
consideration has been given to the state and local tax treatment of such parties. The state and local tax treatment may not conform
to the federal treatment described above. As a result, stockholders and holders of debt securities should consult their own tax
advisor regarding the specific state and local tax consequences of the ownership and disposition of shares of our stock and our
debt securities.
LEGAL MATTERS
Unless the applicable prospectus supplement
indicates otherwise, the validity of the securities in respect of which this prospectus is being delivered will be passed upon
by Wilmer Cutler Pickering Hale and Dorr LLP, Boston, Massachusetts.
EXPERTS
Ernst & Young LLP, an independent
registered public accounting firm, has audited our consolidated financial statements and schedules included in our Annual Report
on Form 10-K for the year ended December 31, 2013, and the effectiveness of our internal control over financial reporting as of
December 31, 2013, as set forth in their reports, which are incorporated by reference in this prospectus and elsewhere in the registration
statement. Our financial statements and schedules are incorporated by reference in reliance on Ernst & Young LLP’s reports,
given on their authority as experts in accounting and auditing.
FRANKLIN STREET PROPERTIES CORP.
Debt Securities
Common Stock
Preferred Stock
Depositary Shares
PROSPECTUS
January 12, 2015
PART II
INFORMATION NOT REQUIRED IN
PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the fees
and expenses payable by us in connection with the sale of the offered securities being registered hereby, other than underwriting
discounts and commissions, all of which expenses, except for the Securities and Exchange Commission registration fee, are estimated.
The selling stockholders will not be responsible for any such expenses.
SEC registration fee | |
$ | | (1) |
Printing and engraving | |
| | |
Accounting services | |
| | |
Legal fees of registrant’s counsel | |
| | |
Transfer agent’s, trustee’s and depository’s fees and expenses | |
| | |
Miscellaneous | |
| | |
Total | |
$ | | (2) |
| (1) | Deferred in reliance upon Rules 456(b) and 457(r). |
| (2) | These fees and expenses are calculated based on the securities offered and the number of issuances and accordingly are not
estimated at this time. |
Item 15. Indemnification of Directors and Officers.
Our Articles of Incorporation require
us to indemnify each person who is, was or has agreed to become an officer or director, or who is, was or has agreed to serve,
at our request, as a director, officer, partner, trustee, employee or agent of another entity to the fullest extent permitted from
time to time by Maryland law. The General Corporation Law of the State of Maryland permits a corporation to indemnify its directors,
officers and certain other parties against judgments, penalties, fines, settlements and reasonable expenses, including attorneys’
fees, actually incurred by them in connection with any proceeding to which they may be made a party by reason of their services
to or at the request of the corporation, unless it is established that (i) the act or omission of the indemnified party was material
to the matter giving rise to the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty,
(ii) the indemnified party actually received an improper personal benefit in money, property or services or (iii) in the case of
any criminal proceeding, the indemnified party had reasonable cause to believe that the act or omission was unlawful. Indemnification
may be made against judgments, penalties, fines, settlements and reasonable expenses actually incurred by the indemnified party
in connection with the proceeding; provided, however, that if the proceeding is one by or in the right of the corporation, indemnification
may not be made with respect to any proceeding in which the indemnified party has been adjudged to be liable to the corporation.
We will indemnify our directors, officers and certain other parties who have been successful, on the merits or otherwise, in the
defense of any proceeding to which they were made a party by reason of their service to us or at our request against expenses (including
attorney fees) actually and reasonably incurred in connection with the proceeding or any claim, issue or matter in a proceeding
in which the indemnified party was successful. In addition, an indemnified party may not be indemnified with respect to any proceeding
charging improper personal benefit to the indemnified party, whether or not involving action in such indemnified party’s
official capacity, in which the indemnified party was adjudged to be liable on the basis that personal benefit was improperly received.
The General Corporation Law of the State
of Maryland permits a court of appropriate jurisdiction to order indemnification of an indemnified party in view of all the relevant
circumstances even if the indemnified party may not otherwise be entitled to indemnification because (i) the act or omission of
the indemnified party was material to the matter giving rise to the proceeding and was committed in bad faith or was the result
of active and deliberate dishonesty, (ii) the indemnified party actually received an improper personal benefit in money, property
or services, or (iii) in the case of any criminal proceeding, the indemnified party had reasonable cause to believe that the act
or omission was unlawful. The General Corporation Law of the State of Maryland also permits a court of appropriate jurisdiction
to order indemnification of an indemnified party in view of all the relevant circumstances even if the indemnified party may not
otherwise be entitled to indemnification because the indemnified party was adjudged to be liable on the basis that personal benefit
was improperly received in any proceeding charging improper personal benefit to the indemnified party, whether or not involving
action in such indemnified party’s official capacity, provided, however, that such order shall be limited to indemnification
against expenses.
Our Articles of Incorporation contain
a provision eliminating the personal liability of a director or officer to us or our stockholders for monetary damages to the fullest
extent permitted by Maryland law. The General Corporation Law of the State of Maryland permits the liability of directors and officers
to a corporation or its stockholders for money damages to be limited, except (i) to the extent that a judgment or other final adjudication
is entered adverse to the director or officer in a proceeding based on a finding that the director’s or officer’s action,
or failure to act, was the result of active and deliberative dishonesty and was material to the cause of action adjudicated in
the proceeding or (ii) to the extent it is proved that the director or officer actually received an improper benefit or profit
in money, property or services. This provision of the General Corporation Law of the State of Maryland does not limit our ability
or our stockholders’ ability to obtain other relief, such as an injunction or rescission. Our Articles of Incorporation also
allow us to purchase insurance to protect FSP Corp. and any director, officer, employee or agent, and any individual serving in
such capacity of another entity at our request. We have obtained such a policy.
Insofar as the foregoing provisions permit
indemnification of directors, officers or persons controlling us for liability arising under the Securities Act, it is the position
of the Securities and Exchange Commission that this indemnification is against public policy as expressed in the Securities Act
and is therefore unenforceable under Section 14 of the Securities Act.
Item 16. Exhibits.
The exhibits to this Registration Statement are listed in
the exhibit index, which appears elsewhere herein and is incorporated herein by reference.
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
| (a)(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, as amended (the “Securities Act
of 1933”); |
| (ii) | to reflect in the prospectus any facts or events arising after the effective date of this 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 this 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 a 20 percent change in the maximum
aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;
and |
| (iii) | to include any material information with respect to the plan of distribution not previously disclosed in this registration
statement or any material change to such information in this registration statement; |
provided, however, that paragraphs (a)(1)(i),
(a)(1)(ii) and (a)(1)(iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs
is contained in reports filed with or furnished to the Commission by a Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are incorporated by reference in this registration
statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of this registration statement.
| (2) | That, for the purposes 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
the 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: |
| (i) | each prospectus filed by a 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 |
| (ii) | 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 a 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 such 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, such undersigned Registrant
will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
| (i) | any preliminary prospectus or prospectus of such undersigned Registrant relating to the offering required to be filed pursuant
to Rule 424; |
| (ii) | any free writing prospectus relating to the offering prepared by or on behalf of such undersigned Registrant or used or referred
to by such undersigned Registrant; |
| (iii) | the portion of any other free writing prospectus relating to the offering containing material information about such undersigned
Registrant or its securities provided by or on behalf of such undersigned Registrant; and |
| (iv) | any other communication that is an offer in the offering made by such 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 Exchange Act (and, where applicable,
each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated
by reference in this 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) | The undersigned Registrant hereby undertake to file an application for the purpose of determining the eligibility of the trustee
to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by
the Commission under Section 305(b)(2) of the Trust Indenture Act. |
| (d) | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers
and controlling persons of any Registrant pursuant to the indemnification provisions described herein, or otherwise, each Registrant
has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities
Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than
the payment by a Registrant of expenses incurred or paid by a director, officer or controlling person of such 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, such 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 Securities Act of 1933 and will be governed by the final adjudication of such issue. |
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all 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 town of Wakefield, Commonwealth of Massachusetts, on the 12th day of January, 2015.
FRANKLIN STREET PROPERTIES CORP.
By: /s/ George J. Carter
Name: George J. Carter
Title: President and Chief Executive Officer
SIGNATURES AND POWER OF ATTORNEY
Each of the undersigned officers and
directors of Franklin Street Properties Corp. hereby severally constitutes and appoints George J. Carter, Barbara J. Fournier and
Scott H. Carter, and each of them, his or her true and lawful attorneys-in-fact and agents, with full powers of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments
to this registration statement to which this Power of Attorney is attached, including post-effective amendments, and to file the
same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do
in person, and hereby ratifies and confirms all said attorneys-in-fact and agents, or either of them, or his or her substitute
or substitutes may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the
Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the
dates indicated.
Signature |
|
Title |
Date |
|
|
|
|
/s/ George J. Carter |
|
President, Chief Executive Officer
and Director (Principal Executive Officer) |
January 12, 2015 |
George J. Carter |
|
|
|
|
|
|
/s/ Barbara J. Fournier |
|
Executive Vice President, Chief Operating Officer,
Secretary, Treasurer and Director |
January 12, 2015 |
Barbara J. Fournier |
|
|
|
|
|
|
/s/ John Demeritt |
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer) |
January 12, 2015 |
John Demeritt |
|
|
|
|
|
|
/s/ Janet P. Notopoulos |
|
Director and Executive Vice President |
January 12, 2015 |
Janet P. Notopoulos |
|
|
|
|
|
|
|
/s/ John N. Burke |
|
Director |
January 12, 2015 |
John N. Burke |
|
|
|
|
|
|
|
/s/ Dennis J. McGillicuddy |
|
Director |
January 12, 2015 |
Dennis J. McGillicuddy |
|
|
|
|
|
|
|
/s/ Georgia Murray |
|
Director |
January 12, 2015 |
Georgia Murray |
|
|
|
|
|
|
|
/s/ Barry Silverstein |
|
Director |
January 12, 2015 |
Barry Silverstein |
|
|
|
|
|
|
|
/s/ Brian Hansen |
|
Director |
January 12, 2015 |
Brian Hansen |
|
|
|
EXHIBIT INDEX
Exhibit No. |
Description |
1.1* |
Form of Underwriting Agreement for Common Stock. |
1.2* |
Form of Underwriting Agreement for Debt Securities. |
4.1 |
Articles of Incorporation of Franklin Street Properties Corp. (incorporated herein by reference to the Registrant’s Form 8-A, filed with the SEC on April 5, 2005 (File No. 001-32470)). |
4.2 |
Restated Bylaws of Franklin Street Properties Corp. (incorporated herein by reference to the Registrant’s Current Report on Form 8-K, filed on February 15, 2013 (File No. 001-32470)). |
4.3 |
Form of Senior Indenture. |
4.4 |
Form of Subordinated Indenture. |
4.5 |
Form of Senior Note. |
4.6 |
Form of Subordinated Note. |
4.7* |
Form of Deposit Agreement |
5 |
Opinion of Wilmer Cutler Pickering Hale and Dorr LLP. |
8 |
Opinion of Wilmer Cutler Pickering Hale and Dorr LLP regarding tax matters. |
12 |
Calculation of Consolidated Ratios of Earnings to Fixed Charges and Consolidated Ratios of Earnings to Combined Fixed Charges and Preferred Stock Dividends. |
23.1 |
Consent of Ernst & Young LLP, independent registered public accounting firm for the Registrant. |
23.2 |
Consent of Wilmer Cutler Pickering Hale and Dorr LLP (included in Exhibit 5 and Exhibit 8). |
24 |
Powers of Attorney (included in the signature pages to the Registration Statement). |
25.1** |
The Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of the Trustee under the Senior Indenture. |
25.2** |
The Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of the Trustee under the Subordinated Indenture. |
_________________________
* To be filed by amendment or by a Current Report on Form 8-K.
** To be filed pursuant to Section 305(b)(2) of the Trust Indenture
Act of 1939.
Exhibit 4.3
FRANKLIN STREET PROPERTIES CORP.
and
_______________
Trustee
INDENTURE
Dated as of _______________
SENIOR DEBT SECURITIES
CROSS-REFERENCE TABLE(1)
Section of
Trust Indenture Act
of 1939, as amended |
|
Section of
Indenture |
310(a) |
6.09 |
310(b) |
6.08 |
|
6.10 |
310(c) |
Inapplicable |
311(a) |
6.13 |
311(b) |
6.13 |
311(c) |
Inapplicable |
312(a) |
4.01
4.04 |
312(b) |
4.04(c) |
312(c) |
4.04(c) |
313(a) |
4.03 |
313(b) |
4.03 |
313(c) |
4.03 |
313(d) |
4.03 |
314(a) |
4.02 |
314(b) |
Inapplicable |
314(c) |
2.04
8.04
9.01(c)
10.01(b)
11.05 |
314(d) |
Inapplicable |
314(e) |
11.05 |
314(f) |
Inapplicable |
315(a) |
6.01
6.02 |
315(b) |
5.11 |
315(c) |
6.01 |
315(d) |
6.01 |
|
6.02 |
315(e) |
5.12 |
316(a) |
5.09
5.10 |
|
7.04 |
316(b) |
5.06
5.10 |
316(c) |
7.02 |
317(a) |
5.04 |
317(b) |
3.04 |
318(a) |
11.07 |
(1) This Cross-Reference Table does not constitute part
of the Indenture and shall not have any bearing on the interpretation of any of its terms or provisions.
TABLE OF CONTENTS
|
|
|
PAGE |
ARTICLE 1 DEFINITIONS |
1 |
|
Section 1.01 |
Certain Terms Defined |
1 |
|
|
|
|
ARTICLE 2 SECURITIES |
5 |
|
Section 2.01 |
Forms Generally |
5 |
|
Section 2.02 |
Form of Trustee’s Certificate of Authentication |
6 |
|
Section 2.03 |
Amount Unlimited; Issuable in Series |
6 |
|
Section 2.04 |
Authentication and Delivery of Securities |
8 |
|
Section 2.05 |
Execution of Securities |
10 |
|
Section 2.06 |
Certificate of Authentication |
10 |
|
Section 2.07 |
Denomination and Date of Securities; Payments of Interest |
10 |
|
Section 2.08 |
Registration, Transfer and Exchange |
11 |
|
Section 2.09 |
Mutilated, Defaced, Destroyed, Lost and Stolen Securities |
13 |
|
Section 2.10 |
Cancellation of Securities; Destruction Thereof |
14 |
|
Section 2.11 |
Temporary Securities |
14 |
|
|
|
|
ARTICLE 3 COVENANTS OF THE ISSUER |
15 |
|
Section 3.01 |
Payment of Principal and Interest |
15 |
|
Section 3.02 |
Offices for Payments, Etc |
15 |
|
Section 3.03 |
Appointment to Fill a Vacancy in Office of Trustee |
15 |
|
Section 3.04 |
Paying Agents |
16 |
|
Section 3.05 |
Written Statement to Trustee |
16 |
|
|
|
|
ARTICLE 4 SECURITYHOLDERS LISTS AND REPORTS BY THE ISSUER AND THE TRUSTEE |
17 |
|
Section 4.01 |
Issuer to Furnish Trustee Information as to Names and Addresses of Securityholders |
17 |
|
Section 4.02 |
Reports by the Issuer |
17 |
|
Section 4.03 |
Reports by the Trustee |
17 |
|
Section 4.04 |
Preservation of Information; Communication with Securityholders |
17 |
|
|
|
|
ARTICLE 5 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT |
18 |
|
Section 5.01 |
Event of Default Defined; Acceleration of Maturity; Waiver of Default |
18 |
|
Section 5.02 |
Collection of Debt by Trustee; Trustee May Prove Debt |
20 |
|
Section 5.03 |
Application of Proceeds |
21 |
|
Section 5.04 |
Suits for Enforcement |
22 |
|
Section 5.05 |
Restoration of Rights on Abandonment of Proceedings |
22 |
|
Section 5.06 |
Limitations on Suits by Securityholders |
23 |
|
Section 5.07 |
Unconditional Right of Securityholders to Institute Certain Suits |
23 |
|
Section 5.08 |
Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default |
23 |
|
Section 5.09 |
Control by Holders of Securities |
24 |
|
Section 5.10 |
Waiver of Past Defaults |
24 |
|
Section 5.11 |
Trustee to Give Notice of Default |
25 |
|
Section 5.12 |
Right of Court to Require Filing of Undertaking to Pay Costs |
25 |
|
|
|
|
ARTICLE 6 CONCERNING THE TRUSTEE |
25 |
|
Section 6.01 |
Duties and Responsibilities of the Trustee; During Default; Prior to Default |
25 |
|
Section 6.02 |
Certain Rights of the Trustee |
26 |
|
Section 6.03 |
Trustee Not Responsible for Recitals, Disposition of Securities or Application of Proceeds Thereof |
27 |
|
Section 6.04 |
Trustee and Agents May Hold Securities; Collections, Etc |
27 |
|
Section 6.05 |
Moneys Held by Trustee |
27 |
|
Section 6.06 |
Compensation and Indemnification of Trustee and Its Prior Claim |
28 |
|
Section 6.07 |
Right of Trustee to Rely on Officer’s Certificate, Etc |
28 |
|
Section 6.08 |
Disqualification; Conflicting Interests |
28 |
|
Section 6.09 |
Persons Eligible for Appointment as Trustee |
28 |
|
Section 6.10 |
Resignation and Removal; Appointment of Successor Trustee |
29 |
|
Section 6.11 |
Acceptance of Appointment by Successor Trustee |
30 |
|
Section 6.12 |
Merger, Conversion, Consolidation or Succession to Business of Trustee |
31 |
|
Section 6.13 |
Preferential Collection of Claims Against the Issuer |
31 |
|
|
|
|
ARTICLE 7 CONCERNING THE SECURITYHOLDERS |
31 |
|
Section 7.01 |
Evidence of Action Taken by Securityholders |
31 |
|
Section 7.02 |
Proof of Execution of Instruments and of Holding of Securities |
32 |
|
Section 7.03 |
Holders to Be Treated as Owners |
32 |
|
Section 7.04 |
Securities Owned by Issuer Deemed Not Outstanding |
32 |
|
Section 7.05 |
Right of Revocation of Action Taken |
33 |
|
|
|
|
ARTICLE 8 SUPPLEMENTAL INDENTURES |
33 |
|
Section 8.01 |
Supplemental Indentures Without Consent of Securityholders |
33 |
|
Section 8.02 |
Supplemental Indentures With Consent of Securityholders |
34 |
|
Section 8.03 |
Effect of Supplemental Indenture |
36 |
|
Section 8.04 |
Documents to Be Given to Trustee |
36 |
|
Section 8.05 |
Notation on Securities in Respect of Supplemental Indentures |
36 |
|
|
|
|
ARTICLE 9 CONSOLIDATION, MERGER, SALE OR CONVEYANCE |
36 |
|
Section 9.01 |
Issuer May Consolidate, Etc., on Certain Terms |
36 |
|
Section 9.02 |
Successor Issuer Substituted |
37 |
|
|
|
|
ARTICLE 10 SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE; UNCLAIMED MONEYS |
37 |
|
Section 10.01 |
Satisfaction and Discharge of Indenture; Defeasance |
37 |
|
Section 10.02 |
Application by Trustee of Funds Deposited for Payment of Securities |
41 |
|
Section 10.03 |
Repayment of Moneys Held by Paying Agent |
41 |
|
Section 10.04 |
Return of Moneys Held by Trustee and Paying Agent Unclaimed for Two Years |
41 |
|
Section 10.05 |
Indemnity for U.S. Government Obligations |
41 |
|
|
|
|
ARTICLE 11 MISCELLANEOUS PROVISIONS |
41 |
|
Section 11.01 |
No Recourse |
41 |
|
Section 11.02 |
Provisions of Indenture for the Sole Benefit of Parties and Holders of Securities |
42 |
|
Section 11.03 |
Successors and Assigns of Issuer Bound by Indenture |
42 |
|
Section 11.04 |
Notices and Demands on Issuer, Trustee and Holders of Securities |
42 |
|
Section 11.05 |
Officer’s Certificates and Opinions of Counsel; Statements to Be Contained Therein |
43 |
|
Section 11.06 |
Payments Due on Saturdays, Sundays and Holidays |
44 |
|
Section 11.07 |
Conflict of Any Provision of Indenture With Trust Indenture Act of 1939 |
44 |
|
Section 11.08 |
New York Law to Govern |
44 |
|
Section 11.09 |
Counterparts |
44 |
|
Section 11.10 |
Effect of Headings |
44 |
|
Section 11.11 |
Actions by Successor |
44 |
|
Section 11.12 |
Severability |
44 |
|
|
|
|
ARTICLE 12 REDEMPTION OF SECURITIES AND SINKING FUNDS |
45 |
|
Section 12.01 |
Applicability of Article |
45 |
|
Section 12.02 |
Notice of Redemption; Partial Redemptions |
45 |
|
Section 12.03 |
Payment of Securities Called for Redemption |
46 |
|
Section 12.04 |
Exclusion of Certain Securities from Eligibility for Selection for Redemption |
47 |
|
Section 12.05 |
Mandatory and Optional Sinking Funds |
47 |
THIS INDENTURE, dated as of _________
between Franklin Street Properties Corp., a Maryland corporation (the “Issuer”) and ________, a _______ (the
“Trustee”),
W I T N E S S E T H :
WHEREAS, the Issuer may from time to
time duly authorize the issue of its unsecured debentures, notes or other evidences of indebtedness to be issued in one or more
series (the “Securities”) up to such principal amount or amounts as may from time to time be authorized in accordance
with the terms of this Indenture;
WHEREAS, the Issuer has duly authorized
the execution and delivery of this Indenture to provide, among other things, for the authentication, delivery and administration
of the Securities; and
WHEREAS, all things necessary to make
this Indenture a valid indenture and agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and
the purchases of the Securities by the holders thereof, the Issuer and the Trustee mutually covenant and agree for the equal and
proportionate benefit of the respective holders from time to time of the Securities as follows:
ARTICLE 1
DEFINITIONS
Section 1.01 Certain
Terms Defined. The following terms (except as otherwise expressly provided or unless the context otherwise clearly requires)
for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this
Section. All other terms used in this Indenture that are defined in the Trust Indenture Act of 1939 or the definitions of which
in the Securities Act of 1933 are referred to in the Trust Indenture Act of 1939, including terms defined therein by reference
to the Securities Act of 1933 (except as herein otherwise expressly provided or unless the context otherwise clearly requires),
shall have the meanings assigned to such terms in said Trust Indenture Act and in said Securities Act as in force at the date of
this Indenture. All accounting terms used herein and not expressly defined shall have the meanings assigned to such terms in accordance
with generally accepted accounting principles, and the term “generally accepted accounting principles” means
such accounting principles as are generally accepted in the United States at the time of any computation. 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. The terms defined in this Article have the meanings assigned to them in this
Article and include the plural as well as the singular.
“Board of Directors”
means either the Board of Directors of the Issuer or any committee of such Board duly authorized to act on its behalf.
“Board Resolution”
means a copy of one or more resolutions, certified by the secretary or an assistant secretary of the Issuer to have been duly adopted
by the Board of Directors and to be in full force and effect, and delivered to the Trustee.
“Business Day” means,
with respect to any Security, a day that in the city (or in any of the cities, if more than one) in which amounts are payable,
as specified in the form of such Security, is not a day on which banking institutions are authorized or required by law or regulation
to close.
“Commission” means
the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or
if at any time after the execution and delivery of this Indenture such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act of 1939, then the body performing such duties on such date.
“Common Stock” means
shares of common stock, par value $0.0001 per share, of the Issuer as the same exists at the date of execution and delivery of
this Indenture or as such stock may be reconstituted from time to time.
“Corporate Trust Office”
means the office of the Trustee at which the corporate trust business of the Trustee shall, at any particular time, be principally
administered, which office is, at the date as of which this Indenture is dated, located at __________.
“Debt” of any Person
means any debt for money borrowed which is created, assumed, incurred or guaranteed in any manner by such Person or for which such
Person is otherwise responsible or liable, and shall expressly include any such guaranty thereof by such Person. For the purpose
of computing the amount of the Debt of any Person there shall be excluded all Debt of such Person for the payment or redemption
or satisfaction of which money or securities (or evidences of such Debt, if permitted under the terms of the instrument creating
such Debt) in the necessary amount shall have been deposited in trust with the proper depositary, whether upon or prior to the
maturity or the date fixed for redemption of such Debt; and, in any instance where Debt is so excluded, for the purpose of computing
the assets of such Person there shall be excluded the money, securities or evidences of Debt deposited by such Person in trust
for the purpose of paying or satisfying such Debt.
“Depositary” means,
with respect to the Securities of any series issuable or issued in the form of one or more Global Securities, the Person designated
as Depositary by the Issuer pursuant to Section 2.04 until a successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter “Depositary” shall mean or include each Person who is then a Depositary
hereunder, and if at any time there is more than one such Person, “Depositary” as used with respect to the Securities
of any such series shall mean the Depositary with respect to the Global Securities of that series.
“Dollar” means the
currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts.
“Event of Default”
means any event or condition specified as such in Section 5.01.
“Foreign Currency”
means a currency issued by the government of a country other than the United States.
“Global Security”
means a Security evidencing all or a part of a series of Securities, issued to the Depositary for such series in accordance with
Section 2.04, and bearing the legend prescribed in Section 2.04.
“Holder”, “holder”,
“holder of Securities”, “Securityholder” or other similar terms mean the Person in whose
name such Security is registered in the Security register kept by the Issuer for that purpose in accordance with the terms hereof.
“Indenture” means
this instrument as originally executed and delivered or, if amended or supplemented as herein provided, as so amended or supplemented
or both, and shall include the forms and terms of particular series of Securities established as contemplated hereunder.
“interest”, unless
the context otherwise requires, refers to interest, and when used with respect to non-interest bearing Securities, refers to interest
payable after maturity, if any.
“Issuer” means Franklin
Street Properties Corp., a Delaware corporation, and, subject to Article 9, its successors and assigns.
“Issuer Order” means
a written statement, request or order of the Issuer signed in its name by the chairman of the Board of Directors, the president
or any vice president of the Issuer.
“Notice of Default”
shall have the meaning set forth in Section 5.01(c).
“Officer’s Certificate”
means a certificate signed by the chairman of the Board of Directors, the president, any vice president, the treasurer, the secretary
or any assistant secretary of the Issuer and delivered to the Trustee. Each such certificate shall comply with Section 314 of the
Trust Indenture Act of 1939 and, except to the extent provided herein, shall include the statements provided for in Section 11.05.
“Opinion of Counsel”
means an opinion in writing signed by the general corporate counsel or such other legal counsel who may be an employee of or counsel
to the Issuer and who shall be satisfactory to the Trustee. Each such opinion shall comply with Section 314 of the Trust Indenture
Act of 1939 and shall include the statements provided for in Section 11.05, if and to the extent required hereby.
“original issue date”
of any Security (or portion thereof) means the earlier of (a) the date of such Security or (b) the date of any Security (or portion
thereof) for which such Security was issued (directly or indirectly) on registration of transfer, exchange or substitution.
“Original Issue Discount Security”
means any 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 5.01.
“Outstanding”, when
used with reference to Securities, shall, subject to the provisions of Section 7.04, mean, as of any particular time, all Securities
authenticated and delivered by the Trustee under this Indenture, except
(a) Securities theretofore cancelled
by the Trustee or delivered to the Trustee for cancellation;
(b) Securities, or portions
thereof, for the payment or redemption of which cash or U.S. Government Obligations (as provided for in Section 10.01 (a) and Section
10.01(b)) in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the
Issuer) or shall have been set aside, segregated and held in trust by the Issuer for the Holders of such Securities (if the Issuer
shall act as its own paying agent); provided, that if such Securities, or portions thereof, are to be redeemed prior to
the maturity thereof, notice of such redemption shall have been given as herein provided, or provision satisfactory to the Trustee
shall have been made for giving such notice; and
(c) Securities in substitution
for which other Securities shall have been authenticated and delivered, or which shall have been paid, pursuant to the terms of
Section 2.09 (except with respect to any such Security as to which proof satisfactory to the Trustee is presented that such Security
is held by a Person in whose hands such Security is a legal, valid and binding obligation of the Issuer), Securities converted
into Common Stock pursuant hereto and Securities not deemed outstanding pursuant to Section 12.02.
In determining whether the Holders of
the requisite principal amount of Outstanding Securities of any or all series have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, the principal amount of an Original Issue Discount 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 5.01.
“Person” means any
individual, corporation, partnership, limited partnership, limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political subdivision thereof.
“principal” whenever
used with reference to the Securities or any Security or any portion thereof, shall be deemed to include “and premium, if
any”.
“record date” shall
have the meaning set forth in Section 2.07.
“Responsible Officer”,
when used with respect to the Trustee, means the chairman of the board of directors, any vice chairman of the board of directors,
the chairman of the trust committee, the chairman of the executive committee, any vice chairman of the executive committee, the
president, any vice president, the cashier, the secretary, the treasurer, any trust officer, any assistant trust officer, any assistant
vice president, any assistant cashier, any assistant secretary, any assistant treasurer, or any other officer or assistant officer
of the Trustee customarily performing functions similar to those performed by the persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of his or her knowledge of and familiarity with the particular
subject.
“Security” or “Securities”
has the meaning stated in the first recital of this Indenture, or, as the case may be, Securities that have been authenticated
and delivered under this Indenture.
“Security Registrar”
shall have the meaning set forth in Section 4.01(b).
“Subsidiary” means
a corporation of which stock having a majority of the voting power under ordinary circumstances is owned, directly or indirectly,
by the Issuer or by one or more subsidiaries of the Issuer, or by the Issuer and one or more subsidiaries of the Issuer.
“Trust Indenture Act of 1939”
(except as otherwise provided in Sections 8.01 and 8.02) means the Trust Indenture Act of 1939 as in force at the date as of which
this Indenture was originally executed.
“Trustee” means the
Person identified as “Trustee” in the first paragraph hereof and, subject to the provisions of Article 6, shall
also include any successor trustee. “Trustee” shall also mean or include each Person who is then a trustee hereunder
and if at any time there is more than one such Person, “Trustee” as used with respect to the Securities of any
series shall mean the trustee with respect to the Securities of such series.
“U.S. Government Obligation”
means (a) a direct obligation of the United States of America, backed by its full faith and credit, or (b) an obligation of a Person
controlled or supervised by and acting as an agency or instrumentality of the United States of America, the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United States of America.
“vice president”,
when used with respect to the Issuer or the Trustee, means any vice president, whether or not designated by a number or a word
or words added before or after the title of “vice president”.
“Yield to Maturity”
means the yield to maturity on a series of securities, calculated at the time of issuance of such series, or, if applicable, at
the most recent redetermination of interest on such series, and calculated in accordance with accepted financial practice.
ARTICLE 2
SECURITIES
Section 2.01 Forms Generally.
The Securities of each series shall be substantially in such form (not inconsistent with this Indenture) as shall be established
by or pursuant to one or more Board Resolutions (as set forth in a Board Resolution or, to the extent established pursuant to (rather
than set forth in) a Board Resolution, an Officer’s Certificate detailing such establishment) or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required
or permitted by this Indenture and may have imprinted or otherwise reproduced thereon such legend or legends or endorsements, not
inconsistent with the provisions of this Indenture, as may be required to comply with any law or with any rules or regulations
pursuant thereto, or with any rules of any securities exchange or to conform to general usage, all as may be determined by the
officers executing such Securities as evidenced by their execution of such Securities.
The definitive Securities shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing
such Securities as evidenced by their execution of such Securities.
Section 2.02 Form of Trustee’s
Certificate of Authentication. The Trustee’s certificate of authentication on all Securities shall be in substantially
the following form:
This is one of the Securities of the
series designated herein and referred to in the within-mentioned Indenture.
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as Trustee |
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By: |
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Authorized Officer |
Section 2.03 Amount Unlimited;
Issuable in Series. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture
is unlimited.
The Securities may be issued in one or
more series. The terms of a series of Securities shall be established prior to the initial issuance thereof in or pursuant to one
or more Board Resolutions, or, to the extent established pursuant to (rather than set forth in) a Board Resolution, in an Officer’s
Certificate detailing such establishment and/or established in one or more indentures supplemental hereto. The terms of such series
reflected in such Board Resolution, Officer’s Certificate, or supplemental indenture may include the following or any additional
or different terms:
(a) the designation of the Securities
of the series (which may be part of a series of Securities previously issued);
(b) the terms and conditions, if
applicable, upon which conversion or exchange of the Securities into Common Stock will be effected, including the initial conversion
or exchange price or rate and any adjustments thereto, the conversion or exchange period and other provisions in addition to or
in lieu of those described herein;
(c) any limit upon the aggregate
principal amount of the Securities of the 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 Securities of the series
pursuant to Section 2.08, 2.09, 2.11, 8.05 or 12.03);
(d) if other than Dollars, the
Foreign Currency in which the Securities of that series are denominated;
(e) any date on which the principal
of the Securities of the series is payable and the right, if any, to extend such date or dates;
(f) the rate or rates at which
the Securities of the series shall bear interest, if any, the record date or dates for the determination of holders to whom interest
is payable, the date or dates from which such interest shall accrue and on which such interest shall be payable and/or the method
by which such rate or rates or date or dates shall be determined, and the right, if any, to extend the interest payment periods
and the duration of that extension;
(g) the place or places where the
principal of and any interest on Securities of the series shall be payable (if other than as provided in Section 3.02);
(h) the price or prices at which,
the period or periods within which and the terms and conditions upon which Securities of the series may be redeemed, in whole or
in part, at the option of the Issuer, pursuant to any sinking fund or otherwise;
(i) the obligation, if any, of
the Issuer to redeem, purchase or repay Securities of the series pursuant to any mandatory redemption, sinking fund or analogous
provisions or at the option of a Holder thereof and the price or prices at which and the period or periods within which and any
terms and conditions upon which Securities of the series shall be redeemed, purchased or repaid, in whole or in part, pursuant
to such obligation;
(j) if other than denominations
of $1,000 and any integral multiple thereof, the denominations in which Securities of the series shall be issuable;
(k) if other than the principal
amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration
of the maturity thereof;
(l) if other than the currency
in which the Securities of that series are denominated, the currency in which payment of the principal of or interest on the Securities
of such series shall be payable;
(m) if the principal of or interest
on the Securities of the series is to be payable, at the election of the Issuer or a Holder thereof, in a currency other than that
in which the Securities are denominated, the period or periods within which, and the terms and conditions upon which, such election
may be made;
(n) if the amount of payments of
principal of and interest on the Securities of the series may be determined with reference to an index based on a currency other
than that in which the Securities of the series are denominated, or by reference to one or more currency exchange rates, securities
or baskets of securities, commodity prices or indices, the manner in which such amounts shall be determined;
(o) if Sections 10.01(b) or 10.01(c)
are inapplicable to Securities of such series;
(p) whether and under what circumstances
the Issuer will pay additional amounts on the Securities of any series in respect of any tax, assessment or governmental charge
withheld or deducted and, if so, whether the Issuer will have the option to redeem such Securities rather than pay such additional
amounts;
(q) if the Securities of such series
are to be issuable in definitive form (whether upon original issue or upon exchange of a temporary Security of such series) only
upon receipt of certain certificates or other documents or satisfaction of other conditions, then the form and terms of such certificates,
documents or conditions;
(r) any trustees, authenticating
or paying agents, transfer agents or registrars or any other agents with respect to the Securities of such series;
(s) any other events of default
or covenants with respect to the Securities of such series in addition to or in lieu of those contained in this Indenture;
(t) if the Securities of the series
may be issued in exchange for surrendered Securities of another series, or for other securities of the Issuer, pursuant to the
terms of such Securities or securities or of any agreement entered into by the Issuer, the ratio of the principal amount of the
Securities of the series to be issued to the principal amount of the Securities or securities to be surrendered in exchange, and
any other material terms of the exchange; and
(u) any other terms of the series.
The Issuer may from time to time, without
notice to or the consent of the holders of any series of Securities, create and issue further Securities of any such series ranking
equally with the Securities of such series in all respects (or in all respects other than (1) the payment of interest accruing
prior to the issue date of such further Securities or (2) the first payment of interest following the issue date of such further
Securities). Such further Securities may be consolidated and form a single series with the Securities of such series and have the
same terms as to status, redemption or otherwise as the Securities of such series.
Section 2.04 Authentication
and Delivery of Securities. The Issuer may deliver Securities of any series executed by the Issuer to the Trustee for authentication
together with the applicable documents referred to below in this Section, and the Trustee shall thereupon authenticate and deliver
such Securities to or upon the order of the Issuer (contained in the Issuer Order referred to below in this Section) or pursuant
to such procedures acceptable to the Trustee and to such recipients as may be specified from time to time by an Issuer Order. The
maturity date, original issue date, interest rate and any other terms of the Securities of such series shall be determined by or
pursuant to such Issuer Order and procedures. If provided for in such procedures, such Issuer Order may authorize authentication
and delivery pursuant to oral instructions from the Issuer or its duly authorized agent, which instructions shall be promptly confirmed
in writing. In authenticating such Securities and accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon:
(a) an Issuer Order requesting
such authentication and setting forth delivery instructions if the Securities are not to be delivered to the Issuer;
(b) any Board Resolution, Officer’s
Certificate and/or executed supplemental indenture referred to in Sections 2.01 and 2.03 by or pursuant to which the forms and
terms of the Securities were established;
(c) an Officer’s Certificate
setting forth the form or forms and terms of the Securities stating that the form or forms and terms of the Securities have been
established pursuant to Sections 2.01 and 2.03 and comply with this Indenture, and covering such other matters as the Trustee may
reasonably request; and
(d) an Opinion of Counsel to the
effect that:
(i) the form or forms and terms of
such Securities have been established pursuant to Sections 2.01 and 2.03 and comply with this Indenture,
(ii) the authentication and delivery
of such Securities by the Trustee are authorized under the provisions of this Indenture,
(iii) such Securities when authenticated
and delivered by the Trustee and issued by the Issuer in the manner and subject to any conditions specified in such Opinion of
Counsel, will constitute valid and binding obligations of the Issuer, and
(iv) all laws and requirements in
respect of the execution and delivery by the Issuer of the Securities have been complied with,
and covering such other matters as the Trustee may reasonably
request.
The Trustee shall have the right to decline
to authenticate and deliver any Securities under this Section if the Trustee, being advised by counsel, determines that such action
may not lawfully be taken by the Issuer or if the Trustee in good faith by its board of directors or board of trustees, executive
committee, or a trust committee of directors or trustees or Responsible Officers shall determine that such action would expose
the Trustee to personal liability to existing Holders or would affect the Trustee’s own rights, duties or immunities under
the Securities, this Indenture or otherwise.
The Issuer shall execute and the Trustee
shall, in accordance with this Section with respect to the Securities of a series, authenticate and deliver one or more Global
Securities that (i) shall represent and shall be denominated in an amount equal to the aggregate principal amount of all of the
Securities of such series issued and not yet cancelled, (ii) shall be registered in the name of the Depositary for such Global
Security or Securities or the nominee of such Depositary, (iii) shall be delivered by the Trustee to such Depositary or pursuant
to such Depositary’s instructions and (iv) shall bear a legend substantially to the following effect: “Unless and until
it is exchanged in whole or in part for Securities in definitive registered form, this Security may not be transferred except as
a whole by the Depositary to the nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee
of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.”
Each Depositary designated pursuant to
this Section must, at the time of its designation and at all times while it serves as Depositary, be a clearing agency registered
under the Securities Exchange Act of 1934 and any other applicable statute or regulation.
Section 2.05 Execution of Securities.
The Securities shall be signed on behalf of the Issuer by the chairman of its Board of Directors, any vice chairman of its Board
of Directors, its chief executive officer, its principal financial officer, its president, any vice president or its treasurer.
Such signatures may be the manual or facsimile signatures of the present or any future such officers. Typographical and other minor
errors or defects in any such reproduction of any such signature shall not affect the validity or enforceability of any Security
that has been duly authenticated and delivered by the Trustee.
In case any officer of the Issuer who
shall have signed any of the Securities shall cease to be such officer before the Security so signed shall be authenticated and
delivered by the Trustee or disposed of by the Issuer, such Security nevertheless may be authenticated and delivered or disposed
of as though the person who signed such Security had not ceased to be such officer of the Issuer; and any Security may be signed
on behalf of the Issuer by such persons as, at the actual date of the execution of such Security, shall be the proper officers
of the Issuer, although at the date of the execution and delivery of this Indenture any such person was not such an officer.
Section 2.06 Certificate of
Authentication. Only such Securities as shall bear thereon a certificate of authentication substantially in the form hereinbefore
recited, executed by the Trustee by the manual signature of one of its authorized officers, shall be entitled to the benefits of
this Indenture or be valid or obligatory for any purpose. The execution of such certificate by the Trustee upon any Security executed
by the Issuer shall be conclusive evidence that the Security so authenticated has been duly authenticated and delivered hereunder
and that the Holder is entitled to the benefits of this Indenture.
Section 2.07 Denomination and
Date of Securities; Payments of Interest. The Securities of each series shall be issuable in denominations established as contemplated
by Section 2.03 or, if not so established, in denominations of $1,000 and any integral multiple thereof. The Securities of each
series shall be numbered, lettered or otherwise distinguished in such manner or in accordance with such plan as the officers of
the Issuer executing the same may determine with the approval of the Trustee, as evidenced by the execution and authentication
thereof. Unless otherwise indicated in a Board Resolution, Officer’s Certificate or supplemental indenture for a particular
series, interest will be calculated on the basis of a 360-day year of twelve 30-day months.
Each Security shall be dated the date
of its authentication. The Securities of each series shall bear interest, if any, from the date, and such interest shall be payable
on the dates, established as contemplated by Section 2.03.
The Person in whose name any Security
of any series is registered at the close of business on any record date applicable to a particular series with respect to any interest
payment date for such series shall be entitled to receive the interest, if any, payable on such interest payment date notwithstanding
any transfer, exchange or conversion of such Security subsequent to the record date and prior to such interest payment date, except
if and to the extent the Issuer shall default in the payment of the interest due on such interest payment date for such series,
in which case such defaulted interest shall be paid to the Persons in whose names Outstanding Securities for such series are registered
at the close of business on a subsequent record date (which shall be not less than five Business Days prior to the date of payment
of such defaulted interest) established by notice given by mail by or on behalf of the Issuer to the Holders of Securities not
less than 15 days preceding such subsequent record date. The term “record date” as used with respect to any
interest payment date (except a date for payment of defaulted interest) for the Securities of any series shall mean the date specified
as such in the terms of the Securities of such series established as contemplated by Section 2.03, or, if no such date is so established,
if such interest payment date is the first day of a calendar month, the 15th day of the immediately preceding calendar month or,
if such interest payment date is the 15th day of a calendar month, the first day of such calendar month, whether or not such record
date is a Business Day.
Section 2.08 Registration,
Transfer and Exchange. The Issuer will keep at each office or agency to be maintained for the purpose as provided in Section
3.02 for each series of Securities a register or registers in which, subject to such reasonable regulations as it may prescribe,
it will provide for the registration of Securities of such series and the registration of transfer of Securities of such series.
Such register shall be in written form in the English language or in any other form capable of being converted into such form within
a reasonable time. At all reasonable times such register or registers shall be open for inspection by the Trustee.
Upon due presentation for registration
of transfer of any Security of any series at any such office or agency to be maintained for the purpose as provided in Section
3.02, the Issuer shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new
Security or Securities of the same series, maturity date, interest rate and original issue date in authorized denominations for
a like aggregate principal amount.
At the option of the Holder thereof,
Securities of any series (except a Global Security) may be exchanged for a Security or Securities of such series having authorized
denominations and an equal aggregate principal amount, upon surrender of such Securities to be exchanged at the agency of the Issuer
that shall be maintained for such purpose in accordance with Section 3.02 and upon payment, if the Issuer shall so require, of
the charges hereinafter provided. Whenever any Securities are so surrendered for exchange, the Issuer shall execute, and the Trustee
shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive. All Securities surrendered
upon any exchange or transfer provided for in this Indenture shall be promptly cancelled and disposed of by the Trustee and the
Trustee will deliver a certificate of disposition thereof to the Issuer.
All Securities presented for registration
of transfer, exchange, redemption or payment shall (if so required by the Issuer or the Trustee) be duly endorsed by, or be accompanied
by a written instrument or instruments of transfer in form satisfactory to the Issuer and the Trustee duly executed by, the Holder
or his or her attorney duly authorized in writing.
The Issuer may require payment of a sum
sufficient to cover any stamp or other tax or other governmental charge that may be imposed in connection with any exchange or
registration of transfer of Securities. No service charge shall be made for any such transaction.
The Issuer shall not be required to exchange
or register a transfer of (a) any Securities of any series for a period of 15 days immediately preceding the first mailing of notice
of redemption of Securities of such series to be redeemed or (b) any Securities selected, called or being called for redemption,
in whole or in part, except, in the case of any Security to be redeemed in part, the portion thereof not so to be redeemed.
Notwithstanding any other provision of
this Section 2.08, unless and until it is exchanged in whole or in part for Securities in definitive registered form, a Global
Security representing all or a portion of the Securities of a series may not be transferred except as a whole by the Depositary
for such series to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor Depositary for such series or a nominee of such successor Depositary.
If at any time the Depositary for the
Securities of a series notifies the Issuer that it is unwilling or unable to continue as Depositary for the Securities of such
series or if at any time the Depositary for the Securities of a series shall no longer be eligible under Section 2.04, the Issuer
shall appoint a successor Depositary with respect to the Securities of such series. If a successor Depositary for the Securities
of such series is not appointed by the Issuer within 90 days after the Issuer receives such notice or becomes aware of such ineligibility,
the Issuer’s determination pursuant to Section 2.03 that the Securities of such series be represented by a Global Security
shall no longer be effective and the Issuer will execute, and the Trustee, upon receipt of an Officer’s Certificate for the
authentication and delivery of definitive Securities of such series, will authenticate and deliver, Securities of such series in
definitive registered form, in any authorized denominations, in an aggregate principal amount equal to the principal amount of
the Global Security or Securities representing the Securities of such series, in exchange for such Global Security or Securities.
The Issuer may at any time and in its
sole discretion determine that the Securities of any series issued in the form of one or more Global Securities shall no longer
be represented by a Global Security or Securities. In such event the Issuer will execute, and the Trustee, upon receipt of an Officer’s
Certificate for the authentication and delivery of definitive Securities of such series, will authenticate and deliver, Securities
of such series in definitive registered form, in any authorized denominations, in an aggregate principal amount equal to the principal
amount of the Global Security or Securities representing such series, in exchange for such Global Security or Securities.
The Depositary for such Global Security
may surrender such Global Security in exchange in whole or in part for Securities of the same series in definitive registered form
in accordance with the two preceding paragraphs or on such other terms as are acceptable to the Issuer and such Depositary. Thereupon,
the Issuer shall execute, and the Trustee shall authenticate and deliver, without service charge,
(i) to
the Person specified by such Depositary a new Security or Securities of the same series, of any authorized denominations 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
(ii) to
such Depositary a new Global Security in a denomination equal to the difference, if any, between the principal amount of the surrendered
Global Security and the aggregate principal amount of Securities authenticated and delivered pursuant to clause (i) above.
Upon the exchange of a Global Security
for Securities in definitive registered form, in authorized denominations, such Global Security shall be cancelled by the Trustee.
Securities in definitive registered form issued in exchange for a Global Security pursuant to this Section 2.08 shall be registered
in such names and in such authorized denominations as the Depositary for such Global Security, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities to or as directed
by the Persons in whose names such Securities are so registered.
All Securities issued upon any transfer
or exchange of Securities shall be valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits
under this Indenture, as the Securities surrendered upon such transfer or exchange.
Section 2.09 Mutilated,
Defaced, Destroyed, Lost and Stolen Securities. In case any temporary or definitive Security shall become mutilated, defaced
or be destroyed, lost or stolen, the Issuer in its discretion may execute, and upon the written request of any officer of the Issuer,
the Trustee shall authenticate and deliver a new Security of the same series, maturity date, interest rate and original issue date,
bearing a number or other distinguishing symbol not contemporaneously outstanding, in exchange and substitution for the mutilated
or defaced Security, or in lieu of and substitution for the Security so destroyed, lost or stolen. In every case the applicant
for a substitute Security shall furnish to the Issuer and to the Trustee and any agent of the Issuer or the Trustee such security
or indemnity as may be required by them to indemnify and defend and to save each of them harmless and, in every case of destruction,
loss or theft, evidence to their satisfaction of the destruction, loss or theft of such Security and of the ownership thereof and
in the case of mutilation or defacement shall surrender the Security to the Trustee.
Upon the issuance of any substitute Security,
the Issuer may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. In case any Security which
has matured or is about to mature or has been called for redemption in full, or is being surrendered for conversion in full, shall
become mutilated or defaced or be destroyed, lost or stolen, the Issuer may, instead of issuing a substitute Security (with the
Holder’s consent, in the case of convertible Securities), pay or authorize the payment of the same or convert, or authorize
conversion of the same (without surrender thereof except in the case of a mutilated or defaced Security), if the applicant for
such payment shall furnish to the Issuer and to the Trustee and any agent of the Issuer or the Trustee such security or indemnity
as any of them may require to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall
also furnish to the Issuer and the Trustee and any agent of the Issuer or the Trustee evidence to their satisfaction of the destruction,
loss or theft of such Security and of the ownership thereof.
Every substitute Security of any series
issued pursuant to the provisions of this Section by virtue of the fact that any such Security is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Issuer, whether or not the destroyed, lost or stolen Security shall be at
any time enforceable by anyone and shall be entitled to all the benefits of (but shall be subject to all the limitations of rights
set forth in) this Indenture equally and proportionately with any and all other Securities of such series duly authenticated and
delivered hereunder. All Securities shall be held and owned upon the express condition that, to the extent permitted by law, the
foregoing provisions are exclusive with respect to the replacement or payment or conversion of mutilated, defaced or destroyed,
lost or stolen Securities and shall preclude any and all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without
their surrender.
Section 2.10 Cancellation
of Securities; Destruction Thereof. All Securities surrendered for exchange for Securities of the same series or for payment,
redemption, registration of transfer, conversion or for credit against any payment in respect of a sinking or analogous fund, if
surrendered to the Issuer or any agent of the Issuer or the Trustee, shall be delivered to the Trustee for cancellation or, if
surrendered to the Trustee, shall be cancelled by it; and no Securities shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Indenture. The Trustee shall dispose of cancelled Securities held by it and deliver a certificate
of disposition to the Issuer. If the Issuer shall acquire any of the Securities, such acquisition shall not operate as a redemption
or satisfaction of the Debt represented by such Securities unless and until the same are delivered to the Trustee for cancellation.
Section 2.11 Temporary Securities.
Pending the preparation of definitive Securities for any series, the Issuer may execute and the Trustee shall authenticate
and deliver temporary Securities for such series (printed, lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be issuable in any authorized denomination, and substantially
in the form of the definitive Securities of such series but with such omissions, insertions and variations as may be appropriate
for temporary Securities, all as may be determined by the Issuer with the concurrence of the Trustee as evidenced by the execution
and authentication thereof. Temporary Securities may contain such reference to any provisions of this Indenture as may be appropriate.
Every temporary Security shall be executed by the Issuer and be authenticated by the Trustee upon the same conditions and in substantially
the same manner, and with like effect, as the definitive Securities. Without unreasonable delay the Issuer shall execute and shall
furnish definitive Securities of such series and thereupon temporary Securities of such series may be surrendered in exchange therefor
without charge at each office or agency to be maintained by the Issuer for that purpose pursuant to Section 3.02 and the Trustee
shall authenticate and deliver in exchange for such temporary Securities of such series an equal aggregate principal amount of
definitive Securities of the same series having authorized denominations. Until so exchanged, the temporary Securities of any series
shall be entitled to the same benefits under this Indenture as definitive Securities of such series, unless the benefits of the
temporary Securities are limited pursuant to Section 2.03.
ARTICLE 3
COVENANTS OF THE ISSUER
Section 3.01 Payment
of Principal and Interest. The Issuer covenants and agrees for the benefit of each series of Securities that it will duly and
punctually pay or cause to be paid the principal of, and interest on, each of the Securities of such series (together with any
additional amounts payable pursuant to the terms of such Securities) at the place or places, at the respective times and in the
manner provided in such Securities and in this Indenture. The interest on Securities (together with any additional amounts payable
pursuant to the terms of such Securities) shall be payable only to or upon the written order of the Holders thereof and at the
option of the Issuer may be paid by mailing checks for such interest payable to or upon the written order of such Holders at their
last addresses as they appear on the Security register of the Issuer.
Section 3.02 Offices
for Payments, Etc. The Issuer will maintain (i) in _______, an agency where the Securities of each series may be presented
for payment, an agency where the Securities of each series may be presented for exchange and conversion, if applicable, as provided
in this Indenture and an agency where the Securities of each series may be presented for registration of transfer as in this Indenture
provided and (ii) such further agencies in such places as may be determined for the Securities of such series pursuant to Section
2.03.
The Issuer will maintain in __________,
an agency where notices and demands to or upon the Issuer in respect of the Securities of any series or this Indenture may be served.
The Issuer will give to the Trustee written
notice of the location of each such agency and of any change of location thereof. In case the Issuer shall fail to maintain any
agency required by this Section to be located in __________, or shall fail to give such notice of the location or of any change
in the location of any of the above agencies, presentations and demands may be made and notices may be served at the Corporate
Trust Office of the Trustee.
The Issuer may from time to time designate
one or more additional agencies where the Securities of a series may be presented for payment, where the Securities of that series
may be presented for exchange or conversion, if applicable, as provided in this Indenture and pursuant to Section 2.03 and where
the Securities of that series may be presented for registration of transfer as in this Indenture provided, and the Issuer may from
time to time rescind any such designation, as the Issuer may deem desirable or expedient; provided, however, that
no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain the agencies provided for
in this Section. The Issuer will give to the Trustee prompt written notice of any such designation or rescission thereof.
Section 3.03 Appointment
to Fill a Vacancy in Office of Trustee. The Issuer, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 6.10, a Trustee, so that there shall at all times be a Trustee with respect to
each series of Securities hereunder.
Section 3.04 Paying Agents.
Whenever the Issuer shall appoint a paying agent other than the Trustee with respect to the Securities of any series, it will
cause such paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject
to the provisions of this Section,
(a) that it will hold all sums
received by it as such agent for the payment of the principal of or interest on the Securities of such series (whether such sums
have been paid to it by the Issuer or by any other obligor on the Securities of such series) in trust for the benefit of the Holders
of the Securities of such series or of the Trustee,
(b) that it will give the Trustee
notice of any failure by the Issuer (or by any other obligor on the Securities of such series) to make any payment of the principal
of or interest on the Securities of such series when the same shall be due and payable, and
(c) that at any time during the
continuance of any such failure, upon the written request of the Trustee, it will forthwith pay to the Trustee all sums so held
in trust by such paying agent.
The Issuer will, on or prior to each
due date of the principal of or interest on the Securities of such series, deposit with the paying agent a sum sufficient to pay
such principal or interest so becoming due, and (unless such paying agent is the Trustee) the Issuer will promptly notify the Trustee
of any failure to take such action.
If the Issuer shall act as its own paying
agent with respect to the Securities of any series, it will, on or before each due date of the principal of or interest on the
Securities of such series, set aside, segregate and hold in trust for the benefit of the Holders of the Securities of such series
a sum sufficient to pay such principal or interest so becoming due. The Issuer will promptly notify the Trustee of any failure
to take such action.
Anything in this Section to the contrary
notwithstanding, but subject to Section 10.01, the Issuer may at any time, for the purpose of obtaining a satisfaction and discharge
with respect to one or more or all series of Securities hereunder, or for any other reason, pay or cause to be paid to the Trustee
all sums held in trust for any such series by the Issuer or any paying agent hereunder, as required by this Section, such sums
to be held by the Trustee upon the trusts herein contained.
Anything in this Section to the contrary
notwithstanding, the agreement to hold sums in trust as provided in this Section is subject to the provisions of Sections 10.03
and 10.04.
Section 3.05 Written
Statement to Trustee. So long as any Securities are Outstanding hereunder, the Issuer will deliver to the Trustee, within 120
days after the end of each fiscal year of the Issuer ending after the date hereof, a written statement covering the previous fiscal
year, signed by two of its officers (which need not comply with Section 11.05), stating that in the course of the performance of
their duties as officers of the Issuer they would normally have knowledge of any default by the Issuer in the performance or fulfillment
of any covenant, agreement or condition contained in this Indenture, stating whether or not they have knowledge of any such default
and, if so, specifying each such default of which the signers have knowledge and the nature thereof.
ARTICLE 4
SECURITYHOLDERS LISTS AND REPORTS BY THE ISSUER AND THE TRUSTEE
Section 4.01 Issuer to Furnish
Trustee Information as to Names and Addresses of Securityholders. The Issuer covenants and agrees that it will furnish
or cause to be furnished to the Trustee a list in such form as the Trustee may reasonably require of the names and addresses of
the Holders of the Securities of each series pursuant to Section 312 of the Trust Indenture Act of 1939:
(a) semiannually and not more than
15 days after each record date for the payment of interest on such Securities, as hereinabove specified, as of such record date
and on dates to be determined pursuant to Section 2.03 for non-interest bearing Securities in each year, and
(b) at such other times as the
Trustee may request in writing, within 30 days after receipt by the Issuer of any such request as of a date not more than 15 days
prior to the time such information is furnished, provided, that, if and so long as the Trustee shall be the Security registrar
(the “Security Registrar”) for such series, such list shall not be required to be furnished.
Section 4.02 Reports by the
Issuer. The Issuer covenants to comply with Section 314(a) of the Trust Indenture Act insofar as it relates to information,
documentations, and other reports which the Issuer may be required to file with the Commission pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934.
Section 4.03 Reports by the
Trustee. Any Trustee’s report required under Section 313(a) of the Trust Indenture Act of 1939 shall be transmitted on
or before ______ in each year following the date hereof, so long as any Securities are Outstanding hereunder, and shall be dated
as of a date convenient to the Trustee but no more than 60 nor less than 45 days prior thereto. The Trustee shall comply with Sections
313(b), 313(c) and 313(d) of the Trust Indenture Act.
Section 4.04 Preservation of
Information; Communication with Securityholders. (a) The Trustee shall preserve, in as current a form as is reasonably practicable,
all information as to the names and addresses of the holders of Securities contained in the most recent list furnished to it as
provided in Section 4.01 and as to the names and addresses of holders of Securities received by the Trustee in its capacity as
Security Registrar (if acting in such capacity).
(b) The
Trustee may destroy any list furnished to it as provided in Section 4.01 upon receipt of a new list so furnished.
(c) Securityholders
may communicate as provided in Section 312(b) of the Trust Indenture Act with other Securityholders with respect to their rights
under this Indenture or under the Securities. The Issuer, the Trustee, the Security Registrar and any other Person shall have the
protection of Section 312(c) of the Trust Indenture Act.
ARTICLE 5
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
Section 5.01 Event of Default
Defined; Acceleration of Maturity; Waiver of Default. “Event of Default”, with respect to Securities
of any series wherever used herein, means each one of the following events which shall have occurred and be continuing (whatever
the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):
(a) default in the payment of any
installment of interest upon any of the Securities of such series as and when the same shall become due and payable, and continuance
of such default for a period of 30 days (or such other period as may be established for the Securities of such series as contemplated
by Section 2.03); or
(b) default in the payment of all
or any part of the principal on any of the Securities of such series as and when the same shall become due and payable either at
maturity, upon redemption, by declaration or otherwise (and, if established for the Securities of such series as contemplated by
Section 2.03, the continuance of such default for a specified period); or
(c) default in the performance,
or breach, of any covenant or agreement of the Issuer in respect of the Securities of such series (other than a covenant or agreement
in respect of the Securities of such series a default in the performance or breach of which is elsewhere in this Section specifically
dealt with), and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified
mail, to the Issuer by the Trustee or to the Issuer and the Trustee by the Holders of at least 25% in principal amount of the Outstanding
Securities of all series affected thereby, a written notice specifying such default or breach and requiring it to be remedied and
stating that such notice is a “Notice of Default” hereunder; or
(d) a court having jurisdiction
in the premises shall enter a decree or order for relief in respect of the Issuer in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee
or sequestrator (or similar official) of the Issuer or for all or substantially all of its property and assets or ordering the
winding up or liquidation of its affairs, and such decree or order shall remain unstayed and in effect for a period of 90 consecutive
days; or
(e) the Issuer shall commence a
voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry
of an order for relief in an involuntary case under any such law, or consent to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Issuer or for any substantial part of its
property and assets, or make any general assignment for the benefit of creditors; or
(f) any other Event of Default
provided for in such series of Securities.
If an Event of Default described in clauses
(a), (b), (c) or (f) occurs and is continuing, then, and in each and every such case, unless the principal of all of the Securities
of such series shall have already become due and payable, either the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Securities of such series then Outstanding hereunder (each such series voting as a separate class) by notice in writing
to the Issuer (and also to the Trustee if given by Securityholders), may declare the entire principal (or, if the Securities of
such series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of such
series) of all Securities of such series and the interest accrued thereon, if any, to be due and payable immediately, and upon
any such declaration the same shall become immediately due and payable. If an Event of Default described in clauses (d) or (e)
occurs and is continuing, then and in each and every such case, the entire principal (or, if any Securities are Original Issue
Discount Securities, such portion of the principal as may be specified in the terms thereof) of all the Securities then Outstanding
and interest accrued thereon, if any, shall become immediately due and payable.
The foregoing provisions, however, are
subject to the condition that if, at any time after the principal of the Securities of any series shall have been so declared due
and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter
provided, the Issuer shall pay or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon
all the Securities of such series and the principal of any and all Securities of such series which shall have become due otherwise
than by acceleration (with interest upon such principal and, to the extent that payment of such interest is enforceable under applicable
law, on overdue installments of interest, at the same rate as the rate of interest specified in the Securities of such series to
the date of such payment or deposit) and such amount as shall be sufficient to cover reasonable compensation to the Trustee, its
agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee except as
a result of negligence or bad faith, and if any and all Events of Default under the Indenture with respect to such series, other
than the non-payment of the principal of Securities of such series which shall have become due solely by such acceleration, shall
have been cured, waived or otherwise remedied as provided herein, then and in every such case the Holders of a majority in aggregate
principal amount of all the Securities of such series then Outstanding, by written notice to the Issuer and to the Trustee, may
waive all defaults with respect to such series and rescind and annul such declaration and its consequences, but no such waiver
or rescission and annulment shall extend to or shall affect any subsequent default or shall impair any right consequent thereon.
Unless otherwise indicated in the Board
Resolution, Officer’s Certificate or supplemental indenture for a series of Original Issue Discount Securities, for all purposes
under this Indenture, if a portion of the principal of any Original Issue Discount Securities shall have been accelerated and declared
due and payable pursuant to the provisions hereof, then, from and after such declaration, unless such declaration has been rescinded
and annulled, the principal amount of such Original Issue Discount Securities shall be deemed, for all purposes hereunder, to be
such portion of the principal thereof as shall be due and payable as a result of such acceleration, and payment of such portion
of the principal thereof as shall be due and payable as a result of such acceleration, together with interest, if any, thereon
and all other amounts owing thereunder, shall constitute payment in full of such Original Issue Discount Securities.
Section 5.02 Collection
of Debt by Trustee; Trustee May Prove Debt. The Issuer covenants that (a) in case default shall be made in the payment of any
installment of interest on any of the Securities of any series when such interest shall have become due and payable, and such default
shall have continued for a period of 30 days or (b) in case default shall be made in the payment of all or any part of the principal
of any of the Securities of any series when the same shall have become due and payable, whether upon maturity of the Securities
of such series or upon any redemption or by declaration or otherwise--then, upon demand of the Trustee, the Issuer will pay to
the Trustee for the benefit of the Holders of the Securities of such series the whole amount that then shall have become due and
payable on all Securities of such series for principal or interest, as the case may be (with interest to the date of such payment
upon the overdue principal and, to the extent that payment of such interest is enforceable under applicable law, on overdue installments
of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified
in the Securities of such series); and, in addition thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including reasonable compensation to the Trustee and each predecessor trustee, their respective agents,
attorneys and counsel, and any expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor trustee
except as a result of its negligence or bad faith.
In case the Issuer shall fail forthwith
to pay such amounts upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered
to institute any action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute
any such action or proceedings to judgment or final decree, and may enforce any such judgment or final decree against the Issuer
or other obligor upon such Securities and collect in the manner provided by law out of the property of the Issuer or other obligor
upon such Securities, wherever situated, the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings
relative to the Issuer or any other obligor upon the Securities under Title 11 of the United States Code or any other applicable
Federal or state bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuer or its property or
such other obligor or its property, or in case of any other comparable judicial proceedings relative to the Issuer or other obligor
upon the Securities of any series, or to the creditors or property of the Issuer or such other obligor, the Trustee, irrespective
of whether the principal of any 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 pursuant to the provisions of this Section, shall be entitled and
empowered, by intervention in such proceedings or otherwise:
(i) to
file and prove a claim or claims for the whole amount of principal and interest (or, if the Securities of any series are Original
Issue Discount Securities, such portion of the principal amount as may be specified in the terms of such series) owing and unpaid
in respect of the Securities of any series, 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 reasonable compensation to the Trustee and each predecessor trustee,
and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances
made, by the Trustee and each predecessor trustee, except as a result of negligence or bad faith) and of the Securityholders allowed
in any judicial proceedings relative to the Issuer or other obligor upon the Securities of any series, or to the creditors or property
of the Issuer or such other obligor,
(ii) unless prohibited by applicable
law and regulations, to vote on behalf of the Holders of the Securities of any series in any election of a trustee or a standby
trustee in arrangement, reorganization, liquidation or other bankruptcy or insolvency proceedings or person performing similar
functions in comparable proceedings, and
(iii) to collect and receive any
moneys or other property payable or deliverable on any such claims, and to distribute all amounts received with respect to the
claims of the Securityholders and of the Trustee on their behalf; and any trustee, receiver or liquidator, custodian or other similar
official is hereby authorized by each of the Securityholders to make payments to the Trustee, and, in the event that the Trustee
shall consent to the making of payments directly to the Securityholders, to pay to the Trustee such amounts as shall be sufficient
to cover reasonable compensation to the Trustee, each predecessor trustee and their respective agents, attorneys and counsel, and
all other expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor trustee except as a result
of negligence or bad faith and all other amounts due to the Trustee or any predecessor trustee pursuant to Section 6.06.
Nothing herein contained shall be deemed
to authorize the Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Securityholder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities of any series or the rights of any Holder thereof,
or to authorize the Trustee to vote in respect of the claim of any Securityholder in any such proceeding except, as aforesaid,
to vote for the election of a trustee in bankruptcy or similar person.
All rights of action and of asserting
claims under this Indenture, or under any of the Securities of any series, may be enforced by the Trustee without the possession
of any of the Securities of such series or the production thereof on any trial or other proceedings relative thereto, and any such
action or proceedings instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery
of judgment, subject to the payment of the expenses, disbursements and compensation of the Trustee, each predecessor trustee and
their respective agents and attorneys, shall be for the ratable benefit of the Holders of the Securities in respect of which such
action was taken.
In any proceedings brought by the Trustee
(and also any proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party),
the Trustee shall be held to represent all the Holders of the Securities in respect to which such action was taken, and it shall
not be necessary to make any Holders of such Securities parties to any such proceedings.
Section 5.03 Application
of Proceeds. Any moneys collected by the Trustee pursuant to this Article in respect of any series shall be applied in the
following order at the date or dates fixed by the Trustee and, in case of the distribution of such moneys on account of principal
or interest, upon presentation of the several Securities in respect of which monies have been collected and stamping (or otherwise
noting) thereon the payment, or issuing Securities of such series in reduced principal amounts in exchange for the presented Securities
of like series if only partially paid, or upon surrender thereof if fully paid:
First:
To the payment of all amounts due to the Trustee or any predecessor trustee pursuant to Section 6.06;
Second:
In case the principal of the Securities of such series in respect of which moneys have been collected shall not have become
and be then due and payable, to the payment of interest on the Securities of such series in default in the order of the maturity
of the installments of such interest, with interest (to the extent that such interest has been collected by the Trustee) upon the
overdue installments of interest, to the extent permitted by applicable law, at the same rate as the rate of interest or Yield
to Maturity (in the case of Original Issue Discount Securities) specified in such Securities, such payments to be made ratably
to the Persons entitled thereto, without discrimination or preference;
Third:
In case the principal of the Securities of such series in respect of which moneys have been collected shall have become
and shall be then due and payable, to the payment of the whole amount then owing and unpaid upon all the Securities of such series
for principal and interest, with interest upon the overdue principal, and (to the extent that such interest has been collected
by the Trustee) upon overdue installments of interest, to the extent permitted by applicable law, at the same rate as the rate
of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the Securities of such series;
and in case such moneys shall be insufficient to pay in full the whole amount so due and unpaid upon the Securities of such series,
then to the payment of such principal and interest, without preference or priority of principal over interest, or of interest over
principal, or of any installment of interest over any other installment of interest, or of any Security of such series over any
other Security of such series, ratably to the aggregate of such principal and accrued and unpaid interest; and
Fourth:
To the payment of the remainder, if any, to the Issuer or any other Person lawfully entitled thereto.
Section 5.04 Suits
for Enforcement. In case an Event of Default has occurred, has not been waived and is continuing, the Trustee may in its discretion
proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, either at law or in equity or in bankruptcy or otherwise, whether
for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted
in this Indenture or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.
Section 5.05 Restoration
of Rights on Abandonment of Proceedings. In case the Trustee shall have proceeded to enforce any right under this Indenture
and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee,
then and in every such case (subject to any determination in such proceeding) the Issuer and the Trustee shall be restored respectively
to their former positions and rights hereunder, and all rights, remedies and powers of the Issuer, the Trustee and the Securityholders
shall continue as though no such proceedings had been taken.
Section 5.06 Limitations
on Suits by Securityholders. No Holder of any Security of any series shall have any right by virtue or by availing of any provision
of this Indenture to institute any action or proceeding at law or in equity or in bankruptcy or otherwise upon or under or with
respect to this Indenture, or for the appointment of a trustee, receiver, liquidator, custodian or other similar official or for
any other remedy hereunder, unless such Holder previously shall have given to the Trustee written notice of default and of the
continuance thereof, as hereinbefore provided, and unless also the Holders of not less than 25% in aggregate principal amount of
the Securities of such series then Outstanding shall have made written request upon the Trustee to institute such action or proceedings
in its own name as trustee hereunder and shall have offered to the Trustee such reasonable indemnity as it may require against
the costs, expenses and liabilities to be incurred therein or thereby and the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity shall have failed to institute any such action or proceeding and no direction inconsistent with
such written request shall have been given to the Trustee pursuant to Section 5.09; it being understood and intended, and being
expressly covenanted by the Holder of every Security with every other Holder and the Trustee, that no one or more Holders of Securities
of any series shall have any right in any manner whatever by virtue or by availing of any provision of this Indenture to affect,
disturb or prejudice the rights of any other such Holder of Securities, or to obtain or seek to obtain priority over or preference
to any other such Holder or to enforce any right under this Indenture, except in the manner herein provided and for the equal,
ratable and common benefit of all Holders of Securities of the applicable series. For the protection and enforcement of the provisions
of this Section, each and every Securityholder and the Trustee shall be entitled to such relief as can be given either at law or
in equity.
Section 5.07 Unconditional
Right of Securityholders to Institute Certain Suits. Notwithstanding any other provision in this Indenture and any provision
of any Security, the right of any Holder of any Security to receive payment of the principal of and interest on such Security on
or after the respective due dates expressed in such Security in accordance with the terms hereof and thereof, or to institute suit
for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent
of such Holder; it being understood and intended, and being expressly covenanted by the Holder of every Security with every other
Holder and the Trustee, that no one or more Holders of Securities of any series shall have any right in any manner whatever by
virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of any other such Holder of
Securities, or to obtain or seek to obtain priority over or preference to any other such Holder or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all Holders of Securities of the
applicable series. For the protection and enforcement of the provisions of this Section, each and every Securityholder and the
Trustee shall be entitled to such relief as can be given either at law or in equity.
Section 5.08 Powers
and Remedies Cumulative; Delay or Omission Not Waiver of Default. Except as provided in Section 5.06, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders of Securities 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.
No delay or omission of the Trustee or
of any Holder of Securities to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid
shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or an acquiescence therein;
and, subject to Section 5.06, every power and remedy given by this Indenture or by law to the Trustee or to the Holders of Securities
may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Holders of Securities.
Section 5.09 Control
by Holders of Securities. The Holders of a majority in aggregate principal amount of the Securities of each series affected
(with each series voting as a separate class) at the time Outstanding shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee
with respect to the Securities of such series by this Indenture; provided, that such direction shall not be otherwise than
in accordance with law and the provisions of this Indenture and provided, further, that (subject to the provisions of Section 6.01)
the Trustee shall have the right to decline to follow any such direction if the Trustee, being advised by counsel, shall determine
that the action or proceeding so directed may not lawfully be taken or if the Trustee in good faith by its board of directors,
the executive committee, or a trust committee of directors or Responsible Officers of the Trustee shall determine that the action
or proceedings so directed would involve the Trustee in personal liability or if the Trustee in good faith shall so determine that
the actions or forbearances specified in or pursuant to such direction would be unduly prejudicial to the interests of Holders
of the Securities of all series so affected not joining in the giving of said direction, it being understood that (subject to Section
6.01) the Trustee shall have no duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair
the right of the Trustee in its discretion to take any action deemed proper by the Trustee and which is not inconsistent with such
direction or directions by Securityholders.
Section 5.10 Waiver
of Past Defaults. The Holders of a majority in aggregate principal amount of the Securities of such series at the time Outstanding,
by notice to the Trustee, may on behalf of the Holders of all the Securities of such series waive any existing default in the performance
of any of the covenants contained herein or established pursuant to Section 2.03 with respect to such series and its consequences,
except an uncured default in the payment of the principal of, or interest on, any of the Securities of that series as and when
the same shall become due by the terms of such Securities; and may rescind an acceleration and its consequences, including any
related payment default that resulted from such acceleration. In the case of any such waiver, the Issuer, the Trustee and the Holders
of the Securities of such series shall be restored to their former positions and rights hereunder, respectively, such default shall
cease to exist and be deemed to have been cured and not to have occurred, and any Event of Default arising therefrom shall be deemed
to have been cured, and not to have occurred for every purpose of this Indenture; but no such waiver shall extend to any subsequent
or other default or Event of Default or impair any right consequent thereon.
Section 5.11 Trustee
to Give Notice of Default. The Trustee shall, within 90 days after the occurrence of a default with respect to the Securities
of any series, give notice of all defaults with respect to that series known to the Trustee to all Holders of Securities of such
series in the manner and to the extent provided in Section 4.03, unless in each case such defaults shall have been cured before
the mailing or publication of such notice (the term “defaults” for the purpose of this Section being hereby
defined to mean any event or condition which is, or with notice or lapse of time or both would become, an Event of Default); provided,
that, except in the case of default in the payment of the principal of or interest on any of the Securities of such series, or
in the payment of any sinking fund installment on such series, the Trustee shall be protected in withholding such notice if and
so long as the board of directors, the executive committee, or a trust committee of directors or trustees and/or Responsible Officers
of the Trustee in good faith determines that the withholding of such notice is in the interests of the Securityholders of such
series.
Section 5.12 Right
of Court to Require Filing of Undertaking to Pay Costs. All parties to this Indenture agree, and each Holder of any
Security by his or her 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 Trustee, to any suit instituted by any Securityholder or group of
Securityholders of any series holding in the aggregate more than 10% in aggregate principal amount of the Securities of such series,
or to any suit instituted by any Securityholder for the enforcement of the payment of the principal of or interest on any Security
of such series, on or after the respective due dates expressed in such Security or established pursuant to this Indenture.
ARTICLE 6
CONCERNING THE TRUSTEE
Section 6.01 Duties
and Responsibilities of the Trustee; During Default; Prior to Default. With respect to the Holders of any series of
Securities issued hereunder, the Trustee, prior to the occurrence of an Event of Default with respect to the Securities of a particular
series and after the curing or waiving of all Events of Default which may have occurred with respect to such series, undertakes
to perform such duties and only such duties as are specifically set forth in this Indenture. In case an Event of Default with respect
to the Securities of a series has occurred (which has not been cured or waived), 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 his or her own affairs.
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.
Section 6.02 Certain Rights
of the Trustee. In furtherance of and subject to the Trust Indenture Act of 1939 and subject to Section 6.01:
(a) 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 statements, certificates or opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but, in the case of any such statements, certificates or opinions which 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;
(b) the Trustee shall not be liable
for any error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts;
(c) 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 pursuant
to Section 5.09 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;
(d) none of the provisions contained
in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in
the performance of any of its duties or in the exercise of any of its rights or powers if there shall be reasonable ground for
believing that the repayment of such funds or adequate indemnity against such liability is not reasonably assured to it;
(e) the Trustee may rely and shall
be protected in acting or refraining from acting upon any resolution, Officer’s Certificate or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond, debenture, note, security or other paper or document believed
by it to be genuine and to have been signed or presented by the proper party or parties;
(f) any request, direction, order
or demand of the Issuer mentioned herein shall be sufficiently evidenced by an Officer’s Certificate (unless other evidence
in respect thereof be herein specifically prescribed); and any resolution of the Board of Directors may be evidenced to the Trustee
by a copy thereof certified by the secretary or an assistant secretary of the Issuer;
(g) the Trustee may consult with
counsel and any advice or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken,
suffered or omitted to be taken by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;
(h) the Trustee shall be under
no obligation to exercise any of the trusts or powers vested in it by this Indenture at the request, order or direction of any
of the Securityholders pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities which might be incurred therein or thereby;
(i) the Trustee shall not be liable
for any action taken or omitted by it in good faith and believed by it to be authorized or within the discretion, rights or powers
conferred upon it by this Indenture;
(j) prior to the occurrence of
an Event of Default hereunder and after the curing or waiving of all Events of Default, 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, consent, order, approval, appraisal, bond, debenture, note, security, or other paper or document unless requested in writing
so to do by the Holders of not less than a majority in aggregate principal amount of the Securities of all series affected then
Outstanding; provided, that, if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such
expenses or liabilities as a condition to proceeding; the reasonable expenses of every such investigation shall be paid by the
Issuer or, if paid by the Trustee or any predecessor trustee, shall be repaid by the Issuer upon demand; and
(k) 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 not regularly
in its employ and the Trustee shall not be responsible for any misconduct or negligence on the part of any such agent or attorney
appointed with due care by it hereunder.
Section 6.03 Trustee Not Responsible
for Recitals, Disposition of Securities or Application of Proceeds Thereof. The recitals contained herein and in the
Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Issuer, and the
Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representation as to the validity or sufficiency
of this Indenture or of the Securities. The Trustee shall not be accountable for the use or application by the Issuer of any of
the Securities or of the proceeds thereof.
Section 6.04 Trustee and Agents
May Hold Securities; Collections, Etc. The Trustee or any agent of the Issuer or the Trustee, in its individual or any other
capacity, may become the owner or pledgee of Securities with the same rights it would have if it were not the Trustee or such agent
and may otherwise deal with the Issuer and receive, collect, hold and retain collections from the Issuer with the same rights it
would have if it were not the Trustee or such agent.
Section 6.05 Moneys Held by
Trustee. Subject to the provisions of Section 10.04 hereof, all moneys received by the Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds
except to the extent required by mandatory provisions of law. Neither the Trustee nor any agent of the Issuer or the Trustee shall
be under any liability for interest on any moneys received by it hereunder.
Section 6.06 Compensation and
Indemnification of Trustee and Its Prior Claim. The Issuer covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to, such reasonable compensation (which shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust) as the Issuer and the Trustee may from time to time agree in writing and,
except as otherwise expressly provided herein, the Issuer covenants and agrees to pay or reimburse the Trustee and each predecessor
trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by or on behalf of it in accordance
with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel
and of all agents and other persons not regularly in its employ) except any such expense, disbursement or advance as may arise
from its negligence or bad faith. The Issuer also covenants to indemnify the Trustee and each predecessor trustee for, and to hold
it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of this Indenture or the trusts hereunder and its duties hereunder, including
the costs and expenses of defending itself against or investigating any claim of liability in the premises. The obligations of
the Issuer under this Section to compensate and indemnify the Trustee and each predecessor trustee and to pay or reimburse the
Trustee and each predecessor trustee for expenses, disbursements and advances shall constitute additional indebtedness hereunder
and shall survive the satisfaction and discharge of this Indenture. Such additional indebtedness shall be a senior claim to that
of the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit
of the Holders of particular Securities, and the Securities are hereby subordinated to such senior claim.
Section 6.07 Right of Trustee
to Rely on Officer’s Certificate, Etc. Subject to Sections 6.01 and 6.02, whenever in the administration of the trusts
of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering
or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may,
in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an
Officer’s Certificate delivered to the Trustee, and such certificate, in the absence of negligence or bad faith on the part
of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted by it under the provisions of this
Indenture upon the faith thereof.
Section 6.08 Disqualification;
Conflicting Interests. If the Trustee has or shall acquire any "conflicting interest" within the meaning of Section
310(b) of the Trust Indenture Act, the Trustee and the Issuer shall in all respects comply with the provisions of Section 310(b)
of the Trust Indenture Act.
Section 6.09 Persons Eligible
for Appointment as Trustee. The Trustee for each series of Securities hereunder shall at all times be a corporation having
a combined capital and surplus of at least $50,000,000 and shall be eligible in accordance with the provisions of Section 310(a)
of the Trust Indenture Act of 1939. If such corporation publishes reports of condition at least annually, pursuant to law or to
the requirements of a Federal, State or District of Columbia 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.
Section 6.10 Resignation and
Removal; Appointment of Successor Trustee. a) The Trustee, or any trustee or trustees hereafter appointed, may at any
time resign with respect to one or more or all series of Securities by giving written notice of resignation to the Issuer and by
mailing notice of such resignation to the Holders of then Outstanding Securities of each series affected at their addresses as
they shall appear on the Security register. Upon receiving such notice of resignation, the Issuer shall promptly appoint a successor
trustee or trustees with respect to the applicable series by written instrument in duplicate, executed by authority of the Board
of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee or
trustees. If no successor trustee shall have been so appointed with respect to any series and have accepted appointment within
30 days after the mailing of such notice of resignation, the resigning trustee may petition any court of competent jurisdiction
for the appointment of a successor trustee, or any Securityholder who has been a bona fide Holder of a Security or Securities of
the applicable series for at least six months may, on behalf of himself or herself and all others similarly situated, petition
any such court for the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.
(b) In case at any time any of
the following shall occur:
(i) the Trustee shall fail to comply
with the provisions of Section 310(b) of the Trust Indenture Act of 1939 with respect to any series of Securities after written
request therefor by the Issuer or by any Securityholder who has been a bona fide Holder of a Security or Securities of such series
for at least six months; or
(ii) the Trustee shall cease to be
eligible in accordance with the provisions of Section 310(a) of the Trust Indenture Act of 1939 and shall fail to resign after
written request therefor by the Issuer or by any Securityholder; or
(iii) the Trustee shall become incapable
of acting with respect to any series of Securities, or shall be adjudged bankrupt or insolvent, or a receiver or liquidator of
the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or liquidation;
then, in any such case, (A) the Issuer may remove the
Trustee with respect to the applicable series of Securities and appoint a successor trustee for such series by written instrument,
in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed
and one copy to the successor trustee, or, (B) subject to Section 315(e) of the Trust Indenture Act of 1939, any Securityholder
who has been a bona fide Holder of a Security or Securities of such series for at least six months may on behalf of himself or
herself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee with respect to such series. Such court may thereupon, after such notice, if any, as it may
deem proper and prescribe, remove the Trustee and appoint a successor trustee.
(c) The Holders of a majority in
aggregate principal amount of the Securities of each series at the time Outstanding may at any time remove the Trustee with respect
to Securities of such series and, with the consent of the Issuer, appoint a successor trustee with respect to the Securities of
such series by delivering to the Trustee so removed, to the successor trustee so appointed and to the Issuer the evidence provided
for in Section 7.01 of the action in that regard taken by the Securityholders.
(d) Any resignation or removal
of the Trustee with respect to any series and any appointment of a successor trustee with respect to such series pursuant to any
of the provisions of this Section 6.10 shall become effective upon acceptance of appointment by the successor trustee as provided
in Section 6.11.
Section 6.11 Acceptance of
Appointment by Successor Trustee. Any successor trustee appointed as provided in Section 6.10 shall execute and deliver to
the Issuer and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or
removal of the predecessor trustee with respect to all or any applicable series shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all rights, powers, duties and obligations with respect to
such series of its predecessor hereunder, with like effect as if originally named as trustee for such series hereunder; but, nevertheless,
on the written request of the Issuer or of the successor trustee, upon payment of its charges then unpaid, the trustee ceasing
to act shall, subject to Section 10.04, pay over to the successor trustee all moneys at the time held by it hereunder and shall
execute and deliver an instrument transferring to such successor trustee all such rights, powers, duties and obligations. Upon
request of any such successor trustee, the Issuer shall execute any and all instruments in writing for more fully and certainly
vesting in and confirming to such successor trustee all such rights and powers. Any trustee ceasing to act shall, nevertheless,
retain a prior claim upon all property or funds held or collected by such trustee to secure any amounts then due it pursuant to
the provisions of Section 6.06.
If a successor trustee is appointed with
respect to the Securities of one or more (but not all) series, the Issuer, the predecessor trustee and each successor trustee with
respect to the Securities of any applicable series shall execute and deliver an indenture supplemental hereto which shall contain
such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the predecessor
trustee with respect to the Securities of any series as to which the predecessor trustee is not retiring shall continue to be vested
in the predecessor trustee, and 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 under separate indentures.
No successor trustee with respect to
any series of Securities shall accept appointment as provided in this Section 6.11 unless at the time of such acceptance such successor
trustee shall be qualified under the provisions of Section 310(b) of the Trust Indenture Act of 1939 and eligible under the provisions
of Section 310(a) of the Trust Indenture Act of 1939.
Upon acceptance of appointment by any
successor trustee as provided in this Section 6.11, the Issuer shall mail notice thereof to the Holders of Securities of each series
affected, by mailing such notice to such Holders at their addresses as they shall appear on the Security register. If the acceptance
of appointment is substantially contemporaneous with the resignation, then the notice called for by the preceding sentence may
be combined with the notice called for by Section 6.10. If the Issuer fails to mail such notice within ten days after acceptance
of appointment by the successor trustee, the successor trustee shall cause such notice to be given at the expense of the Issuer.
Section 6.12 Merger, Conversion,
Consolidation or Succession to Business of Trustee. 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 the corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder; provided, that such corporation shall be qualified under the provisions of Section 310(b) of the Trust Indenture
Act of 1939 and eligible under the provisions of Section 310(a) of the Trust Indenture Act of 1939, without the execution or filing
of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.
In case, at the time such successor to
the Trustee shall succeed to the trusts created by this Indenture, any of the Securities of any series shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee and
deliver such Securities so authenticated; and, in case at that time any of the Securities of any series shall not have been authenticated,
any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of
the successor trustee; and in all such cases such certificate shall have the full force which it is anywhere in the Securities
of such series or in this Indenture provided that the certificate of the Trustee shall have; provided, that the right to
adopt the certificate of authentication of any predecessor trustee or to authenticate Securities of any series in the name of any
predecessor trustee shall apply only to its successor or successors by merger, conversion or consolidation.
Section 6.13 Preferential Collection
of Claims Against the Issuer. The Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding any creditor
relationship described in Section 311(b) of the Trust Indenture Act. A Trustee who has resigned or been removed shall be subject
to Section 311(a) of the Trust Indenture Act to the extent included therein.
ARTICLE 7
CONCERNING THE SECURITYHOLDERS
Section 7.01 Evidence of Action
Taken by Securityholders. Any request, demand, authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by a specified percentage in principal amount of the Securityholders of any or all series may
be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such specified percentage of Securityholders
in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective
when such instrument or instruments are delivered to the Trustee. Proof of execution of any instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this Indenture and (subject to Sections 6.01 and 6.02) conclusive in favor
of the Trustee and the Issuer, if made in the manner provided in this Article.
Section 7.02 Proof of Execution
of Instruments and of Holding of Securities. Subject to Sections 6.01 and 6.02, the execution of any instrument by a
Holder or his agent or proxy may be proved in accordance with such reasonable rules and regulations as may be prescribed by the
Trustee or in such manner as shall be satisfactory to the Trustee. The holding of Securities shall be proved by the Security register
or by a certificate of the registrar thereof. The Issuer may set a record date for purposes of determining the identity of Holders
of any series entitled to vote or consent to any action referred to in Section 7.01, which record date may be set at any time or
from time to time by notice to the Trustee, for any date or dates (in the case of any adjournment or reconsideration) not more
than 60 days nor less than five days prior to the proposed date of such vote or consent, and thereafter, notwithstanding any other
provisions hereof, only Holders of such series of record on such record date shall be entitled to so vote or give such consent
or revoke such vote or consent. Notice of such record date may be given before or after any request for any action referred to
in Section 7.01 is made by the Issuer.
Section 7.03 Holders to Be
Treated as Owners. The Issuer, the Trustee and any agent of the Issuer or of the Trustee may deem and treat the Person in whose
name any Security shall be registered upon the Security register for such series as the absolute owner of such Security (whether
or not such Security shall be overdue and notwithstanding any notation of ownership or other writing thereon) for the purpose of
receiving payment of or on account of the principal of, and, subject to the provisions of this Indenture, interest on, such Security
and for all other purposes; and neither the Issuer nor the Trustee nor any agent of the Issuer or the Trustee shall be affected
by any notice to the contrary. All such payments so made to any such Person, or upon his or her order, shall be valid, and, to
the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for moneys payable.
Section 7.04 Securities Owned
by Issuer Deemed Not Outstanding. In determining whether the Holders of the requisite aggregate principal amount of Outstanding
Securities of any or all series have concurred in any direction, consent or waiver under this Indenture, Securities which are owned
by the Issuer or any other obligor on the Securities with respect to which such determination is being made or by any Person directly
or indirectly controlling or controlled by or under direct or indirect common control with the Issuer or any other obligor on the
Securities with respect to which such determination is being made shall be disregarded and deemed not to be Outstanding for the
purpose of any such determination, except that, for the purpose of determining whether the Trustee shall be protected in relying
on any such direction, consent or waiver, only Securities which the Trustee knows are so owned shall be so disregarded. Securities
so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of
the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Issuer or any other
obligor upon the Securities or any Person directly or indirectly controlling or controlled by or under direct or indirect common
control with the Issuer or any other obligor on the Securities. In case of a dispute as to such right, the advice of counsel shall
be full protection in respect of any decision made by the Trustee in accordance with such advice.
Section 7.05 Right of Revocation
of Action Taken. At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 7.01, of the taking
of any action by the Holders of the percentage in aggregate principal amount of the Securities of any or all series, as the case
may be, specified in this Indenture in connection with such action, any Holder of a Security the serial number of which is shown
by the evidence to be included among the serial numbers of the Securities the Holders of which have consented to such action may,
by filing written notice at the Corporate Trust Office and upon proof of holding as provided in this Article, revoke such action
so far as concerns such Security. Except as aforesaid, any such action taken by the Holder of any Security shall be conclusive
and binding upon such Holder and upon all future Holders and owners of such Security and of any Securities issued in exchange or
substitution therefor or on registration of transfer thereof, irrespective of whether or not any notation in regard thereto is
made upon any such Security. Any action taken by the Holders of the percentage in aggregate principal amount of the Securities
of any or all series, as the case may be, specified in this Indenture in connection with such action shall be conclusively binding
upon the Issuer, the Trustee and the Holders of all the Securities affected by such action.
ARTICLE 8
SUPPLEMENTAL INDENTURES
Section 8.01 Supplemental Indentures
Without Consent of Securityholders. The Issuer, when authorized by a resolution of its Board of Directors, and the Trustee
may from time to time and at any time, without the consent of any of the Securityholders, enter into an indenture or indentures
supplemental hereto in form satisfactory to the Trustee for one or more of the following purposes:
(a) to convey, transfer, assign,
mortgage or pledge to the Trustee as security for the Securities of one or more series any property or assets;
(b) to evidence the succession
of a corporation, limited liability company, partnership or trust to the Issuer, or successive successions, and the assumption
by such successor of the covenants, agreements and obligations of the Issuer pursuant to, or to otherwise comply with, Article
9;
(c) to comply with the requirements
of the Commission in order to effect or maintain the qualification of this Indenture under the Trust Indenture Act of 1939, as
amended;
(d) to add to the covenants of
the Issuer such further covenants, restrictions, conditions or provisions as its Board of Directors and the Trustee shall consider
to be for the protection of the Holders of Securities, and to make the occurrence, or the occurrence and continuance, of a default
in any such additional covenants, restrictions, conditions or provisions an Event of Default permitting the enforcement of all
or any of the several remedies provided in this Indenture as herein set forth; provided, that in respect of any such additional
covenant, restriction, condition or provision such supplemental indenture may provide for a particular period of grace after default
(which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement
upon such an Event of Default or may limit the remedies available to the Trustee upon such an Event of Default or may limit the
right of the Holders of a majority in aggregate principal amount of the Securities of such series to waive such an Event of Default;
(e) to cure any ambiguity, defect
or inconsistency, or to conform this Indenture or any supplemental indenture to the description of the Securities set forth in
any prospectus or prospectus supplement related to such series of Securities;
(f) to provide for or add guarantors
for the Securities of one or more series;
(g) to establish the form or terms
of Securities of any series as permitted by Sections 2.01 and 2.03;
(h) to evidence and provide for
the acceptance of appointment hereunder by a successor trustee with respect to the Securities of one or more series and to add
to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one trustee, pursuant to the requirements of Section 6.11;
(i) to add to, delete from or revise
the conditions, limitations and restrictions on the authorized amount, terms, purposes of issue, authentication and delivery of
any series of Securities, as herein set forth;
(j) to make any change to the Securities
of any series so long as no Securities of such series are Outstanding; and
(k) to make any other change that
does not adversely affect the interests of the Holders of the Securities in any material respect.
The Trustee shall join with the Issuer
in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations which may be therein
contained and to accept the conveyance, transfer, assignment, mortgage or pledge of any property thereunder, but the Trustee shall
not be obligated to enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities
under this Indenture or otherwise.
Any supplemental indenture authorized
by the provisions of this Section may be executed without the consent of the Holders of any of the Securities at the time Outstanding,
notwithstanding any of the provisions of Section 8.02.
Section 8.02 Supplemental Indentures
With Consent of Securityholders. With the consent (evidenced as provided in Article 7) of the Holders of not less than a majority
in aggregate principal amount of the Securities at the time Outstanding of one or more series affected by such supplemental indenture
(voting as separate series), the Issuer, when authorized by a resolution of the Board of Directors, and the Trustee may, from time
to time and at any time, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying
in any manner the rights of the Holders of the Securities of each such consenting series; provided, that no such supplemental
indenture shall, without the consent of the Holder of each Security so affected, (a) extend the final maturity of any Security,
or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any amount
payable on redemption thereof, or
make the principal thereof (including any amount in respect of original issue discount) or interest thereon payable in any currency
other than that provided in the Securities or in accordance with the terms thereof, or reduce the amount of the principal of an
Original Issue Discount Security that would be due and payable upon an acceleration of the maturity thereof pursuant to Section
5.01 or the amount thereof provable in bankruptcy pursuant to Section 5.02, or (b) waive an uncured default in the payment of principal
of any Security or interest thereon (except in the case of a rescission of acceleration of the Securities of such series by the
Holders of at least a majority in aggregate principal amount of the Securities of such series at the time Outstanding and a waiver
of the payment default that resulted from such acceleration) or change a provision related to the waiver of past defaults or changes
or impair the right of any Securityholder to institute suit for the payment or conversion thereof or, if the Securities provide
therefor, any right of repayment at the option of the Securityholder, or (c) modify any of the provisions of this section except
to increase any required percentage or to provide that certain other provisions cannot be modified or waived without the consent
of the Holder of each Security so affected, or (d) reduce the aforesaid percentage of Securities of any series, the consent of
the Holders of which is required for any such supplemental indenture or the consent of Holders of which is required for any modification,
amendment or waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences
provided for in this Indenture.
A supplemental indenture which changes
or eliminates any covenant, Event of Default or other provision of this Indenture (1) that has been expressly included solely for
the benefit of one or more particular series of Securities, if any, or (2) which modifies the rights of Holders of Securities of
one or more series with respect to any covenant, Event of Default or provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series with respect to which such covenant, Event of Default or other
provision has not been included or so modified.
Upon the request of the Issuer, accompanied
by a Board Resolution authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence
of the consent of Securityholders as aforesaid and other documents, if any, required by Section 7.01, the Trustee shall join with
the Issuer in the execution of such supplemental indenture unless such 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 the consent
of the Securityholders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be
sufficient if such consent shall approve the substance thereof.
Promptly after the execution by the Issuer
and the Trustee of any supplemental indenture pursuant to the provisions of this Section, the Trustee shall give a notice thereof
to the Holders of then Outstanding Securities of each series affected thereby, by mailing a notice thereof by first-class mail
to such Holders at their addresses as they shall appear on the Security register, and in each case such notice shall set forth
in general terms the substance of such supplemental indenture. Any failure of the Trustee to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such supplemental indenture.
Section 8.03 Effect of Supplemental
Indenture. Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture shall be and
be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Issuer and the Holders of Securities of each series affected thereby shall
thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all
the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
Section 8.04 Documents to Be
Given to Trustee. The Trustee, subject to the provisions of Sections 6.01 and 6.02, may receive an Officer’s Certificate
and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article 8 complies with
the applicable provisions of this Indenture.
Section 8.05 Notation on Securities
in Respect of Supplemental Indentures. Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article may bear a notation in form approved by the Trustee for such
series as to any matter provided for by such supplemental indenture or as to any action taken by Securityholders. If the Issuer
or the Trustee shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any modification of this Indenture contained in any such supplemental indenture may be prepared by the Issuer,
authenticated by the Trustee and delivered in exchange for the Securities of such series then Outstanding.
ARTICLE 9
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 9.01 Issuer May Consolidate,
Etc., on Certain Terms. The Issuer shall not consolidate with or merge into any other Person (in a transaction in which the
Issuer is not the surviving corporation) or convey, transfer or lease its properties and assets substantially as an entirety to
any Person, unless (a) the Person formed by such consolidation or into which the Issuer is merged or the Person which acquires
by conveyance or transfer, or which leases, the properties and assets of the Issuer substantially as an entirety (i) shall be a
corporation, limited liability company, partnership or trust, (ii) shall be organized and validly existing under the laws of the
United States of America, any State thereof or the District of Columbia and (iii) 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 interest on all the Securities and the performance or observance of every covenant of this Indenture on the part of the
Issuer to be performed, by supplemental indenture satisfactory in form to the Trustee, executed and delivered to the Trustee, by
the Person formed by such consolidation or into which the Issuer shall have been merged or by the Person which shall have acquired
the Issuer’s assets; (b) immediately after giving effect to such transaction, no Event of Default, and no event which, after
notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing; and (c) the Issuer has
delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental
indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been
complied with.
The conditions of (a)(ii) above shall
not apply in the case of a corporation or entity not organized under the laws of the United States of America, any State thereof
or the District of Columbia which shall agree, in form satisfactory to the Trustee, (i) to subject itself to the jurisdiction of
the United States district court for the Southern District of New York and (ii) to indemnify and hold harmless the holders of all
Securities against (A) any tax, assessment or governmental charge imposed on such holders by a jurisdiction other than the United
States or any political subdivision or taxing authority thereof or therein with respect to, and withheld on the making of, any
payment of principal or interest on such Securities and which would not have been so imposed and withheld had such consolidation,
merger, sale or conveyance not been made and (B) any tax, assessment or governmental charge imposed on or relating to, and any
costs or expenses involved in, such consolidation, merger, sale or conveyance.
The restrictions in this Section 9.01
shall not apply to (i) the merger or consolidation of the Issuer with one of its affiliates, if the Board of Directors determines
in good faith that the purpose of such transaction is principally to change the Issuer’s State of incorporation or convert
the Issuer’s form of organization to another form, or (ii) the merger of the Issuer with or into a single direct or indirect
wholly owned Subsidiary.
Nothing contained in this Article shall
apply to, limit or impose any requirements upon the consolidation or merger of any Person into the Issuer where the Issuer is the
survivor of such transaction, or the acquisition by the Issuer, by purchase or otherwise, of all or any part of the property of
any other Person (whether or not affiliated with the Issuer).
Section 9.02 Successor Issuer
Substituted. Upon any consolidation of the Issuer with, or merger of the Issuer into, any other Person or any conveyance, transfer
or lease of the properties and assets of the Issuer substantially as an entirety in accordance with Section 9.01, the successor
Person formed by such consolidation or into which the Issuer is merged or 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 Issuer under this Indenture with the same effect
as if such successor Person had been named as the Issuer 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 Securities.
In case of any such consolidation, merger,
sale, lease or conveyance, such changes in phraseology and form (but not in substance) may be made in the Securities thereafter
to be issued as may be appropriate.
ARTICLE 10
SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE; UNCLAIMED MONEYS
Section 10.01 Satisfaction
and Discharge of Indenture; Defeasance. b) If at any time
(i) the Issuer shall have paid or
caused to be paid the principal of and interest on all the Securities of any series Outstanding hereunder (other than Securities
of such series which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.09) as and
when the same shall have become due and payable, or
(ii) the Issuer shall have delivered
to the Trustee for cancellation all Securities of any series theretofore authenticated (other than any Securities of such series
which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 2.09) or
(iii) in the case of any series of
Securities the exact amount (including the currency of payment) of principal of and interest due on which on the dates referred
to in clause (B) below can be determined at the time of making the deposit referred to in such clause,
(A) all the Securities of such
series not theretofore delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become
due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption, and
(B) the Issuer shall have irrevocably
deposited or caused to be deposited with the Trustee as trust funds the entire amount in cash (other than moneys repaid by the
Trustee or any paying agent to the Issuer in accordance with Section 10.04) or, in the case of any series of Securities the payments
on which may only be made in Dollars, U.S. Government Obligations maturing as to principal and interest in such amounts and at
such times as will insure the availability of cash sufficient to pay on any subsequent interest payment date all interest due on
such interest payment date on the Securities of such series and to pay at maturity or upon redemption all Securities of such series
(in each case other than any Securities of such series which shall have been destroyed, lost or stolen and which shall have been
replaced or paid as provided in Section 2.09) not theretofore delivered to the Trustee for cancellation, including principal and
interest due or to become due to such date of maturity, as the case may be,
and if, in any such case (i), (ii) or (iii), the Issuer shall
also pay or cause to be paid all other sums payable hereunder by the Issuer, including amounts due the Trustee pursuant to Section
6.06, with respect to Securities of such series, then this Indenture shall cease to be of further effect with respect to Securities
of such series (except as to (1) rights of registration of transfer, conversion and exchange of Securities of such series and the
Issuer’s right of optional redemption, (2) substitution of mutilated, defaced, destroyed, lost or stolen Securities, (3)
rights of Holders of Securities to receive, solely from the trust fund described in Section 10.01(a)(iii)(B), payments of principal
thereof and interest thereon, upon the original stated due dates therefor (but not upon acceleration) and remaining rights of the
Holders to receive, solely from the trust fund described in Section 10.01(a)(iii)(B), sinking fund payments, if any, (4) the rights
(including the Trustee’s rights under Section 10.05) and immunities of the Trustee hereunder and the Trustee’s obligations
under Sections 10.02 and 10.04 and (5) the obligations of the Issuer under Section 3.02), and the Trustee, on demand of the Issuer
accompanied by an Officer’s Certificate and an Opinion of Counsel which complies with Section 11.05 and at the cost and expense
of the Issuer, shall execute proper instruments acknowledging such satisfaction of and discharging this Indenture with respect
to such series. The Issuer agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred
and to compensate the Trustee for any services thereafter reasonably and properly rendered by the Trustee in connection with this
Indenture or the Securities of such series.
(b) The following subsection shall apply
to the Securities of each series unless specifically otherwise provided in a Board Resolution, Officer’s Certificate or indenture
supplemental hereto provided pursuant to Section 2.03. In addition to the right to discharge of the Indenture pursuant to subsection
(a) above, the Issuer, at its option and at any time, by written notice by an officer delivered to the Trustee, may elect to have
all of its obligations discharged with all Outstanding Securities of a series (“Legal Defeasance”), such discharge
to be effective on the date that the conditions set forth in clauses (i) through (iv) and (vi) of Section 10.01(d) are satisfied,
and thereafter the Issuer shall be deemed to have paid and discharged the entire Debt on all the Securities of such a series, and
satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned and this
Indenture shall cease to be of further effect with respect to Securities of such series (except as to (1) rights of registration
of transfer, conversion and exchange of Securities of such series, (2) substitution of apparently mutilated, defaced, destroyed,
lost or stolen Securities, (3) rights of Holders of Securities to receive, solely from the trust fund described in Section 10.01(d)(i),
payments of principal thereof and interest thereon, upon the original stated due dates therefor (but not upon acceleration) and
remaining rights of the Holders to receive, solely from the trust fund described in Section 10.01(d)(i), sinking fund payments,
if any, (4) the rights (including the Trustee’s rights under Section 10.05) and immunities of the Trustee hereunder and the
Trustee’s obligations with respect to the Securities of such series under Sections 10.02 and 10.04 and (5) the obligations
of the Issuer under Section 3.02).
(c) The following subsection shall apply
to the Securities of each series unless specifically otherwise provided in a Board Resolution, Officer’s Certificate or indenture
supplemental hereto provided pursuant to Section 2.03. In addition to the right to discharge of the Indenture pursuant to subsection
(a) and to Legal Defeasance pursuant to subsection (b), above, the Issuer, at its option and at any time, by written notice executed
by an officer delivered to the Trustee, may elect to have its obligations under any covenant contained in this Indenture or in
the Board Resolution or supplemental indenture relating to such series pursuant to Section 2.03 discharged with respect to all
Outstanding Securities of a series, this Indenture and any indentures supplemental to this Indenture with respect to such series
(“Covenant Defeasance”), such discharge to be effective on the date the conditions set forth in clauses (i)
through (iii) and (v) through (vi) of Section 10.01(d) are satisfied, and such Securities shall thereafter be deemed to be not
“Outstanding” for the purposes of any direction, waiver, consent or declaration of Securityholders (and the consequences
of any thereof) in connection with such covenants, but shall continue to be “Outstanding” for all other purposes under
this Indenture. For this purpose, such Covenant Defeasance means that, with respect to the Outstanding Securities of a series,
the Issuer may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of
reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute
an Event of Default under Section 5.01(c) or otherwise, but except as specified in this Section 10.01(c), the remainder of the
Issuer’s obligations under the Securities of such series, this Indenture, and any indentures supplemental to this Indenture
with respect to such series shall be unaffected thereby.
(d) The following shall be the conditions
to the application of Legal Defeasance under subsection (b) or Covenant Defeasance under subsection (c) to the Securities of the
applicable series:
(i) the Issuer irrevocably deposits
or causes to be deposited in trust with the Trustee or, at the option of the Trustee, with a trustee satisfactory to the Trustee
and the Company under the terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee, cash or U.S.
Government Obligations that will generate cash sufficient to pay principal of and interest on the Outstanding Securities of such
series to maturity or redemption, as the case may be, and to pay all other amounts payable by it hereunder, provided that (A) the
trustee of the irrevocable trust, if any, shall have been irrevocably instructed to pay such funds or the proceeds of such U.S.
Government Obligations to the Trustee and (B) the Trustee shall have been irrevocably instructed to apply such funds or the proceeds
of such U.S. Government Obligations to (x) the principal and interest on all Securities of such series on the date that such principal
or interest is due and payable and (y) any mandatory sinking fund payments on the day on which such payments are due and payable
in accordance with the terms of the Indenture and the Securities of such series, and the Issuer shall also pay or cause to be paid
all other amounts payable hereunder with respect to such series;
(ii) the Issuer delivers to the Trustee
an Officer’s Certificate stating that all conditions precedent specified herein relating to Legal Defeasance or Covenant
Defeasance, as the case may be, have been complied with, and an Opinion of Counsel to the same effect;
(iii) no Event of Default under subsection
(a), (b), (d) or (e) of Section 5.01 shall have occurred and be continuing, and no event which with notice or lapse of time or
both would become such an Event of Default shall have occurred and be continuing, on the date of such deposit;
(iv) in the event of an election
for Legal Defeasance under subsection (b), the Issuer shall have delivered to the Trustee an Opinion of Counsel stating that (A) the
Issuer has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of this
instrument, there has been a change in the applicable Federal income tax law, in either case (A) or (B) to the effect
that, and based thereon such opinion shall confirm that, the Holders of such Securities will not recognize gain or loss for Federal
income tax purposes as a result of the deposit, defeasance and discharge to be effected with respect to such Securities and will
be subject to Federal income tax on the same amounts, in the same manner and at the same times as would be the case if such deposit,
defeasance and discharge were not to occur;
(v) in the event of an election for
Covenant Defeasance under subsection (c), the Issuer shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of such Securities will not recognize gain or loss for Federal income tax purposes as a result of the deposit
and Covenant Defeasance to be effected with respect to such Securities and will be subject to Federal income tax on the same amount,
in the same manner and at the same times as would be the case if such deposit and Covenant Defeasance were not to occur; and
(vi) notwithstanding any other provisions
of this subsection (d), such defeasance shall be effected in compliance with any additional or substitute terms, conditions or
limitations which may be imposed on the Issuer pursuant to Section 2.03.
After such irrevocable deposit made pursuant to this Section
10.01(d) and satisfaction of the other conditions set forth in this subsection (d), the Trustee upon request shall execute proper
instruments acknowledging the discharge of the Issuer’s obligations pursuant to this Section 10.01.
Section 10.02 Application by
Trustee of Funds Deposited for Payment of Securities. Subject to Section 10.04, all moneys deposited with the Trustee
(or other trustee) pursuant to Section 10.01 shall be held in trust and applied by it to the payment, either directly or through
any paying agent (including the Issuer acting as its own paying agent), to the Holders of the particular Securities of such series
for the payment or redemption of which such moneys have been deposited with the Trustee, of all sums due and to become due thereon
for principal and interest; but such money need not be segregated from other funds except to the extent required by law.
Section 10.03 Repayment of
Moneys Held by Paying Agent. In connection with the satisfaction and discharge of this Indenture with respect to Securities
of any series, all moneys then held by any paying agent under the provisions of this Indenture with respect to such series of Securities
shall, upon demand of the Issuer, be repaid to it or paid to the Trustee and thereupon such paying agent shall be released from
all further liability with respect to such moneys.
Section 10.04 Return of Moneys
Held by Trustee and Paying Agent Unclaimed for Two Years. Any moneys deposited with or paid to the Trustee or any paying
agent for the payment of the principal of, interest on or additional amounts in respect of any Security of any series and not applied
but remaining unclaimed for two years after the date upon which such principal, interest or additional amount shall have become
due and payable, shall be repaid to the Issuer by the Trustee for such series or such paying agent, and the Holder of the Securities
of such series shall thereafter look only to the Issuer for any payment which such Holder may be entitled to collect, and all liability
of the Trustee or any paying agent with respect to such moneys shall thereupon cease.
Section 10.05 Indemnity for
U.S. Government Obligations. The Issuer shall pay and indemnify the Trustee against any tax, fee or other charge imposed on
or assessed against the U.S. Government Obligations deposited pursuant to Section 10.01 or the principal or interest received in
respect of such obligations.
ARTICLE 11
MISCELLANEOUS PROVISIONS
Section 11.01 No Recourse.
No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any Security, or for any claim based
thereon or otherwise in respect thereof, shall be had against any incorporator, stockholder, officer or
director, past, present or future
as such, of the Issuer or of any predecessor or successor corporation, either directly or through the Issuer or any such predecessor
or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment
or penalty or otherwise; it being expressly understood that this Indenture and the obligations issued hereunder are solely corporate
obligations, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, stockholders,
officers or directors as such, of the Issuer or of any predecessor or successor corporation, or any of them, because of the creation
of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture
or in any of the Securities or implied therefrom; and that any and all such personal liability of every name and nature, either
at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every such incorporator,
stockholder, officer or director as such, because of the creation of the indebtedness hereby authorized, or under or by reason
of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom, are hereby
expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issuance of
such Securities.
Section 11.02 Provisions of
Indenture for the Sole Benefit of Parties and Holders of Securities. Nothing in this Indenture or in the Securities,
expressed or implied, shall give or be construed to give to any person, firm or corporation, other than the parties hereto and
their successors and the Holders of the Securities any legal or equitable right, remedy or claim under this Indenture or under
any covenant or provision herein contained, all such covenants and provisions being for the sole benefit of the parties hereto
and their successors and of the Holders of the Securities.
Section 11.03 Successors and
Assigns of Issuer Bound by Indenture. All the covenants, stipulations, promises and agreements contained in this Indenture
by or on behalf of the Issuer shall bind its successors and assigns, whether so expressed or not.
Section 11.04 Notices and
Demands on Issuer, Trustee and Holders of Securities. Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or by the Holders of Securities to or on the Issuer
may be given or served by being deposited postage prepaid, first-class mail (except as otherwise specifically provided
herein) addressed (until another address of the Issuer is filed by the Issuer with the Trustee) to Franklin Street Properties
Corp., 401 Edgewater Place, Suite 200 Wakefield, MA 01880, Attn: Chief Financial Officer. Any notice, direction, request
or demand by the Issuer or any Holder of Securities to or upon the Trustee shall be deemed to have been sufficiently given or
made, for all purposes, if given or made at _______, ________, Attn: _______.
Where this Indenture provides for notice
to Holders of Securities, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and
mailed, first-class postage prepaid, to each Holder entitled thereto, at his or her last address as it appears in the Security
register. In case, by reason of the suspension of or irregularities in regular mail service, it shall be impracticable to mail
notice of any event to Holders of Securities when said notice is required to be given pursuant to any provision of this Indenture
or of the Securities, then any manner of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient
giving of such notice.
In case, by reason of the suspension
of or irregularities in regular mail service, it shall be impracticable to mail notice to the Issuer when such notice is required
to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the
Trustee shall be deemed to be a sufficient giving of such notice.
Neither the failure to give notice, nor
any defect in any notice so given, to any particular Holder of a Security shall affect the sufficiency of such notice with respect
to other Holders of Securities given as provided above.
Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to receive such notice either before or after the event,
and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
Section 11.05 Officer’s
Certificates and Opinions of Counsel; Statements to Be Contained Therein. Upon any application or demand by the Issuer
to the Trustee to take any action under any of the provisions of this Indenture, the Issuer shall furnish to the Trustee an Officer’s
Certificate stating that all conditions precedent 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 have been complied with,
except that in the case of any such application or demand as to which the furnishing of such documents is specifically required
by any provision of this Indenture relating to such particular application or demand, no additional certificate or opinion need
be furnished.
Each certificate or opinion provided
for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant provided for in this
Indenture shall include (a) a statement that the person making such certificate or opinion has read such covenant or condition,
(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained
in such certificate or opinion are based, (c) a statement that, in the opinion of such person, he or she has made such examination
or investigation as is necessary to enable him or her 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 or not, in the opinion of such person, such condition or covenant has
been complied with.
Any certificate, statement or opinion
of an officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of or representations
by counsel, unless such officer knows that the certificate or opinion or representations with respect to the matters upon which
his or her certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should
know that the same are erroneous. Any certificate, statement or opinion of counsel may be based, insofar as it relates to factual
matters, information with respect to which is in the possession of the Issuer, upon the certificate, statement or opinion of or
representations by an officer or officers of the Issuer, unless such counsel knows that the certificate, statement or opinion or
representations with respect to the matters upon which his or her certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion
of an officer of the Issuer or of counsel may be based, insofar as it relates to accounting matters, upon a certificate or opinion
of or representations by an accountant or firm of accountants in the employ of the Issuer, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with respect to the accounting matters upon which his or
her certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know
that the same are erroneous.
Any certificate or opinion of any independent
firm of public accountants filed with and directed to the Trustee shall contain a statement that such firm is independent.
Section 11.06 Payments Due
on Saturdays, Sundays and Holidays. If the date of maturity of interest on or principal of the Securities of any series or
the date fixed for redemption or repayment of any such Security, or the last day on which a Holder has the right to convert any
Security, shall not be a Business Day, then payment of interest or principal, or any conversion, need not be made on such date,
but may be made on the next succeeding Business Day with the same force and effect as if made on the date of maturity or the date
fixed for redemption or on such last day for conversion, and no interest shall accrue for the period after such date.
Section 11.07 Conflict of Any
Provision of Indenture With Trust Indenture Act of 1939. If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with another provision included in this Indenture by operation of Sections 310 to 317, inclusive, of the
Trust Indenture Act of 1939, such incorporated provision shall control.
Section 11.08 New York Law
to Govern. This Indenture and each Security shall be deemed to be a contract under the laws of the State of New York, and for
all purposes shall be governed by and construed in accordance with the laws of such State without regard to any principle of conflict
of laws that would require or permit the application of the laws of any other jurisdiction, except as may otherwise be required
by mandatory provisions of law.
Section 11.09 Counterparts.
This Indenture may be executed in any number of counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
Section 11.10 Effect of Headings.
The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction
hereof.
Section 11.11 Actions by Successor.
Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board of directors
or its equivalent, committee or officer of the Issuer shall and may be done and performed with like force and effect by the corresponding
board, committee or officer of any corporation that shall at the time be the lawful successor of the Issuer.
Section 11.12 Severability.
In case any one or more of the provisions contained in this Indenture or in the Securities of any series shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Indenture or of such Securities, but this Indenture and such Securities shall be construed as if such
invalid or illegal or unenforceable provision had never been contained herein or therein.
ARTICLE 12
REDEMPTION OF SECURITIES AND SINKING FUNDS
Section 12.01 Applicability
of Article. The provisions of this Article shall be applicable to the Securities of any series which are redeemable before
their maturity or to any sinking fund for the retirement of Securities of a series, except as otherwise specified, as contemplated
by Section 2.03 for Securities of such series.
Section 12.02 Notice of Redemption;
Partial Redemptions. Notice of redemption to the Holders of Securities of any series to be redeemed as a whole or in part at
the option of the Issuer shall be given by mailing notice of such redemption by first class mail, postage prepaid, at least 30
days and not more than 60 days prior to the date fixed for redemption to such Holders of Securities of such series at their last
addresses as they shall appear upon the Security register. Any notice which is given in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives the notice. Failure to give notice or any defect in the notice
to the Holder of any Security of a series designated for redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security of such series.
The notice of redemption to each such
Holder shall specify the principal amount of each Security of such series held by such Holder to be redeemed, the date fixed for
redemption, the redemption price, the place or places of payment, that payment will be made upon presentation and surrender of
such Securities, that such redemption is pursuant to the mandatory or optional sinking fund, or both, if such be the case, that
interest accrued to the date fixed for redemption will be paid as specified in such notice and that on and after said date interest
thereon or on the portions thereof to be redeemed will cease to accrue and shall also specify, if applicable, the conversion price
then in effect and the date on which the right to convert such Securities or the portions thereof to be redeemed will expire. In
case any Security of a series is to be redeemed in part only, the notice of redemption shall state the portion of the principal
amount thereof to be redeemed and shall state that on and after the date fixed for redemption, upon surrender of such Security,
a new Security or Securities of such series in principal amount equal to the unredeemed portion thereof will be issued.
The notice of redemption of Securities
of any series to be redeemed at the option of the Issuer shall be given by the Issuer or, at the Issuer’s request, by the
Trustee in the name and at the expense of the Issuer.
On or before the redemption date specified
in the notice of redemption given as provided in this Section, the Issuer will deposit with the Trustee or with one or more paying
agents (or, if the Issuer is acting as its own paying agent, set aside, segregate and hold in trust as provided in Section 3.04)
an amount of money sufficient to redeem on the redemption date all the Securities of such series so called for redemption (other
than those Securities theretofore surrendered for conversion into Common Stock in accordance with their terms) at the appropriate
redemption price, together with accrued interest to the date fixed for redemption. If any Security called for redemption is converted
pursuant hereto and in accordance with the terms thereof, any money deposited with the Trustee or any paying agent or so segregated
and held in trust for the redemption of such Security shall be paid to the Issuer upon the Issuer’s request, or, if then
held
by the Issuer, shall be discharged from
such trust. The Issuer will deliver to the Trustee at least 10 days prior to the date the notice required to be delivered to the
Holders is to be sent (unless a shorter time period shall be acceptable to the Trustee) an Officer’s Certificate (which need
not comply with Section 11.05) stating the aggregate principal amount of Securities to be redeemed. In case of a redemption at
the election of the Issuer prior to the expiration of any restriction on such redemption, the Issuer shall deliver to the Trustee,
prior to the giving of any notice of redemption to Holders pursuant to this Section, an Officer’s Certificate stating that
such restriction has been complied with.
If less than all the Securities of a
series are to be redeemed, the Trustee shall select, in such manner as it shall deem appropriate and fair, Securities of such series
to be redeemed in whole or in part. Securities may be redeemed in part in multiples equal to the minimum authorized denomination
for Securities of such series or any multiple thereof. The Trustee shall promptly notify the Issuer in writing of the Securities
of such series selected for redemption and, in the case of any Securities of such series selected for partial redemption, 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 Securities of any series shall relate, in the case of any Security redeemed or to be redeemed only in part,
to the portion of the principal amount of such Security which has been or is to be redeemed. If any Security selected for partial
redemption is surrendered for conversion after such selection, the converted portion of such Security shall be deemed (so far as
may be possible) to be the portion selected for redemption.
Section 12.03 Payment of Securities
Called for Redemption. If notice of redemption has been given as above provided, the Securities or portions of Securities specified
in such notice shall become due and payable on the date and at the place stated in such notice at the applicable redemption price,
together with interest accrued to the date fixed for redemption, and on and after said date (unless the Issuer shall default in
the payment of such Securities at the redemption price, together with interest accrued to said date) interest on the Securities
or portions of Securities so called for redemption shall cease to accrue, and such Securities shall cease from and after the date
fixed for redemption to be convertible into Common Stock (to the extent otherwise convertible in accordance with their terms),
if applicable, and cease to be entitled to any benefit or security under this Indenture, and except as provided in the paragraph
below, the Holders thereof shall have no right in respect of such Securities except the right to receive the redemption price thereof
and unpaid interest to the date fixed for redemption. On presentation and surrender of such Securities at a place of payment specified
in said notice, said Securities or the specified portions thereof shall be paid and redeemed by the Issuer at the applicable redemption
price, together with interest accrued thereon to the date fixed for redemption; provided, that payment of interest becoming
due on or prior to the date fixed for redemption shall be payable to the Holders of such Securities registered as such on the relevant
record date subject to the terms and provisions of Sections 2.03 and 2.07 hereof.
If any Security called for redemption
shall not be so paid upon surrender thereof for redemption, the principal shall, until paid or duly provided for, bear interest
from the date fixed for redemption at the rate of interest or Yield to Maturity (in the case of an Original Issue Discount Security)
borne by such Security and, if applicable, such Security shall remain convertible into Common Stock until the principal of such
Security shall have been paid or duly provided for.
Upon presentation of any Security redeemed
in part only, the Issuer shall execute and the Trustee shall authenticate and deliver to or on the order of the Holder thereof,
at the expense of the Issuer, a new Security or Securities of such series, of authorized denominations, in principal amount equal
to the unredeemed portion of the Security so presented.
Section 12.04 Exclusion of
Certain Securities from Eligibility for Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate number in an Officer’s Certificate delivered
to the Trustee at least 40 days prior to the last date on which notice of redemption may be given as being owned of record and
beneficially by, and not pledged or hypothecated by either (a) the Issuer or (b) an entity specifically identified in such written
statement as directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer.
Section 12.05 Mandatory and
Optional Sinking Funds. The minimum amount of any sinking fund payment provided for by the terms of the Securities of any series
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 the Securities of any series is herein referred to as an “optional sinking fund payment”.
The date on which a sinking fund payment is to be made is herein referred to as the “sinking fund payment date”.
In lieu of making all or any part of
any mandatory sinking fund payment with respect to any series of Securities in cash, the Issuer may at its option (a) deliver to
the Trustee Securities of such series theretofore purchased or otherwise acquired (except upon redemption pursuant to the mandatory
sinking fund) by the Issuer or receive credit for Securities of such series (not previously so credited) theretofore purchased
or otherwise acquired (except as aforesaid) by the Issuer and delivered to the Trustee for cancellation pursuant to Section 2.10
and, if applicable, receive credit for Securities (not previously so credited) converted into Common Stock and so delivered to
the Trustee for cancellation, (b) receive credit for optional sinking fund payments (not previously so credited) made pursuant
to this Section, or (c) receive credit for Securities of such series (not previously so credited) redeemed by the Issuer through
any optional redemption provision contained in the terms of such series. Securities so delivered or credited shall be received
or credited by the Trustee at the sinking fund redemption price specified in such Securities.
On or before the 60th day next preceding
each sinking fund payment date for any series, the Issuer will deliver to the Trustee an Officer’s Certificate (which need
not contain the statements required by Section 11.05) (a) specifying the portion of the mandatory sinking fund payment to be satisfied
by payment of cash and the portion to be satisfied by credit of Securities of such series and the basis for such credit, (b) stating
that none of the Securities of such series for which credit will be taken has theretofore been so credited, (c) stating that no
defaults in the payment of interest or Events of Default with respect to such series have occurred (which have not been waived
or cured) and are continuing and (d) stating whether or not the Issuer intends to exercise its right to make an optional sinking
fund payment with respect to such series and, if so, specifying the amount of such optional sinking fund payment which the Issuer
intends to pay on or before the next succeeding sinking fund payment date. Any Securities of such series to be credited and required
to be delivered to the Trustee in order for the Issuer to be entitled to credit
therefor as aforesaid which have not theretofore
been delivered to the Trustee shall be delivered for cancellation pursuant to Section 2.10 to the Trustee with such Officer’s
Certificate (or reasonably promptly thereafter if acceptable to the Trustee). Such Officer’s Certificate shall be irrevocable
and upon its receipt by the Trustee the Issuer shall become unconditionally obligated to make all the cash payments or payments
therein referred to, if any, on or before the next succeeding sinking fund payment date. Failure of the Issuer, on or before any
such 60th day, to deliver such Officer’s Certificate and Securities specified in this paragraph, if any, shall not constitute
a default but shall constitute, on and as of such date, the irrevocable election of the Issuer that the mandatory sinking fund
payment for such series due on the next succeeding sinking fund payment date shall be paid entirely in cash without the option
to deliver or credit Securities of such series in respect thereof.
If the sinking fund payment or payments
(mandatory or optional or both) to be made in cash on the next succeeding sinking fund payment date plus any unused balance of
any preceding sinking fund payments made in cash shall exceed $50,000 (or the equivalent thereof in any Foreign Currency or a lesser
sum in Dollars or in any Foreign Currency if the Issuer shall so request) with respect to the Securities of any particular series,
such cash shall be applied on the next succeeding sinking fund payment date to the redemption of Securities of such series at the
sinking fund redemption price together with accrued interest to the date fixed for redemption. If such amount shall be $50,000
(or the equivalent thereof in any Foreign Currency) or less and the Issuer makes no such request then it shall be carried over
until a sum in excess of $50,000 (or the equivalent thereof in any Foreign Currency) is available, which delay in accordance with
this paragraph shall not be a default or breach of the obligation to make such payment. The Trustee shall select, in the manner
provided in Section 12.02, for redemption on such sinking fund payment date a sufficient principal amount of Securities of such
series to which such cash may be applied, as nearly as may be, and shall (if requested in writing by the Issuer) inform the Issuer
of the serial numbers of the Securities of such series (or portions thereof) so selected. The Trustee, in the name and at the expense
of the Issuer (or the Issuer, if it shall so request the Trustee in writing), shall cause notice of redemption of the Securities
of such series to be given in substantially the manner provided in Section 12.02 (and with the effect provided in Section 12.03)
for the redemption of Securities of such series in part at the option of the Issuer. The amount of any sinking fund payments not
so applied or allocated to the redemption of Securities of such series shall be added to the next cash sinking fund payment for
such series and, together with such payment, shall be applied in accordance with the provisions of this Section. Any and all sinking
fund moneys held on the stated maturity date of the Securities of any particular series (or earlier, if such maturity is accelerated),
which are not held for the payment or redemption of particular Securities of such series, shall be applied, together with other
moneys, if necessary, sufficient for the purpose, to the payment of the principal of, and interest on, the Securities of such series
at maturity. The Issuer’s obligation to make a mandatory or optional sinking fund payment shall automatically be reduced
by an amount equal to the sinking fund redemption price allocable to any Securities or portions thereof called for redemption pursuant
to the preceding paragraph on any sinking fund payment date and converted into Common Stock in accordance with the terms of such
Securities; provided that, if the Trustee is not the conversion agent for the Securities, the Issuer or such conversion
agent shall give the Trustee written notice on or prior to the date fixed for redemption of the principal amount of Securities
or portions thereof so converted.
On or before each sinking fund payment
date, the Issuer shall pay to the Trustee in cash or shall otherwise provide for the payment of all interest accrued to the date
fixed for redemption on Securities to be redeemed on such sinking fund payment date.
The Trustee shall not redeem or cause
to be redeemed any Securities of a series with sinking fund moneys or give any notice of redemption of Securities for such series
by operation of the sinking fund during the continuance of a default in payment of interest on such Securities or of any Event
of Default except that, where the mailing of notice of redemption of any Securities shall theretofore have been made, the Trustee
shall redeem or cause to be redeemed such Securities, provided that it shall have received from the Issuer a sum sufficient for
such redemption. Except as aforesaid, any moneys in the sinking fund for such series at the time when any such default or Event
of Default shall occur, and any moneys thereafter paid into the sinking fund, shall, during the continuance of such default or
Event of Default, be deemed to have been collected under Article 5 and held for the payment of all such Securities. In case such
Event of Default shall have been waived as provided in Section 5.10, or the default cured on or before the 60th day preceding the
sinking fund payment date in any year, such moneys shall thereafter be applied on such sinking fund payment date in accordance
with this Section to the redemption of such Securities.
[Signature pages
follow]
IN WITNESS WHEREOF, the parties hereto
have caused this Indenture to be duly executed as of _____________.
FRANKLIN STREET PROPERTIES CORP. |
By: |
|
|
Name: |
|
Title: |
Attest: |
By: |
|
|
Name: |
|
Title: |
|
|
|
|
|
|
____________, Trustee |
Exhibit 4.4
FRANKLIN STREET PROPERTIES CORP.
and
________
Trustee
INDENTURE
Dated as of _______________
SUBORDINATED DEBT SECURITIES
CROSS-REFERENCE TABLE(1)
Section of
Trust Indenture Act
of 1939, as amended |
|
Section of
Indenture |
310(a) |
6.09 |
310(b) |
6.08 |
|
6.10 |
310(c) |
Inapplicable |
311(a) |
6.13 |
311(b) |
6.13 |
311(c) |
Inapplicable |
312(a) |
4.01
4.04 |
312(b) |
4.04(c) |
312(c) |
4.04(c) |
313(a) |
4.03 |
313(b) |
4.03 |
313(c) |
4.03 |
313(d) |
4.03 |
314(a) |
4.02 |
314(b) |
Inapplicable |
314(c) |
2.04
8.04
9.01(c)
10.01(b)
11.05 |
314(d) |
Inapplicable |
314(e) |
11.05 |
314(f) |
Inapplicable |
315(a) |
6.01
6.02 |
315(b) |
5.11 |
315(c) |
6.01 |
315(d) |
6.01 |
|
6.02 |
315(e) |
5.12 |
316(a) |
5.09
5.10 |
|
7.04 |
316(b) |
5.06
5.10 |
316(c) |
7.02 |
317(a) |
5.04 |
317(b) |
3.04 |
318(a) |
11.07 |
_____________
(1) This
Cross-Reference Table does not constitute part of the Indenture and shall not have any bearing on the interpretation of any of
its terms or provisions.
TABLE OF CONTENTS
Page
ARTICLE 1 |
DEFINITIONS |
1 |
Section 1.01 |
Certain Terms Defined |
1 |
|
|
|
ARTICLE 2 |
SECURITIES |
6 |
Section 2.01 |
Forms Generally |
6 |
Section 2.02 |
Form of Trustee’s Certificate of Authentication |
6 |
Section 2.03 |
Amount Unlimited; Issuable in Series |
6 |
Section 2.04 |
Authentication and Delivery of Securities |
9 |
Section 2.05 |
Execution of Securities |
10 |
Section 2.06 |
Certificate of Authentication |
11 |
Section 2.07 |
Denomination and Date of Securities; Payments of Interest |
11 |
Section 2.08 |
Registration, Transfer and Exchange |
11 |
Section 2.09 |
Mutilated, Defaced, Destroyed, Lost and Stolen Securities |
14 |
Section 2.10 |
Cancellation of Securities; Destruction Thereof |
14 |
Section 2.11 |
Temporary Securities |
15 |
|
|
|
ARTICLE 3 |
COVENANTS OF THE ISSUER |
15 |
Section 3.01 |
Payment of Principal and Interest |
15 |
Section 3.02 |
Offices for Payments, Etc |
15 |
Section 3.03 |
Appointment to Fill a Vacancy in Office of Trustee |
16 |
Section 3.04 |
Paying Agents |
16 |
Section 3.05 |
Written Statement to Trustee |
17 |
|
|
|
ARTICLE 4 |
SECURITYHOLDERS LISTS AND REPORTS BY THE ISSUER AND THE TRUSTEE |
17 |
Section 4.01 |
Issuer to Furnish Trustee Information as to Names and Addresses of Securityholders |
17 |
Section 4.02 |
Reports by the Issuer |
17 |
Section 4.03 |
Reports by the Trustee |
18 |
Section 4.04 |
Preservation of Information; Communication with Securityholders |
18 |
|
|
|
ARTICLE 5 |
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT |
18 |
Section 5.01 |
Event of Default Defined; Acceleration of Maturity; Waiver of Default |
18 |
Section 5.02 |
Collection of Debt by Trustee; Trustee May Prove Debt |
20 |
Section 5.03 |
Application of Proceeds |
22 |
Section 5.04 |
Suits for Enforcement |
23 |
Section 5.05 |
Restoration of Rights on Abandonment of Proceedings |
23 |
Section 5.06 |
Limitations on Suits by Securityholders |
23 |
Section 5.07 |
Unconditional Right of Securityholders to Institute Certain Suits |
24 |
Section 5.08 |
Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default |
24 |
Section 5.09 |
Control by Holders of Securities |
24 |
Section 5.10 |
Waiver of Past Defaults |
25 |
Section 5.11 |
Trustee to Give Notice of Default |
25 |
Section 5.12 |
Right of Court to Require Filing of Undertaking to Pay Costs |
25 |
|
|
|
ARTICLE 6 |
CONCERNING THE TRUSTEE |
26 |
Section 6.01 |
Duties and Responsibilities of the Trustee; During Default; Prior to Default |
26 |
Section 6.02 |
Certain Rights of the Trustee |
26 |
Section 6.03 |
Trustee Not Responsible for Recitals, Disposition of Securities or Application of Proceeds Thereof |
28 |
Section 6.04 |
Trustee and Agents May Hold Securities; Collections, Etc |
28 |
Section 6.05 |
Moneys Held by Trustee |
28 |
Section 6.06 |
Compensation and Indemnification of Trustee and Its Prior Claim |
28 |
Section 6.07 |
Right of Trustee to Rely on Officer’s Certificate, Etc |
29 |
Section 6.08 |
Disqualification; Conflicting Interests |
29 |
Section 6.09 |
Persons Eligible for Appointment as Trustee |
29 |
Section 6.10 |
Resignation and Removal; Appointment of Successor Trustee |
29 |
Section 6.11 |
Acceptance of Appointment by Successor Trustee |
30 |
Section 6.12 |
Merger, Conversion, Consolidation or Succession to Business of Trustee |
31 |
Section 6.13 |
Preferential Collection of Claims Against the Issuer |
32 |
|
|
|
ARTICLE 7 |
CONCERNING THE SECURITYHOLDERS |
32 |
Section 7.01 |
Evidence of Action Taken by Securityholders |
32 |
Section 7.02 |
Proof of Execution of Instruments and of Holding of Securities |
32 |
Section 7.03 |
Holders to Be Treated as Owners |
32 |
Section 7.04 |
Securities Owned by Issuer Deemed Not Outstanding |
33 |
Section 7.05 |
Right of Revocation of Action Taken |
33 |
|
|
|
ARTICLE 8 |
SUPPLEMENTAL INDENTURES |
33 |
Section 8.01 |
Supplemental Indentures Without Consent of Securityholders |
33 |
Section 8.02 |
Supplemental Indentures With Consent of Securityholders |
35 |
Section 8.03 |
Effect of Supplemental Indenture |
36 |
Section 8.04 |
Documents to Be Given to Trustee |
36 |
Section 8.05 |
Notation on Securities in Respect of Supplemental Indentures |
36 |
|
|
|
ARTICLE 9 |
CONSOLIDATION, MERGER, SALE OR CONVEYANCE |
37 |
Section 9.01 |
Issuer May Consolidate, Etc., on Certain Terms |
37 |
Section 9.02 |
Successor Issuer Substituted |
38 |
|
|
|
ARTICLE 10 |
SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE; UNCLAIMED MONEYS |
38 |
Section 10.01 |
Satisfaction and Discharge of Indenture; Defeasance |
38 |
Section 10.02 |
Application by Trustee of Funds Deposited for Payment of Securities |
41 |
Section 10.03 |
Repayment of Moneys Held by Paying Agent |
42 |
Section 10.04 |
Return of Moneys Held by Trustee and Paying Agent Unclaimed for Two Years |
42 |
Section 10.05 |
Indemnity for U.S. Government Obligations |
42 |
|
|
|
ARTICLE 11 |
MISCELLANEOUS PROVISIONS |
42 |
Section 11.01 |
No Recourse |
42 |
Section 11.02 |
Provisions of Indenture for the Sole Benefit of Parties and Holders of Securities |
43 |
Section 11.03 |
Successors and Assigns of Issuer Bound by Indenture |
43 |
Section 11.04 |
Notices and Demands on Issuer, Trustee and Holders of Securities |
43 |
Section 11.05 |
Officer’s Certificates and Opinions of Counsel; Statements to Be Contained Therein |
44 |
Section 11.06 |
Payments Due on Saturdays, Sundays and Holidays |
44 |
Section 11.07 |
Conflict of Any Provision of Indenture With Trust Indenture Act of 1939 |
45 |
Section 11.08 |
New York Law to Govern |
45 |
Section 11.09 |
Counterparts |
45 |
Section 11.10 |
Effect of Headings |
45 |
Section 11.11 |
Actions by Successor |
45 |
Section 11.12 |
Severability |
45 |
|
|
|
ARTICLE 12 |
REDEMPTION OF SECURITIES AND SINKING FUNDS |
45 |
Section 12.01 |
Applicability of Article |
45 |
Section 12.02 |
Notice of Redemption; Partial Redemptions |
45 |
Section 12.03 |
Payment of Securities Called for Redemption |
47 |
Section 12.04 |
Exclusion of Certain Securities from Eligibility for Selection for Redemption |
47 |
Section 12.05 |
Mandatory and Optional Sinking Funds |
48 |
|
|
|
ARTICLE 13 |
SUBORDINATION OF SECURITIES |
50 |
Section 13.01 |
Agreement of Subordination |
50 |
Section 13.02 |
Payments to Securityholders |
50 |
Section 13.03 |
Subrogation of Securities |
52 |
Section 13.04 |
Authorization by Securityholders |
52 |
Section 13.05 |
Notice to Trustee |
52 |
Section 13.06 |
Trustee’s Relation to Senior Indebtedness |
53 |
Section 13.07 |
No Impairment of Subordination |
54 |
Section 13.08 |
Rights of Trustee |
54 |
THIS INDENTURE, dated as of _________
between Franklin Street Properties Corp., a Delaware corporation (the “Issuer”), and ________, a _______ (the
“Trustee”),
W I T N E S S E T H:
WHEREAS, the Issuer may from time to
time duly authorize the issue of its unsecured subordinated debentures, notes or other evidences of indebtedness to be issued in
one or more series (the “Securities”) up to such principal amount or amounts as may from time to time be authorized
in accordance with the terms of this Indenture;
WHEREAS, the Issuer has duly authorized
the execution and delivery of this Indenture to provide, among other things, for the authentication, delivery and administration
of the Securities; and
WHEREAS, all things necessary to make
this Indenture a valid indenture and agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and
the purchases of the Securities by the holders thereof, the Issuer and the Trustee mutually covenant and agree for the equal and
proportionate benefit of the respective holders from time to time of the Securities as follows:
ARTICLE 1
DEFINITIONS
Section 1.01 Certain Terms Defined.
The following terms (except as otherwise expressly provided or unless the context otherwise clearly requires) for all purposes
of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section. All other
terms used in this Indenture that are defined in the Trust Indenture Act of 1939 or the definitions of which in the Securities
Act of 1933 are referred to in the Trust Indenture Act of 1939, including terms defined therein by reference to the Securities
Act of 1933 (except as herein otherwise expressly provided or unless the context otherwise clearly requires), shall have the meanings
assigned to such terms in said Trust Indenture Act and in said Securities Act as in force at the date of this Indenture. All accounting
terms used herein and not expressly defined shall have the meanings assigned to such terms in accordance with generally accepted
accounting principles, and the term “generally accepted accounting principles” means such accounting principles
as are generally accepted in the United States at the time of any computation. 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. The terms defined in this Article have the meanings assigned to them in this Article and include
the plural as well as the singular.
“Board of Directors”
means either the Board of Directors of the Issuer or any committee of such Board duly authorized to act on its behalf.
“Board Resolution”
means a copy of one or more resolutions, certified by the secretary or an assistant secretary of the Issuer to have been duly adopted
by the Board of Directors and to be in full force and effect, and delivered to the Trustee.
“Business Day” means,
with respect to any Security, a day that in the city (or in any of the cities, if more than one) in which amounts are payable,
as specified in the form of such Security, is not a day on which banking institutions are authorized or required by law or regulation
to close.
“Commission” means
the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or
if at any time after the execution and delivery of this Indenture such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act of 1939, then the body performing such duties on such date.
“Common Stock” means
shares of common stock, par value $0.0001 per share, of the Issuer as the same exists at the date of execution and delivery of
this Indenture or as such stock may be reconstituted from time to time.
“Corporate Trust Office”
means the office of the Trustee at which the corporate trust business of the Trustee shall, at any particular time, be principally
administered, which office is, at the date as of which this Indenture is dated, located at __________.
“Debt” of any Person
means any debt for money borrowed which is created, assumed, incurred or guaranteed in any manner by such Person or for which such
Person is otherwise responsible or liable, and shall expressly include any such guaranty thereof by such Person. For the purpose
of computing the amount of the Debt of any Person there shall be excluded all Debt of such Person for the payment or redemption
or satisfaction of which money or securities (or evidences of such Debt, if permitted under the terms of the instrument creating
such Debt) in the necessary amount shall have been deposited in trust with the proper depositary, whether upon or prior to the
maturity or the date fixed for redemption of such Debt; and, in any instance where Debt is so excluded, for the purpose of computing
the assets of such Person there shall be excluded the money, securities or evidences of Debt deposited by such Person in trust
for the purpose of paying or satisfying such Debt.
“Depositary” means,
with respect to the Securities of any series issuable or issued in the form of one or more Global Securities, the Person designated
as Depositary by the Issuer pursuant to Section 2.04 until a successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter “Depositary” shall mean or include each Person who is then a Depositary
hereunder, and if at any time there is more than one such Person, “Depositary” as used with respect to the Securities
of any such series shall mean the Depositary with respect to the Global Securities of that series.
“Dollar” means the
currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts.
“Event of Default”
means any event or condition specified as such in Section 5.01.
“Foreign Currency”
means a currency issued by the government of a country other than the United States.
“Global Security”,
means a Security evidencing all or a part of a series of Securities, issued to the Depositary for such series in accordance with
Section 2.04, and bearing the legend prescribed in Section 2.04.
“Holder”, “holder”,
“holder of Securities”, “Securityholder” or other similar terms mean the Person in whose
name such Security is registered in the Security register kept by the Issuer for that purpose in accordance with the terms hereof.
“Indenture” means
this instrument as originally executed and delivered or, if amended or supplemented as herein provided, as so amended or supplemented
or both, and shall include the forms and terms of particular series of Securities established as contemplated hereunder.
“interest”, unless
the context otherwise requires, refers to interest, and when used with respect to non-interest bearing Securities, refers to interest
payable after maturity, if any.
“Issuer” means Franklin
Street Properties Corp., a Delaware corporation, and, subject to Article 9, its successors and assigns.
“Issuer Order” means
a written statement, request or order of the Issuer signed in its name by the chairman of the Board of Directors, the president
or any vice president of the Issuer.
“Notice of Default”
shall have the meaning set forth in Section 5.01(c).
“Officer’s Certificate”
means a certificate signed by the chairman of the Board of Directors, the president, any vice president, the treasurer, the secretary
or any assistant secretary of the Issuer and delivered to the Trustee. Each such certificate shall comply with Section 314 of the
Trust Indenture Act of 1939 and, except to the extent provided herein, shall include the statements provided for in Section 11.05.
“Opinion of Counsel”
means an opinion in writing signed by the general corporate counsel or such other legal counsel who may be an employee of or counsel
to the Issuer and who shall be satisfactory to the Trustee. Each such opinion shall comply with Section 314 of the Trust Indenture
Act of 1939 and shall include the statements provided for in Section 11.05, if and to the extent required hereby.
“original issue date”
of any Security (or portion thereof) means the earlier of (a) the date of such Security or (b) the date of any Security (or portion
thereof) for which such Security was issued (directly or indirectly) on registration of transfer, exchange or substitution.
“Original Issue Discount Security”
means any 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 5.01.
“Outstanding”, when
used with reference to Securities, shall, subject to the provisions of Section 7.04, mean, as of any particular time, all Securities
authenticated and delivered by the Trustee under this Indenture, except
(a) Securities theretofore cancelled
by the Trustee or delivered to the Trustee for cancellation;
(b) Securities, or portions thereof,
for the payment or redemption of which cash or U.S. Government Obligations (as provided for in Section 10.01(a) and Section 10.01(b))
in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Issuer) or
shall have been set aside, segregated and held in trust by the Issuer for the Holders of such Securities (if the Issuer shall act
as its own paying agent); provided, that if such Securities, or portions thereof, are to be redeemed prior to the maturity
thereof, notice of such redemption shall have been given as herein provided, or provision satisfactory to the Trustee shall have
been made for giving such notice; and
(c) Securities in substitution for which
other Securities shall have been authenticated and delivered, or which shall have been paid, pursuant to the terms of Section 2.09
(except with respect to any such Security as to which proof satisfactory to the Trustee is presented that such Security is held
by a Person in whose hands such Security is a legal, valid and binding obligation of the Issuer), Securities converted into Common
Stock pursuant hereto and Securities not deemed outstanding pursuant to Section 12.02.
In determining whether the Holders of
the requisite principal amount of Outstanding Securities of any or all series have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, the principal amount of an Original Issue Discount 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 5.01.
“Person” means any
individual, corporation, partnership, limited partnership, limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political subdivision thereof.
“principal” whenever
used with reference to the Securities or any Security or any portion thereof, shall be deemed to include “and premium, if
any”.
“record date” shall
have the meaning set forth in Section 2.07.
“Responsible Officer”,
when used with respect to the Trustee, means the chairman of the board of directors, any vice chairman of the board of directors,
the chairman of the trust committee, the chairman of the executive committee, any vice chairman of the executive committee, the
president, any vice president, the cashier, the secretary, the treasurer, any trust officer, any assistant trust officer, any assistant
vice president, any assistant cashier, any assistant secretary, any assistant treasurer, or any other officer or assistant officer
of the Trustee customarily performing functions similar to those performed by the persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of his or her knowledge of and familiarity with the particular
subject.
“Security” or “Securities”
has the meaning stated in the first recital of this Indenture, or, as the case may be, Securities that have been authenticated
and delivered under this Indenture.
“Security Registrar”
shall have the meaning set forth in Section 4.01(b).
“Senior Indebtedness”
of a Person means the principal of, premium, if any, interest on, and any other payment due pursuant to any of the following, whether
outstanding at the date hereof or hereafter incurred or created:
(a) all of the indebtedness of that
Person for money borrowed;
(b) all of the indebtedness of that
Person evidenced by notes, debentures, bonds or other securities sold by that Person for money;
(c) all of the lease obligations which
are capitalized on the books of that Person in accordance with generally accepted accounting principles;
(d) all indebtedness of others of the
kinds described in either of the preceding clauses (a) or (b) above and all lease obligations of others of the kind described in
the preceding clause (c) above that the Person, in any manner, assumes or guarantees or that the Person in effect guarantees through
an agreement to purchase, whether that agreement is contingent or otherwise; and
(e) all renewals, extensions or refundings
of indebtedness of the kinds described in any of the preceding clauses (a), (b) and (d) and all renewals or extensions of leases
of the kinds described in either of the preceding clauses (c) or (d) above;
unless, in the case of any particular indebtedness,
lease, renewal, extension or refunding, the instrument or lease creating or evidencing it or the assumption or guarantee relating
to it expressly provides that such indebtedness, lease, renewal, extension or refunding is not superior in right of payment to
the Securities.
“Subsidiary” means
a corporation of which stock having a majority of the voting power under ordinary circumstances is owned, directly or indirectly,
by the Issuer or by one or more subsidiaries of the Issuer, or by the Issuer and one or more subsidiaries of the Issuer.
“Trust Indenture Act of 1939”
(except as otherwise provided in Sections 8.01 and 8.02) means the Trust Indenture Act of 1939 as in force at the date as of which
this Indenture was originally executed.
“Trustee” means the
Person identified as “Trustee” in the first paragraph hereof and, subject to the provisions of Article 6, shall
also include any successor trustee. “Trustee” shall also mean or include each Person who is then a trustee hereunder
and if at any time there is more than one such Person, “Trustee” as used with respect to the Securities of any
series shall mean the trustee with respect to the Securities of such series.
“U.S. Government Obligation”
means (a) a direct obligation of the United States of America, backed by its full faith and credit, or (b) an obligation of a Person
controlled or supervised by and acting as an agency or instrumentality of the United States of America, the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United States of America.
“vice president”,
when used with respect to the Issuer or the Trustee, means any vice president, whether or not designated by a number or a word
or words added before or after the title of “vice president”.
“Yield to Maturity”
means the yield to maturity on a series of securities, calculated at the time of issuance of such series, or, if applicable, at
the most recent redetermination of interest on such series, and calculated in accordance with accepted financial practice.
ARTICLE 2
SECURITIES
Section 2.01 Forms Generally. The
Securities of each series shall be substantially in such form (not inconsistent with this Indenture) as shall be established by
or pursuant to one or more Board Resolutions (as set forth in a Board Resolution or, to the extent established pursuant to (rather
than set forth in) a Board Resolution, an Officer’s Certificate detailing such establishment) or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required
or permitted by this Indenture and may have imprinted or otherwise reproduced thereon such legend or legends or endorsements, not
inconsistent with the provisions of this Indenture, as may be required to comply with any law or with any rules or regulations
pursuant thereto, or with any rules of any securities exchange or to conform to general usage, all as may be determined by the
officers executing such Securities as evidenced by their execution of such Securities.
The definitive Securities shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing
such Securities as evidenced by their execution of such Securities.
Section 2.02 Form of Trustee’s
Certificate of Authentication. The Trustee’s certificate of authentication on all Securities shall be in substantially
the following form:
This is one of the Securities of the
series designated herein and referred to in the within-mentioned Indenture.
_______________________________________
as Trustee
By: ___________________________________
Authorized Officer
Section 2.03 Amount Unlimited;
Issuable in Series. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture
is unlimited.
The Securities may be issued in one or
more series. The terms of a series of Securities shall be established prior to the initial issuance thereof in or pursuant to one
or more Board Resolutions, or, to the extent established pursuant to (rather than set forth in) a Board Resolution, in an Officer’s
Certificate detailing such establishment and/or established in one or more indentures supplemental hereto. The terms of such series
reflected in such Board Resolution, Officer’s Certificate, or supplemental indenture may include the following or any additional
or different terms:
(a) the designation of the Securities
of the series (which may be part of a series of Securities previously issued);
(b) the terms and conditions, if applicable,
upon which conversion or exchange of the Securities into Common Stock will be effected, including the initial conversion or exchange
price or rate and any adjustments thereto, the conversion or exchange period and other provisions in addition to or in lieu of
those described herein;
(c) any limit upon the aggregate principal
amount of the Securities of the 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 Securities of the series pursuant to Section
2.08, 2.09, 2.11, 8.05 or 12.03);
(d) if other than Dollars, the Foreign
Currency in which the Securities of that series are denominated;
(e) any date on which the principal
of the Securities of the series is payable and the right, if any, to extend such date or dates;
(f) the rate or rates at which the Securities
of the series shall bear interest, if any, the record date or dates for the determination of holders to whom interest is payable,
the date or dates from which such interest shall accrue and on which such interest shall be payable and/or the method by which
such rate or rates or date or dates shall be determined, and the right, if any, to extend the interest payment periods and the
duration of that extension;
(g) the place or places where the principal
of and any interest on Securities of the series shall be payable (if other than as provided in Section 3.02);
(h) the price or prices at which, the
period or periods within which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in
part, at the option of the Issuer, pursuant to any sinking fund or otherwise;
(i) the obligation, if any, of the Issuer
to redeem, purchase or repay Securities of the series pursuant to any mandatory redemption, sinking fund or analogous provisions
or at the option of a Holder thereof and the price or prices at which and the period or periods within which and any terms and
conditions upon which Securities of the series shall be redeemed, purchased or repaid, in whole or in part, pursuant to such obligation;
(j) if other than denominations of $1,000
and any integral multiple thereof, the denominations in which Securities of the series shall be issuable;
(k) if other than the principal amount
thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration
of the maturity thereof;
(l) if other than the currency in which
the Securities of that series are denominated, the currency in which payment of the principal of or interest on the Securities
of such series shall be payable;
(m) if the principal of or interest
on the Securities of the series is to be payable, at the election of the Issuer or a Holder thereof, in a currency other than that
in which the Securities are denominated, the period or periods within which, and the terms and conditions upon which, such election
may be made;
(n) if the amount of payments of principal
of and interest on the Securities of the series may be determined with reference to an index based on a currency other than that
in which the Securities of the series are denominated, or by reference to one or more currency exchange rates, securities or baskets
of securities, commodity prices or indices, the manner in which such amounts shall be determined;
(o) if Sections 10.01(b) or 10.01(c)
are inapplicable to Securities of such series;
(p) whether and under what circumstances
the Issuer will pay additional amounts on the Securities of any series in respect of any tax, assessment or governmental charge
withheld or deducted and, if so, whether the Issuer will have the option to redeem such Securities rather than pay such additional
amounts;
(q) if the Securities of such series
are to be issuable in definitive form (whether upon original issue or upon exchange of a temporary Security of such series) only
upon receipt of certain certificates or other documents or satisfaction of other conditions, then the form and terms of such certificates,
documents or conditions;
(r) any trustees, authenticating or
paying agents, transfer agents or registrars or any other agents with respect to the Securities of such series;
(s) any other events of default or covenants
with respect to the Securities of such series in addition to or in lieu of those contained in this Indenture;
(t) if the Securities of the series
may be issued in exchange for surrendered Securities of another series, or for other securities of the Issuer, pursuant to the
terms of such Securities or securities or of any agreement entered into by the Issuer, the ratio of the principal amount of the
Securities of the series to be issued to the principal amount of the Securities or securities to be surrendered in exchange, and
any other material terms of the exchange;
(u) the extent to which payments on
the Securities will be subordinated to the payment of Senior Indebtedness of the Issuer; and
(v) any other terms of the series.
The Issuer may from time to time, without
notice to or the consent of the holders of any series of Securities, create and issue further Securities of any such series ranking
equally with the Securities of such series in all respects (or in all respects other than (1) the payment of interest accruing
prior to the issue date of such further Securities or (2) the first payment of interest following the issue date of such further
Securities). Such further Securities may be consolidated and form a single series with the Securities of such series and have the
same terms as to status, redemption or otherwise as the Securities of such series.
Section 2.04 Authentication and
Delivery of Securities. The Issuer may deliver Securities of any series executed by the Issuer to the Trustee for authentication
together with the applicable documents referred to below in this Section, and the Trustee shall thereupon authenticate and deliver
such Securities to or upon the order of the Issuer (contained in the Issuer Order referred to below in this Section) or pursuant
to such procedures acceptable to the Trustee and to such recipients as may be specified from time to time by an Issuer Order. The
maturity date, original issue date, interest rate and any other terms of the Securities of such series shall be determined by or
pursuant to such Issuer Order and procedures. If provided for in such procedures, such Issuer Order may authorize authentication
and delivery pursuant to oral instructions from the Issuer or its duly authorized agent, which instructions shall be promptly confirmed
in writing. In authenticating such Securities and accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon:
(a) an Issuer Order requesting such
authentication and setting forth delivery instructions if the Securities are not to be delivered to the Issuer;
(b) any Board Resolution, Officer’s
Certificate and/or executed supplemental indenture referred to in Sections 2.01 and 2.03 by or pursuant to which the forms and
terms of the Securities were established;
(c) an Officer’s Certificate setting
forth the form or forms and terms of the Securities stating that the form or forms and terms of the Securities have been established
pursuant to Sections 2.01 and 2.03 and comply with this Indenture, and covering such other matters as the Trustee may reasonably
request; and
(d) an Opinion of Counsel to the effect
that:
(i) the form or forms and terms
of such Securities have been established pursuant to Sections 2.01 and 2.03 and comply with this Indenture,
(ii) the authentication and delivery
of such Securities by the Trustee are authorized under the provisions of this Indenture,
(iii) such Securities when authenticated
and delivered by the Trustee and issued by the Issuer in the manner and subject to any conditions specified in such Opinion of
Counsel, will constitute valid and binding obligations of the Issuer, and
(iv) all laws and requirements
in respect of the execution and delivery by the Issuer of the Securities have been complied with,
and covering such other matters as the
Trustee may reasonably request.
The Trustee shall have the right to decline
to authenticate and deliver any Securities under this Section if the Trustee, being advised by counsel, determines that such action
may not lawfully be taken by the Issuer or if the Trustee in good faith by its board of directors or board of trustees, executive
committee, or a trust committee of directors or trustees or Responsible Officers shall determine that such action would expose
the Trustee to personal liability to existing Holders or would affect the Trustee’s own rights, duties or immunities under
the Securities, this Indenture or otherwise.
The Issuer shall execute and the Trustee
shall, in accordance with this Section with respect to the Securities of a series, authenticate and deliver one or more Global
Securities that (i) shall represent and shall be denominated in an amount equal to the aggregate principal amount of all of the
Securities of such series issued and not yet cancelled, (ii) shall be registered in the name of the Depositary for such Global
Security or Securities or the nominee of such Depositary, (iii) shall be delivered by the Trustee to such Depositary or pursuant
to such Depositary’s instructions and (iv) shall bear a legend substantially to the following effect: “Unless and until
it is exchanged in whole or in part for Securities in definitive registered form, this Security may not be transferred except as
a whole by the Depositary to the nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee
of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.”
Each Depositary designated pursuant to
this Section must, at the time of its designation and at all times while it serves as Depositary, be a clearing agency registered
under the Securities Exchange Act of 1934 and any other applicable statute or regulation.
Section 2.05 Execution of Securities.
The Securities shall be signed on behalf of the Issuer by the chairman of its Board of Directors, any vice chairman of its Board
of Directors, its chief executive officer, its principal financial officer, its president, any vice president or its treasurer.
Such signatures may be the manual or facsimile signatures of the present or any future such officers. Typographical and other minor
errors or defects in any such reproduction of any such signature shall not affect the validity or enforceability of any Security
that has been duly authenticated and delivered by the Trustee.
In case any officer of the Issuer who
shall have signed any of the Securities shall cease to be such officer before the Security so signed shall be authenticated and
delivered by the Trustee or disposed of by the Issuer, such Security nevertheless may be authenticated and delivered or disposed
of as though the person who signed such Security had not ceased to be such officer of the Issuer; and any Security may be signed
on behalf of the Issuer by such persons as, at the actual date of the execution of such Security, shall be the proper officers
of the Issuer, although at the date of the execution and delivery of this Indenture any such person was not such an officer.
Section 2.06 Certificate of Authentication.
Only such Securities as shall bear thereon a certificate of authentication substantially in the form hereinbefore recited, executed
by the Trustee by the manual signature of one of its authorized officers, shall be entitled to the benefits of this Indenture or
be valid or obligatory for any purpose. The execution of such certificate by the Trustee upon any Security executed by the Issuer
shall be conclusive evidence that the Security so authenticated has been duly authenticated and delivered hereunder and that the
Holder is entitled to the benefits of this Indenture.
Section 2.07 Denomination and Date
of Securities; Payments of Interest. The Securities of each series shall be issuable in denominations established as contemplated
by Section 2.03 or, if not so established, in denominations of $1,000 and any integral multiple thereof. The Securities of each
series shall be numbered, lettered or otherwise distinguished in such manner or in accordance with such plan as the officers of
the Issuer executing the same may determine with the approval of the Trustee, as evidenced by the execution and authentication
thereof. Unless otherwise indicated in a Board Resolution, Officer’s Certificate or supplemental indenture for a particular
series, interest will be calculated on the basis of a 360-day year of twelve 30-day months.
Each Security shall be dated the date
of its authentication. The Securities of each series shall bear interest, if any, from the date, and such interest shall be payable
on the dates, established as contemplated by Section 2.03.
The Person in whose name any Security
of any series is registered at the close of business on any record date applicable to a particular series with respect to any interest
payment date for such series shall be entitled to receive the interest, if any, payable on such interest payment date notwithstanding
any transfer, exchange or conversion of such Security subsequent to the record date and prior to such interest payment date, except
if and to the extent the Issuer shall default in the payment of the interest due on such interest payment date for such series,
in which case such defaulted interest shall be paid to the Persons in whose names Outstanding Securities for such series are registered
at the close of business on a subsequent record date (which shall be not less than five Business Days prior to the date of payment
of such defaulted interest) established by notice given by mail by or on behalf of the Issuer to the Holders of Securities not
less than 15 days preceding such subsequent record date. The term “record date” as used with respect to any interest
payment date (except a date for payment of defaulted interest) for the Securities of any series shall mean the date specified as
such in the terms of the Securities of such series established as contemplated by Section 2.03, or, if no such date is so established,
if such interest payment date is the first day of a calendar month, the 15th day of the immediately preceding calendar month or,
if such interest payment date is the 15th day of a calendar month, the first day of such calendar month, whether or not such record
date is a Business Day.
Section 2.08 Registration, Transfer
and Exchange. The Issuer will keep at each office or agency to be maintained for the purpose as provided in Section 3.02 for
each series of Securities a register or registers in which, subject to such reasonable regulations as it may prescribe, it will
provide for the registration of Securities of such series and the registration of transfer of Securities of such series. Such register
shall be in written form in the English language or in any other form capable of being converted into such form within a reasonable
time. At all reasonable times such register or registers shall be open for inspection by the Trustee.
Upon due presentation for registration
of transfer of any Security of any series at any such office or agency to be maintained for the purpose as provided in Section
3.02, the Issuer shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new
Security or Securities of the same series, maturity date, interest rate and original issue date in authorized denominations for
a like aggregate principal amount.
At the option of the Holder thereof,
Securities of any series (except a Global Security) may be exchanged for a Security or Securities of such series having authorized
denominations and an equal aggregate principal amount, upon surrender of such Securities to be exchanged at the agency of the Issuer
that shall be maintained for such purpose in accordance with Section 3.02 and upon payment, if the Issuer shall so require, of
the charges hereinafter provided. Whenever any Securities are so surrendered for exchange, the Issuer shall execute, and the Trustee
shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive. All Securities surrendered
upon any exchange or transfer provided for in this Indenture shall be promptly cancelled and disposed of by the Trustee and the
Trustee will deliver a certificate of disposition thereof to the Issuer.
All Securities presented for registration
of transfer, exchange, redemption or payment shall (if so required by the Issuer or the Trustee) be duly endorsed by, or be accompanied
by a written instrument or instruments of transfer in form satisfactory to the Issuer and the Trustee duly executed by, the Holder
or his or her attorney duly authorized in writing.
The Issuer may require payment of a sum
sufficient to cover any stamp or other tax or other governmental charge that may be imposed in connection with any exchange or
registration of transfer of Securities. No service charge shall be made for any such transaction.
The Issuer shall not be required to exchange
or register a transfer of (a) any Securities of any series for a period of 15 days immediately preceding the first mailing of notice
of redemption of Securities of such series to be redeemed or (b) any Securities selected, called or being called for redemption,
in whole or in part, except, in the case of any Security to be redeemed in part, the portion thereof not so to be redeemed.
Notwithstanding any other provision of
this Section 2.08, unless and until it is exchanged in whole or in part for Securities in definitive registered form, a Global
Security representing all or a portion of the Securities of a series may not be transferred except as a whole by the Depositary
for such series to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor Depositary for such series or a nominee of such successor Depositary.
If at any time the Depositary for the
Securities of a series notifies the Issuer that it is unwilling or unable to continue as Depositary for the Securities of such
series or if at any time the Depositary for the Securities of a series shall no longer be eligible under Section 2.04, the Issuer
shall appoint a successor Depositary with respect to the Securities of such series. If a successor Depositary for the Securities
of such series is not appointed by the Issuer within 90 days after the Issuer receives such notice or becomes aware of such ineligibility,
the Issuer’s determination pursuant to Section 2.03 that the Securities of such series be represented by a Global Security
shall no longer be effective and the Issuer will execute, and the Trustee, upon receipt of an Officer’s Certificate for the
authentication and delivery of definitive Securities of such series, will authenticate and deliver, Securities of such series in
definitive registered form, in any authorized denominations, in an aggregate principal amount equal to the principal amount of
the Global Security or Securities representing the Securities of such series, in exchange for such Global Security or Securities.
The Issuer may at any time and in its
sole discretion determine that the Securities of any series issued in the form of one or more Global Securities shall no longer
be represented by a Global Security or Securities. In such event the Issuer will execute, and the Trustee, upon receipt of an Officer’s
Certificate for the authentication and delivery of definitive Securities of such series, will authenticate and deliver, Securities
of such series in definitive registered form, in any authorized denominations, in an aggregate principal amount equal to the principal
amount of the Global Security or Securities representing such series, in exchange for such Global Security or Securities.
The Depositary for such Global Security
may surrender such Global Security in exchange in whole or in part for Securities of the same series in definitive registered form
in accordance with the two preceding paragraphs or on such other terms as are acceptable to the Issuer and such Depositary. Thereupon,
the Issuer shall execute, and the Trustee shall authenticate and deliver, without service charge,
(i) to the Person specified by
such Depositary a new Security or Securities of the same series, of any authorized denominations 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
(ii) to such Depositary a new
Global Security in a denomination equal to the difference, if any, between the principal amount of the surrendered Global Security
and the aggregate principal amount of Securities authenticated and delivered pursuant to clause (i) above.
Upon the exchange of a Global Security
for Securities in definitive registered form, in authorized denominations, such Global Security shall be cancelled by the Trustee.
Securities in definitive registered form issued in exchange for a Global Security pursuant to this Section 2.08 shall be registered
in such names and in such authorized denominations as the Depositary for such Global Security, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities to or as directed
by the Persons in whose names such Securities are so registered.
All Securities issued upon any transfer
or exchange of Securities shall be valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits
under this Indenture, as the Securities surrendered upon such transfer or exchange.
Section 2.09 Mutilated, Defaced,
Destroyed, Lost and Stolen Securities. In case any temporary or definitive Security shall become mutilated, defaced or be destroyed,
lost or stolen, the Issuer in its discretion may execute, and upon the written request of any officer of the Issuer, the Trustee
shall authenticate and deliver a new Security of the same series, maturity date, interest rate and original issue date, bearing
a number or other distinguishing symbol not contemporaneously outstanding, in exchange and substitution for the mutilated or defaced
Security, or in lieu of and substitution for the Security so destroyed, lost or stolen. In every case the applicant for a substitute
Security shall furnish to the Issuer and to the Trustee and any agent of the Issuer or the Trustee such security or indemnity as
may be required by them to indemnify and defend and to save each of them harmless and, in every case of destruction, loss or theft,
evidence to their satisfaction of the destruction, loss or theft of such Security and of the ownership thereof and in the case
of mutilation or defacement shall surrender the Security to the Trustee.
Upon the issuance of any substitute Security,
the Issuer may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. In case any Security which
has matured or is about to mature or has been called for redemption in full, or is being surrendered for conversion in full, shall
become mutilated or defaced or be destroyed, lost or stolen, the Issuer may, instead of issuing a substitute Security (with the
Holder’s consent, in the case of convertible Securities), pay or authorize the payment of the same or convert, or authorize
conversion of the same (without surrender thereof except in the case of a mutilated or defaced Security), if the applicant for
such payment shall furnish to the Issuer and to the Trustee and any agent of the Issuer or the Trustee such security or indemnity
as any of them may require to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall
also furnish to the Issuer and the Trustee and any agent of the Issuer or the Trustee evidence to their satisfaction of the destruction,
loss or theft of such Security and of the ownership thereof.
Every substitute Security of any series
issued pursuant to the provisions of this Section by virtue of the fact that any such Security is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Issuer, whether or not the destroyed, lost or stolen Security shall be at
any time enforceable by anyone and shall be entitled to all the benefits of (but shall be subject to all the limitations of rights
set forth in) this Indenture equally and proportionately with any and all other Securities of such series duly authenticated and
delivered hereunder. All Securities shall be held and owned upon the express condition that, to the extent permitted by law, the
foregoing provisions are exclusive with respect to the replacement or payment or conversion of mutilated, defaced or destroyed,
lost or stolen Securities and shall preclude any and all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without
their surrender.
Section 2.10 Cancellation of Securities;
Destruction Thereof. All Securities surrendered for exchange for Securities of the same series or for payment, redemption,
registration of transfer, conversion or for credit against any payment in respect of a sinking or analogous fund, if surrendered
to the Issuer or any agent of the Issuer or the Trustee, shall be delivered to the Trustee for cancellation or, if surrendered
to the Trustee, shall be cancelled by it; and no Securities shall be issued in lieu thereof except as expressly permitted by any
of the provisions of this Indenture. The Trustee shall dispose of cancelled Securities held by it and deliver a certificate of
disposition to the Issuer. If the Issuer shall acquire any of the Securities, such acquisition shall not operate as a redemption
or satisfaction of the Debt represented by such Securities unless and until the same are delivered to the Trustee for cancellation.
Section 2.11 Temporary Securities.
Pending the preparation of definitive Securities for any series, the Issuer may execute and the Trustee shall authenticate
and deliver temporary Securities for such series (printed, lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be issuable in any authorized denomination, and substantially
in the form of the definitive Securities of such series but with such omissions, insertions and variations as may be appropriate
for temporary Securities, all as may be determined by the Issuer with the concurrence of the Trustee as evidenced by the execution
and authentication thereof. Temporary Securities may contain such reference to any provisions of this Indenture as may be appropriate.
Every temporary Security shall be executed by the Issuer and be authenticated by the Trustee upon the same conditions and in substantially
the same manner, and with like effect, as the definitive Securities. Without unreasonable delay the Issuer shall execute and shall
furnish definitive Securities of such series and thereupon temporary Securities of such series may be surrendered in exchange therefor
without charge at each office or agency to be maintained by the Issuer for that purpose pursuant to Section 3.02 and the Trustee
shall authenticate and deliver in exchange for such temporary Securities of such series an equal aggregate principal amount of
definitive Securities of the same series having authorized denominations. Until so exchanged, the temporary Securities of any series
shall be entitled to the same benefits under this Indenture as definitive Securities of such series, unless the benefits of the
temporary Securities are limited pursuant to Section 2.03.
ARTICLE 3
COVENANTS OF THE ISSUER
Section 3.01 Payment of Principal
and Interest. The Issuer covenants and agrees for the benefit of each series of Securities that it will duly and punctually
pay or cause to be paid the principal of, and interest on, each of the Securities of such series (together with any additional
amounts payable pursuant to the terms of such Securities) at the place or places, at the respective times and in the manner provided
in such Securities and in this Indenture. The interest on Securities (together with any additional amounts payable pursuant to
the terms of such Securities) shall be payable only to or upon the written order of the Holders thereof and at the option of the
Issuer may be paid by mailing checks for such interest payable to or upon the written order of such Holders at their last addresses
as they appear on the Security register of the Issuer.
Section 3.02 Offices for Payments,
Etc. The Issuer will maintain (i) in _______, an agency where the Securities of each series may be presented for payment, an
agency where the Securities of each series may be presented for exchange and conversion, if applicable, as provided in this Indenture
and an agency where the Securities of each series may be presented for registration of transfer as in this Indenture provided and
(ii) such further agencies in such places as may be determined for the Securities of such series pursuant to Section 2.03.
The Issuer will maintain in __________,
an agency where notices and demands to or upon the Issuer in respect of the Securities of any series or this Indenture may be served.
The Issuer will give to the Trustee written
notice of the location of each such agency and of any change of location thereof. In case the Issuer shall fail to maintain any
agency required by this Section to be located in __________, or shall fail to give such notice of the location or of any change
in the location of any of the above agencies, presentations and demands may be made and notices may be served at the Corporate
Trust Office of the Trustee.
The Issuer may from time to time designate
one or more additional agencies where the Securities of a series may be presented for payment, where the Securities of that series
may be presented for exchange or conversion, if applicable, as provided in this Indenture and pursuant to Section 2.03 and where
the Securities of that series may be presented for registration of transfer as in this Indenture provided, and the Issuer may from
time to time rescind any such designation, as the Issuer may deem desirable or expedient; provided, however, that
no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain the agencies provided for
in this Section. The Issuer will give to the Trustee prompt written notice of any such designation or rescission thereof.
Section 3.03 Appointment to Fill
a Vacancy in Office of Trustee. The Issuer, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint,
in the manner provided in Section 6.10, a Trustee, so that there shall at all times be a Trustee with respect to each series of
Securities hereunder.
Section 3.04 Paying Agents. Whenever
the Issuer shall appoint a paying agent other than the Trustee with respect to the Securities of any series, it will cause such
paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section,
(a) that it will hold all sums received
by it as such agent for the payment of the principal of or interest on the Securities of such series (whether such sums have been
paid to it by the Issuer or by any other obligor on the Securities of such series) in trust for the benefit of the Holders of the
Securities of such series or of the Trustee,
(b) that it will give the Trustee notice
of any failure by the Issuer (or by any other obligor on the Securities of such series) to make any payment of the principal of
or interest on the Securities of such series when the same shall be due and payable, and
(c) that at any time during the continuance
of any such failure, upon the written request of the Trustee, it will forthwith pay to the Trustee all sums so held in trust by
such paying agent.
The Issuer will, on or prior to each
due date of the principal of or interest on the Securities of such series, deposit with the paying agent a sum sufficient to pay
such principal or interest so becoming due, and (unless such paying agent is the Trustee) the Issuer will promptly notify the Trustee
of any failure to take such action.
If the Issuer shall act as its own paying
agent with respect to the Securities of any series, it will, on or before each due date of the principal of or interest on the
Securities of such series, set aside, segregate and hold in trust for the benefit of the Holders of the Securities of such series
a sum sufficient to pay such principal or interest so becoming due. The Issuer will promptly notify the Trustee of any failure
to take such action.
Anything in this Section to the contrary
notwithstanding, but subject to Section 10.01, the Issuer may at any time, for the purpose of obtaining a satisfaction and discharge
with respect to one or more or all series of Securities hereunder, or for any other reason, pay or cause to be paid to the Trustee
all sums held in trust for any such series by the Issuer or any paying agent hereunder, as required by this Section, such sums
to be held by the Trustee upon the trusts herein contained.
Anything in this Section to the contrary
notwithstanding, the agreement to hold sums in trust as provided in this Section is subject to the provisions of Sections 10.03
and 10.04.
Section 3.05 Written Statement
to Trustee. So long as any Securities are Outstanding hereunder, the Issuer will deliver to the Trustee, within 120 days after
the end of each fiscal year of the Issuer ending after the date hereof, a written statement covering the previous fiscal year,
signed by two of its officers (which need not comply with Section 11.05), stating that in the course of the performance of their
duties as officers of the Issuer they would normally have knowledge of any default by the Issuer in the performance or fulfillment
of any covenant, agreement or condition contained in this Indenture, stating whether or not they have knowledge of any such default
and, if so, specifying each such default of which the signers have knowledge and the nature thereof.
ARTICLE 4
SECURITYHOLDERS LISTS AND REPORTS BY THE ISSUER AND THE TRUSTEE
Section 4.01 Issuer to Furnish
Trustee Information as to Names and Addresses of Securityholders. The Issuer covenants and agrees that it will furnish
or cause to be furnished to the Trustee a list in such form as the Trustee may reasonably require of the names and addresses of
the Holders of the Securities of each series pursuant to Section 312 of the Trust Indenture Act of 1939:
(a) semiannually and not more than 15
days after each record date for the payment of interest on such Securities, as hereinabove specified, as of such record date and
on dates to be determined pursuant to Section 2.03 for non-interest bearing Securities in each year, and
(b) at such other times as the Trustee
may request in writing, within 30 days after receipt by the Issuer of any such request as of a date not more than 15 days prior
to the time such information is furnished, provided, that, if and so long as the Trustee shall be the Security registrar
(the “Security Registrar”) for such series, such list shall not be required to be furnished.
Section 4.02 Reports by the Issuer.
The Issuer covenants to comply with Section 314(a) of the Trust Indenture Act insofar as it relates to information, documentations,
and other reports which the Issuer may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934.
Section 4.03 Reports by the Trustee.
Any Trustee’s report required under Section 313(a) of the Trust Indenture Act of 1939 shall be transmitted on or before
______ in each year following the date hereof, so long as any Securities are Outstanding hereunder, and shall be dated as of a
date convenient to the Trustee but no more than 60 nor less than 45 days prior thereto. The Trustee shall comply with Sections
313(b), 313(c) and 313(d) of the Trust Indenture Act.
Section 4.04 Preservation of Information;
Communication with Securityholders. (a) The Trustee shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the holders of Securities contained in the most recent list furnished to it as provided
in Section 4.01 and as to the names and addresses of holders of Securities received by the Trustee in its capacity as Security
Registrar (if acting in such capacity).
(b) The Trustee may destroy any list
furnished to it as provided in Section 4.01 upon receipt of a new list so furnished.
(c) Securityholders may communicate
as provided in Section 312(b) of the Trust Indenture Act with other Securityholders with respect to their rights under this Indenture
or under the Securities. The Issuer, the Trustee, the Security Registrar and any other Person shall have the protection of Section
312(c) of the Trust Indenture Act.
ARTICLE 5
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
Section 5.01 Event of Default
Defined; Acceleration of Maturity; Waiver of Default. “Event of Default”, with respect to Securities
of any series wherever used herein, means each one of the following events which shall have occurred and be continuing (whatever
the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):
(a) default in the payment of any installment
of interest upon any of the Securities of such series as and when the same shall become due and payable, and continuance of such
default for a period of 90 days (or such other period as may be established for the Securities of such series as contemplated by
Section 2.03); or
(b) default in the payment of all or
any part of the principal on any of the Securities of such series as and when the same shall become due and payable either at maturity,
upon redemption, by declaration or otherwise, (and, if established for the Securities of such series as contemplated by Section
2.03, the continuance of such default for a specified period); or
(c) default in the performance, or breach,
of any covenant or agreement of the Issuer in respect of the Securities of such series (other than a covenant or agreement in respect
of the Securities of such series a default in the performance or breach of which is elsewhere in this Section specifically dealt
with), and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified
mail, to the Issuer by the Trustee or to the Issuer and the Trustee by the Holders of at least 25% in principal amount of the Outstanding
Securities of all series affected thereby, a written notice specifying such default or breach and requiring it to be remedied and
stating that such notice is a “Notice of Default” hereunder; or
(d) a court having jurisdiction in the
premises shall enter a decree or order for relief in respect of the Issuer in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee
or sequestrator (or similar official) of the Issuer or for all or substantially all of its property and assets or ordering the
winding up or liquidation of its affairs, and such decree or order shall remain unstayed and in effect for a period of 90 consecutive
days; or
(e) the Issuer shall commence a voluntary
case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an
order for relief in an involuntary case under any such law, or consent to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Issuer or for any substantial part of its
property and assets, or make any general assignment for the benefit of creditors; or
(f) any other Event of Default provided
for in such series of Securities.
If an Event of Default described in clauses
(a), (b), (c) or (f) occurs and is continuing, then, and in each and every such case, unless the principal of all of the Securities
of such series shall have already become due and payable, either the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Securities of such series then Outstanding hereunder (each such series voting as a separate class) by notice in writing
to the Issuer (and also to the Trustee if given by Securityholders), may declare the entire principal (or, if the Securities of
such series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of such
series) of all Securities of such series and the interest accrued thereon, if any, to be due and payable immediately, and upon
any such declaration the same shall become immediately due and payable. If an Event of Default described in clauses (d) or (e)
occurs and is continuing, then and in each and every such case, the entire principal (or, if any Securities are Original Issue
Discount Securities, such portion of the principal as may be specified in the terms thereof) of all the Securities then Outstanding
and interest accrued thereon, if any, shall become immediately due and payable.
The foregoing provisions, however, are
subject to the condition that if, at any time after the principal of the Securities of any series shall have been so declared due
and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter
provided, the Issuer shall pay or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon
all the Securities of such series and the principal of any and all Securities of such series which shall have become due otherwise
than by acceleration (with interest upon such principal and, to the extent that payment of such interest is enforceable under applicable
law, on overdue installments of interest, at the same rate as the rate of interest specified in the Securities of such series to
the date of such payment or deposit) and such amount as shall be sufficient to cover reasonable compensation to the Trustee, its
agents,
attorneys and counsel, and all other expenses
and liabilities incurred, and all advances made, by the Trustee except as a result of negligence or bad faith, and if any and all
Events of Default under the Indenture with respect to such series, other than the non-payment of the principal of Securities of
such series which shall have become due by acceleration, shall have been cured, waived or otherwise remedied as provided herein--then
and in every such case the Holders of a majority in aggregate principal amount of all the Securities of such series then Outstanding,
by written notice to the Issuer and to the Trustee, may waive all defaults with respect to such series and rescind and annul such
declaration and its consequences, but no such waiver or rescission and annulment shall extend to or shall affect any subsequent
default or shall impair any right consequent thereon.
Unless otherwise indicated in the Board
Resolution, Officer’s Certificate or supplemental indenture for a series of Original Issue Discount Securities, for all purposes
under this Indenture, if a portion of the principal of any Original Issue Discount Securities shall have been accelerated and declared
due and payable pursuant to the provisions hereof, then, from and after such declaration, unless such declaration has been rescinded
and annulled, the principal amount of such Original Issue Discount Securities shall be deemed, for all purposes hereunder, to be
such portion of the principal thereof as shall be due and payable as a result of such acceleration, and payment of such portion
of the principal thereof as shall be due and payable as a result of such acceleration, together with interest, if any, thereon
and all other amounts owing thereunder, shall constitute payment in full of such Original Issue Discount Securities.
Section 5.02 Collection of Debt
by Trustee; Trustee May Prove Debt. The Issuer covenants that (a) in case default shall be made in the payment of any installment
of interest on any of the Securities of any series when such interest shall have become due and payable, and such default shall
have continued for a period of 30 days or (b) in case default shall be made in the payment of all or any part of the principal
of any of the Securities of any series when the same shall have become due and payable, whether upon maturity of the Securities
of such series or upon any redemption or by declaration or otherwise--then, upon demand of the Trustee, the Issuer will pay to
the Trustee for the benefit of the Holders of the Securities of such series the whole amount that then shall have become due and
payable on all Securities of such series for principal or interest, as the case may be (with interest to the date of such payment
upon the overdue principal and, to the extent that payment of such interest is enforceable under applicable law, on overdue installments
of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified
in the Securities of such series); and, in addition thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including reasonable compensation to the Trustee and each predecessor trustee, their respective agents,
attorneys and counsel, and any expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor trustee
except as a result of its negligence or bad faith.
In case the Issuer shall fail forthwith
to pay such amounts upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered
to institute any action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute
any such action or proceedings to judgment or final decree, and may enforce any such judgment or final decree against the Issuer
or other obligor upon such Securities and collect in the manner provided by law out of the property of the Issuer or other obligor
upon such Securities, wherever situated, the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings
relative to the Issuer or any other obligor upon the Securities under Title 11 of the United States Code or any other applicable
Federal or state bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuer or its property or
such other obligor or its property, or in case of any other comparable judicial proceedings relative to the Issuer or other obligor
upon the Securities of any series, or to the creditors or property of the Issuer or such other obligor, the Trustee, irrespective
of whether the principal of any 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 pursuant to the provisions of this Section, shall be entitled and
empowered, by intervention in such proceedings or otherwise:
(i) to file and prove a claim
or claims for the whole amount of principal and interest (or, if the Securities of any series are Original Issue Discount Securities,
such portion of the principal amount as may be specified in the terms of such series) owing and unpaid in respect of the Securities
of any series, 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 reasonable compensation to the Trustee and each predecessor trustee, and their respective agents, attorneys
and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor
trustee, except as a result of negligence or bad faith) and of the Securityholders allowed in any judicial proceedings relative
to the Issuer or other obligor upon the Securities of any series, or to the creditors or property of the Issuer or such other obligor,
(ii) unless prohibited by applicable
law and regulations, to vote on behalf of the Holders of the Securities of any series in any election of a trustee or a standby
trustee in arrangement, reorganization, liquidation or other bankruptcy or insolvency proceedings or person performing similar
functions in comparable proceedings, and
(iii) to collect and receive any
moneys or other property payable or deliverable on any such claims, and to distribute all amounts received with respect to the
claims of the Securityholders and of the Trustee on their behalf; and any trustee, receiver or liquidator, custodian or other similar
official is hereby authorized by each of the Securityholders to make payments to the Trustee, and, in the event that the Trustee
shall consent to the making of payments directly to the Securityholders, to pay to the Trustee such amounts as shall be sufficient
to cover reasonable compensation to the Trustee, each predecessor trustee and their respective agents, attorneys and counsel, and
all other expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor trustee except as a result
of negligence or bad faith and all other amounts due to the Trustee or any predecessor trustee pursuant to Section 6.06.
Nothing herein contained shall be deemed
to authorize the Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Securityholder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities of any series or the rights of any Holder thereof,
or to authorize the Trustee to vote in respect of the claim of any Securityholder in any such proceeding except, as aforesaid,
to vote for the election of a trustee in bankruptcy or similar person.
All rights of action and of asserting
claims under this Indenture, or under any of the Securities of any series, may be enforced by the Trustee without the possession
of any of the Securities of such series or the production thereof on any trial or other proceedings relative thereto, and any such
action or proceedings instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery
of judgment, subject to the payment of the expenses, disbursements and compensation of the Trustee, each predecessor trustee and
their respective agents and attorneys, shall be for the ratable benefit of the Holders of the Securities in respect of which such
action was taken.
In any proceedings brought by the Trustee
(and also any proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party),
the Trustee shall be held to represent all the Holders of the Securities in respect to which such action was taken, and it shall
not be necessary to make any Holders of such Securities parties to any such proceedings.
Section 5.03 Application of Proceeds.
Any moneys collected by the Trustee pursuant to this Article in respect of any series shall be applied in the following order
at the date or dates fixed by the Trustee and, in case of the distribution of such moneys on account of principal or interest,
upon presentation of the several Securities in respect of which monies have been collected and stamping (or otherwise noting) thereon
the payment, or issuing Securities of such series in reduced principal amounts in exchange for the presented Securities of like
series if only partially paid, or upon surrender thereof if fully paid:
First:
To the payment of all amounts due to the Trustee or any predecessor trustee pursuant to Section 6.06;
Second:
In case the principal of the Securities of such series in respect of which moneys have been collected shall not have become
and be then due and payable, to the payment of interest on the Securities of such series in default in the order of the maturity
of the installments of such interest, with interest (to the extent that such interest has been collected by the Trustee) upon the
overdue installments of interest, to the extent permitted by applicable law, at the same rate as the rate of interest or Yield
to Maturity (in the case of Original Issue Discount Securities) specified in such Securities, such payments to be made ratably
to the Persons entitled thereto, without discrimination or preference;
Third:
In case the principal of the Securities of such series in respect of which moneys have been collected shall have become
and shall be then due and payable, to the payment of the whole amount then owing and unpaid upon all the Securities of such series
for principal and interest, with interest upon the overdue principal, and (to the extent that such interest has been collected
by the Trustee) upon overdue installments of interest, to the extent permitted by applicable law, at the same rate as the rate
of interest or Yield to Maturity (in the
case of Original Issue Discount Securities)
specified in the Securities of such series; and in case such moneys shall be insufficient to pay in full the whole amount so due
and unpaid upon the Securities of such series, then to the payment of such principal and interest or Yield to Maturity, without
preference or priority of principal over interest or Yield to Maturity, or of interest or Yield to Maturity over principal, or
of any installment of interest over any other installment of interest, or of any Security of such series over any other Security
of such series, ratably to the aggregate of such principal and accrued and unpaid interest or Yield to Maturity; and
Fourth:
To the payment of the remainder, if any, to the Issuer or any other Person lawfully entitled thereto.
Section 5.04 Suits for Enforcement.
In case an Event of Default has occurred, has not been waived and is continuing, the Trustee may in its discretion proceed to protect
and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement
of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture or to
enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.
Section 5.05 Restoration of Rights
on Abandonment of Proceedings. In case the Trustee shall have proceeded to enforce any right under this Indenture and such
proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee, then
and in every such case (subject to any determination in such proceeding) the Issuer and the Trustee shall be restored respectively
to their former positions and rights hereunder, and all rights, remedies and powers of the Issuer, the Trustee and the Securityholders
shall continue as though no such proceedings had been taken.
Section 5.06 Limitations on Suits
by Securityholders. No Holder of any Security of any series shall have any right by virtue or by availing of any provision
of this Indenture to institute any action or proceeding at law or in equity or in bankruptcy or otherwise upon or under or with
respect to this Indenture, or for the appointment of a trustee, receiver, liquidator, custodian or other similar official or for
any other remedy hereunder, unless such Holder previously shall have given to the Trustee written notice of default and of the
continuance thereof, as hereinbefore provided, and unless also the Holders of not less than 25% in aggregate principal amount of
the Securities of such series then Outstanding shall have made written request upon the Trustee to institute such action or proceedings
in its own name as trustee hereunder and shall have offered to the Trustee such reasonable indemnity as it may require against
the costs, expenses and liabilities to be incurred therein or thereby and the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity shall have failed to institute any such action or proceeding and no direction inconsistent with
such written request shall have been given to the Trustee pursuant to Section 5.09; it being understood and intended, and being
expressly covenanted by the Holder of every Security with every other Holder and the Trustee, that no one or more Holders of Securities
of any series shall have any right in any manner whatever by virtue or by availing of any provision of this Indenture to affect,
disturb or prejudice the rights of any other such Holder of Securities, or to obtain or seek to obtain priority over or preference
to any other such Holder or to enforce any right under this Indenture, except in the manner herein provided and for the equal,
ratable and common benefit of all Holders of Securities of the applicable series. For the protection and enforcement of the provisions
of this Section, each and every Securityholder and the Trustee shall be entitled to such relief as can be given either at law or
in equity.
Section 5.07 Unconditional Right
of Securityholders to Institute Certain Suits. Notwithstanding any other provision in this Indenture and any provision
of any Security, the right of any Holder of any Security to receive payment of the principal of and interest on such Security on
or after the respective due dates expressed in such Security in accordance with the terms hereof and thereof, or to institute suit
for the enforcement of any such payment on or after such respective dates, or for the enforcement of such conversion right, shall
not be impaired or affected without the consent of such Holder, it being understood and intended, and being expressly covenanted
by the Holder of every Security with every other Holder and the Trustee, that no one or more Holders of Securities of any series
shall have any right in any manner whatever by virtue or by availing of any provision of this Indenture to affect, disturb or prejudice
the rights of any other such Holder of Securities, or to obtain or seek to obtain priority over or preference to any other such
Holder or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common
benefit of all Holders of Securities of the applicable series. For the protection and enforcement of the provisions of this Section,
each and every Securityholder and the Trustee shall be entitled to such relief as can be given either at law or in equity.
Section 5.08 Powers and Remedies
Cumulative; Delay or Omission Not Waiver of Default. Except as provided in Section 5.06, no right or remedy herein conferred
upon or reserved to the Trustee or to the Holders of Securities 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.
No delay or omission of the Trustee or
of any Holder of Securities to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid
shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or an acquiescence therein;
and, subject to Section 5.06, every power and remedy given by this Indenture or by law to the Trustee or to the Holders of Securities
may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Holders of Securities.
Section 5.09 Control by Holders
of Securities. The Holders of a majority in aggregate principal amount of the Securities of each series affected (with each
series voting as a separate class) at the time Outstanding shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect
to the Securities of such series by this Indenture; provided, that such direction shall not be otherwise than in accordance
with law and the provisions of this Indenture and provided, further, that (subject to the provisions of Section 6.01) the Trustee
shall have the right to decline to follow any such direction if the Trustee, being advised by counsel, shall determine that the
action or proceeding so directed may not lawfully be taken or if the Trustee in good faith by its board of directors, the executive
committee, or a trust committee of directors or Responsible Officers of the Trustee shall determine that the action or proceedings
so directed would involve the Trustee in personal liability or if the Trustee in good faith shall so determine that the actions
or forbearances specified in or pursuant to such direction would be unduly prejudicial to the interests of Holders of the Securities
of all series so affected not joining in the giving of said direction, it being understood that (subject to Section 6.01) the Trustee
shall have no duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair
the right of the Trustee in its discretion to take any action deemed proper by the Trustee and which is not inconsistent with such
direction or directions by Securityholders.
Section 5.10 Waiver of Past Defaults.
Prior to the declaration of the acceleration of the maturity of the Securities of any series as provided in Section 5.01, the Holders
of a majority in aggregate principal amount of the Securities of such series at the time Outstanding, by notice to the Trustee,
may on behalf of the Holders of all the Securities of such series waive any existing default in the performance of any of the covenants
contained herein or established pursuant to Section 2.03 with respect to such series and its consequences, except a default in
the payment of the principal of, or interest on, any of the Securities of that series as and when the same shall become due by
the terms of such Securities. In the case of any such waiver, the Issuer, the Trustee and the Holders of the Securities of such
series shall be restored to their former positions and rights hereunder, respectively, such default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default arising therefrom shall be deemed to have been cured,
and not to have occurred for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default
or Event of Default or impair any right consequent thereon.
Section 5.11 Trustee to Give Notice
of Default. The Trustee shall, within 90 days after the occurrence of a default with respect to the Securities of any series,
give notice of all defaults with respect to that series known to the Trustee to all Holders of Securities of such series in the
manner and to the extent provided in Section 4.03, unless in each case such defaults shall have been cured before the mailing or
publication of such notice (the term “defaults” for the purpose of this Section being hereby defined to mean
any event or condition which is, or with notice or lapse of time or both would become, an Event of Default); provided, that,
except in the case of default in the payment of the principal of or interest on any of the Securities of such series, or in the
payment of any sinking fund installment on such series, the Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee, or a trust committee of directors or trustees and/or Responsible Officers of
the Trustee in good faith determines that the withholding of such notice is in the interests of the Securityholders of such series.
Section 5.12 Right of Court to
Require Filing of Undertaking to Pay Costs. All parties to this Indenture agree, and each Holder of any Security by
his or her 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 Trustee, to any suit instituted by any Securityholder or group of
Securityholders of any series holding in the aggregate more than 10% in aggregate principal amount of the Securities of such series,
or to any suit instituted by any Securityholder for the enforcement of the payment of the principal of or interest on any Security
of such series, on or after the respective due dates expressed in such Security or established pursuant to this Indenture.
ARTICLE 6
CONCERNING THE TRUSTEE
Section 6.01 Duties and Responsibilities
of the Trustee; During Default; Prior to Default. With respect to the Holders of any series of Securities issued hereunder,
the Trustee, prior to the occurrence of an Event of Default with respect to the Securities of a particular series and after the
curing or waiving of all Events of Default which may have occurred with respect to such series, undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture. In case an Event of Default with respect to the Securities
of a series has occurred (which has not been cured or waived), 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 his or her own affairs.
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.
Section 6.02 Certain Rights of
the Trustee. In furtherance of and subject to the Trust Indenture Act of 1939 and subject to Section 6.01:
(a) 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 statements, certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture;
but, in the case of any such statements, certificates or opinions which 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;
(b) the Trustee shall not be liable
for any error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts;
(c) 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 pursuant
to Section 5.09 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;
(d) none of the provisions contained
in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in
the performance of any of its duties or in the exercise of any of its rights or powers if there shall be reasonable ground for
believing that the repayment of such funds or adequate indemnity against such liability is not reasonably assured to it;
(e) the Trustee may rely and shall be
protected in acting or refraining from acting upon any resolution, Officer’s Certificate or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond, debenture, note, security or other paper or document believed
by it to be genuine and to have been signed or presented by the proper party or parties;
(f) any request, direction, order or
demand of the Issuer mentioned herein shall be sufficiently evidenced by an Officer’s Certificate (unless other evidence
in respect thereof be herein specifically prescribed); and any resolution of the Board of Directors may be evidenced to the Trustee
by a copy thereof certified by the secretary or an assistant secretary of the Issuer;
(g) the Trustee may consult with counsel
and any advice or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered
or omitted to be taken by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;
(h) the Trustee shall be under no obligation
to exercise any of the trusts or powers vested in it by this Indenture at the request, order or direction of any of the Securityholders
pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee reasonable security
or indemnity against the costs, expenses and liabilities which might be incurred therein or thereby;
(i) the Trustee shall not be liable
for any action taken or omitted by it in good faith and believed by it to be authorized or within the discretion, rights or powers
conferred upon it by this Indenture;
(j) prior to the occurrence of an Event
of Default hereunder and after the curing or waiving of all Events of Default, 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, consent,
order, approval, appraisal, bond, debenture, note, security, or other paper or document unless requested in writing so to do by
the Holders of not less than a majority in aggregate principal amount of the Securities of all series affected then Outstanding;
provided, that, if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such expenses
or liabilities as a condition to proceeding; the reasonable expenses of every such investigation shall be paid by the Issuer or,
if paid by the Trustee or any predecessor trustee, shall be repaid by the Issuer upon demand; and
(k) 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 not regularly in
its employ and the Trustee shall not be responsible for any misconduct or negligence on the part of any such agent or attorney
appointed with due care by it hereunder.
Section 6.03 Trustee Not Responsible
for Recitals, Disposition of Securities or Application of Proceeds Thereof. The recitals contained herein and in the
Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Issuer, and the
Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representation as to the validity or sufficiency
of this Indenture or of the Securities. The Trustee shall not be accountable for the use or application by the Issuer of any of
the Securities or of the proceeds thereof.
Section 6.04 Trustee and Agents
May Hold Securities; Collections, Etc. The Trustee or any agent of the Issuer or the Trustee, in its individual or any other
capacity, may become the owner or pledgee of Securities with the same rights it would have if it were not the Trustee or such agent
and may otherwise deal with the Issuer and receive, collect, hold and retain collections from the Issuer with the same rights it
would have if it were not the Trustee or such agent.
Section 6.05 Moneys Held by Trustee.
Subject to the provisions of Section 10.04 hereof, all moneys received by the Trustee shall, until used or applied as herein
provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to
the extent required by mandatory provisions of law. Neither the Trustee nor any agent of the Issuer or the Trustee shall be under
any liability for interest on any moneys received by it hereunder.
Section 6.06 Compensation and Indemnification
of Trustee and Its Prior Claim. The Issuer covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, such reasonable compensation (which shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust) as the Issuer and the Trustee may from time to time agree in writing and, except as otherwise
expressly provided herein, the Issuer covenants and agrees to pay or reimburse the Trustee and each predecessor trustee upon its
request for all reasonable expenses, disbursements and advances incurred or made by or on behalf of it in accordance with any of
the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of
all agents and other persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Issuer also covenants to indemnify the Trustee and each predecessor trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with
the acceptance or administration of this Indenture or the trusts hereunder and its duties hereunder, including the costs and expenses
of defending itself against or investigating any claim of liability in the premises. The obligations of the Issuer under this Section
to compensate and indemnify the Trustee and each predecessor trustee and to pay or reimburse the Trustee and each predecessor trustee
for expenses, disbursements and advances shall constitute additional indebtedness hereunder and shall survive the satisfaction
and discharge of this Indenture. Such additional indebtedness shall be a senior claim to that of the Securities upon all property
and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the Holders of particular Securities,
and the Securities are hereby subordinated to such senior claim.
Section 6.07 Right of Trustee to
Rely on Officer’s Certificate, Etc. Subject to Sections 6.01 and 6.02, whenever in the administration of the trusts of
this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering
or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may,
in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an
Officer’s Certificate delivered to the Trustee, and such certificate, in the absence of negligence or bad faith on the part
of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted by it under the provisions of this
Indenture upon the faith thereof.
Section 6.08 Disqualification;
Conflicting Interests. If the Trustee has or shall acquire any "conflicting interest" within the meaning of Section
310(b) of the Trust Indenture Act, the Trustee and the Issuer shall in all respects comply with the provisions of Section 310(b)
of the Trust Indenture Act.
Section 6.09 Persons Eligible for
Appointment as Trustee. The Trustee for each series of Securities hereunder shall at all times be a corporation having a combined
capital and surplus of at least $50,000,000 and shall be eligible in accordance with the provisions of Section 310(a) of the Trust
Indenture Act of 1939. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements
of a Federal, State or District of Columbia 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.
Section 6.10 Resignation and Removal;
Appointment of Successor Trustee. a) The Trustee, or any trustee or trustees hereafter appointed, may at any time resign
with respect to one or more or all series of Securities by giving written notice of resignation to the Issuer and by mailing notice
of such resignation to the Holders of then Outstanding Securities of each series affected at their addresses as they shall appear
on the Security register. Upon receiving such notice of resignation, the Issuer shall promptly appoint a successor trustee or trustees
with respect to the applicable series by written instrument in duplicate, executed by authority of the Board of Directors, one
copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee or trustees. If no successor
trustee shall have been so appointed with respect to any series and have accepted appointment within 30 days after the mailing
of such notice of resignation, the resigning trustee may petition any court of competent jurisdiction for the appointment of a
successor trustee, or any Securityholder who has been a bona fide Holder of a Security or Securities of the applicable series for
at least six months may, on behalf of himself or herself and all others similarly situated, petition any such court for the appointment
of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(b) In case at any time any of the following
shall occur:
(i) the Trustee shall fail to
comply with the provisions of Section 310(b) of the Trust Indenture Act of 1939 with respect to any series of Securities after
written request therefor by the Issuer or by any Securityholder who has been a bona fide Holder of a Security or Securities of
such series for at least six months; or
(ii) the Trustee shall cease to
be eligible in accordance with the provisions of Section 310(a) of the Trust Indenture Act of 1939 and shall fail to resign after
written request therefor by the Issuer or by any Securityholder; or
(iii) the Trustee shall become
incapable of acting with respect to any series of Securities, or shall be adjudged bankrupt or insolvent, or a receiver or liquidator
of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or liquidation;
then, in any such case, (A) the Issuer may remove the Trustee
with respect to the applicable series of Securities and appoint a successor trustee for such series by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one
copy to the successor trustee, or, (B) subject to Section 315(e) of the Trust Indenture Act of 1939, any Securityholder who has
been a bona fide Holder of a Security or Securities of such series for at least six months may on behalf of himself or herself
and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment
of a successor trustee with respect to such series. Such court may thereupon, after such notice, if any, as it may deem proper
and prescribe, remove the Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate
principal amount of the Securities of each series at the time Outstanding may at any time remove the Trustee with respect to Securities
of such series and, with the consent of the Issuer, appoint a successor trustee with respect to the Securities of such series by
delivering to the Trustee so removed, to the successor trustee so appointed and to the Issuer the evidence provided for in Section
7.01 of the action in that regard taken by the Securityholders.
(d) Any resignation or removal of the
Trustee with respect to any series and any appointment of a successor trustee with respect to such series pursuant to any of the
provisions of this Section 6.10 shall become effective upon acceptance of appointment by the successor trustee as provided in Section
6.11.
Section 6.11 Acceptance of Appointment
by Successor Trustee. Any successor trustee appointed as provided in Section 6.10 shall execute and deliver to the Issuer and
to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee with respect to all or any applicable series shall become effective and such successor trustee, without any
further act, deed or conveyance, shall become vested with all rights, powers, duties and obligations with respect to such series
of its predecessor hereunder, with like effect as if originally named as trustee for such series hereunder; but, nevertheless,
on the written request of the Issuer or of the successor trustee, upon payment of its charges then unpaid, the trustee ceasing
to act shall, subject to Section 10.04, pay over to the successor trustee all moneys at the time held by it hereunder and shall
execute and deliver an instrument transferring to such successor trustee all such rights, powers, duties and obligations. Upon
request of any such successor trustee, the Issuer shall execute any and all instruments in writing for more fully and certainly
vesting in and confirming to such successor trustee all such rights and powers. Any trustee ceasing to act shall, nevertheless,
retain a prior claim upon all property or funds held or collected by such trustee to secure any amounts then due it pursuant to
the provisions of Section 6.06.
If a successor trustee is appointed with
respect to the Securities of one or more (but not all) series, the Issuer, the predecessor trustee and each successor trustee with
respect to the Securities of any applicable series shall execute and deliver an indenture supplemental hereto which shall contain
such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the predecessor
trustee with respect to the Securities of any series as to which the predecessor trustee is not retiring shall continue to be vested
in the predecessor trustee, and 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 under separate indentures.
No successor trustee with respect to
any series of Securities shall accept appointment as provided in this Section 6.11 unless at the time of such acceptance such successor
trustee shall be qualified under the provisions of Section 310(b) of the Trust Indenture Act of 1939 and eligible under the provisions
of Section 310(a) of the Trust Indenture Act of 1939.
Upon acceptance of appointment by any
successor trustee as provided in this Section 6.11, the Issuer shall mail notice thereof to the Holders of Securities of each series
affected, by mailing such notice to such Holders at their addresses as they shall appear on the Security register. If the acceptance
of appointment is substantially contemporaneous with the resignation, then the notice called for by the preceding sentence may
be combined with the notice called for by Section 6.10. If the Issuer fails to mail such notice within ten days after acceptance
of appointment by the successor trustee, the successor trustee shall cause such notice to be given at the expense of the Issuer.
Section 6.12 Merger, Conversion,
Consolidation or Succession to Business of Trustee. 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 the corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder; provided, that such corporation shall be qualified under the provisions of Section 310(b) of the Trust Indenture
Act of 1939 and eligible under the provisions of Section 310(a) of the Trust Indenture Act of 1939, without the execution or filing
of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.
In case, at the time such successor to
the Trustee shall succeed to the trusts created by this Indenture, any of the Securities of any series shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee and
deliver such Securities so authenticated; and, in case at that time any of the Securities of any series shall not have been authenticated,
any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of
the successor trustee; and in all such cases such certificate shall have the full force which it is anywhere in the Securities
of such series or in this Indenture provided that the certificate of the Trustee shall have; provided, that the right to
adopt the certificate of authentication of any predecessor trustee or to authenticate Securities of any series in the name of any
predecessor trustee shall apply only to its successor or successors by merger, conversion or consolidation.
Section 6.13 Preferential Collection
of Claims Against the Issuer. The Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding any creditor
relationship described in Section 311(b) of the Trust Indenture Act. A Trustee who has resigned or been removed shall be subject
to Section 311(a) of the Trust Indenture Act to the extent included therein.
ARTICLE 7
CONCERNING THE SECURITYHOLDERS
Section 7.01 Evidence of Action
Taken by Securityholders. Any request, demand, authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by a specified percentage in principal amount of the Securityholders of any or all series may
be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such specified percentage of Securityholders
in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective
when such instrument or instruments are delivered to the Trustee. Proof of execution of any instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this Indenture and (subject to Sections 6.01 and 6.02) conclusive in favor
of the Trustee and the Issuer, if made in the manner provided in this Article.
Section 7.02 Proof of Execution
of Instruments and of Holding of Securities. Subject to Sections 6.01 and 6.02, the execution of any instrument by a
Holder or his agent or proxy may be proved in accordance with such reasonable rules and regulations as may be prescribed by the
Trustee or in such manner as shall be satisfactory to the Trustee. The holding of Securities shall be proved by the Security register
or by a certificate of the registrar thereof. The Issuer may set a record date for purposes of determining the identity of Holders
of any series entitled to vote or consent to any action referred to in Section 7.01, which record date may be set at any time or
from time to time by notice to the Trustee, for any date or dates (in the case of any adjournment or reconsideration) not more
than 60 days nor less than five days prior to the proposed date of such vote or consent, and thereafter, notwithstanding any other
provisions hereof, only Holders of such series of record on such record date shall be entitled to so vote or give such consent
or revoke such vote or consent. Notice of such record date may be given before or after any request for any action referred to
in Section 7.01 is made by the Issuer.
Section 7.03 Holders to Be Treated
as Owners. The Issuer, the Trustee and any agent of the Issuer or of the Trustee may deem and treat the Person in whose name
any Security shall be registered upon the Security register for such series as the absolute owner of such Security (whether or
not such Security shall be overdue and notwithstanding any notation of ownership or other writing thereon) for the purpose of receiving
payment of or on account of the principal of, and, subject to the provisions of this Indenture, interest on, such Security and
for all other purposes; and neither the Issuer nor the Trustee nor any agent of the Issuer or the Trustee shall be affected by
any notice to the contrary. All such payments so made to any such Person, or upon his or her order, shall be valid, and, to the
extent of the sum or sums so paid, effectual to satisfy and discharge the liability for moneys payable.
Section 7.04 Securities Owned by
Issuer Deemed Not Outstanding. In determining whether the Holders of the requisite aggregate principal amount of Outstanding
Securities of any or all series have concurred in any direction, consent or waiver under this Indenture, Securities which are owned
by the Issuer or any other obligor on the Securities with respect to which such determination is being made or by any Person directly
or indirectly controlling or controlled by or under direct or indirect common control with the Issuer or any other obligor on the
Securities with respect to which such determination is being made shall be disregarded and deemed not to be Outstanding for the
purpose of any such determination, except that, for the purpose of determining whether the Trustee shall be protected in relying
on any such direction, consent or waiver, only Securities which the Trustee knows are so owned shall be so disregarded. Securities
so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of
the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Issuer or any other
obligor upon the Securities or any Person directly or indirectly controlling or controlled by or under direct or indirect common
control with the Issuer or any other obligor on the Securities. In case of a dispute as to such right, the advice of counsel shall
be full protection in respect of any decision made by the Trustee in accordance with such advice.
Section 7.05 Right of Revocation
of Action Taken. At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 7.01, of the taking
of any action by the Holders of the percentage in aggregate principal amount of the Securities of any or all series, as the case
may be, specified in this Indenture in connection with such action, any Holder of a Security the serial number of which is shown
by the evidence to be included among the serial numbers of the Securities the Holders of which have consented to such action may,
by filing written notice at the Corporate Trust Office and upon proof of holding as provided in this Article, revoke such action
so far as concerns such Security. Except as aforesaid, any such action taken by the Holder of any Security shall be conclusive
and binding upon such Holder and upon all future Holders and owners of such Security and of any Securities issued in exchange or
substitution therefor or on registration of transfer thereof, irrespective of whether or not any notation in regard thereto is
made upon any such Security. Any action taken by the Holders of the percentage in aggregate principal amount of the Securities
of any or all series, as the case may be, specified in this Indenture in connection with such action shall be conclusively binding
upon the Issuer, the Trustee and the Holders of all the Securities affected by such action.
ARTICLE 8
SUPPLEMENTAL INDENTURES
Section 8.01 Supplemental Indentures
Without Consent of Securityholders. The Issuer, when authorized by a resolution of its Board of Directors, and the Trustee
may from time to time and at any time, without the consent of any of the Securityholders, enter into an indenture or indentures
supplemental hereto in form satisfactory to the Trustee for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage
or pledge to the Trustee as security for the Securities of one or more series any property or assets;
(b) to evidence the succession of a
corporation, limited liability company, partnership or trust to the Issuer, or successive successions, and the assumption by such
successor of the covenants, agreements and obligations of the Issuer pursuant to Article 9;
(c) to add to the covenants of the Issuer
such further covenants, restrictions, conditions or provisions as its Board of Directors and the Trustee shall consider to be for
the protection of the Holders of Securities, and to make the occurrence, or the occurrence and continuance, of a default in any
such additional covenants, restrictions, conditions or provisions an Event of Default permitting the enforcement of all or any
of the several remedies provided in this Indenture as herein set forth; provided, that in respect of any such additional
covenant, restriction, condition or provision such supplemental indenture may provide for a particular period of grace after default
(which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement
upon such an Event of Default or may limit the remedies available to the Trustee upon such an Event of Default or may limit the
right of the Holders of a majority in aggregate principal amount of the Securities of such series to waive such an Event of Default;
(d) to cure any ambiguity, defect or
inconsistency, or to conform this Indenture or any supplemental indenture to the description of the Securities set forth in any
prospectus or prospectus supplement related to such series of Securities;
(e) to provide for or add guarantors
for the Securities of one or more series;
(f) to establish the form or terms of
Securities of any series as permitted by Sections 2.01 and 2.03;
(g) to evidence and provide for the
acceptance of appointment hereunder by a successor trustee with respect to the Securities of one or more series and to add to or
change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of Section 6.11;
(h) to add to, delete from or revise
the conditions, limitations and restrictions on the authorized amount, terms, purposes of issue, authentication and delivery of
any series of Securities, as herein set forth;
(i) to make any change to the Securities
of any series so long as no Securities of such series are Outstanding; and
(j) to make any other change that does
not adversely affect the interests of the Holders of the Securities in any material respect.
The Trustee shall join with the Issuer
in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations which may be therein
contained and to accept the conveyance, transfer, assignment, mortgage or pledge of any property thereunder, but the Trustee shall
not be obligated to enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities
under this Indenture or otherwise.
Any supplemental indenture authorized
by the provisions of this Section may be executed without the consent of the Holders of any of the Securities at the time Outstanding,
notwithstanding any of the provisions of Section 8.02.
Section 8.02 Supplemental Indentures
With Consent of Securityholders. With the consent (evidenced as provided in Article 7) of the Holders of not less than a majority
in aggregate principal amount of the Securities at the time Outstanding of one or more series affected by such supplemental indenture
(voting as separate series), the Issuer, when authorized by a resolution of the Board of Directors, and the Trustee may, from time
to time and at any time, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying
in any manner the rights of the Holders of the Securities of each such consenting series; provided, that no such supplemental
indenture shall, without the consent of the Holder of each Security so affected, (a) extend the final maturity of any Security,
or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any amount
payable on redemption thereof, or make the principal thereof (including any amount in respect of original issue discount) or interest
thereon payable in any currency other than that provided in the Securities or in accordance with the terms thereof, or reduce the
amount of the principal of an Original Issue Discount Security that would be due and payable upon an acceleration of the maturity
thereof pursuant to Section 5.01 or the amount thereof provable in bankruptcy pursuant to Section 5.02, or waive a default in the
payment of principal of any Security or interest thereon or change a provision related to the waiver of past defaults or changes
or impair the right of any Securityholder to institute suit for the payment or conversion thereof or, if the Securities provide
therefor, any right of repayment at the option of the Securityholder, or (b) modify any of the provisions of this section except
to increase any required percentage or to provide that certain other provisions cannot be modified or waived without the consent
of the Holder of each Security so affected, or (c) reduce the aforesaid percentage of Securities of any series, the consent of
the Holders of which is required for any such supplemental indenture or the consent of Holders of which is required for any modification,
amendment or waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences
provided for in this Indenture.
A supplemental indenture which changes
or eliminates any covenant, Event of Default or other provision of this Indenture (1) that has been expressly included solely for
the benefit of one or more particular series of Securities, if any, or (2) which modifies the rights of Holders of Securities of
one or more series with respect to any covenant, Event of Default or provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series with respect to which such covenant, Event of Default or other
provision has not be modified.
Upon the request of the Issuer, accompanied
by a Board Resolution authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence
of the consent of Securityholders as aforesaid and other documents, if any, required by Section 7.01, the Trustee shall join with
the Issuer in the execution of such supplemental indenture unless such 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 the consent
of the Securityholders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be
sufficient if such consent shall approve the substance thereof.
Promptly after the execution by the Issuer
and the Trustee of any supplemental indenture pursuant to the provisions of this Section, the Trustee shall give a notice thereof
to the Holders of then Outstanding Securities of each series affected thereby, by mailing a notice thereof by first-class mail
to such Holders at their addresses as they shall appear on the Security register, and in each case such notice shall set forth
in general terms the substance of such supplemental indenture. Any failure of the Trustee to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such supplemental indenture.
Section 8.03 Effect of Supplemental
Indenture. Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture shall be and
be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Issuer and the Holders of Securities of each series affected thereby shall
thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all
the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
Section 8.04 Documents to Be Given
to Trustee. The Trustee, subject to the provisions of Sections 6.01 and 6.02, may receive an Officer’s Certificate and
an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article 8 complies with
the applicable provisions of this Indenture.
Section 8.05 Notation on Securities
in Respect of Supplemental Indentures. Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article may bear a notation in form approved by the Trustee for such
series as to any matter provided for by such supplemental indenture or as to any action taken by Securityholders. If the Issuer
or the Trustee shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any modification of this Indenture contained in any such supplemental indenture may be prepared by the Issuer,
authenticated by the Trustee and delivered in exchange for the Securities of such series then Outstanding.
ARTICLE 9
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 9.01 Issuer May Consolidate,
Etc., on Certain Terms. The Issuer shall not consolidate with or merge into any other Person (in a transaction in which the
Issuer is not the surviving corporation) or convey, transfer or lease its properties and assets substantially as an entirety to
any Person, unless (a) the Person formed by such consolidation or into which the Issuer is merged or the Person which acquires
by conveyance or transfer, or which leases, the properties and assets of the Issuer substantially as an entirety (i) shall be a
corporation, limited liability company, partnership or trust, (ii) shall be organized and validly existing under the laws of the
United States of America, any State thereof or the District of Columbia and (iii) 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 interest on all the Securities and the performance or observance of every covenant of this Indenture on the part of the
Issuer to be performed, by supplemental indenture satisfactory in form to the Trustee, executed and delivered to the Trustee, by
the Person formed by such consolidation or into which the Issuer shall have been merged or by the Person which shall have acquired
the Issuer’s assets; (b) immediately after giving effect to such transaction and treating any indebtedness which becomes
an obligation of the Issuer or any Subsidiary as a result of such transaction as having been incurred by the Issuer or such Subsidiary
at the time of such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an
Event of Default, shall have happened and be continuing; and (c) the Issuer has delivered to the Trustee an Officer’s Certificate
and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture
is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent
herein provided for relating to such transaction have been complied with.
The conditions of (a)(ii) above shall
not apply in the case of a corporation or entity not organized under the laws of the United States of America, any State thereof
or the District of Columbia which shall agree, in form satisfactory to the Trustee, (i) to subject itself to the jurisdiction of
the United States district court for the Southern District of New York and (ii) to indemnify and hold harmless the holders of all
Securities against (A) any tax, assessment or governmental charge imposed on such holders by a jurisdiction other than the United
States or any political subdivision or taxing authority thereof or therein with respect to, and withheld on the making of, any
payment of principal or interest on such Securities and which would not have been so imposed and withheld had such consolidation,
merger, sale or conveyance not been made and (B) any tax, assessment or governmental charge imposed on or relating to, and any
costs or expenses involved in, such consolidation, merger, sale or conveyance.
The restrictions in this Section 9.01
shall not apply to (i) the merger or consolidation of the Issuer with one of its affiliates, if the Board of Directors determines
in good faith that the purpose of such transaction is principally to change the Issuer’s State of incorporation or convert
the Issuer’s form of organization to another form, or (ii) the merger of the Issuer with or into a single direct or indirect
wholly owned Subsidiary.
Nothing contained in this Article shall
apply to, limit or impose any requirements upon the consolidation or merger of any Person into the Issuer where the Issuer is the
survivor of such transaction, or the acquisition by the Issuer, by purchase or otherwise, of all or any part of the property of
any other Person (whether or not affiliated with the Issuer).
Section 9.02 Successor Issuer Substituted.
Upon any consolidation of the Issuer with, or merger of the Issuer into, any other Person or any conveyance, transfer or lease
of the properties and assets of the Issuer substantially as an entirety in accordance with Section 9.01, the successor Person formed
by such consolidation or into which the Issuer is merged or 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 Issuer under this Indenture with the same effect as if such
successor Person had been named as the Issuer 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 Securities.
In case of any such consolidation, merger,
sale, lease or conveyance, such changes in phraseology and form (but not in substance) may be made in the Securities thereafter
to be issued as may be appropriate.
ARTICLE 10
SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE;
UNCLAIMED MONEYS
Section 10.01 Satisfaction and
Discharge of Indenture; Defeasance. b) If at any time
(i) the Issuer shall have paid
or caused to be paid the principal of and interest on all the Securities of any series Outstanding hereunder (other than Securities
of such series which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.09) as and
when the same shall have become due and payable, or
(ii) the Issuer shall have delivered
to the Trustee for cancellation all Securities of any series theretofore authenticated (other than any Securities of such series
which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 2.09) or
(iii) in the case of any series
of Securities the exact amount (including the currency of payment) of principal of and interest due on which on the dates referred
to in clause (B) below can be determined at the time of making the deposit referred to in such clause,
(A) all the Securities of such
series not theretofore delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become
due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption, and
(B) the Issuer shall have irrevocably
deposited or caused to be deposited with the Trustee as trust funds the entire amount in cash (other than moneys repaid by the
Trustee or any paying agent to the Issuer in accordance with Section 10.04) or, in the case of any series of Securities the payments
on which may only be made in Dollars, U.S. Government Obligations maturing as to principal and interest in such amounts and at
such times as will insure the availability of cash sufficient to pay on any subsequent interest payment date all interest due on
such interest payment date on the Securities of such series and to pay at maturity or upon
redemption all Securities of such
series (in each case other than any Securities of such series which shall have been destroyed, lost or stolen and which shall have
been replaced or paid as provided in Section 2.09) not theretofore delivered to the Trustee for cancellation, including principal
and interest due or to become due to such date of maturity, as the case may be,
and if, in any such case (i), (ii) or (iii), the Issuer shall also
pay or cause to be paid all other sums payable hereunder by the Issuer, including amounts due the Trustee pursuant to Section 6.06,
with respect to Securities of such series, then this Indenture shall cease to be of further effect with respect to Securities of
such series (except as to (1) rights of registration of transfer, conversion and exchange of Securities of such series and the
Issuer’s right of optional redemption, (2) substitution of mutilated, defaced, destroyed, lost or stolen Securities, (3)
rights of Holders of Securities to receive, solely from the trust fund described in Section 10.01(a)(iii)(B), payments of principal
thereof and interest thereon, upon the original stated due dates therefor (but not upon acceleration) and remaining rights of the
Holders to receive, solely from the trust fund described in Section 10.01(a)(iii)(B), sinking fund payments, if any, (4) the rights
(including the Trustee’s rights under Section 10.05) and immunities of the Trustee hereunder and the Trustee’s obligations
under Sections 10.02 and 10.04 and (5) the obligations of the Issuer under Section 3.02), and the Trustee, on demand of the Issuer
accompanied by an Officer’s Certificate and an Opinion of Counsel which complies with Section 11.05 and at the cost and expense
of the Issuer, shall execute proper instruments acknowledging such satisfaction of and discharging this Indenture with respect
to such series. The Issuer agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred
and to compensate the Trustee for any services thereafter reasonably and properly rendered by the Trustee in connection with this
Indenture or the Securities of such series.
(b) The following subsection shall
apply to the Securities of each series unless specifically otherwise provided in a Board Resolution, Officer’s Certificate
or indenture supplemental hereto provided pursuant to Section 2.03. In addition to the right to discharge of the Indenture pursuant
to subsection (a) above, the Issuer, at its option and at any time, by written notice by an officer delivered to the Trustee, may
elect to have all of its obligations discharged with all Outstanding Securities of a series (“Legal Defeasance”),
such discharge to be effective on the date that the conditions set forth in clauses (i) through (iv) and (vi) of Section 10.01(d)
are satisfied, and thereafter the Issuer shall be deemed to have paid and discharged the entire Debt on all the Securities of such
a series, and satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned
and this Indenture shall cease to be of further effect with respect to Securities of such series (except as to (1) rights of registration
of transfer, conversion and exchange of Securities of such series, (2) substitution of apparently mutilated, defaced, destroyed,
lost or stolen Securities, (3) rights of Holders of Securities to receive, solely from the trust fund described in Section 10.01(d)(i),
payments of principal thereof and interest thereon, upon the original stated due dates therefor (but not upon acceleration) and
remaining rights of the Holders to receive, solely from the trust fund described in Section 10.01(d)(i), sinking fund payments,
if any, (4) the rights (including the Trustee’s rights under Section 10.05) and immunities of the Trustee hereunder and the
Trustee’s obligations with respect to the Securities of such series under Sections 10.02 and 10.04 and (5) the obligations
of the Issuer under Section 3.02).
(c) The following subsection shall
apply to the Securities of each series unless specifically otherwise provided in a Board Resolution, Officer’s Certificate
or indenture supplemental hereto provided pursuant to Section 2.03. In addition to the right to discharge of the Indenture pursuant
to subsection (a) and to Legal Defeasance pursuant to subsection (b), above, the Issuer, at its option and at any time, by written
notice executed by an officer delivered to the Trustee, may elect to have its obligations under any covenant contained in this
Indenture or in the Board Resolution or supplemental indenture relating to such series pursuant to Section 2.03 discharged with
respect to all Outstanding Securities of a series, this Indenture and any indentures supplemental to this Indenture with respect
to such series (“Covenant Defeasance”), such discharge to be effective on the date the conditions set forth
in clauses (i) through (iii) and (v) through (vi) of Section 10.01(d) are satisfied, and such Securities shall thereafter be deemed
to be not “Outstanding” for the purposes of any direction, waiver, consent or declaration of Securityholders (and the
consequences of any thereof) in connection with such covenants, but shall continue to be “Outstanding” for all other
purposes under this Indenture. For this purpose, such Covenant Defeasance means that, with respect to the Outstanding Securities
of a series, the Issuer may omit to comply with and shall have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of reference in any such covenant to any other provision herein or in any other document and such omission to comply
shall not constitute an Event of Default under Section 5.01(c) or otherwise, but except as specified in this Section 10.01(c),
the remainder of the Issuer’s obligations under the Securities of such series, this Indenture, and any indentures supplemental
to this Indenture with respect to such series shall be unaffected thereby.
(d) The following shall be the conditions
to the application of Legal Defeasance under subsection (b) or Covenant Defeasance under subsection (c) to the Securities of the
applicable series:
(i) the Issuer irrevocably deposits
or causes to be deposited in trust with the Trustee or, at the option of the Trustee, with a trustee satisfactory to the Trustee
and the Company under the terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee, cash or U.S.
Government Obligations that will generate cash sufficient to pay principal of and interest on the Outstanding Securities of such
series to maturity or redemption, as the case may be, and to pay all other amounts payable by it hereunder, provided that (A) the
trustee of the irrevocable trust, if any, shall have been irrevocably instructed to pay such funds or the proceeds of such U.S.
Government Obligations to the Trustee and (B) the Trustee shall have been irrevocably instructed to apply such funds or the proceeds
of such U.S. Government Obligations to (x) the principal and interest on all Securities of such series on the date that such principal
or interest is due and payable and (y) any mandatory sinking fund payments on the day on which such payments are due and payable
in accordance with the terms of the Indenture and the Securities of such series, and the Issuer shall also pay or cause to be paid
all other amounts payable hereunder with respect to such series;
(ii) the Issuer delivers to the
Trustee an Officer’s Certificate stating that all conditions precedent specified herein relating to Legal Defeasance or Covenant
Defeasance, as the case may be, have been complied with, and an Opinion of Counsel to the same effect;
(iii) no Event of Default under
subsection (a), (b), (d) or (e) of Section 5.01 shall have occurred and be continuing, and no event which with notice or lapse
of time or both would become such an Event of Default shall have occurred and be continuing, on the date of such deposit;
(iv) in the event of an election
for Legal Defeasance under subsection (b), the Issuer shall have delivered to the Trustee an Opinion of Counsel stating that (A) the
Issuer has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of this
instrument, there has been a change in the applicable Federal income tax law, in either case (A) or (B) to the effect
that, and based thereon such opinion shall confirm that, the Holders of such Securities will not recognize gain or loss for Federal
income tax purposes as a result of the deposit, defeasance and discharge to be effected with respect to such Securities and will
be subject to Federal income tax on the same amounts, in the same manner and at the same times as would be the case if such deposit,
defeasance and discharge were not to occur;
(v) in the event of an election
for Covenant Defeasance under subsection (c), the Issuer shall have delivered to the Trustee an Opinion of Counsel to the
effect that the Holders of such Securities will not recognize gain or loss for Federal income tax purposes as a result of the deposit
and Covenant Defeasance to be effected with respect to such Securities and will be subject to Federal income tax on the same amount,
in the same manner and at the same times as would be the case if such deposit and Covenant Defeasance were not to occur; and
(vi) notwithstanding any other
provisions of this subsection (d), such defeasance shall be effected in compliance with any additional or substitute terms, conditions
or limitations which may be imposed on the Issuer pursuant to Section 2.03.
After such irrevocable deposit made pursuant to this Section
10.01(d) and satisfaction of the other conditions set forth in this subsection (d), the Trustee upon request shall execute proper
instruments acknowledging the discharge of the Issuer’s obligations pursuant to this Section 10.01.
Section 10.02 Application by Trustee
of Funds Deposited for Payment of Securities. Subject to Section 10.04, all moneys deposited with the Trustee (or other
trustee) pursuant to Section 10.01 shall be held in trust and applied by it to the payment, either directly or through any paying
agent (including the Issuer acting as its own paying agent), to the Holders of the particular Securities of such series for the
payment or redemption of which such moneys have been deposited with the Trustee, of all sums due and to become due thereon for
principal and interest; but such money need not be segregated from other funds except to the extent required by law.
Section 10.03 Repayment of Moneys
Held by Paying Agent. In connection with the satisfaction and discharge of this Indenture with respect to Securities of any
series, all moneys then held by any paying agent under the provisions of this Indenture with respect to such series of Securities
shall, upon demand of the Issuer, be repaid to it or paid to the Trustee and thereupon such paying agent shall be released from
all further liability with respect to such moneys.
Section 10.04 Return of Moneys
Held by Trustee and Paying Agent Unclaimed for Two Years. Any moneys deposited with or paid to the Trustee or any paying
agent for the payment of the principal of, interest on or additional amounts in respect of any Security of any series and not applied
but remaining unclaimed for two years after the date upon which such principal, interest or additional amount shall have become
due and payable, shall be repaid to the Issuer by the Trustee for such series or such paying agent, and the Holder of the Securities
of such series shall thereafter look only to the Issuer for any payment which such Holder may be entitled to collect, and all liability
of the Trustee or any paying agent with respect to such moneys shall thereupon cease.
Section 10.05 Indemnity for U.S.
Government Obligations. The Issuer shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed
against the U.S. Government Obligations deposited pursuant to Section 10.01 or the principal or interest received in respect of
such obligations.
ARTICLE 11
MISCELLANEOUS PROVISIONS
Section 11.01 No Recourse. No
recourse under or upon any obligation, covenant or agreement of this Indenture, or of any Security, or for any claim based thereon
or otherwise in respect thereof, shall be had against any incorporator, stockholder, officer or director, past, present or future
as such, of the Issuer or of any predecessor or successor corporation, either directly or through the Issuer or any such predecessor
or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment
or penalty or otherwise; it being expressly understood that this Indenture and the obligations issued hereunder are solely corporate
obligations, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, stockholders,
officers or directors as such, of the Issuer or of any predecessor or successor corporation, or any of them, because of the creation
of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture
or in any of the Securities or implied therefrom; and that any and all such personal liability of every name and nature, either
at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every such incorporator,
stockholder, officer or director as such, because of the creation of the indebtedness hereby authorized, or under or by reason
of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom, are hereby
expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issuance of
such Securities.
Section 11.02 Provisions of Indenture
for the Sole Benefit of Parties and Holders of Securities. Nothing in this Indenture or in the Securities, expressed
or implied, shall give or be construed to give to any person, firm or corporation, other than the parties hereto and their successors
and the Holders of the Securities any legal or equitable right, remedy or claim under this Indenture or under any covenant or provision
herein contained, all such covenants and provisions being for the sole benefit of the parties hereto and their successors and of
the Holders of the Securities.
Section 11.03 Successors and Assigns
of Issuer Bound by Indenture. All the covenants, stipulations, promises and agreements contained in this Indenture by or on
behalf of the Issuer shall bind its successors and assigns, whether so expressed or not.
Section 11.04 Notices and Demands
on Issuer, Trustee and Holders of Securities. Any notice or demand which by any provision of this Indenture is required
or permitted to be given or served by the Trustee or by the Holders of Securities to or on the Issuer may be given or served by
being deposited postage prepaid, first-class mail (except as otherwise specifically provided herein) addressed (until another address
of the Issuer is filed by the Issuer with the Trustee) to Franklin Street Properties Corp., 401 Edgewater Place, Suite 200
Wakefield, MA 01880, Attn: Chief Financial Officer. Any notice, direction, request or demand by the Issuer or any Holder of Securities
to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or made at _______,
________, Attn: _______.
Where this Indenture provides for notice
to Holders of Securities, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and
mailed, first-class postage prepaid, to each Holder entitled thereto, at his or her last address as it appears in the Security
register. In case, by reason of the suspension of or irregularities in regular mail service, it shall be impracticable to mail
notice of any event to Holders of Securities when said notice is required to be given pursuant to any provision of this Indenture
or of the Securities, then any manner of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient
giving of such notice.
In case, by reason of the suspension
of or irregularities in regular mail service, it shall be impracticable to mail notice to the Issuer when such notice is required
to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the
Trustee shall be deemed to be a sufficient giving of such notice.
Neither the failure to give notice, nor
any defect in any notice so given, to any particular Holder of a Security shall affect the sufficiency of such notice with respect
to other Holders of Securities given as provided above.
Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to receive such notice either before or after the event,
and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
Section 11.05 Officer’s Certificates
and Opinions of Counsel; Statements to Be Contained Therein. Upon any application or demand by the Issuer to the Trustee
to take any action under any of the provisions of this Indenture, the Issuer shall furnish to the Trustee an Officer’s Certificate
stating that all conditions precedent 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 have been complied with, except
that in the case of any such application or demand as to which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or demand, no additional certificate or opinion need be furnished.
Each certificate or opinion provided
for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant provided for in this
Indenture shall include (a) a statement that the person making such certificate or opinion has read such covenant or condition,
(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained
in such certificate or opinion are based, (c) a statement that, in the opinion of such person, he or she has made such examination
or investigation as is necessary to enable him or her 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 or not, in the opinion of such person, such condition or covenant has
been complied with.
Any certificate, statement or opinion
of an officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of or representations
by counsel, unless such officer knows that the certificate or opinion or representations with respect to the matters upon which
his or her certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should
know that the same are erroneous. Any certificate, statement or opinion of counsel may be based, insofar as it relates to factual
matters, information with respect to which is in the possession of the Issuer, upon the certificate, statement or opinion of or
representations by an officer or officers of the Issuer, unless such counsel knows that the certificate, statement or opinion or
representations with respect to the matters upon which his or her certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion
of an officer of the Issuer or of counsel may be based, insofar as it relates to accounting matters, upon a certificate or opinion
of or representations by an accountant or firm of accountants in the employ of the Issuer, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with respect to the accounting matters upon which his or
her certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know
that the same are erroneous.
Any certificate or opinion of any independent
firm of public accountants filed with and directed to the Trustee shall contain a statement that such firm is independent.
Section 11.06 Payments Due on Saturdays,
Sundays and Holidays. If the date of maturity of interest on or principal of the Securities of any series or the date fixed
for redemption or repayment of any such Security, or the last day on which a Holder has the right to convert any Security, shall
not be a Business Day, then payment of interest or principal, or any conversion, need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect as if made on the date of maturity or the date fixed for redemption
or on such last day for conversion, and no interest shall accrue for the period after such date.
Section 11.07 Conflict of Any Provision
of Indenture With Trust Indenture Act of 1939. If and to the extent that any provision of this Indenture limits, qualifies
or conflicts with another provision included in this Indenture by operation of Sections 310 to 317, inclusive, of the Trust Indenture
Act of 1939, such incorporated provision shall control.
Section 11.08 New York Law to Govern.
This Indenture and each Security shall be deemed to be a contract under the laws of the State of New York, and for all purposes
shall be governed by and construed in accordance with the laws of such State without regard to any principle of conflict of laws
that would require or permit the application of the laws of any other jurisdiction, except as may otherwise be required by mandatory
provisions of law.
Section 11.09 Counterparts. This
Indenture may be executed in any number of counterparts, each of which shall be an original; but such counterparts shall together
constitute but one and the same instrument.
Section 11.10 Effect of Headings.
The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction
hereof.
Section 11.11 Actions by Successor.
Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board of directors
or its equivalent, committee or officer of the Issuer shall and may be done and performed with like force and effect by the corresponding
board, committee or officer of any corporation that shall at the time be the lawful successor of the Issuer.
Section 11.12 Severability.
In case any one or more of the provisions contained in this Indenture or in the Securities of any series shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Indenture or of such Securities, but this Indenture and such Securities shall be construed as if such
invalid or illegal or unenforceable provision had never been contained herein or therein.
ARTICLE 12
REDEMPTION OF SECURITIES AND SINKING FUNDS
Section 12.01 Applicability of
Article. The provisions of this Article shall be applicable to the Securities of any series which are redeemable before their
maturity or to any sinking fund for the retirement of Securities of a series, except as otherwise specified, as contemplated by
Section 2.03 for Securities of such series.
Section 12.02 Notice of Redemption;
Partial Redemptions. Notice of redemption to the Holders of Securities of any series to be redeemed as a whole or in part at
the option of the Issuer shall be given by mailing notice of such redemption by first class mail, postage prepaid, at least 30
days and not more than 60 days prior to the date fixed for redemption to such Holders of Securities of such series at their last
addresses as they shall appear upon the Security register. Any notice which is given in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives the notice. Failure to give notice or any defect in the notice
to the Holder of any Security of a series designated for redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security of such series.
The notice of redemption to each such
Holder shall specify the principal amount of each Security of such series held by such Holder to be redeemed, the date fixed for
redemption, the redemption price, the place or places of payment, that payment will be made upon presentation and surrender of
such Securities, that such redemption is pursuant to the mandatory or optional sinking fund, or both, if such be the case, that
interest accrued to the date fixed for redemption will be paid as specified in such notice and that on and after said date interest
thereon or on the portions thereof to be redeemed will cease to accrue and shall also specify, if applicable, the conversion price
then in effect and the date on which the right to convert such Securities or the portions thereof to be redeemed will expire. In
case any Security of a series is to be redeemed in part only, the notice of redemption shall state the portion of the principal
amount thereof to be redeemed and shall state that on and after the date fixed for redemption, upon surrender of such Security,
a new Security or Securities of such series in principal amount equal to the unredeemed portion thereof will be issued.
The notice of redemption of Securities
of any series to be redeemed at the option of the Issuer shall be given by the Issuer or, at the Issuer’s request, by the
Trustee in the name and at the expense of the Issuer.
On or before the redemption date specified
in the notice of redemption given as provided in this Section, the Issuer will deposit with the Trustee or with one or more paying
agents (or, if the Issuer is acting as its own paying agent, set aside, segregate and hold in trust as provided in Section 3.04)
an amount of money sufficient to redeem on the redemption date all the Securities of such series so called for redemption (other
than those Securities theretofore surrendered for conversion into Common Stock in accordance with their terms) at the appropriate
redemption price, together with accrued interest to the date fixed for redemption. If any Security called for redemption is converted
pursuant hereto and in accordance with the terms thereof, any money deposited with the Trustee or any paying agent or so segregated
and held in trust for the redemption of such Security shall be paid to the Issuer upon the Issuer’s request, or, if then
held by the Issuer, shall be discharged from such trust. The Issuer will deliver to the Trustee at least 10 days prior to the date
the notice required to be delivered to the Holders is to be sent (unless a shorter time period shall be acceptable to the Trustee)
an Officer’s Certificate (which need not comply with Section 11.05) stating the aggregate principal amount of Securities
to be redeemed. In case of a redemption at the election of the Issuer prior to the expiration of any restriction on such redemption,
the Issuer shall deliver to the Trustee, prior to the giving of any notice of redemption to Holders pursuant to this Section, an
Officer’s Certificate stating that such restriction has been complied with.
If less than all the Securities of a
series are to be redeemed, the Trustee shall select, in such manner as it shall deem appropriate and fair, Securities of such series
to be redeemed in whole or in part. Securities may be redeemed in part in multiples equal to the minimum authorized denomination
for Securities of such series or any multiple thereof. The Trustee shall promptly notify the Issuer in writing of the Securities
of such series selected for redemption and, in the case of any Securities of such series selected for partial redemption, 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 Securities of any series shall relate, in the case of any Security redeemed or to be redeemed only in part,
to the portion of the principal amount of such Security which has been or is to be redeemed. If any Security selected for partial
redemption is surrendered for conversion after such selection, the converted portion of such Security shall be deemed (so far as
may be possible) to be the portion selected for redemption.
Section 12.03 Payment of Securities
Called for Redemption. If notice of redemption has been given as above provided, the Securities or portions of Securities specified
in such notice shall become due and payable on the date and at the place stated in such notice at the applicable redemption price,
together with interest accrued to the date fixed for redemption, and on and after said date (unless the Issuer shall default in
the payment of such Securities at the redemption price, together with interest accrued to said date) interest on the Securities
or portions of Securities so called for redemption shall cease to accrue, and such Securities shall cease from and after the date
fixed for redemption to be convertible into Common Stock (to the extent otherwise convertible in accordance with their terms),
if applicable, and cease to be entitled to any benefit or security under this Indenture, and except as provided in the paragraph
below, the Holders thereof shall have no right in respect of such Securities except the right to receive the redemption price thereof
and unpaid interest to the date fixed for redemption. On presentation and surrender of such Securities at a place of payment specified
in said notice, said Securities or the specified portions thereof shall be paid and redeemed by the Issuer at the applicable redemption
price, together with interest accrued thereon to the date fixed for redemption; provided, that payment of interest becoming
due on or prior to the date fixed for redemption shall be payable to the Holders of such Securities registered as such on the relevant
record date subject to the terms and provisions of Sections 2.03 and 2.07 hereof.
If any Security called for redemption
shall not be so paid upon surrender thereof for redemption, the principal shall, until paid or duly provided for, bear interest
from the date fixed for redemption at the rate of interest or Yield to Maturity (in the case of an Original Issue Discount Security)
borne by such Security and, if applicable, such Security shall remain convertible into Common Stock until the principal of such
Security shall have been paid or duly provided for.
Upon presentation of any Security redeemed
in part only, the Issuer shall execute and the Trustee shall authenticate and deliver to or on the order of the Holder thereof,
at the expense of the Issuer, a new Security or Securities of such series, of authorized denominations, in principal amount equal
to the unredeemed portion of the Security so presented.
Section 12.04 Exclusion of Certain
Securities from Eligibility for Selection for Redemption. Securities shall be excluded from eligibility for selection
for redemption if they are identified by registration and certificate number in an Officer’s Certificate delivered to the
Trustee at least 40 days prior to the last date on which notice of redemption may be given as being owned of record and beneficially
by, and not pledged or hypothecated by either (a) the Issuer or (b) an entity specifically identified in such written statement
as directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer.
Section 12.05 Mandatory and Optional
Sinking Funds. The minimum amount of any sinking fund payment provided for by the terms of the Securities of any series 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 the Securities of any series is herein referred to as an “optional sinking fund payment”.
The date on which a sinking fund payment is to be made is herein referred to as the “sinking fund payment date”.
In lieu of making all or any part of
any mandatory sinking fund payment with respect to any series of Securities in cash, the Issuer may at its option (a) deliver to
the Trustee Securities of such series theretofore purchased or otherwise acquired (except upon redemption pursuant to the mandatory
sinking fund) by the Issuer or receive credit for Securities of such series (not previously so credited) theretofore purchased
or otherwise acquired (except as aforesaid) by the Issuer and delivered to the Trustee for cancellation pursuant to Section 2.10
and, if applicable, receive credit for Securities (not previously so credited) converted into Common Stock and so delivered to
the Trustee for cancellation, (b) receive credit for optional sinking fund payments (not previously so credited) made pursuant
to this Section, or (c) receive credit for Securities of such series (not previously so credited) redeemed by the Issuer through
any optional redemption provision contained in the terms of such series. Securities so delivered or credited shall be received
or credited by the Trustee at the sinking fund redemption price specified in such Securities.
On or before the 60th day next preceding
each sinking fund payment date for any series, the Issuer will deliver to the Trustee an Officer’s Certificate (which need
not contain the statements required by Section 11.05) (a) specifying the portion of the mandatory sinking fund payment to be satisfied
by payment of cash and the portion to be satisfied by credit of Securities of such series and the basis for such credit, (b) stating
that none of the Securities of such series for which credit will be taken has theretofore been so credited, (c) stating that no
defaults in the payment of interest or Events of Default with respect to such series have occurred (which have not been waived
or cured) and are continuing and (d) stating whether or not the Issuer intends to exercise its right to make an optional sinking
fund payment with respect to such series and, if so, specifying the amount of such optional sinking fund payment which the Issuer
intends to pay on or before the next succeeding sinking fund payment date. Any Securities of such series to be credited and required
to be delivered to the Trustee in order for the Issuer to be entitled to credit therefor as aforesaid which have not theretofore
been delivered to the Trustee shall be delivered for cancellation pursuant to Section 2.10 to the Trustee with such Officer’s
Certificate (or reasonably promptly thereafter if acceptable to the Trustee). Such Officer’s Certificate shall be irrevocable
and upon its receipt by the Trustee the Issuer shall become unconditionally obligated to make all the cash payments or payments
therein referred to, if any, on or before the next succeeding sinking fund payment date. Failure of the Issuer, on or before any
such 60th day, to deliver such Officer’s Certificate and Securities specified in this paragraph, if any, shall not constitute
a default but shall constitute, on and as of such date, the irrevocable election of the Issuer that the mandatory sinking fund
payment for such series due on the next succeeding sinking fund payment date shall be paid entirely in cash without the option
to deliver or credit Securities of such series in respect thereof.
If the sinking fund payment or payments
(mandatory or optional or both) to be made in cash on the next succeeding sinking fund payment date plus any unused balance of
any preceding sinking fund payments made in cash shall exceed $50,000 (or the equivalent thereof in any Foreign Currency or a lesser
sum in Dollars or in any Foreign Currency if the Issuer shall so request) with respect to the Securities of any particular series,
such cash shall be applied on the next succeeding sinking fund payment date to the redemption of Securities of such series at the
sinking fund redemption price together with accrued interest to the date fixed for redemption. If such amount shall be $50,000
(or the equivalent thereof in any Foreign Currency) or less and the Issuer makes no such request then it shall be carried over
until a sum in excess of $50,000 (or the equivalent thereof in any Foreign Currency) is available, which delay in accordance with
this paragraph shall not be a default or breach of the obligation to make such payment. The Trustee shall select, in the manner
provided in Section 12.02, for redemption on such sinking fund payment date a sufficient principal amount of Securities of such
series to which such cash may be applied, as nearly as may be, and shall (if requested in writing by the Issuer) inform the Issuer
of the serial numbers of the Securities of such series (or portions thereof) so selected. The Trustee, in the name and at the expense
of the Issuer (or the Issuer, if it shall so request the Trustee in writing), shall cause notice of redemption of the Securities
of such series to be given in substantially the manner provided in Section 12.02 (and with the effect provided in Section 12.03)
for the redemption of Securities of such series in part at the option of the Issuer. The amount of any sinking fund payments not
so applied or allocated to the redemption of Securities of such series shall be added to the next cash sinking fund payment for
such series and, together with such payment, shall be applied in accordance with the provisions of this Section. Any and all sinking
fund moneys held on the stated maturity date of the Securities of any particular series (or earlier, if such maturity is accelerated),
which are not held for the payment or redemption of particular Securities of such series, shall be applied, together with other
moneys, if necessary, sufficient for the purpose, to the payment of the principal of, and interest on, the Securities of such series
at maturity. The Issuer’s obligation to make a mandatory or optional sinking fund payment shall automatically be reduced
by an amount equal to the sinking fund redemption price allocable to any Securities or portions thereof called for redemption pursuant
to the preceding paragraph on any sinking fund payment date and converted into Common Stock in accordance with the terms of such
Securities; provided that, if the Trustee is not the conversion agent for the Securities, the Issuer or such conversion
agent shall give the Trustee written notice on or prior to the date fixed for redemption of the principal amount of Securities
or portions thereof so converted.
On or before each sinking fund payment
date, the Issuer shall pay to the Trustee in cash or shall otherwise provide for the payment of all interest accrued to the date
fixed for redemption on Securities to be redeemed on such sinking fund payment date.
The Trustee shall not redeem or cause
to be redeemed any Securities of a series with sinking fund moneys or give any notice of redemption of Securities for such series
by operation of the sinking fund during the continuance of a default in payment of interest on such Securities or of any Event
of Default except that, where the mailing of notice of redemption of any Securities shall theretofore have been made, the Trustee
shall redeem or cause to be redeemed such Securities, provided that it shall have received from the Issuer a sum sufficient for
such redemption. Except as aforesaid, any moneys in the sinking fund for such series at the time when any such default or Event
of Default shall occur, and any moneys thereafter paid into the sinking fund, shall, during the continuance of such default or
Event of Default, be deemed to have been collected under Article 5 and held for the payment of all such Securities. In case such
Event of Default shall have been waived as provided in Section 5.10, or the default cured on or before the 60th day preceding the
sinking fund payment date in any year, such moneys shall thereafter be applied on such sinking fund payment date in accordance
with this Section to the redemption of such Securities.
ARTICLE 13
SUBORDINATION OF SECURITIES
Section 13.01 Agreement of Subordination.
The Issuer covenants and agrees, and each holder of Securities issued hereunder by its acceptance thereof likewise covenants
and agrees, that all Securities shall be issued subject to the provisions of this Article 13; and each Securityholder, whether
upon original issue or upon transfer or assignment thereof, accepts and agrees to be bound by such provisions.
The payment of the principal of and interest
on all Securities issued hereunder shall, to the extent and in the manner hereinafter set forth, be subordinated and subject in
right of payment to the prior payment in full of all Senior Indebtedness of the Issuer, whether outstanding at the date of this
Indenture or thereafter incurred.
The provisions of this Article 13 define
the subordination of the Securities, as obligations of the Issuer, with respect to Senior Indebtedness of the Issuer.
No provision of this Article 13 shall
prevent the occurrence of any default or Event of Default hereunder.
Section 13.02 Payments to Securityholders.
In the event and during the continuation of any default in the payment of principal, premium, interest or any other payment
due on any Senior Indebtedness of the Issuer continuing beyond the period of grace, if any, specified in the instrument or lease
evidencing such Senior Indebtedness of the Issuer, then, unless and until such default shall have been cured or waived or shall
have ceased to exist, no payment shall be made by the Issuer with respect to the principal of or interest on the Securities, except
sinking fund obligations satisfied by credit of acquired Securities under Section 12.05 prior to the happening of such default
and payments made pursuant to Article 10 hereof from monies deposited with the Trustee pursuant thereto prior to the happening
of such default.
Upon any payment by the Issuer, or distribution
of assets of the Issuer of any kind or character, whether in cash, property or securities, to creditors upon any dissolution or
winding-up or liquidation or reorganization of the Issuer, whether voluntary or involuntary or in bankruptcy, insolvency, receivership
or other proceedings, all amounts due or to become due upon all Senior Indebtedness of the Issuer shall first be paid in full,
or payment thereof provided for in money in accordance with its terms, before any payment is made on account of the principal or
interest on the Securities (except payments made pursuant to Article 10 hereof from monies deposited with the Trustee pursuant
thereto prior to the happening of such dissolution, winding-up, liquidation or reorganization); and upon any such dissolution or
winding-up or liquidation or reorganization any payment by the Issuer, or distribution of assets of the Issuer of any kind or character,
whether in cash, property or securities, to which the holders of the Securities or the Trustee would be entitled, except for the
provisions of this Article 13, shall (except as aforesaid) be paid
by the Issuer or by any receiver, trustee
in bankruptcy, liquidating trustee, agent or other Person making such payment or distribution, or by the holders of the Securities
or by the Trustee under this Indenture if received by them or it, directly to the holders of Senior Indebtedness of the Issuer
(pro rata to such holders on the basis of the respective amounts of Senior Indebtedness of the Issuer held by such holders, as
calculated by the Issuer) or their representative or representatives, or to the trustee or trustees under any indenture pursuant
to which any instruments evidencing any Senior Indebtedness of the Issuer may have been issued, as their respective interests may
appear, to the extent necessary to pay all Senior Indebtedness of the Issuer in full, in money or money’s worth, after giving
effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness of the Issuer, before any payment
or distribution is made to the holders of the Securities or to the Trustee.
In the event that, notwithstanding the
foregoing, any payment or distribution of assets of the Issuer of any kind or character, whether in cash, property or securities,
prohibited by the foregoing, shall be received by the Trustee or the holders of the Securities before all Senior Indebtedness of
the Issuer is paid in full, or provision is made for such payment in money in accordance with its terms, such payment or distribution
shall be held in trust for the benefit of and shall be paid over or delivered to the holders of Senior Indebtedness of the Issuer
or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments
evidencing any Senior Indebtedness of the Issuer may have been issued, as their respective interests may appear, as calculated
by the Issuer, for application to the payment of all Senior Indebtedness of the Issuer remaining unpaid to the extent necessary
to pay all Senior Indebtedness of the Issuer in full in money in accordance with its terms, after giving effect to any concurrent
payment or distribution to or for the holders of such Senior Indebtedness.
For purposes of this Article 13, the
words, “cash, property or securities” shall not be deemed to include shares of stock of the Issuer as reorganized or
readjusted, or securities of the Issuer or any other corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this Article 13 with respect to the Securities to the payment
of all Senior Indebtedness of the Issuer which may at the time be outstanding; provided that (i) the Senior Indebtedness of the
Issuer is assumed by the new corporation, if any, resulting from any such reorganization or readjustment, and (ii) the rights of
the holders of the Senior Indebtedness of the Issuer (other than leases) and of leases which are assumed are not, without the consent
of such holders, altered by such reorganization or readjustment.
The consolidation of the Issuer with,
or the merger of the Issuer into, another corporation or the liquidation or dissolution of the Issuer 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 9 hereof shall not be deemed a dissolution, winding-up, liquidation or reorganization for the purposes
of this Section 13.02 if such other corporation shall, as a part of such consolidation, merger, conveyance or transfer, comply
with the conditions stated in Article 9 hereof. Nothing in this Section 13.02 shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 6.06.
Section 13.03 Subrogation of Securities.
Subject to the payment in full of all Senior Indebtedness of the Issuer, the rights of the holders of the Securities shall
be subrogated to the rights of the holders of Senior Indebtedness of the Issuer to receive payments or distributions of cash, property
or securities of the Issuer applicable to the Senior Indebtedness of the Issuer until the principal of and interest on the Securities
shall be paid in full; and, for the purposes of such subrogation, no payments or distributions to the holders of the Senior Indebtedness
of the Issuer of any cash, property or securities to which the holders of the Securities or the Trustee would be entitled except
for the provisions of this Article 13 to or for the benefit of the holders of Senior Indebtedness of the Issuer by holders of the
Securities or the Trustee, shall, as between the Issuer, its creditors other than holders of Senior Indebtedness of the Issuer,
and the holders of the Securities, be deemed to be a payment by the Issuer to or on account of the Senior Indebtedness of the Issuer.
It is understood that the provisions of this Article 13 are and are intended solely for the purpose of defining the relative rights
of the holders of the Securities, on the one hand, and the holders of the Senior Indebtedness of the Issuer, on the other hand.
Nothing contained in this Article 13
or elsewhere in this Indenture or in the Securities is intended to or shall impair, as between the Issuer, its creditors other
than the holders of its Senior Indebtedness, and the holders of the Securities, the obligation of the Issuer, which is absolute
and unconditional, to pay to the holders of the Securities the principal of and interest on the 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
of the Securities and creditors of the Issuer other than the holders of its Senior Indebtedness, nor shall anything herein or therein
prevent the Trustee or the holder of any Security from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article 13 of the holders of Senior Indebtedness of the Issuer
in respect of cash, property or securities of the Issuer received upon the exercise of any such remedy.
Upon any payment or distribution of assets
of the Issuer referred to in this Article 13, the Trustee, subject to the provisions of Section 6.01, and the holders of the Securities
shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which such dissolution, winding-up,
liquidation or reorganization proceedings are pending, or 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 of the Securities, for the
purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Indebtedness and other
indebtedness of the Issuer, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article 13.
Section 13.04 Authorization by
Securityholders. Each holder of a Security 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 provided in this Article 13 appoints the Trustee
its attorney-in-fact for any and all such purposes.
Section 13.05 Notice to Trustee.
The Issuer shall give promptly written notice to a Responsible Officer of the Trustee of any fact known to the Issuer which
would prohibit the making of any payment of monies to or by the Trustee in respect of the Securities pursuant to the provisions
of this Article 13. Notwithstanding the provisions of this Article 13 or any other
provision of this Indenture, the Trustee
shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payment of monies to or
by the Trustee in respect of the Securities pursuant to the provisions of this Article 13, unless and until a Responsible Officer
of the Trustee shall have received written notice thereof at the Corporate Trust Office of the Trustee from the Issuer or a holder
or holders of Senior Indebtedness of the Issuer or from any trustee therefor; and before the receipt of any such written notice,
the Trustee, subject to the provisions of Section 6.01, shall be entitled in all respects to assume that no such facts exist; provided
that if on a date not fewer than three Business Days prior to the date upon which by the terms hereof any such monies may become
payable for any purpose (including, without limitation, the payment of the principal of or interest on any Security) the Trustee
shall not have received, with respect to such monies, the notice provided for in this Section 13.05, then, anything herein contained
to the contrary notwithstanding, the Trustee shall have full power and authority to receive such monies and to 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 prior date. Notwithstanding anything to the contrary hereinbefore set forth, nothing shall prevent any payment by
the Issuer or the Trustee to the Securityholders of monies in connection with a redemption of Securities if (i) notice of such
redemption has been given pursuant to Article 12 hereof prior to the receipt by the Trustee of written notice as aforesaid, and
(ii) such notice of redemption is given not earlier than 60 days before the redemption date.
The Trustee conclusively shall be entitled
to rely on the delivery to it of a written notice by a Person representing himself to be a holder of Senior Indebtedness of the
Issuer (or a trustee on behalf of such holder) to establish that such notice has been given by a holder of Senior Indebtedness
of the Issuer or a trustee on behalf of any such holder or holders. In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a holder of Senior Indebtedness of the Issuer to participate
in any payment or distribution pursuant to this Article 13, the Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness of the Issuer held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under
this Article 13, and if such evidence is not furnished the Trustee may defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment.
Section 13.06 Trustee’s Relation
to Senior Indebtedness. The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article
13 in respect of any Senior Indebtedness of the Issuer at any time held by it, to the same extent as any other holder of Senior
Indebtedness of the Issuer and nothing elsewhere in this Indenture shall deprive the Trustee of any of its rights as such holder.
With respect to the holders of Senior
Indebtedness of the Issuer, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically
set forth in this Article 13, and no implied covenants or obligations with respect to the holders of Senior Indebtedness of the
Issuer 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 of the Issuer and the Trustee shall not be liable to any holder of Senior Indebtedness of the Issuer
if it shall pay over or deliver to holders of Securities, the Issuer or any other Person money or assets to which any holder of
Senior Indebtedness of the Issuer shall be entitled by virtue of this Article 13 or otherwise.
Section 13.07 No Impairment of
Subordination. No right of any present or future holder of any Senior Indebtedness of the Issuer to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Issuer or
by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Issuer with the terms, provisions
and covenants of this Indenture, regardless of any knowledge thereof which any such holder may have or otherwise be charged with.
Section 13.08 Rights of Trustee.
Nothing in this Article 13 shall apply to claims of or payments to, the Trustee pursuant to Section 6.06.
[Signature pages
follow]
IN WITNESS WHEREOF, the parties hereto
have caused this Indenture to be duly executed as of _____________.
FRANKLIN STREET PROPERTIES CORP.
By: _______________________________
Name:
Title:
Attest:
By: _______________________________
Name:
Title:
___________________________, Trustee
By: _______________________________
Name:
Title:
Exhibit 4.5
Form of Senior Note
(FACE OF SECURITY)
[Each Global Security shall bear
substantially the following legend:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE
OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY
TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS SECURITY IS PRESENTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[If the Security has original issue discount
for U.S. federal income tax purposes, insert tax legend:
[FOR PURPOSES OF SECTIONS 1272 , 1273,
and 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (“THE CODE”), THIS SECURITY IS BEING ISSUED WITH
ORIGINAL ISSUE DISCOUNT. THE AMOUNT OF ORIGINAL ISSUE DISCOUNT (AS DEFINED IN SECTION 1273(A)(1) OF THE CODE AND TREASURY
REGULATION SECTION 1.1273-1(A)) WITH RESPECT TO THIS SECURITY IS ______, THE ISSUE DATE (AS DEFINED IN SECTION 1275(A)(2) OF THE
CODE AND TREASURY REGULATION SECTION 1.1273-2(A)(2)) OF THIS SECURITY IS _______, THE ISSUE PRICE (AS DEFINED IN SECTION 1273(B)
OF THE CODE AND TREASURY REGULATION SECTION 1.1273-2(A)) OF THIS SECURITY IS _______, AND THE YIELD TO MATURITY (AS DEFINED IN
TREASURY REGULATION SECTION 1.1272-1(B)) OF THIS SECURITY IS _______.] ]
FRANKLIN STREET PROPERTIES CORP.
[ Title of Security ]
No. [ ] |
CUSIP No.: [ ] |
|
[Common Code][ISIN]: [ ] |
|
[$ ] |
FRANKLIN STREET PROPERTIES
CORP., a Delaware corporation (“Issuer”, which term includes any successor corporation), for value received promises
to pay to [If the Security is a Global Security -- CEDE & CO.][If the Security is not a Global Security -- __________]
or registered assigns, the principal sum of __________ on __________,____ (the “Maturity Date”) [If the Security
is to bear interest prior to maturity, insert--, and to pay interest thereon from _____________ or from the most recent interest
payment date to which interest has been paid or duly provided for, [semiannually in arrears on ______ and ______ in each year],
commencing _________, ____ (each, an “Interest Payment Date”) at the rate of [___% per annum], until the principal
hereof is paid or made available for payment [If applicable insert--, and (to the extent that the payment of such interest
shall be legally enforceable) at the rate of ___% per annum on any overdue principal and on any overdue installment of interest].
The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture
(as defined below), be paid to the Holder in whose name this Security (or one or more predecessor Securities) is registered at
the close of business on the record date for such interest, which shall be the _______ or ________ (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date (each, an “Interest Record Date”). Interest will be computed
on the basis of [a 360-day year of twelve 30-day months].]
[If the Security is
not to bear interest prior to maturity, insert--The principal of this Security shall not bear interest except in the case of
a default in payment of principal upon acceleration, upon redemption or at maturity and, in each such case, the overdue principal
of this Security shall bear interest at the rate of ___% per annum (to the extent that the payment of such interest shall be legally
enforceable), which shall accrue from the date of such default in payment to the date payment of such principal has been made or
duly provided for. Interest on any overdue principal shall be payable on demand.]
Reference is made to
the further provisions set forth on the reverse of this Security contained herein, which will for all purposes have the same effect
as if set forth at this place.
IN WITNESS WHEREOF,
the Issuer has caused this Security to be signed manually or by facsimile by its duly authorized officer under its corporate seal.
FRANKLIN STREET PROPERTIES CORP.
By: _____________________________________
Name: _______________________________
Title: ________________________________
Attest:
By: __________________________
Name: ________________________
Title: _________________________
This is one of the
Securities of the series designated herein and referred to in the within-mentioned Indenture.
Dated: [ ]
____________, as Trustee
By: ______________________________________
Title: ________________________________
(REVERSE
OF SECURITY)
FRANKLIN
STREET PROPERTIES CORP.
[ Title
of Security ]
1. Indenture
This Security is one
of a duly authorized issue of debentures, notes or other evidence of indebtedness (hereinafter called the “Securities”)
of the Issuer of the series hereinafter specified, which series is initially limited in aggregate principal amount to [$]____________,
all of such Securities issued and to be issued under an Indenture dated as of ________, _____ (the “Indenture”) between
the Issuer and __________________________ as trustee (the “Trustee”). Capitalized terms herein are used as defined
in the Indenture unless otherwise indicated. The terms of the Securities include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939, as in effect on the date of the Indenture. The Securities are
subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of all such terms.
To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Security and the terms of
the Indenture, the terms of the Indenture shall control.
This Security is one
of a series of Securities designated pursuant to the Indenture [and an [Supplemental Indenture] dated _____, _____, issued
pursuant to Section 2.01 and Section 2.03 thereof (the “Supplement”)] as ________________. The Securities are general
unsecured obligations of the Issuer. The Issuer may, subject to the provisions of the Indenture and applicable law, issue additional
Securities of any series under the Indenture.
2. Method
of Payment.
The Issuer shall pay
interest on the Securities (except defaulted interest) to the persons who are the registered Holders at the close of business on
the Interest Record Date immediately preceding the Interest Payment Date notwithstanding any transfer or exchange of such Security
subsequent to such Interest Record Date and prior to such Interest Payment Date. Holders must surrender Securities to the Trustee
to collect principal payments. The Issuer shall pay Principal and interest in money of [the United States] that at the time
of payment is legal tender for payment of public and private debts. [However, the payments of interest, and any portion of the
Principal (other than interest payable at maturity or on any redemption or repayment date or the final payment of Principal) shall
be made by the Paying Agent, upon receipt from the Issuer of immediately available funds by __________ [a./p.m.], New York
City time (or such other time as may be agreed to between the Issuer and the Paying Agent or the Issuer), directly to a Holder
(by Federal funds wire transfer or otherwise) if the Holder has delivered written instructions to the Trustee 15 days prior to
such payment date requesting that such payment will be so made and designating the bank account to which such payments shall be
so made and in the case of payments of Principal surrenders the same to the Trustee in exchange for a Security or Securities aggregating
the same principal amount as the unredeemed principal amount of the Securities surrendered.]
[The Securities
of this series may be redeemed at any time [on or after ______, ______], as a whole or in part, at the option of
the Issuer, upon mailing notice of such redemption not less than 30 and not more than 60 days to the Holders of such Securities,
at a redemption price equal to ___________.]
| 4. | Paying Agent and Security Registrar |
Initially, the Trustee
will act as Paying Agent and Security Registrar. The Issuer may change any Paying Agent or Security Registrar without
notice to the Holders.
| 5. | Denominations; Transfer; Exchange. |
The Securities are
in registered form, without coupons, in denominations of [$1,000] and multiples of [$1,000]. A Holder shall register
the transfer of or exchange Securities in accordance with the Indenture. The Issuer may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain transfer taxes or similar governmental charges payable
in connection therewith as permitted by the Indenture. [The Issuer need not register the transfer of or exchange (a) any Securities
for a period of fifteen (15) days preceding the first mailing of notice that such Securities are to be redeemed, or (b) any Securities
selected, called or being called for redemption in whole or in part, except, in the case of any Security to be redeemed in part,
the portion thereof not to be so redeemed.]
The registered Holder
of a Security shall be treated as the owner of it for all purposes.
If funds for the payment
of principal or interest remain unclaimed for two years, the Trustee and the Paying Agent will repay the funds to the Issuer. After
that, all liability of the Trustee and such Paying Agent with respect to such funds shall cease.
The Indenture [as
amended by the Supplement] contains provisions for defeasance at any time of (a) the entire indebtedness of the Issuer on this
Security and (b) certain restrictive covenants and the related Events of Default, upon compliance by the Issuer with certain conditions
set forth therein, which provisions [apply] to this Security.
| 9. | Amendment; Supplement; Waiver. |
Subject to certain
exceptions, the Securities of this series, [the Supplement] and the provisions of the Indenture relating to the Securities of this
series may be amended or supplemented with the written consent of the Holders of at least a majority in aggregate principal amount
of the Securities of this series then outstanding, and any existing Default or Event of Default, other than the non-payment of
the principal amount of or interest on the Securities of this series, or compliance with certain provisions may be waived with
the consent of the Holders of a majority in aggregate principal amount of all the Securities of this series then outstanding. Without
notice to or consent of any Holder, the parties thereto may amend or supplement the Indenture and the Securities to, among other
things, cure any ambiguity, defect or inconsistency, provide for uncertificated Securities in addition to or in place of certificated
Securities, or make any other change that does not adversely affect the rights of any Holder of a Security.
| 10. | Defaults and Remedies. |
If an Event of Default
(other than certain bankruptcy Events of Default with respect to the Issuer) occurs and is continuing, the Trustee or the Holders
of at least 25% in aggregate principal amount of Securities of this series then outstanding (voting as a separate class) by notice
in writing to the Issuer (and also to the Trustee if such notice is given by the Holders) may declare [the entire principal]
of the Securities of this series and the interest accrued thereon, if any, to be due and payable immediately in the manner and
with the effect provided in the Indenture. If a bankruptcy Event of Default with respect to the Issuer occurs and is continuing,
then [the entire principal] of the Securities then outstanding and interest accrued thereon, if any, shall become due and
payable immediately in the manner and with the effect provided in the Indenture. Holders of Securities may not enforce
the Indenture or the Securities except as provided in the Indenture. The Trustee is not obligated to enforce the Indenture or the
Securities unless it has received indemnity satisfactory to it. The Indenture permits, subject to certain limitations therein provided,
Holders of a majority in aggregate principal amount of the Securities then outstanding to direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of Securities notice of certain continuing Defaults or Events of Default
if it determines that withholding notice is in their interest.
| 11. | Trustee Dealings with Issuer. |
The Trustee under the
Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the
Issuer as if it were not the Trustee.
| 12. | No Recourse Against Others. |
No stockholder, director,
officer, employee or incorporator, past, present or future as such, of the Issuer or any predecessor or successor corporation thereof
shall have any liability for any obligation under the Securities or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Holder of a Security by accepting a Security waives and releases all such liability.
The waiver and release are part of the consideration for the issuance of the Securities.
This Security shall
not be valid until the Trustee manually signs the certificate of authentication on this Security.
| 14. | Abbreviations and Defined Terms. |
Customary abbreviations
may be used in the name of a Holder of a Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification Procedures, the Issuer has caused CUSIP numbers to be printed on
the Securities as a convenience to the Holders of the Securities. No representation is made as to the accuracy of such numbers
as printed on the Securities and reliance may be placed only on the other identification numbers printed hereon.
The laws of the State
of New York shall govern the Indenture and this Security thereof, and for all purposes this Security shall be governed by and construed
in accordance with the laws of such State without regard to any principle of conflict of laws that would require or permit the
application of the laws of any other jurisdiction, except as may otherwise be required by mandatory provisions of law.
ASSIGNMENT
FORM
I or we assign and
transfer this Security to
|
(Print or type name, address and zip code of assignee or transferee) |
|
|
(Insert Social Security or other identifying number of assignee or transferee) |
and irrevocably appoint ______________________________________________
agent to transfer this Security on the books of the Issuer. The agent may substitute another to act for him.
Dated: |
|
|
Signed: |
|
|
|
|
|
(Signed exactly as name appears on the other side of this Security) |
Signature
Guarantee: _____________________________
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably acceptable to the Trustee)
Exhibit 4.6
Form of
Subordinated Note
(FACE OF SECURITY)
[Each Global Security shall bear
substantially the following legend:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE
OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY
TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS SECURITY IS PRESENTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[If the Security has original issue discount
for U.S. federal income tax purposes, insert tax legend:
[FOR PURPOSES OF SECTIONS 1272 , 1273,
and 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (“THE CODE”), THIS SECURITY IS BEING ISSUED WITH
ORIGINAL ISSUE DISCOUNT. THE AMOUNT OF ORIGINAL ISSUE DISCOUNT (AS DEFINED IN SECTION 1273(A)(1) OF THE CODE AND TREASURY
REGULATION SECTION 1.1273-1(A)) WITH RESPECT TO THIS SECURITY IS ______, THE ISSUE DATE (AS DEFINED IN SECTION 1275(A)(2) OF THE
CODE AND TREASURY REGULATION SECTION 1.1273-2(A)(2)) OF THIS SECURITY IS _______, THE ISSUE PRICE (AS DEFINED IN SECTION 1273(B)
OF THE CODE AND TREASURY REGULATION SECTION 1.1273-2(A)) OF THIS SECURITY IS _______, AND THE YIELD TO MATURITY (AS DEFINED IN
TREASURY REGULATION SECTION 1.1272-1(B)) OF THIS SECURITY IS _______.] ]
FRANKLIN STREET PROPERTIES CORP.
[ Title of Security ]
No. [ ] |
CUSIP No.: [ ] |
|
[Common Code][ISIN]: [ ] |
|
[$ ] |
Franklin Street Properties
Corp., a Delaware corporation (“Issuer”, which term includes any successor corporation), for value received promises
to pay to [If the Security is a Global Security -- CEDE & CO.][If the Security is not a Global Security -- __________]
or registered assigns, the principal sum of __________ on __________,____ (the “Maturity Date”) [If the Security
is to bear interest prior to maturity, insert--, and to pay interest thereon from _____________ or from the most recent interest
payment date to which interest has been paid or duly provided for, [semiannually in arrears on ______ and ______ in each year],
commencing _________, ____ (each, an “Interest Payment Date”) at the rate of [___% per annum], until the principal
hereof is paid or made available for payment [If applicable insert--, and (to the extent that the payment of such interest
shall be legally enforceable) at the rate of ___% per annum on any overdue principal and on any overdue installment of interest].
The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture
(as defined below), be paid to the Holder in whose name this Security (or one or more predecessor Securities) is registered at
the close of business on the record date for such interest, which shall be the _______ or ________ (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date (each, an “Interest Record Date”). Interest will be computed
on the basis of [a 360-day year of twelve 30-day months].]
[If the Security is
not to bear interest prior to maturity, insert--The principal of this Security shall not bear interest except in the case of
a default in payment of principal upon acceleration, upon redemption or at maturity and, in each such case, the overdue principal
of this Security shall bear interest at the rate of ___% per annum (to the extent that the payment of such interest shall be legally
enforceable), which shall accrue from the date of such default in payment to the date payment of such principal has been made or
duly provided for. Interest on any overdue principal shall be payable on demand.]
Reference is made to
the further provisions set forth on the reverse of this Security contained herein, which will for all purposes have the same effect
as if set forth at this place.
IN WITNESS WHEREOF,
the Issuer has caused this Security to be signed manually or by facsimile by its duly authorized officer under its corporate seal.
FRANKLIN STREET PROPERTIES CORP.
By: _____________________________________
Name: _______________________________
Title: ________________________________
Attest:
By: __________________________
Name: ________________________
Title: _________________________
This is one of the
Securities of the series designated herein and referred to in the within-mentioned Indenture.
Dated: [ ]
____________, as Trustee
By: _____________________________________
Title: ________________________________
(REVERSE
OF SECURITY)
FRANKLIN
STREET PROPERTIES CORP.
[ Title
of Security ]
This Security is one
of a duly authorized issue of debentures, notes or other evidence of indebtedness (hereinafter called the “Securities”)
of the Issuer of the series hereinafter specified, which series is initially limited in aggregate principal amount to [$]____________,
all of such Securities issued and to be issued under an Indenture dated as of ________, _____ (the “Indenture”) between
the Issuer and __________________________ as trustee (the “Trustee”). Capitalized terms herein are used as defined
in the Indenture unless otherwise indicated. The terms of the Securities include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939, as in effect on the date of the Indenture. The Securities are
subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of all such terms.
To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Security and the terms of
the Indenture, the terms of the Indenture shall control.
This Security is one
of a series of Securities designated pursuant to the Indenture [and an [Supplemental Indenture] dated _____, _____, issued
pursuant to Section 2.01 and Section 2.03 thereof (the “Supplement”)] as ________________. The Securities are general
unsecured obligations of the Issuer. The Issuer may, subject to the provisions of the Indenture and applicable law, issue additional
Securities of any series under the Indenture.
The Issuer shall pay
interest on the Securities (except defaulted interest) to the persons who are the registered Holders at the close of business on
the Interest Record Date immediately preceding the Interest Payment Date notwithstanding any transfer or exchange of such Security
subsequent to such Interest Record Date and prior to such Interest Payment Date. Holders must surrender Securities to the Trustee
to collect principal payments. The Issuer shall pay Principal and interest in money of [the United States] that at the time
of payment is legal tender for payment of public and private debts. [However, the payments of interest, and any portion of the
Principal (other than interest payable at maturity or on any redemption or repayment date or the final payment of Principal) shall
be made by the Paying Agent, upon receipt from the Issuer of immediately available funds by __________ [a./p.m.], New York
City time (or such other time as may be agreed to between the Issuer and the Paying Agent or the Issuer), directly to a Holder
(by Federal funds wire transfer or otherwise) if the Holder has delivered written instructions to the Trustee 15 days prior to
such payment date requesting that such payment will be so made and designating the bank account to which such payments shall be
so made and in the case of payments of Principal surrenders the same to the Trustee in exchange for a Security or Securities aggregating
the same principal amount as the unredeemed principal amount of the Securities surrendered.]
[The Securities
of this series may be redeemed at any time [on or after ______, ______], as a whole or in part, at the option of
the Issuer, upon mailing notice of such redemption not less than 30 and not more than 60 days to the Holders of such Securities,
at a redemption price equal to ___________.]
| 4. | Paying Agent and Security Registrar |
Initially, the Trustee
will act as Paying Agent and Security Registrar. The Issuer may change any Paying Agent or Security Registrar without
notice to the Holders.
| 5. | Denominations; Transfer; Exchange. |
The Securities are
in registered form, without coupons, in denominations of [$1,000] and multiples of [$1,000]. A Holder shall register
the transfer of or exchange Securities in accordance with the Indenture. The Issuer may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain transfer taxes or similar governmental charges payable
in connection therewith as permitted by the Indenture. [The Issuer need not register the transfer of or exchange (a) any Securities
for a period of fifteen (15) days preceding the first mailing of notice that such Securities are to be redeemed, or (b) any Securities
selected, called or being called for redemption in whole or in part, except, in the case of any Security to be redeemed in part,
the portion thereof not to be so redeemed.]
The registered Holder
of a Security shall be treated as the owner of it for all purposes.
If funds for the payment
of principal or interest remain unclaimed for two years, the Trustee and the Paying Agent will repay the funds to the Issuer. After
that, all liability of the Trustee and such Paying Agent with respect to such funds shall cease.
The Indenture [as
amended by the Supplement] contains provisions for defeasance at any time of (a) the entire indebtedness of the Issuer on this
Security and (b) certain restrictive covenants and the related Events of Default, upon compliance by the Issuer with certain conditions
set forth therein, which provisions [apply] to this Security.
| 9. | Amendment; Supplement; Waiver. |
Subject to certain
exceptions, the Securities of this series, [the Supplement] and the provisions of the Indenture relating to the Securities of this
series may be amended or supplemented with the written consent of the Holders of at least a majority in aggregate principal amount
of the Securities of this series then outstanding, and any existing Default or Event of Default, other than the non-payment of
the principal amount of or interest on the Securities of this series, or compliance with certain provisions may be waived with
the consent of the Holders of a majority in aggregate principal amount of all the Securities of this series, then outstanding.
Without notice to or consent of any Holder, the parties thereto may amend or supplement the Indenture and the Securities to, among
other things, cure any ambiguity, defect or inconsistency, provide for uncertificated Securities in addition to or in place of
certificated Securities, or make any other change that does not adversely affect the rights of any Holder of a Security.
| 10. | Defaults and Remedies. |
If an Event of Default
(other than certain bankruptcy Events of Default with respect to the Issuer) occurs and is continuing, the Trustee or the Holders
of at least 25% in aggregate principal amount of Securities of this series then outstanding (voting as a separate class) by notice
in writing to the Issuer (and also to the Trustee if such notice is given by the Holders) may declare [the entire principal]
of the Securities of this series and the interest accrued thereon, if any, to be due and payable immediately in the manner and
with the effect provided in the Indenture. If a bankruptcy Event of Default with respect to the Issuer occurs and is continuing,
then [the entire principal] of the Securities then outstanding and interest accrued thereon, if any, shall become due and
payable immediately in the manner and with the effect provided in the Indenture. Holders of Securities may not enforce
the Indenture or the Securities except as provided in the Indenture. The Trustee is not obligated to enforce the Indenture or the
Securities unless it has received indemnity satisfactory to it. The Indenture permits, subject to certain limitations therein provided,
Holders of a majority in aggregate principal amount of the Securities then outstanding to direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of Securities notice of certain continuing Defaults or Events of Default
if it determines that withholding notice is in their interest.
Reference is made to
the Indenture, including, without limitation, provisions subordinating the payment of principal of and premium, if any, and interest
on the Securities to the prior payment in full of all Senior Indebtedness as defined in the Indenture. Such further
provisions shall for all purposes have the same effect as though fully set forth at this place.
| 12. | Trustee Dealings with Issuer. |
The Trustee under the
Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the
Issuer as if it were not the Trustee.
| 13. | No Recourse Against Others. |
No stockholder, director,
officer, employee or incorporator, past, present or future as such, of the Issuer or any predecessor or successor corporation thereof
shall have any liability for any obligation under the Securities or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Holder of a Security by accepting a Security waives and releases all such liability.
The waiver and release are part of the consideration for the issuance of the Securities.
This Security shall
not be valid until the Trustee manually signs the certificate of authentication on this Security.
| 15. | Abbreviations and Defined Terms. |
Customary abbreviations
may be used in the name of a Holder of a Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification Procedures, the Issuer has caused CUSIP numbers to be printed on
the Securities as a convenience to the Holders of the Securities. No representation is made as to the accuracy of such numbers
as printed on the Securities and reliance may be placed only on the other identification numbers printed hereon.
The laws of the State
of New York shall govern the Indenture and this Security thereof, and for all purposes this Security shall be governed by and construed
in accordance with the laws of such State without regard to any principle of conflict of laws that would require or permit the
application of the laws of any other jurisdiction, except as may otherwise be required by mandatory provisions of law.
ASSIGNMENT
FORM
I or we assign and
transfer this Security to
|
(Print or type name, address and zip code of assignee or transferee) |
|
|
(Insert Social Security or other identifying number of assignee or transferee) |
and irrevocably appoint ______________________________________________
agent to transfer this Security on the books of the Issuer. The agent may substitute another to act for him.
Dated: |
|
|
Signed: |
|
|
|
|
|
(Signed exactly as name appears on the other side of this Security) |
Signature
Guarantee: ______________________________________
Participant in a recognized Signature Guarantee Medallion
Program (or other
signature guarantor program reasonably acceptable to the Trustee)
Exhibit 5
|
|
+1 617 526 6000 (t)
+1 617 526 5000 (f)
wilmerhale.com |
January 12, 2015
Franklin Street Properties Corp.
401 Edgewater Place, Suite 200
Wakefield, MA 01880
|
Re: |
Registration Statement on Form S-3 |
Ladies and Gentlemen:
This opinion is furnished to you in connection
with a Registration Statement on Form S-3 (the “Registration Statement”) filed by Franklin Street Properties Corp.,
a Maryland corporation (the “Company”), with the Securities and Exchange Commission (the “Commission”)
under the Securities Act of 1933, as amended (the “Securities Act”), for the registration of the following securities
of the Company (the “Securities”):
| i. | senior debt securities (the “Senior Debt Securities”); |
| ii. | subordinated debt securities (the “Subordinated Debt Securities” and, together with the Senior Debt Securities,
the “Debt Securities”); |
| iii. | common stock, par value $0.0001 per share (the “Common Stock”); |
| iv. | preferred stock, par value $0.0001 per share (the “Preferred Stock”); and |
| v. | depositary shares representing a fractional interest in or multiple shares of Preferred Stock (the “Depositary Shares”); |
all of which may be issued and sold by the Company and, with
respect to the common stock, sold by selling stockholders from time to time on a delayed or continuous basis pursuant to Rule 415
under the Securities Act and in reliance on Rule 456(b) and Rule 457(r) under the Securities Act at an indeterminate aggregate
initial offering price, as set forth in the Registration Statement, the prospectus contained therein (the “Prospectus”)
and any amendments or supplements thereto.
We are acting as counsel
for the Company in connection with the filing of the Registration Statement. The Senior Debt Securities may be issued pursuant
to a senior indenture (together with any supplemental indentures relating to the Senior Debt Securities, the “Senior Indenture”)
to be entered into between the Company and a trustee to be named in the Senior Indenture and duly qualified under the Trust Indenture
Act of 1939, as amended (the “Trust Indenture Act”). The Subordinated Debt Securities may be issued pursuant to a subordinated
indenture (together with any supplemental indentures relating to the Subordinated Debt
Franklin
Street Properties Corp.
January 12, 2015
Page 2
Securities, the “Subordinated
Indenture,” and together with the Senior Indenture, the “Indentures”) to be entered into between the Company
and a trustee to be named in the Subordinated Indenture and duly qualified under the Trust Indenture Act. The terms of shares of
any class of Preferred Stock will be set forth in Articles Supplementary with respect thereto. The shares of Preferred Stock represented
by Depositary Shares will be deposited pursuant to a Depositary Agreement (the “Depositary Agreement”) between the
Company and a bank or trust company as depositary, and the terms of such shares of Preferred Stock will be set forth in Articles
Supplementary with respect thereto.
We have examined and relied upon signed
copies of the Registration Statement as filed with the Commission, including the exhibits thereto. We have also examined and relied
upon the minutes of meetings of the stockholders and the Board of Directors of the Company as provided to us by the Company and
the Articles of Incorporation and By-Laws of the Company, each as restated and/or amended to date (collectively the “Charter
Documents”).
In our examination of the foregoing documents,
we have assumed the genuineness of all signatures, the legal capacity of all individual signatories, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all documents submitted to us as copies, the authenticity
of such original documents and the completeness and accuracy of the corporate minute books of the Company provided to us by the
Company.
We have relied as to certain matters
on information obtained from public officials and officers of the Company, and we have assumed that (i) one or more Prospectus
supplements will have been prepared and filed with the Commission describing the Securities offered thereby; (ii) all Securities
will be issued and sold in compliance with applicable federal and state securities laws and in the manner stated in the Registration
Statement, the Prospectus and the applicable Prospectus supplements; (iii) in the case of Debt Securities, (a) the applicable
Indenture will be duly authorized, executed and delivered by the trustee named therein, (b) the applicable Indenture will
be duly qualified under the Trust Indenture Act and the applicable trustee will be duly eligible to serve as trustee, and (c) the
Debt Securities will be duly authenticated by the trustee named in the applicable Indenture; (iv) any Depositary Agreement will
be duly authorized, executed and delivered by all parties thereto other than the Company; (v) a definitive purchase, underwriting
or similar agreement with respect to any Securities offered will be duly authorized, executed and delivered by all parties thereto
other than the Company; (vi) any Securities issuable upon conversion, exchange or exercise of any Security being offered will
be duly authorized, created and, if appropriate, reserved for issuance upon such conversion, exchange or exercise; (vii) with
respect to shares of Common Stock or Preferred Stock offered, there will be sufficient shares of Common Stock or Preferred Stock
authorized under the Company’s Articles of Incorporation, as restated and/or amended, and not otherwise reserved for issuance;
and (viii) the Company will be validly existing as a corporation and in good standing under the laws of the State of Maryland.
Franklin
Street Properties Corp.
January 12, 2015
Page 3
We are expressing no opinion herein
as to the application of any federal or state law or regulation to the power, authority or competence of any party to any agreement
with respect to any of the Securities other than the Company. We have assumed that such agreements are, or will be, the valid
and binding obligations of each party thereto other than the Company, and enforceable against each such other party in accordance
with their respective terms.
We have assumed for purposes
of our opinions below that no authorization, approval, consent or other action by, and no notice to or filing with, any governmental
authority or regulatory body or any other third party is required for the due execution, delivery or performance by the Company
or, if any such authorization, approval, consent, action, notice or filing is required, it will have been duly obtained, taken,
given or made and will be in full force and effect. We have also assumed that the execution and delivery by the Company of
the Indentures and the Depositary Agreement and the Securities and the performance by the Company of its obligations thereunder
do not and will not violate, conflict with or constitute a default under (i) any agreement or instrument to which the Company
or any of its properties is then subject, (ii) any law, rule or regulation to which the Company or any of its properties
is then subject or (iii) any judicial or regulatory order or decree of any governmental authority.
We have also assumed that
there will not have occurred, prior to the date of issuance of the Securities, any change in law affecting the validity or enforceability
of such Securities and that at the time of the issuance and sale of the Securities, the Board of Directors of the Company (or any
committee thereof acting pursuant to authority properly delegated to such committee by the Board of Directors) shall not have taken
any action to rescind or otherwise reduce its prior authorization of the issuance of the Securities.
Our opinions below are
qualified to the extent that they may be subject to or affected by (i) applicable bankruptcy, insolvency, reorganization,
moratorium, usury, fraudulent conveyance or similar laws relating to or affecting the rights or remedies of creditors generally,
(ii) duties and standards imposed on creditors and parties to contracts, including, without limitation, requirements of materiality,
good faith, reasonableness and fair dealing and (iii) general equitable principles. Furthermore, we express no opinion
as to the availability of any equitable or specific remedy upon any breach of any of the agreements as to which we are opining
herein, or any of the agreements, documents or obligations referred to therein, or to the successful
Franklin
Street Properties Corp.
January 12, 2015
Page 4
assertion of any equitable defenses, inasmuch
as the availability of such remedies or the success of any equitable defenses may be subject to the discretion of a court. We also
express no opinion herein as to the laws of any state or jurisdiction other than the state laws of the State of Maryland and the
State of New York and the federal laws of the United States of America. We express no opinion herein with respect to compliance
by the Company with the securities or “blue sky” laws of any state or other jurisdiction of the United States or of
any foreign jurisdiction. In addition, we express no opinion and make no statement herein with respect to the antifraud laws of
any jurisdiction.
We also express no opinion
herein as to any provision of any agreement (i) that may be deemed to or construed to waive any right of the Company, (ii) to
the effect that rights and remedies are not exclusive, that every right or remedy is cumulative and may be exercised in addition
to or with any other right or remedy and does not preclude recourse to one or more other rights or remedies, (iii) relating to
the effect of invalidity or unenforceability of any provision of any agreement on the validity or enforceability of any other provision
thereof, (iv) that is in violation of public policy, (v) relating to indemnification and contribution with respect to
securities law matters, (vi) which provides that the terms of any agreement may not be waived or modified except in writing,
(vii) purporting to indemnify any person against his, her or its own negligence or intentional misconduct, (viii) requiring
the payment of penalties, consequential damages or liquidated damages or (ix) relating to choice of law or consent to jurisdiction.
Based upon and subject
to the foregoing, we are of the opinion that:
1.
With respect to the Debt Securities, when (i) specifically authorized for issuance by proper action of the Company’s
Board of Directors or an authorized committee thereof (the “Authorizing Resolutions”), (ii) the applicable Indenture
has been duly authorized, executed and delivered, (iii) the terms of the Debt Securities and of their issuance and sale have
been duly established in conformity with the applicable Indenture and the Authorizing Resolutions, (iv) such Debt Securities
have been duly executed and authenticated in accordance with the applicable Indenture and issued and sold as contemplated by the
Registration Statement, the Prospectus and the applicable supplements to such Prospectus and (v) the Company has received
the consideration provided for in the Authorizing Resolutions and the applicable underwriting agreement or other purchase agreement,
such Debt Securities will constitute valid and binding obligations of the Company, enforceable against the Company in accordance
with their terms.
Franklin
Street Properties Corp.
January 12, 2015
Page 5
2.
With respect to the Common Stock, when (i) specifically authorized for issuance by the Authorizing Resolutions, (ii) the
terms of the issuance and sale of the Common Stock have been duly established in conformity with the Charter Documents, (iii) the
shares of Common Stock have been issued and sold as contemplated by the Registration Statement, the Prospectus and the applicable
supplements to such Prospectus and (iv) the Company has received the consideration provided for in the Authorizing Resolutions
and the applicable underwriting agreement or other purchase agreement and such consideration per share is not less than the par
value per share of the Common Stock, the Common Stock will be validly issued, fully paid and nonassessable.
3.
With respect to shares of any class of the Preferred Stock, when (i) the Authorizing Resolutions have specifically authorized
the issuance and terms of the shares of the class, the terms of the offering thereof and related matters, including resolutions
establishing and designating the class and fixing and determining the terms thereof and the filing of Articles Supplementary with
respect to the class with the State Department of Assessments and Taxation of Maryland (“SDAT”), and such Articles
Supplementary have been duly filed with, and accepted of record by, the SDAT prior to the issuance of such shares, (ii) the terms
of the issuance and sale of the class of Preferred Stock have been duly established in conformity with the Charter Documents, (iii)
the shares of the class of Preferred Stock have been issued and sold as contemplated by the Registration Statement, the Prospectus
and the applicable supplements to such Prospectus, and (iv) the Company has received the consideration provided for in the Authorizing
Resolutions and the applicable underwriting agreement or other purchase agreement and such consideration per share is not less
than the par value per share of the Preferred Stock, the shares of such class of Preferred Stock will be validly issued, fully
paid and nonassessable.
4.
With respect to the Depositary Shares, when (i) the Authorizing Resolutions have specifically authorized the issuance and
terms of the Depositary Shares, the terms of the offering thereof and related matters, including the adoption of Articles Supplementary
relating to the Preferred Stock underlying the Depositary Shares and the filing of the Articles Supplementary with the SDAT, and
such Articles Supplementary have been duly filed, and accepted of record by, the SDAT prior to the issuance of the Depositary Shares,
(ii) the applicable Depositary Agreement relating to the Depositary Shares has been duly authorized, executed and delivered; any
depositary receipts evidencing rights in the Depositary Shares have been executed; and the depositary appointed by the Company,
(iii) the terms of the issuance and sale of the Depositary Shares have been duly established in conformity with the Charter
Franklin
Street Properties Corp.
January 12, 2015
Page 6
Documents, (iv) the Depositary Shares have been issued
and sold as contemplated by the Registration Statement, the Prospectus and the applicable supplements to such Prospectus, (v) the
shares of Preferred Stock underlying the Depositary Shares have been deposited with a bank or trust company (which meets the requirements
for the depositary set forth in the Registration Statement), and (vi) the Company has received the consideration provided for in
the Authorizing Resolutions and the applicable underwriting agreement or other purchase agreement, the Depositary Shares will be
legally issued and will entitle the holders of such Depositary Shares to the rights specified in the applicable Depositary Agreement
and the applicable depositary receipts.
Please note that we are
opining only as to the matters expressly set forth herein, and no opinion should be inferred as to any other matters. This
opinion is based upon currently existing statutes, rules, regulations and judicial decisions, and we disclaim any obligation to
advise you of any change in any of these sources of law or subsequent legal or factual developments which might affect any matters
or opinions set forth herein.
We hereby consent to the filing of this
opinion with the Commission as an exhibit to the Registration Statement in accordance with the requirements of Item 601(b)(5) of
Regulation S-K under the Securities Act and to the use of our name therein and in the related Prospectus and in any prospectus
supplement under the caption “Legal Matters.” In giving such consent, we do not hereby admit that we are in the category
of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission.
Very truly yours,
WILMER CUTLER PICKERING HALE AND DORR LLP
By: /s/ Kenneth A. Hoxsie
Kenneth A. Hoxsie, a Partner
Exhibit 8
+1 617 526 6000 (t)
+1 617 526 5000 (f)
www.wilmerhale.com |
January 12, 2015
Franklin Street Properties Corp.
401 Edgewater Place
Suite 200
Wakefield, MA 01880-6210
| Re: | Certain Federal Income Tax Matters Related to Franklin Street Properties Corp. |
Dear Ladies and Gentlemen:
This opinion is being delivered to you
in connection with certain federal income tax matters related to Franklin Street Properties Corp. (“FSP Corp.”) in
connection with the Registration Statement on Form S-3 (the “Registration Statement”) filed on January 12, 2015 by
FSP Corp. with the Securities and Exchange Commission, relating to the issuance and sale from time to time of shares of common
stock, shares of preferred stock, debt securities, and depositary shares of FSP Corp. Except as otherwise provided, capitalized
terms not defined herein have the meanings set forth in the letter delivered to Wilmer Cutler Pickering Hale and Dorr LLP by FSP
Corp. containing certain representations of FSP Corp. relevant to this opinion (the “Representation Letter”). All section
references, unless otherwise indicated, are to the United States Internal Revenue Code of 1986, as amended (the “Code”).
The conclusions expressed herein represent
our judgment as to the proper application of relevant provisions of the Code, Treasury Regulations, case law, and rulings and other
pronouncements of the Internal Revenue Service (the “IRS”) as in effect on the date of this opinion. No assurances
can be given that such laws will not be amended or otherwise changed, or that such changes will not affect the conclusions expressed
herein. Nevertheless, we undertake no responsibility to advise you of any developments in the application or interpretation of
the income tax laws of the United States.
Our opinion represents our best judgment
of how a court would decide if presented with the issues addressed herein and is not binding upon either the IRS or any court.
Thus, no assurances can be given that a position taken in reliance on our opinion will not be challenged by the IRS or rejected
by a court.
In our capacity as counsel to FSP Corp.,
and for purposes of rendering this opinion, we have examined and relied upon the Registration Statement, the Representation Letter,
the Articles of Incorporation of FSP Corp. and the By-Laws of FSP Corp., each as amended through the date hereof, and such other
documents as we considered relevant to our analysis. In our examination of documents, we have assumed the authenticity of original
documents, the accuracy of copies, the genuineness of signatures, and the legal capacity of signatories.
Franklin Street Properties Corp.
January 12, 2015
Page 2
We have made such factual and legal inquiries,
including examination of the documents set forth above, as we have deemed necessary or appropriate for purposes of our opinion.
For purposes of rendering our opinion, however, we have not made an independent investigation or audit of the facts set forth in
any of the above-referenced documents, including the Registration Statement and the Representation Letter. We consequently have
relied upon the representations contained therein and assumed that the information presented in such documents or otherwise furnished
to us is accurate and complete in all respects relevant to our opinion.
In our review, we have assumed, with
your consent, that all of the obligations imposed by any documents on the parties thereto have been and will be performed or satisfied
substantially in accordance with their terms. We have further assumed that during its taxable year ended December 31, 2002 and
subsequent taxable years that FSP Corp. and the Partnership Subsidiaries have operated and will continue to operate in a manner
that has made and will make the representations and covenants contained in the Representation Letter true, complete and correct
for all such years. Moreover, we have assumed that FSP Corp. and the Partnership Subsidiaries have been and will continue to be
operated in the manner described in the relevant partnership agreement, articles (or certificate) of incorporation or other organizational
documents, and in the Registration Statement. Finally, we have assumed that any statement in the Representation Letter that is
made “to the knowledge of,” “belief of” or similarly qualified is correct and accurate, and that such representation
or statement will continue to be correct and accurate without such qualification.
We also have assumed for the purposes
of this opinion, without inquiry with respect thereto, that FSP Corp. is a validly organized and duly incorporated corporation
under the laws of the State of Maryland. In the event any of the statements, representations, or assumptions upon which we have
relied in rendering this opinion is incorrect or incomplete, our opinion could be adversely affected and may not be relied upon.
Opinion
Based upon the foregoing, and subject
to the various assumptions, limitations, and qualifications set forth in this letter, we are of the opinion that
1. FSP Corp. qualified to be taxed as
a REIT pursuant to sections 856 through 860 of the Code for its taxable years ended December 31, 2002 through December
31, 2014, and FSP Corp.’s organization, ownership and proposed method of operation as described in the Registration Statement
and Representation Letter will enable it to continue to qualify as a REIT for its taxable year ending December 31, 2015, and
in the future; and
Franklin Street Properties Corp.
January 12, 2015
Page 3
2. The statements in the Registration
Statement under the caption “Material United States Federal Income Tax Considerations” have been reviewed by us and,
insofar as such statements constitute matters of law or legal conclusions, are correct in all material respects.
FSP Corp.’s qualification and taxation
as a REIT depends upon FSP Corp.’s ability to meet on a continuing basis, through actual annual operating and other results,
the various requirements under the Code as described in the Registration Statement with regard to, among other things, the sources
of its gross income, the composition of its assets, the level of distributions to stockholders, and the diversity of its share
ownership. Wilmer Cutler Pickering Hale and Dorr LLP will not review FSP Corp.’s compliance with these requirements on an
independent or ongoing basis. No assurance can be given that the actual results of operations of FSP Corp., the sources of its
income, the nature of its assets, the level of FSP Corp.’s distributions to its shareholders and the diversity of FSP Corp.’s
share ownership for any given taxable year will satisfy the requirements under the Code for qualification and taxation as a REIT
or that the relief provisions applicable to REITs will be available to FSP Corp.
This opinion addresses only the specific
United States federal income tax consequences set forth above in the numbered paragraphs under the caption “Opinion”
and does not address any other federal, state, local, or foreign income, estate, gift, transfer, sales, use, or other tax consequences
that may be applicable to FSP Corp.
This opinion is intended for the purpose
of inclusion as an exhibit to the Registration Statement. It may not be relied upon for any other purpose. This opinion speaks
only as of the date hereof, and we undertake no obligation to update or supplement this opinion to reflect any changes of law or
fact (including without limitation our subsequent discovery of any facts that are inconsistent with the Representation Letter).
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and further consent to the use of our
name in the Registration Statement in connection with references to this opinion. In giving this consent, however, we do not hereby
admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended.
Very truly yours,
Wilmer Cutler Pickering
Hale and Dorr LLP
By: /s/ Robert D. Burke
Robert D. Burke, a Partner
Exhibit 12
FRANKLIN STREET PROPERTIES CORP.
CALCULATION OF RATIOS OF EARNINGS TO FIXED CHARGES
CALCULATION OF RATIOS OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS
| |
Nine Months | | |
| | |
| | |
| | |
| | |
| |
| |
Ended | | |
For the Year Ended | |
| |
September 30 | | |
| | |
| | |
| | |
| | |
| |
(Dollars in thousands) | |
2014 | | |
2013 | | |
2012 | | |
2011 | | |
2010 | | |
2009 | |
| |
| | |
| | |
| | |
| | |
| | |
| |
Earnings | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Add: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Income from continuing operations | |
$ | 8,853 | | |
$ | 17,294 | | |
$ | 22,950 | | |
$ | 19,357 | | |
$ | 17,729 | | |
$ | 27,085 | |
Provision for income taxes | |
| 403 | | |
| 480 | | |
| 335 | | |
| 267 | | |
| 217 | | |
| 248 | |
(Earnings) Loss of equity investees | |
| 1,491 | | |
| 1,358 | | |
| (2,033 | ) | |
| (3,685 | ) | |
| (1,266 | ) | |
| (1,994 | ) |
Distributed income of equity investees | |
| 81 | | |
| 108 | | |
| 2,810 | | |
| 5,056 | | |
| 5,170 | | |
| 5,628 | |
Fixed charges (see below) | |
| 20,950 | | |
| 21,054 | | |
| 16,068 | | |
| 12,666 | | |
| 7,284 | | |
| 6,570 | |
Subtract: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Interest capitalized | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Preferred distributions of consolidated subsidiaries | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Total Earnings | |
$ | 31,778 | | |
$ | 40,294 | | |
$ | 40,130 | | |
$ | 33,661 | | |
$ | 29,134 | | |
$ | 37,537 | |
Fixed Charges: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Interest expensed | |
| 20,950 | | |
| 21,054 | | |
| 16,068 | | |
| 12,666 | | |
| 7,284 | | |
| 6,570 | |
Interest capitalized | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Interest portion of rent expense which is deemed to be representative of the interest factor | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Total Fixed Charges | |
$ | 20,950 | | |
$ | 21,054 | | |
$ | 16,068 | | |
$ | 12,666 | | |
$ | 7,284 | | |
$ | 6,570 | |
Preferred dividends | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Total combined fixed charges and preferred dividends | |
$ | 20,950 | | |
$ | 21,054 | | |
$ | 16,068 | | |
$ | 12,666 | | |
$ | 7,284 | | |
$ | 6,570 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Ratio of earnings to fixed charges | |
| 1.52 | | |
| 1.91 | | |
| 2.50 | | |
| 2.66 | | |
| 4.00 | | |
| 5.71 | |
Ratio of earnings to combined fixed charges and preferred dividends | |
| 1.52 | | |
| 1.91 | | |
| 2.50 | | |
| 2.66 | | |
| 4.00 | | |
| 5.71 | |
Exhibit 23.1
Consent of Independent Registered
Public Accounting Firm
We consent to the reference to our firm under the caption
"Experts" in this Registration Statement (Form S-3) of Franklin Street Properties Corp. for the registration of debt
securities, common stock, preferred stock, and depositary shares and to the incorporation by reference therein of our reports dated
February 18, 2014, with respect to the consolidated financial statements and schedules of Franklin Street Properties Corp., and
the effectiveness of internal control over financial reporting of Franklin Street Properties Corp., included in its Annual Report
(Form 10-K) for the year ended December 31, 2013, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Boston, Massachusetts
January 12, 2015
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