As
filed with the Securities and Exchange Commission on January 24, 2025
Registration
Statement No. 333-
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
S-3
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
POWER
REIT
(Exact
name of registrant as specified in its charter)
| Maryland |
|
45-3116572 |
(State
or other jurisdiction of
incorporation or organization) |
|
(I.R.S.
Employer
Identification No.) |
301
Winding Road
Old
Bethpage, New York 11804
(212)
750-0371
(Address,
including zip code, and telephone number, including area code, of registrant’s principal executive offices)
David
Lesser
Chairman
and Chief Executive Officer
301
Winding Road
Old
Bethpage, New York 11804
(212)
750-0371
(Name,
address, including zip code, and telephone number, including area code, of agent for service)
Copies
to:
Leslie
Marlow, Esq.
Patrick
J. Egan, Esq.
Blank
Rome LLP
1271
Avenue of the Americas
New
York, New York 10020
Telephone:
(212) 885-5000
Facsimile:
(212) 885-5001
Approximate
date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement, as
determined by market conditions.
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, a smaller reporting
company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large
accelerated filer |
☐ |
Accelerated
filer |
☐ |
| Non-accelerated
filer |
☒ |
Smaller
reporting company |
☒ |
| |
|
Emerging
growth company |
☐ |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act. ☐
The
Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment that specifically states that this registration statement shall thereafter become effective
in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall become effective
on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
EXPLANATORY
NOTE
We
are filing this registration statement with the Securities and Exchange Commission (the “SEC”) using a “shelf”
registration process. Under this registered “shelf,” in the future, we may, from time to time, sell any combination of the
securities described herein, in one or more offerings, up to a maximum aggregate offering price of $50,000,000. This prospectus provides
you with a general description of the securities.
Each
time we offer and sell securities, we will provide a supplement to this prospectus that contains specific information about the offering
and the amounts, prices and terms of the securities. The supplement may also add, update or change information contained in this prospectus
with respect to that offering. You should carefully read this prospectus and the applicable prospectus supplement before you invest in
any of our securities.
We
may offer and sell the securities described in this prospectus and any prospectus supplement to or through one or more underwriters,
dealers and agents, or directly to purchasers, or through a combination of these methods. If any underwriters, dealers or agents are
involved in the sale of any of the securities, their names and any applicable purchase price, fee, commission or discount arrangement
between or among them will be set forth, or will be calculable from the information set forth, in the applicable prospectus supplement.
See the sections of this prospectus entitled “About this Prospectus” and “Plan of Distribution”
for more information. No securities may be sold without delivery of this prospectus and the applicable prospectus supplement describing
the method and terms of the offering of such securities.
This
prospectus may not be used to sell securities unless it is accompanied by a prospectus supplement.
One
of the offerings registered under the registration statement of which this prospectus is a part is the offering of our Common Shares
under that certain At Market Issuance Sales Agreement, dated January 24, 2025 (the “Sales Agreement”), that we entered
into with A.G.P./Alliance Global Partners, as Sales Agent.
This
registration statement of Power REIT contains two prospectuses:
| |
● |
a
base prospectus, which covers the offering, issuance and sale by us of Common Shares, preferred stock, debt securities, warrants,
and units identified above from time to time in one or more offerings, which together shall have an aggregate initial offering price
not to exceed $50,000,000; and |
| |
|
|
| |
● |
an
“at the market offering” prospectus (the “Sales Agreement Prospectus”) covering the offer, issuance and sale
by us of up to a maximum aggregate offering price of up to $2,100,000 of our Common Shares that may be issued and sold from time
to time under the Sales Agreement with A.G.P./Alliance Global Partners. |
The
base prospectus immediately follows this explanatory note. The specific terms of any securities to be offered pursuant to the base prospectus
will be specified in one or more prospectus supplements to the base prospectus. The Sales Agreement Prospectus immediately follows the
base prospectus. The $2,100,000 of Common Shares that may be offered, issued and sold under the Sales Agreement Prospectus is included
in the $50,000,000 of securities that may be offered, issued and sold by us under the base prospectus. Upon termination of the Sales
Agreement, any portion of the $2,100,000 included in the Sales Agreement Prospectus that is not sold pursuant to the Sales Agreement
will be available for sale in other offerings pursuant to the base prospectus, and if no shares are sold under the Sales Agreement, the
full $2,100,000, of securities may be sold in other offerings pursuant to the base prospectus.
The
information contained in this prospectus is not complete and may be changed. These securities may not be sold until the registration
statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and
is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject
to Completion, Dated January 24, 2025
PROSPECTUS
$50,000,000
POWER
REIT
Common
Shares
Preferred
Stock
Debt
Securities
Warrants
Units
We
may, from time to time, offer and sell up to $50,000,000 of any combination of our common shares, par value $0.001 (the “Common
Shares”), shares of preferred stock, par value $0.001 per share (the “preferred stock”), including our 7.75% Series
A Cumulative Redeemable Perpetual Preferred Stock, Liquidation Preference $25.00 per Share (the “Series A Preferred Stock”),
debt securities, warrants or units described in this prospectus, either individually or in combination with other securities, at prices
and on terms described in one or more supplements to this prospectus. We may also offer Common Shares, shares of our preferred stock,
or Series A Preferred Stock upon conversion of debt securities, Common Shares upon conversion of Series A Preferred Stock, or Common
Shares, shares of our preferred stock, Series A Preferred Stock, or debt securities upon the exercise of warrants.
This
prospectus provides you with a general description of the securities that we may offer. Each time we offer and sell securities, we will
provide a supplement to this prospectus that contains specific information about the offering and the amounts, prices and terms of the
securities. We may also authorize one or more free writing prospectuses to be provided to you in connection with these offerings. The
prospectus supplement and any related free writing prospectus may also add, update or change information contained in this prospectus.
You should carefully read this prospectus, the applicable prospectus supplement and any related free writing prospectus, as well as the
documents incorporated by reference, before buying any of the securities being offered.
Securities
may be sold by us to or through underwriters or dealers, directly to purchasers or through agents designated from time to time. For additional
information on the methods of sale, you should refer to the section entitled “Plan of Distribution” in this prospectus and
in the applicable prospectus supplement. If any underwriters, dealers or agents are involved in the sale of any of the securities, their
names and any applicable purchase price, fee, commission or discount arrangement between or among them will be set forth, or will be
calculable from the information set forth, in the applicable prospectus supplement. The price to the public of such securities and the
net proceeds we expect to receive from such sale will also be set forth in a prospectus supplement. No securities may be sold without
delivery of this prospectus and the applicable prospectus supplement describing the method and terms of the offering of such securities.
Our
Common Shares are listed on the NYSE American under the symbol “PW.” On January 21, 2025, the last reported sale price of
our Common Shares on the NYSE American was $1.22 per share. Our Series A Preferred Stock is listed on the NYSE American under the symbol
“PW PRA.” On January 21, 2025, the last reported sale price of our Series A Preferred Stock on the NYSE American was $3.80.
The
applicable prospectus supplement will contain information, where applicable, as to any other listing, if any, on any securities market
or other exchange of the specific security covered by such prospectus supplement.
As
of the date of this prospectus, the aggregate market value of our outstanding Common Shares held by non-affiliates is approximately $6,300,659,
which is calculated based on 2,775,621 shares of our outstanding Common Shares held by non-affiliates and a price of $2.27 per share,
the closing price of our Common Shares on December 5, 2024, which is the highest closing sale price of our Common Shares on the NYSE
American within the prior 60 days of this prospectus. During the prior twelve calendar month period that ends on and includes the date
hereof, we have not offered or sold any of our Common Shares pursuant to General Instruction I.B.6 to Form S-3. Pursuant to General Instruction
I.B.6 of Form S-3, in no event will we sell securities pursuant to this prospectus with a value of more than one-third of the aggregate
market value of our Common Shares held by non-affiliates in any 12-month period, so long as the aggregate market value of our Common
Shares held by non-affiliates is less than $75 million.
BECAUSE
WE ARE A REAL ESTATE INVESTMENT TRUST, THERE ARE RESTRICTIONS ON THE TOTAL AMOUNT OF OUR CAPITAL STOCK THAT YOU MAY OWN AND ON TRANSFERS
OF OUR CAPITAL STOCK THAT MAY IMPLICATE THESE RESTRICTIONS. SEE “DESCRIPTION OF THE SECURITIES WE MAY OFFER.”
Investing
in our securities involves a high degree of risk. You should review carefully the risks and uncertainties described under the
heading “Risk Factors” beginning on page 7 of this prospectus and page S-7 of the Sales Agreement Prospectus and
contained in any applicable prospectus supplement and in any free writing prospectuses we have authorized for use in connection with
a specific offering, and under similar headings in the other documents that are incorporated by reference into this
prospectus.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined
if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The
date of this prospectus is , 2025.
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement on Form S-3 that we filed with the Securities and Exchange Commission (the “SEC”)
using a “shelf” registration process. Under this shelf registration statement, we may sell from time to time in one or more
offerings up to a total dollar amount of $50,000,000 of Common Shares, preferred stock, including shares of our Series A Preferred Stock,
various series of debt securities and/or warrants to purchase any of such securities, either individually or as units in combination
with other securities as described in this prospectus. Each time we sell any type or series of securities under this prospectus, we will
provide a prospectus supplement that will contain more specific information about the terms of that offering. We may also authorize one
or more free writing prospectuses to be provided to you that may contain material information relating to these offerings. The prospectus
supplement and any related free writing prospectus that we may authorize to be provided to you may also add, update or change any of
the information contained in this prospectus or in the documents we have incorporated by reference into this prospectus. To the extent
that any statement that we make in a prospectus supplement is inconsistent with statements made in this prospectus, the statements made
in this prospectus will be deemed modified or superseded by those made in a prospectus supplement. You should carefully read both this
prospectus and the applicable prospectus supplement and any related free writing prospectus, together with the additional information
described under “Where You Can Find More Information,” before buying any of the securities being offered.
THIS
PROSPECTUS MAY NOT BE USED TO CONSUMMATE A SALE OF SECURITIES UNLESS IT IS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT
Neither
we, nor any agent, underwriter or dealer has authorized any person to give any information or to make any representation other than those
contained or incorporated by reference in this prospectus, any applicable prospectus supplement or any related free writing prospectus
prepared by or on behalf of us or to which we have referred you. If anyone provides you with different or inconsistent information, you
should not rely on it. This prospectus, any applicable supplement to this prospectus or any related free writing prospectus does not
constitute an offer to sell or the solicitation of an offer to buy any securities other than the registered securities to which they
relate, nor does this prospectus, any applicable supplement to this prospectus or any related free writing prospectus constitute an offer
to sell or the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make such offer
or solicitation in such jurisdiction.
You
should not assume that the information contained in this prospectus, any applicable prospectus supplement or any related free writing
prospectus is accurate on any date subsequent to the date set forth on the front of the document or that any information we have incorporated
by reference is correct on any date subsequent to the date of the document incorporated by reference, even though this prospectus, any
applicable prospectus supplement or any related free writing prospectus is delivered, or securities are sold, on a later date.
This
prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made to the
actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some
of the documents referred to herein have been filed, will be filed or will be incorporated by reference as exhibits to the registration
statement of which this prospectus is a part, and you may obtain copies of those documents as described below under the section entitled
“Where You Can Find More Information.”
Except
as otherwise indicated herein or as the context otherwise requires, references in this prospectus to “Power REIT,” “the
Company,” “we,” “us,” “our” and similar references refer to Power REIT, a Maryland real estate
investment trust, and where appropriate our consolidated subsidiaries.
This
prospectus and the information incorporated herein by reference include trademarks, service marks and trade names owned by us or other
companies. All trademarks, service marks and trade names included or incorporated by reference into this prospectus, any applicable prospectus
supplement or any related free writing prospectus are the property of their respective owners.
PROSPECTUS
SUMMARY
The
following summary highlights information contained elsewhere in this prospectus or incorporated by reference herein and does not contain
all the information that may be important to purchasers of our securities. Prospective purchasers of our securities should carefully
read the entire prospectus, the applicable prospectus supplement and any related free writing prospectus, including the risks of investing
in our securities discussed under the heading “Risk Factors” contained in this prospectus, the applicable prospectus supplement
and any related free writing prospectus, and under similar headings in the other documents that are incorporated by reference into this
prospectus. Prospective purchasers of our securities should also carefully read the information incorporated by reference into this prospectus,
including our financial statements, and the exhibits to the registration statement of which this prospectus is a part.
Company
Overview
Power
REIT (the “Registrant” or the “Trust”, and together with its consolidated subsidiaries, “we”, “us”,
or “Power REIT”, unless the context requires otherwise) is a Maryland-domiciled, internally-managed real estate investment
trust (a “REIT”) that owns a portfolio of real estate assets related to transportation, energy infrastructure and Controlled
Environment Agriculture (“CEA”) in the United States.
We
are structured as a holding company and own our assets through twenty-four direct and indirect wholly owned, special purpose subsidiaries
that have been formed in order to hold real estate assets, obtain financing and generate lease revenue. As of September 30, 2024, the
Trust’s assets consisted of approximately 112 miles of railroad infrastructure and related real estate which is owned by its subsidiary
Pittsburgh & West Virginia Railroad (“P&WV”), approximately 447 acres of fee simple land leased to a number of utility
scale solar power generating projects with an aggregate generating capacity of approximately 82 Megawatts (“MW”) and approximately
249 acres of land with approximately 2,112,000 square feet of existing or under construction CEA properties in the form of greenhouses.
In
2019, Power REIT pivoted to focus on greenhouses as a technology play in the form of real estate. Over the past five years, a significant
amount of capital flowed into the CEA sector in the United States. CEA facilities generally are either indoor warehouse facilities that
require lights for plant growth and heating, ventilation and air conditioning to maintain the climate or greenhouses, which benefit from
free and natural sunlight and proven approaches to maintain a proper growing environment. Our investment thesis was based on greenhouses
as sustainable approach to growing certain crops.
Power
REIT invested in greenhouses for state-licensed cannabis and food cultivation. Unfortunately, the market for both opportunities has been
challenging and the greenhouse portfolio has performed poorly with significant vacancy. Currently, the entire greenhouse portfolio is
being marketed for sale but the market to sell these properties is weak. We continue to explore all options to monetize these assets.
As previously disclosed in our SEC filings, the greenhouse portfolio secures a loan, which loan is currently in default. The loan is
non-recourse to Power REIT, which reduces our exposure.
While
we may continue to explore opportunities in the greenhouse and cannabis space, we are now exploring new opportunities. The real estate
market is in a state of transition and experiencing a wave of distressed properties due to several factors, including economic downturns,
shifting property demand in a post-COVID environment, rising interest rates and mortgage defaults. We believe the current environment
can create significant opportunities for Power REIT. We are focused on identifying special opportunities in the form of investing in
distressed situations including debt and other types of secured interests in real estate, distressed properties and real estate related
companies. As part of moving Power REIT forward, we are looking to selectively raise capital.
Corporate
Structure
Power
REIT was formed as part of a reorganization and reverse triangular merger of P&WV that closed on December 2, 2011. P&WV survived
the reorganization as a wholly-owned subsidiary of the Registrant. Currently, the Trust is structured as a holding company and owns its
assets through twenty-four wholly-owned, special purpose subsidiaries that have been formed in order to hold real estate assets, obtain
financing and generate lease revenue.
Smaller
Reporting Company
We
are a “smaller reporting company” as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
As a result, we may take advantage of certain reduced disclosure obligations available to smaller reporting companies, including the
exemption from compliance with the auditor attestation requirements pursuant to the Sarbanes-Oxley Act of 2022, reduced disclosure about
our executive compensation arrangements and the requirements to provide only two years of audited financial statements in our annual
reports and registration statements. We will continue to be a “smaller reporting company” as long as (1) we have a public
float (i.e., the market value of our Common Shares held by non-affiliates) less than $250 million calculated as of the last business
day of our most recently completed second fiscal quarter, or (2) our annual revenues are less than $100 million for our previous fiscal
year and we have either no public float or a public float of less than $700 million as of the end of that fiscal year’s second
fiscal quarter. Decreased disclosures in our SEC filings due to our status as a “smaller reporting company” may make it harder
for investors to analyze our results of operations and financial prospects.
Restrictions
on Ownership and Transfer
In
order to assist us in complying with the limitations on the concentration of ownership of REIT stock imposed by the Internal Revenue
Code of 1986, as amended (the “Code”), among other purposes, our amended and restated Declaration of Trust (“Declaration
of Trust”) provides that no person or entity, may own, directly or indirectly, more than 9.9% in economic value of the aggregate
of the outstanding Common Shares of Power REIT. However, our Declaration of Trust authorizes our Board of Trustees to exempt from time
to time, the ownership limits applicable to certain individuals or entities.
Our
Declaration of Trust also prohibits any person from (1) beneficially or constructively owning shares of our capital stock that would
result in our being “closely held” under Section 856(h) of the Code at any time during the taxable year, (2) transferring
shares of our capital stock if such transfer would result in our stock being beneficially or constructively owned by fewer than 100 persons,
and (3) beneficially or constructively owning shares of our capital stock if such ownership would cause us otherwise to fail to qualify
as a REIT.
This
provision or other provisions in our governing documents or provisions that we may adopt in the future, may limit the ability of our
shareholders to sell their shares at a premium over then-current market prices by discouraging a third party from seeking to obtain control
of us. See “Risk Factors” and “Description of Capital Stock.”
Distribution
Policy
Any
distributions that we make will be at the discretion of our Board of Trustees, and there can be no assurance that dividends will be paid
in any particular period or at any particular level, or sustained in future periods based on past timing of payments and payments levels.
Dividends on our Series A Preferred Stock are cumulative and must be paid in full and on a current basis in order for the Trust to pay
dividends on its Common Shares.
We
currently do not make regular quarterly distributions to holders of our Common Shares, but may elect to do so in the future. Distributions
declared by us will be authorized by our Board of Trustees in its sole discretion out of funds legally available therefor and will be
dependent upon a number of factors, including the capital requirements of our trust and meeting the distribution requirements necessary
to maintain our qualification as a REIT. We cannot assure that our intended distributions will be made or sustained or that our Board
of Trustees will not change our distribution policy in the future. Under some circumstances, we may be required to fund distributions
from working capital, liquidate assets at prices or times that we regard as unfavorable or borrow to provide funds for distributions,
or we may make distributions in the form of a taxable stock dividend. However, we have no current intention to use the net proceeds from
this offering to make distributions to holders of our Common Shares.
Summary
Risk Factors
An
investment in our securities involves significant risks. The following is a summary of the risks relating to the Trust. A more detailed
description of each of the risks can be found under the sections captioned “Risk Factors” located in the documents incorporated
by reference herein and in any prospectus supplement. Before purchasing any securities, you should consider carefully the risks and uncertainties
described under the heading “Risk Factors” in this prospectus, the applicable prospectus supplement, in any free writing
prospectuses we have authorized for use in connection with a specific offering, and under similar headings in the other documents that
are incorporated by reference into this prospectus.
Risks
Related to our Financial Position and Liquidity
| |
● |
We
have incurred a loss for the year ended December 31, 2023 and the nine months ended September 30, 2024 and may be unable to generate
sufficient revenue to cover expenses or generate net income. |
| |
● |
We
may need to raise additional capital or sell additional properties to fund our operations. |
| |
● |
If
our acquisitions or our overall business performance fail to meet expectations, we could be restricted from paying dividends to shareholders
and default on our loans, which are secured by collateral in our properties and assets. |
| |
● |
We
have substantial debt and preferred shares outstanding with substantial liquidation preference, which could adversely affect our
overall financial health and our operating flexibility. |
| |
● |
We
may incur significant debt, which may subject us to restrictive covenants and increased risk of loss. |
| |
● |
If
we are unable to comply with the covenants in our loan agreements, we might be adversely affected. |
| |
● |
Secured
indebtedness exposes us to the possibility of foreclosure, which could result in the loss of our investment in certain of our subsidiaries
or in a property or group of properties or other assets subject to indebtedness. For example, our greenhouse portfolio is secured
by a loan that is currently in default. |
Risks
Related to our Operations
| |
● |
We
have a limited operating history. |
| |
● |
Our
tenants have limited operating histories and may be more susceptible to payment and other lease defaults. |
| |
● |
Our
tenants operate in a nascent industry that has experienced pricing gyrations which may impact their ability to pay rent. |
| |
● |
Our
tenants may be unable to operate their businesses and default on their lease payments to us. |
| |
● |
Our
business activities and the business activities of our cannabis tenants are currently illegal under U.S. federal law. |
| |
● |
The
failure to implement our business strategy could be negatively affect our operations. |
| |
● |
Even
if we are able to execute our business strategy, that strategy may not be successful. |
| |
● |
We
operate in a highly competitive market for investment opportunities. |
| |
● |
The
properties we have or do acquire that are acquired, “as-is” are subject to risk. |
| |
● |
We
will continue to need additional capital to make new investments. |
| |
● |
The
investment portfolio is concentrated in a relatively few number of investments, industries and lessees. |
| |
● |
Our
property portfolio has a high concentration of properties located in certain states. |
| |
● |
If
our acquisitions or our overall business performance fail to meet expectations, the amount of cash available to us to pay dividends
may decrease and we could default on our secured loans. |
| |
● |
Our
operating results may be negatively affected by development and construction delays and cost overruns. |
| |
● |
The
valuation and accounting treatment of certain long-lived assets could result in future asset impairments, including to our greenhouse
assets. |
| |
● |
Many
factors, including changes in interest rates and the negative perceptions of the cannabis sector generally, can have an adverse effect
on the market value of our securities. |
| |
● |
Individual
taxpayers might perceive REIT securities as less desirable relative to the securities of other corporations because of the lower
tax rate on certain dividends from such corporations. |
| |
● |
Our
securities with claims that are senior to our Common Shares may limit or prevent us from paying dividends. |
| |
● |
We
are dependent upon Mr. David H. Lesser for our success. |
| |
● |
Our
management team may have interests that conflict with the Trust’s interests. |
| |
● |
Our
lessee’s ability to pay us is expected to be dependent solely on the revenues of a specific project. |
| |
● |
Some
losses related to our real property assets may not be covered by insurance. |
| |
● |
Discovery
of environmentally hazardous conditions may adversely affect our operating results. |
| |
● |
Legislative,
regulatory, accounting or tax rules, and any changes to them could adversely affect us. |
| |
● |
Changes
in interest rates may negatively affect the value of our assets and securities and access to financing. |
| |
● |
Our
quarterly results may fluctuate. |
| |
● |
We
may fail to remain qualified as a REIT. |
| |
● |
We
could lose our status as a REIT which would subject us to U.S. federal income tax and applicable state and local taxes. |
| |
● |
If
we are deemed to be subject to Section 280E of the Code that could cause us to incur U.S. federal income tax and jeopardize our REIT
status. |
| |
● |
Legislative,
regulatory or administrative changes could adversely affect us or our shareholders. |
| |
● |
If
we were deemed to be an investment company under the Investment Company Act of 1940, applicable restrictions could make it impractical
for us to continue our business as contemplated. |
| |
● |
Net
leases may not result in fair market lease rates over time. |
| |
● |
We
are increasingly dependent on information technology, and our systems and infrastructure face certain risks, including cybersecurity
and data leakage risks. |
| |
● |
If
a sale-leaseback transaction is recharacterized in a lessee’s bankruptcy proceeding, our financial condition could be adversely
affected. |
| |
● |
Provisions
of the Maryland General Corporation Law and our Declaration of Trust and Bylaws could deter takeover attempts. |
| |
● |
A
resurgence of the COVID-19 pandemic, or the future outbreak of any other highly infectious or contagious diseases, could materially
and adversely impact or cause disruption to our tenants and their operations, and in turn our performance, financial condition, results
of operations and cash flows. |
Risks
Related to Our Investments Strategy
| |
● |
Certain
properties in our portfolio could be considered special purpose use assets which may impact market value and the ability to lease
to generate income. |
| |
● |
Our
investments in greenhouse properties may be difficult to sell or re-lease. |
| |
● |
Our
focus on non-traditional real estate asset classes will subject us to more risks than if we were broadly diversified to include other
assets classes. |
| |
● |
Renewable
energy resources are complex, and our investments in them rely on long-term projections. |
| |
● |
Infrastructure
assets may be subject to the risk of fluctuations in commodity prices and supply. |
| |
● |
Infrastructure
investments are subject to obsolescence risks. |
| |
● |
Renewable
energy investments may be adversely affected by variations in weather patterns. |
| |
● |
Investments
in renewable energy may be dependent on equipment or manufacturers that have limited operating histories or financial or other challenges. |
Risks
Related to our Securities
| |
● |
There
is a 9.9% limit on the amount of our equity securities that any one person or entity may own. |
| |
● |
We
cannot assure that our securities will remain listed on the NYSE American. |
| |
● |
Low
trading volumes in our listed securities may adversely affect holders’ ability to resell their securities. |
| |
● |
Our
stock price has fluctuated in the past and has recently been volatile. |
| |
● |
Our
ability to issue Preferred Stock could adversely affect the rights of existing security holders. |
| |
● |
The
issuance of additional equity securities may dilute existing equity holders. |
| |
● |
Our
Series A Preferred Stock is subject to interest rate risk. |
| |
● |
Inflation
may negatively affect the value of our equity securities. |
| |
● |
Our
Series A Preferred Stock has not been rated and is junior to our existing and future debt. |
| |
● |
Holders
of Series A Preferred Stock have limited voting rights. |
| |
● |
Dividends
on our Series A Preferred Stock can be suspended and not paid on a current basis. |
| |
● |
The
change of control conversion, delisting conversion and redemption features of our Series A Preferred Stock may make it more difficult
for a party to take over our trust. |
| |
● |
We
may issue additional Series A Preferred Stock at a discount to liquidation value. |
| |
● |
Ownership
limitations may restrict change in control or business combination opportunities in which our shareholders might receive a premium
for their shares. |
Risks
Related to Regulation
| |
● |
The
U.S. federal government’s approach towards cannabis laws may be subject to change. |
| |
● |
We
cannot predict the impact that future regulations may have on us. |
| |
● |
Our
properties may be subject to environmental regulations. |
| |
● |
We
may be subject to regulation that impacts our real estate properties. |
| |
● |
We
may be subject to anti-money laundering laws and regulations in the United States. |
| |
● |
Litigation,
complaints, enforcement actions and governmental inquiries could have a material adverse effect on our business, financial condition
and results of operations. |
| |
● |
State
and local regulation of cannabis may negatively impact our properties and the viability of tenant operations related thereto. |
| |
● |
We
and our cannabis tenant may have difficulty accessing the service of banks. |
Tax
Status
As
a real estate investment trust, we are not subject to state or federal income taxes. However, in order to maintain our REIT status, we
are required to make distributions, other than capital gain distributions, to our shareholders each year in the amount of at least 90%
of our “REIT taxable income.” Dividends that are paid from earnings and profits will be treated as ordinary income and generally
will not qualify as qualified dividend income. In addition to the aforementioned distribution requirement, we must meet numerous other
asset and income tests and other requirements of the Code; failure to meet any of these requirements or tests may result in us losing
our REIT status.
See
“Material United States Federal Income Tax Considerations.”
Exchange
Listing
Our
Common Shares are listed on the NYSE American under the symbol “PW” and our Series A Preferred Stock is listed on the NYSE
American under the symbol “PW PRA.” Any preferred shares, warrants or units that we may offer may or may not be listed, as
shall be disclosed in the supplements to this prospectus relating to the offering of such securities.
General
Corporate Information
Power
REIT is incorporated in the State of Maryland as a real estate investment trust. Power REIT was formed in August 2011 to effect a triangular
merger of the Pittsburgh & West Virginia Railroad (“Reorganization”). Pittsburgh & West Virginia Railroad was a publicly
traded REIT prior to the Reorganization and was listed on the American Stock Exchange in 1967. Concurrent with the Reorganization, which
was completed on December 2, 2011, Power REIT became listed on the NYSE American under the ticker symbol “PW” and Pittsburgh
& West Virginia Railroad survived the Reorganization as a wholly owned, special purpose subsidiary of Power REIT with a sole purpose
of owning and managing its railroad property. Power REIT is an internally managed REIT.
Our
principal executive offices are located at 301 Winding Road, Old Bethpage, New York 11804 and our offices can be reached by telephone
at (212) 750-0371. Our website address is http://www.pwreit.com. The information on, or otherwise accessible through, our website
does not constitute a part of this prospectus. We make our periodic and current reports that are filed with the Securities and Exchange
Commission (the “SEC”) available, free of charge, on our website as soon as reasonably practicable after such material is
electronically filed with, or furnished to, the SEC. The information contained in, and that can be accessed through, our website is not
incorporated into and is not a part of this prospectus.
The
Securities We May Offer
We
may offer our Common Shares, shares of our preferred stock, including shares of our Series A Preferred Stock, various series of debt
securities and/or warrants to purchase any of such securities, either individually or as units in combination with other securities,
with a total value of up to $50,000,000 from time to time under this prospectus at prices and on terms to be determined at the time of
any offering. This prospectus provides you with a general description of the securities we may offer. Each time we offer a type or series
of securities under this prospectus, we will provide a prospectus supplement that will describe the specific amounts, prices and other
important terms of the securities, including, to the extent applicable:
| |
● |
designation
or classification; |
| |
|
|
| |
● |
aggregate
principal amount or aggregate offering price; |
| |
|
|
| |
● |
maturity; |
| |
|
|
| |
● |
original
issue discount; |
| |
|
|
| |
● |
rates
and times of payment of interest or dividends; |
| |
|
|
| |
● |
redemption,
conversion, exercise, exchange or sinking fund terms; |
| |
|
|
| |
● |
ranking; |
| |
|
|
| |
● |
restrictive
covenants; |
| |
|
|
| |
● |
voting
or other rights; |
| |
|
|
| |
● |
conversion
or exchange prices or rates and, if applicable, any provisions for changes to or adjustments in the conversion or exchange prices
or rates and in the securities or other property receivable upon conversion or exchange; and |
| |
|
|
| |
● |
a
discussion of material United States federal income tax considerations, if any. |
The
prospectus supplement and any related free writing prospectus that we may authorize to be provided to you may also add, update or change
information contained in this prospectus or in documents we have incorporated by reference. However, no prospectus supplement or free
writing prospectus will offer a security that is not registered and described in this prospectus at the time of the effectiveness of
the registration statement of which this prospectus is a part.
We
may sell the securities directly to investors or to or through agents, underwriters or dealers. We, and our agents, underwriters or dealers
reserve the right to accept or reject all or part of any proposed purchase of securities. If we do offer securities to or through agents,
underwriters or dealers, we will include in the applicable prospectus supplement:
| |
●
|
the
names of those agents, underwriters, or dealers; |
| |
|
|
| |
●
|
applicable
fees, discounts and commissions to be paid to them; |
| |
|
|
| |
●
|
details
regarding over-allotment options, if any; and |
| |
|
|
| |
●
|
the
net proceeds to us. |
The
following is a summary of the securities we may offer with this prospectus.
Common
Shares
We
may issue our Common Shares from time to time. Each holder of our Common Shares is entitled to one vote for each share on all matters
submitted to a vote of the shareholders, including the election of directors. Subject to preferences that may be applicable to any outstanding
Series A Preferred Stock, the holders of Common Shares are entitled to receive ratably such dividends, if any, as may be declared from
time to time by the board of trustees out of funds legally available therefor. In the event of our liquidation, dissolution or winding
up, the holders of Common Shares are entitled to share ratably in all assets remaining after payment of liabilities, subject to prior
distribution rights of Series A Preferred Stock, if any, then outstanding. The holders of our Common Shares have no preemptive, subscription,
cumulative voting or conversion rights and there are no redemption or sinking fund provisions applicable to our Common Shares. The rights,
preferences and privileges of the holders of Common Shares are subject to, and may be adversely affected by, the rights of the holders
of shares of any series of Series A Preferred Stock that we may designate in the future.
Preferred
Stock
Our
board of trustees has the power under our charter to classify and reclassify any unissued common shares into one or more classes or series
of preferred stock, set the terms of each such class or series and authorize us to issue the newly classified or reclassified shares.
Each such class or series of preferred stock will have such designations, preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications and terms or conditions of redemption as shall be determined by our
board of trustees.
As
of the date of this prospectus, the authorized capital stock of the Trust consists of 100,000,000 shares, classified as 98,325,000 Common
Shares, and 1,675,000 shares of Series A Preferred Stock, with a total of 336,944 shares of our Series A Preferred Stock issued and outstanding.
The
outstanding shares of Series A Preferred Stock are fully paid and non-assessable. Additional shares of preferred stock may be issued
in one or more series from time to time by our Board of Trustees, and the Board of Trustees is expressly authorized to fix the designations
and the powers, preferences and rights, and the qualifications, limitations and restrictions of each series. Subject to the determination
of our Board of Trustees, any shares of preferred stock that may be issued in the future would generally have preferences over our common
stock with respect to the payment of dividends and the distribution of assets in the event of any liquidation, dissolution or winding
up of Power REIT.
Preferred
stock may be issued independently or together with any other securities and may be attached to or separate from the securities. The following
description of the preferred stock sets forth general terms and provisions of the preferred stock to which any prospectus supplement
may relate. The statements below describing the preferred stock are in all respects subject to and qualified in their entirety by reference
to the applicable provisions of our charter and bylaws setting forth the terms of a class or series of preferred stock. The issuance
of preferred stock could adversely affect the voting power, dividend rights and other rights of holders of common stock. Although our
board of trustees does not have this intention at the present time, it or a duly authorized committee could establish another class or
series of preferred stock, that could, depending on the terms of the series, delay, defer or prevent a transaction or a change in control
of our trust that might involve a premium price for the common stock or otherwise be in the best interest of the holders thereof.
We
urge you to read the applicable prospectus supplement (and any free writing prospectus that we may authorize to be provided to you) related
to the series of Preferred Stock being offered, as well as the complete certificate of designation that contains the terms of the applicable
series of Preferred Stock.
Debt
Securities
We
may issue debt securities from time to time, in one or more series, as either senior or subordinated debt or as senior or subordinated
convertible debt. The senior debt securities will rank equally with any other unsecured and unsubordinated debt. The subordinated debt
securities will be subordinate and junior in right of payment, to the extent and in the manner described in the instrument governing
the debt, to all of our senior indebtedness. Convertible debt securities will be convertible into or exchangeable for our Common Shares
or other securities. Conversion may be mandatory or at your option and would be at prescribed conversion rates.
Any
debt securities issued under this prospectus will be issued under one or more documents called indentures, which are contracts between
us and a national banking association or other eligible party, as trustee. In this prospectus, we have summarized certain general features
of the debt securities. We urge you, however, to read the applicable prospectus supplement (and any free writing prospectus that we may
authorize to be provided to you) related to the series of debt securities being offered, as well as the complete indentures that contain
the terms of the debt securities. A form of indenture has been filed as an exhibit to the registration statement of which this prospectus
is a part, and supplemental indentures and forms of debt securities containing the terms of the debt securities being offered will be
filed as exhibits to the registration statement of which this prospectus is a part or will be incorporated by reference from reports
that we file with the SEC.
Warrants
We
may issue warrants for the purchase of Common Shares, Preferred Stock and/or debt securities in one or more series. We may issue warrants
independently or as units in combination with Common Shares, Preferred Stock and/or debt securities, and the warrants may be attached
to or separate from these securities. In this prospectus, we have summarized certain general features of the warrants.
We
urge you, however, to read the applicable prospectus supplement (and any free writing prospectus that we may authorize to be provided
to you) related to the series of warrants being offered, as well as any warrant agreements and warrant certificates that contain the
terms of the warrants. We will file as exhibits to the registration statement of which this prospectus is a part, or will incorporate
by reference from reports that we file with the SEC, the form of warrant and/or the warrant agreement and warrant certificate, as applicable,
that contain the terms of the particular series of warrants we are offering, and any supplemental agreements, before the issuance of
such warrants.
Any
warrants issued under this prospectus may be evidenced by warrant certificates. Warrants also may be issued under an applicable warrant
agreement that we enter into with a warrant agent. We will indicate the name and address of the warrant agent, if applicable, in the
prospectus supplement relating to the particular series of warrants being offered.
Units
We
may issue units consisting of any combination of the other types of securities offered under this prospectus in one or more series. We
may evidence each series of units by unit certificates that we will issue under a separate agreement. We may enter into unit agreements
with a unit agent. Each unit agent will be a bank or trust company that we select. We will indicate the name and address of the unit
agent in the applicable prospectus supplement relating to a particular series of units.
In
this prospectus, we have summarized certain general features of the units under “Description of Units.” We urge you, however,
to read the applicable prospectus supplement (and any related free writing prospectus that we may authorize to be provided to you) related
to the series of units being offered, as well as the complete unit agreement that contains the terms of the units. We will file as exhibits
to the registration statement of which this prospectus is a part, or will incorporate by reference from reports that we file with the
SEC, the specific unit agreement that contains the terms of the particular series of units we are offering, before the issuance of such
units.
RISK
FACTORS
Investing
in our securities involves a high degree of risk. Before deciding whether to invest in our securities, you should consider carefully
the risks and uncertainties described under the heading “Risk Factors” contained in the applicable prospectus supplement
and any related free writing prospectus, and discussed under the section entitled “Risk Factors” contained in our most recent
Annual Report on Form 10-K, our subsequent Quarterly Reports on Form 10-Q as may be updated by subsequent annual, quarterly and other
reports that are incorporated by reference into this prospectus in their entirety. The risks described in these documents are not the
only ones we face, but those that we consider to be material. There may be other unknown or unpredictable economic, business, competitive,
regulatory or other factors that could have material adverse effects on our future results. Past financial performance may not be a reliable
indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. If any of
these risks actually occurs, our business, financial condition, results of operations or cash flow could be seriously harmed. This could
cause the trading price of our Common Shares to decline, resulting in a loss of all or part of your investment. Please also read carefully
the section below entitled “Forward-Looking Statements.”
FORWARD-LOOKING
STATEMENTS
Throughout
this prospectus, the accompanying prospectus supplement and the documents incorporated by reference in them, we make “forward-looking
statements” as that term is defined in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”),
and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include
the words “may,” “would,” “could,” “likely,” “estimate,” “intend,”
“plan,” “continue,” “believe,” “expect” or “anticipate” and similar words,
as well as statements relating to our acquisition, development and expansion plans, objectives and expectations, our liquidity projections
and similar topics. These forward-looking statements generally relate to our plans, objectives, prospects and expectations for future
operations and results and are based upon what we consider to be reasonable future estimates. Although we believe that our plans, objectives,
prospects and expectations reflected in, or suggested by, such forward-looking statements are reasonable at the present time, we may
not achieve them or we may modify them from time to time. Furthermore, there is no assurance that any positive trends suggested or referred
to in such statements will continue. Forward-looking statements are not guarantees of future performance, and a variety of factors could
cause our actual results to differ materially from the anticipated or expected results expressed in these forward-looking statements.
Many of these factors are beyond our ability to control or predict, and readers are cautioned not to put undue reliance on any forward-looking
statements. You should read this prospectus, the accompanying prospectus supplement and the information incorporated into them by reference
thoroughly with the understanding that actual future results may be materially different from what we expect. In particular, you should
read the “Risk Factors” section of this prospectus for information regarding risk factors that could affect our results.
The
following list, which is not intended to be an all-encompassing list of risks and uncertainties affecting us, summarizes several factors
that could cause our actual results to differ materially from those anticipated or expected in these forward-looking statements:
| |
● |
general
economic conditions in markets in which we conduct business; |
| |
|
|
| |
● |
business
conditions in the energy and transportation industries; |
| |
|
|
| |
● |
the
regulatory environment; |
| |
|
|
| |
● |
fluctuations
in interest rates; |
| |
|
|
| |
● |
exposure
to state regulation of cannabis companies acting in the capacity as tenants; |
| |
|
|
| |
● |
the
performance of existing investments or new investments that we may make; |
| |
|
|
| |
● |
our
ability to source acquisitions at valuations favorable to us; |
| |
|
|
| |
● |
our
ability to maintain our REIT status; and |
| |
|
|
| |
● |
other
material items. |
We
undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise,
except as may be required by law. You are advised to consult any further disclosures we make on related subjects in our Annual Reports
on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as filed with the SEC. Also note that we provide cautionary
discussion of risks, uncertainties and assumptions relevant to our business in our Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K, including those incorporated by reference in this prospectus.
The
risks and uncertainties referred to above are factors that, individually or in the aggregate, management believes could cause our actual
results to differ materially from expected or historical results. We note these factors for investors as permitted by the Private Securities
Litigation Reform Act of 1995. You should understand that it is not possible to predict or identify all such factors. Consequently, you
should not consider such disclosures to be a complete discussion of all potential risks or uncertainties.
USE
OF PROCEEDS
We
will retain broad discretion over the use of the net proceeds from the sale of the securities offered hereby. Except as described in
any prospectus supplement or in any related free writing prospectus that we may authorize to be provided to you, we currently intend
to use the net proceeds from the sale of the securities offered by us hereunder primarily for working capital and general corporate purposes,
including making investments and share repurchases. We will set forth in the applicable prospectus supplement or free writing prospectus
our intended use for the net proceeds received from the sale of any securities sold pursuant to the prospectus supplement or free writing
prospectus.
Distribution
Policy
Any
distributions that we make will be at the discretion of our Board of Trustees, and there can be no assurance that dividends will be paid
in any particular period or at any particular level, or sustained in future periods based on past timing of payments and payments levels.
Dividends on our Series A Preferred Stock are cumulative and must be paid in full and on a current basis in order for the Trust to pay
dividends on its Common Shares. Beginning in the fourth fiscal quarter of 2022, the Trust ceased to declare quarterly dividend payments on its 7.75% Series A
Cumulative Redeemable Perpetual Preferred Stock.
We
currently do not make regular quarterly distributions to holders of our Common Shares, but may elect to do so in the future. Distributions
declared by us will be authorized by our Board of Trustees in its sole discretion out of funds legally available therefor and will be
dependent upon a number of factors, including the capital requirements of our trust and meeting the distribution requirements necessary
to maintain our qualification as a REIT. We cannot assure that our intended distributions will be made or sustained or that our Board
of Trustees will not change our distribution policy in the future. Under some circumstances, we may be required to fund distributions
from working capital, liquidate assets at prices or times that we regard as unfavorable or borrow to provide funds for distributions,
or we may make distributions in the form of a taxable stock dividend. However, we have no current intention to use the net proceeds from
this offering to make distributions nor do we intend to make distributions using shares of our common stock. We do not intend to reduce
the expected distribution per share if we issue the securities contemplated in this prospectus.
DESCRIPTION
OF CAPITAL STOCK
The
following description of our securities is a summary of the detailed provisions of our Declaration of Trust and By-laws governing the
terms of our securities. These statements do not purport to be complete, or to give full effect to the provisions of applicable statutory
and common law, and are subject to, and qualified in their entirety by reference to, the terms of our Declaration of Trust and By-Laws.
Pursuant
to our Declaration of Trust, we are currently authorized to issue 98,325,000 Common Shares of beneficial interest, $0.001 par value,
and 1,675,000 shares of Series A Preferred Stock, par value $25.00 per share, or such other class of shares as may be determined by the
Board of Trustees. Our Board of Trustees, without any action by our shareholders, may amend our Declaration of Trust from time to time
to issue securities of any type, class or series and increase or decrease the aggregate number of authorized Common Shares or other securities
of any type, including without limitation any class or series of securities. Other than our Common Shares, we do not currently have any
other class of stock issued and outstanding.
Pursuant
to our Declaration of Trust, the Board of Trustees may authorize, without approval of any shareholder, the issuance from time to time
of shares of any class or series or securities or rights convertible into shares of any class or series for such consideration (whether
in cash, property, past or future services, obligation for future payment or otherwise) as the Board of Trustees may deem advisable (or
without consideration in the case of a share dividend or share split).
Except
as may be provided by the Board of Trustees in setting the terms of any particular securities that we may issue, no holder of shares
of our stock or other securities has any preemptive right to purchase or subscribe for any additional shares of our stock or other securities.
Overview
As
of January 21, 2025, the authorized capital stock of the Trust consists of 100,000,000 shares, classified as 98,325,000 Common Shares,
and 1,675,000 shares of Series A Preferred Stock, with a total of 336,944 shares of our Series A Preferred Stock issued and outstanding.
Common
Shares
General
As
of January 21, 2025, 3,389,661 of our Common Shares were issued and outstanding. The outstanding shares are, and the Common Shares offered
hereby upon delivery and payment will be, fully paid and non-assessable.
Voting
Rights
Each
holder of Common Shares is entitled to one vote for each share registered in such holder’s name on our books on all matters submitted
to a vote of shareholders. The holders of our Common Shares do not have cumulative voting rights. As a result, the holders of Common
Shares entitled to exercise more than 50% of the voting rights in an election of trustees can elect 100% of the trustees to be elected
if they choose to do so. In such event, the holders of the remaining Common Shares voting for the election of trustees will not be able
to elect any persons to our board of trustees. The trust’s quorum requirements for the election of trustees and for other general
matters submitted to a vote of shareholders, is 33% unless otherwise specified by statute or in our Governing Documents. Our trustees
are elected to serve for one-year terms and are re-elected annually at the annual shareholders’ meeting.
Dividend
Rights
Holders
of Common Shares are entitled to such dividends as our board of trustees may declare out of funds legally available therefore. Debt agreements
or preferred stock agreements that we enter into may contain restrictions on certain payments by us, including dividends.
Liquidation
Rights and Other Preferences
Subject
to the prior rights of creditors and any preferred shares outstanding, the holders of the Common Shares are entitled in the event of
liquidation, dissolution or winding up to share pro rata in the distribution of all remaining assets. There are no preemptive or conversion
rights or redemption or sinking fund provisions in respect of the Common Shares.
Maryland
Law permits a Maryland real estate investment trust to include in its declaration of trust a provision limiting the liability of its
trustees and officers to the trust and its shareholders for money damages except for liability resulting from (a) actual receipt of an
improper benefit or profit in money, property or services or (b) active or deliberate dishonesty established in a judgment or other final
adjudication to be material to the cause of action. Our Declaration of Trust contains a provision that limits the liability of our trustees
and officers to the maximum extent permitted by Maryland law.
Transfer
Agent and Registrar
The
Transfer Agent and Registrar for our Common Shares is Broadridge Corporate Issuer Solutions, Inc.
Preferred
Shares
General
As
of January 21, 2025, the authorized capital stock of the Trust consists of 1,675,000 shares of Series A Preferred Stock with a total
of 336,944 shares of our Series A Preferred Stock issued and outstanding.
Our
board of trustees has the power under our charter to classify and reclassify any unissued Common Shares into one or more classes or series
of preferred stock, set the terms of each such class or series and authorize us to issue the newly classified or reclassified shares.
Each such class or series of preferred stock will have such designations, preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications and terms or conditions of redemption as shall be determined by our
board of trustees.
The
outstanding shares of Series A Preferred Stock are fully paid and non-assessable. Additional shares of preferred stock may be issued
in one or more series from time to time by our Board of Trustees, and the Board of Trustees is expressly authorized to fix the designations
and the powers, preferences and rights, and the qualifications, limitations and restrictions of each series. Subject to the determination
of our Board of Trustees, any shares of preferred stock that may be issued in the future would generally have preferences over our common
stock with respect to the payment of dividends and the distribution of assets in the event of any liquidation, dissolution or winding
up of Power REIT.
Preferred
stock may be issued independently or together with any other securities and may be attached to or separate from the securities. The following
description of the preferred stock sets forth general terms and provisions of the preferred stock to which any prospectus supplement
may relate. The statements below describing the preferred stock are in all respects subject to and qualified in their entirety by reference
to the applicable provisions of our charter and bylaws setting forth the terms of a class or series of preferred stock. The issuance
of preferred stock could adversely affect the voting power, dividend rights and other rights of holders of common stock. Although our
board of trustees does not have this intention at the present time, it or a duly authorized committee could establish another class or
series of preferred stock, that could, depending on the terms of the series, delay, defer or prevent a transaction or a change in control
of our trust that might involve a premium price for the common stock or otherwise be in the best interest of the holders thereof.
Below
is a description of preferred shares that we may issue under this prospectus followed by a description of our Series A Preferred Stock
Terms
Subject
to the limitations prescribed by our charter, our Board of Trustees is authorized to classify any unissued shares of preferred stock
and to reclassify any previously classified but unissued shares of preferred stock into other classes or series of stock. Our Board of
Trustees may fix the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions,
qualifications and terms and conditions of redemption for each class or series.
Reference
is made to the applicable prospectus supplement relating to the class or series of preferred stock offered thereby for the specific terms
thereof, including:
| |
● |
the
designation of the class or series of preferred stock; |
| |
|
|
| |
● |
the
number of shares of preferred stock of the class or series, the liquidation preference of the shares of preferred stock and the offering
price of the shares of preferred stock; |
| |
|
|
| |
● |
the
dividend rate(s), period(s) and/or payment day(s) or method(s) of calculation thereof applicable to the class or series of preferred
stock; |
| |
|
|
| |
● |
the
date from which dividends on the class or series of preferred stock shall accumulate, if applicable; |
| |
|
|
| |
● |
the
procedures for any auction and remarketing, if any, for the class or series of preferred stock; |
| |
|
|
| |
● |
the
provision for a sinking fund, if any, for the class or series of preferred stock; |
| |
|
|
| |
● |
the
provisions for redemption, if applicable, of the class or series of preferred stock; |
| |
|
|
| |
● |
any
listing of the preferred stock on any securities exchange; |
| |
|
|
| |
● |
the
terms and conditions, if applicable, upon which the class or series of preferred stock may or will be convertible into our common
stock or other securities, including the conversion price or manner of calculation thereof; |
| |
|
|
| |
● |
the
relative ranking and preferences of the class or series of preferred stock as to dividend rights and rights upon liquidation, dissolution
or winding up of our affairs; |
| |
|
|
| |
● |
whether
interests in the preferred stock will be represented by depositary shares; |
| |
● |
any
additional limitations on ownership and restrictions on transfer of the class or series of preferred stock; |
| |
|
|
| |
● |
any
limitations on the issuance of any class or series of preferred stock ranking senior or equal to the class or series of preferred
stock being offered as to dividend rights and rights upon liquidation, dissolution or the winding up of our affairs; |
| |
|
|
| |
● |
a
discussion of U.S. federal income tax considerations applicable to the preferred stock; and |
| |
|
|
| |
● |
any
other specific terms, preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other
distributions, qualifications and terms and conditions of redemption of the preferred stock. |
The
terms of each class or series of preferred stock will be described in any prospectus supplement related to such class or series of preferred
stock and will contain a discussion of any material Maryland law or material U.S. federal income tax considerations applicable to the
preferred stock.
Transfer
Agent and Registrar
We
will name the registrar and transfer agent for the preferred stock in the applicable prospectus supplement.
Series
A Preferred Stock
Ranking
The
Series A Preferred Stock, as to dividend rights and rights upon our liquidation, dissolution or winding-up, rank:
| |
● |
senior
to all classes or series of our common stock and to all other equity securities ranking junior to the Series A Preferred Stock with
respect to dividend rights and rights upon our liquidation, dissolution or winding up; |
| |
|
|
| |
● |
equal
to any class or series of equity securities ranking equal to the Series A Preferred Stock with respect to dividend rights or rights
upon our liquidation, dissolution or winding up; and |
| |
|
|
| |
● |
junior
to any class or series of equity securities ranking senior to the Series A Preferred Stock with respect to dividend rights or rights
upon our liquidation, dissolution or winding up. |
The
term “equity securities” does not include convertible debt securities, which would rank senior to the Series A Preferred
Stock prior to conversion (and whose ranking after conversion would depend on the specific terms of the post-conversion securities).
In addition, the Series A Preferred Stock ranks junior to all our current and future indebtedness and the indebtedness of our subsidiaries.
Dividends
Holders
of outstanding shares of the Series A Preferred Stock are entitled to receive, out of funds legally available for the payment of dividends,
cumulative cash dividends in the amount of $1.9375 per share each year, which is equivalent to the rate of 7.75% of the $25.00 liquidation
preference per share of Series A Preferred Stock per annum. Dividends are payable quarterly in arrears for the preceding Dividend Period
(as defined below) on the 15th day of March, June, September and December of each year or, if not a business day, the next succeeding
business day, to all holders of record on the applicable record date. We refer to each such payment date as a “Dividend Payment
Date,” and “Dividend Period” means, with respect to a given Dividend Payment Date, the nearest preceding period among
the following: March 1 to May 31, June 1 to August 31, September 1 to November 30 and December 1 to the last day of the next following
February.
Any
dividend payable on Series A Preferred Stock, including any dividend payable for any partial dividend period (for example, any dividend
payable in respect of shares that have been outstanding for only part of a dividend period), will be computed on the basis of a 360-day
year consisting of twelve 30-day months. Dividends are payable to holders of record of Series A Preferred Stock as they appear in the
transfer agent’s records at the close of business on the applicable record date, which will be the date that our board of trustees
designates as the record date for the payment of a dividend that is not more than 30 nor fewer than 10 days prior to the Dividend Payment
Date, which date we refer to as a “Dividend Payment Record Date.”
Our
Board of Trustees will not authorize, pay or set apart for payment by us any dividend on the Series A Preferred Stock at any time that:
| |
● |
the
terms and conditions of any of our agreements, including any agreement relating to our indebtedness, prohibits such authorization,
payment or setting apart for payment; |
| |
|
|
| |
● |
the
terms and conditions of any of our agreements, including any agreement relating to our indebtedness, provides that such authorization,
payment or setting apart for payment would constitute a breach of, or a default under, such agreement; or |
| |
|
|
| |
● |
the
law restricts or prohibits such authorization, payment or setting apart for payment. |
Notwithstanding
the foregoing, dividends on the Series A Preferred Stock will accrue whether or not:
| |
● |
any
of the agreements or laws referred to above are applicable; |
| |
|
|
| |
● |
we
have earnings; |
| |
|
|
| |
● |
there
are funds legally available for the payment of such dividends; or |
| |
|
|
| |
● |
such
dividends are declared by us. |
Accrued
but unpaid dividends on the Series A Preferred Stock will not bear additional interest.
We
will not declare or pay or set aside for payment any dividends (other than a dividend paid in common stock or other shares ranking junior
to the Series A Preferred Stock as to dividends and upon liquidation) or declare or make any distribution of cash or other property on
common stock or other shares that rank junior or equal to the Series A Preferred Stock as to dividends and upon liquidation or redeem
or otherwise acquire common stock or other shares that rank junior or equal to the Series A Preferred Stock as to dividends and upon
liquidation (except by conversion into or exchange for common stock or other shares ranking junior to the Series A Preferred Stock as
to dividends and upon liquidation and except for the redemption of shares of our stock pursuant to the provisions of our charter relating
to ownership limits and restrictions on transfer of our equity securities), unless we also have declared and either paid or set aside
for payment full cumulative dividends on the Series A Preferred Stock for all past Dividend Periods.
If
we do not declare and either pay or set aside for payment full cumulative dividends on the Series A Preferred Stock and all shares that
rank equal, as to dividends, to the Series A Preferred Stock, the amount that we have declared will be allocated pro rata to the holders
of Series A Preferred Stock and such other shares, so that the amount declared for each share of Series A Preferred Stock and for each
such other share is proportionate to the accrued and unpaid dividends on such security. Any dividend payment made on the Series A Preferred
Stock will first be credited against the earliest accrued but unpaid dividend due with respect to such securities that remains payable.
If,
for any taxable year, we elect to designate as “capital gain dividends” (as defined in Section 857 of the Code) a portion,
which we refer to as the Capital Gains Amount, of the dividends not in excess of our earnings and profits that are paid or made available
for the year to the holders of all classes of shares, or the “Total Dividends”, then the portion of the Capital Gains Amount
that will be allocable to the holders of Series A Preferred Stock will be the Capital Gains Amount multiplied by a fraction, the numerator
of which will be the total dividends (within the meaning of the Code) paid or made available to the holders of Series A Preferred Stock
for the year and the denominator of which will be the Total Dividends.
Liquidation
Preference
Upon
any voluntary or involuntary liquidation, dissolution or winding up of our affairs, the holders of Series A Preferred Stock will be entitled
to be paid out of our assets legally available for distribution to our shareholders a liquidation preference of $25.00 per share, plus
an amount equal to any accrued and unpaid dividends (whether or not declared) to, but not including, the date of payment, before any
distribution or payment may be made to holders of common stock or any other class or series of our equity stock ranking, as to liquidation
rights, junior to the Series A Preferred Stock. If, upon our voluntary or involuntary liquidation, dissolution or winding up, our available
assets are insufficient to pay the full amount of the liquidating distributions on all outstanding shares of Series A Preferred Stock
and the corresponding amounts payable on all shares of each other class or series of stock ranking, as to liquidation rights, equal to
the Series A Preferred Stock, then the holders of the Series A Preferred Stock and the shares of each such other class or series of stock
ranking, as to liquidation rights, equal to the Series A Preferred Stock will share ratably in any distribution of assets in proportion
to the full liquidating distributions to which they would otherwise be respectively entitled. Holders of Series A Preferred Stock will
be entitled to written notice of any voluntary or involuntary liquidation, dissolution or winding up at least 15 days before the payment
date of such liquidating distribution. After payment to them of the full amount of the liquidating distributions to which they are entitled,
the holders of Series A Preferred Stock will have no right or claim to any of our remaining assets.
In
determining whether any distribution (other than upon voluntary or involuntary dissolution), by dividend, redemption or other acquisition
of shares of stock of the Trust or otherwise, is permitted under applicable Maryland law, amounts that would be needed, if the Trust
were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of the holders of the Series
A Preferred Stock will not be added to the Trust’s total liabilities.
Our
consolidation or merger with or into any other person or entity or the sale, lease, transfer or conveyance of all or substantially all
of our property or business will not be deemed to constitute our liquidation, dissolution or winding up.
Optional
Redemption
Notwithstanding
any other provision relating to redemption or repurchase of the Series A Preferred Stock, we currently may redeem any or all of the Series
A Preferred Stock at any time at a redemption price of $25.00 per share plus all dividends accrued and unpaid (whether or not declared),
if our board of trustees determines that such redemption is necessary to preserve our status as a REIT for federal income tax purposes.
On
and after February 28, 2019, the Series A Preferred Stock may be redeemed at our option, in whole or in part, at any time and from time
to time, for cash, at a redemption price of $25.00 per share plus all dividends accrued and unpaid (whether or not declared) on the Series
A Preferred Stock to, but not including, the date of such redemption (unless the redemption date is after a record date for a Series
A Preferred Stock declared dividend payment and prior to the corresponding Series A Preferred Stock dividend payment date, in which case
no additional amount for such accrued and unpaid dividend will be included in the redemption price), without interest, upon the giving
of notice, as provided below.
If
less than all of the outstanding Series A Preferred Stock is to be redeemed, the shares to be redeemed will be determined pro rata, by
lot or in such other equitable manner as prescribed by our board of trustees that will not result in a violation of the ownership limits
and restrictions on transfer of our stock contained in our charter. If the redemption is to be by lot, and if as a result of the redemption
any holder of Series A Preferred Stock would own, or be deemed by virtue of certain attribution provisions of the Code to own, in excess
of 9.9% in value or in number of shares (whichever is more restrictive) of our issued and outstanding equity securities (including the
Series A Preferred Stock), then, except in certain instances, we will redeem the requisite number of shares of Series A Preferred Stock
of that holder such that the holder will not own or be deemed by virtue of such attribution provisions of the Code to own, subsequent
to the redemption, in excess of 9.9% in value or in number of shares (whichever is more restrictive) of our issued and outstanding equity
securities.
We
will mail to the record holders of Series A Preferred Stock, a notice of optional redemption no less than 30 days nor more than 60 days
prior to the redemption date to the address, as shown on our share transfer books. A failure to give notice of redemption or any defect
in the notice or in its mailing will not affect the validity of the redemption of any Series A Preferred Stock except as to the holder
to whom notice was defective or not given. Each notice will state the following:
| |
● |
the
date fixed for redemption thereof, which we refer to as the redemption date; |
| |
|
|
| |
● |
the
redemption price; |
| |
|
|
| |
● |
the
total number of shares of Series A Preferred Stock to be redeemed (and, if less than all the shares held by any holder are to be
redeemed, the number of shares to be redeemed from such holder); |
| |
|
|
| |
● |
the
place or places where the shares of Series A Preferred Stock are to be surrendered for payment,
together with the certificates, if any, representing such shares (duly endorsed for transfer)
and any other documents we require
in
connection with such redemption; and |
| |
|
|
| |
● |
that
dividends on the Series A Preferred Stock to be redeemed will cease to accrue on the redemption date. |
The
redemption price of the shares of Series A Preferred Stock to be redeemed will then be paid to or on the order of the person whose name
appears in our stock ledger as the owner of such shares.
From
and after the redemption date (unless we fail to pay or set aside the redemption price):
| |
● |
all
dividends on the Series A Preferred Stock designated for redemption will cease to accrue; |
| |
|
|
| |
● |
all
rights of the holders of the Series A Preferred Stock designated for redemption, except the
right to receive
the
redemption price, will cease and terminate; |
| |
|
|
| |
● |
the
Series A Preferred Stock designated for redemption may not thereafter be transferred except with our consent; and |
| |
|
|
| |
● |
the
Series A Preferred Stock designated for redemption will not be deemed to be outstanding for any purpose whatsoever. |
Notwithstanding
the foregoing, unless full cumulative dividends on all outstanding Series A Preferred Stock have been or contemporaneously are declared
and paid in cash or declared and a sum sufficient for the cash payment of the dividends has been set apart for payment for all past dividend
periods, no shares of Series A Preferred Stock may be redeemed unless all outstanding shares of Series A Preferred Stock are simultaneously
redeemed. Unless full cumulative dividends on all outstanding Series A Preferred Stock have been paid or declared and a sum sufficient
for the cash payment of the dividends has been set apart for payment for all past dividend periods, we will not purchase or otherwise
acquire directly or indirectly any Series A Preferred Stock (except by exchange for our equity securities ranking as to dividend rights
and liquidation preference junior to the Series A Preferred Stock or except pursuant to the provisions of our charter relating to ownership
limits and restrictions on transfer of our stock). So long as no dividends on Series A Preferred Stock for any past dividend period are
in arrears, we shall, subject to the foregoing, be entitled at any time and from time to time to repurchase Series A Preferred Stock
in open-market transactions duly authorized by our board of trustees and effected in compliance with applicable laws. However, these
requirements will not prevent our purchase or acquisition of Series A Preferred Stock pursuant to a purchase or exchange offer made on
the same terms to holders of all outstanding Series A Preferred Stock or our redemption of Series A Preferred Stock pursuant to the provisions
of our charter relating to ownership limits and restrictions on transfer of our stock. It also does not prevent our purchase or acquisition
of Series A Preferred Stock in one-off transactions with either cash or our Common Shares.
All
shares of the Series A Preferred Stock that we redeem or repurchase will be retired and restored to the status of authorized but unissued
Common Shares, without designation as to series or class.
Special
Optional Redemption
During
any period of time that both (i) the Series A Preferred Stock is not listed on the NYSE AMERICAN, the NYSE, NASDAQ or an exchange or
quotation system that is a successor to the NYSE MKT, the NYSE or NASDAQ and (ii) we are not subject to the reporting requirements of
the Exchange Act, but any Series A Preferred Stock is outstanding (such combination of circumstances a “Delisting Event”),
we will have the option to redeem the outstanding Series A Preferred Stock, in whole and not in part, within 90 days after any such Delisting
Event, for a redemption price of $25.00 per share plus all dividends accrued and unpaid (whether or not declared) to, but not including,
the redemption date (unless the redemption date is after a record date for a Series A Preferred Stock declared dividend payment and prior
to the corresponding Series A Preferred Stock dividend payment date, in which case no additional amount for such accrued and unpaid dividend
will be included in the redemption price), upon the giving of notice, as provided below.
In
addition, upon the occurrence of a Change of Control (as defined below), we may, at our option, redeem the Series A Preferred Stock,
in whole and not in part, and within 120 days after any such Change of Control occurred, by paying $25.00 per share plus all dividends
accrued and unpaid (whether or not declared) on the Series A Preferred Stock to, but not including, the date of redemption (unless the
redemption date is after a record date for a Series A Preferred Stock declared dividend payment and prior to the corresponding Series
A Preferred Stock dividend payment date, in which case no additional amount for such accrued and unpaid dividend will be included in
the redemption price). If, prior to the Delisting Event Conversion Date or Change of Control Conversion Date (each as defined below),
as applicable, we provide notice of redemption with respect to the Series A Preferred Stock (whether pursuant to our optional redemption
right or our special optional redemption right), holders of Series A Preferred Stock will not have the conversion right described below
under “—Conversion Rights.”
Notwithstanding
the foregoing, we shall not have the right to redeem the Series A Preferred Stock (x) upon any Delisting Event occurring in connection
with a transaction set forth in the first bullet point of the definition of Change of Control unless such Delisting Event also constitutes
a Change of Control or (y) with respect to any Delisting Event or Change of Control occurring in connection with a transaction (an “Affiliate
Transaction”) with, or by, any person (as defined below) who prior to such transaction is an affiliate of the Trust.
We
will mail to the record holder of the Series A Preferred Stock, a notice of redemption no less than 30 days nor more than 60 days prior
to the redemption date. We will send the notice to the address, as shown on our share transfer books. A failure to give notice of redemption
or any defect in the notice or in its mailing will not affect the validity of the redemption of any Series A Preferred Stock except as
to the holder to whom notice was defective or not given. Each notice will state the following:
| |
● |
the
redemption date; |
| |
|
|
| |
● |
the
redemption price; |
| |
|
|
| |
● |
the
total number of shares of Series A Preferred Stock to be redeemed; |
| |
|
|
| |
● |
the
place or places where the shares of Series A Preferred Stock are to be surrendered for payment, together with the certificates, if
any, representing such shares (duly endorsed for transfer) and any other documents we require in connection with such redemption; |
| |
|
|
| |
● |
that
the Series A Preferred Stock is being redeemed pursuant to our special optional redemption right, and, as applicable, if in connection
with the occurrence of a Change of Control, a brief description of the transaction or transactions constituting such Change of Control; |
| |
● |
that
holders of the Series A Preferred Stock to be redeemed will not be able to tender such Series A Preferred Stock for conversion in
connection with the Delisting Event or Change of Control, as applicable, and each Series A Preferred Stock tendered for conversion
that is selected, prior to the Delisting Event Conversion Date or Change of Control Conversion Date, as applicable, for redemption
will be redeemed on the related date of redemption instead of converted on the Delisting Event Conversion Date or Change of Control
Conversion Date, as applicable; and |
| |
|
|
| |
● |
that
dividends on the Series A Preferred Stock to be redeemed will cease to accrue on the redemption date. |
If
we redeem fewer than all of the outstanding shares of Series A Preferred Stock we will determine the number of outstanding shares of
Series A Preferred Stock to be redeemed on a pro rata basis, by lot or by any other equitable method we may choose that will not result
in a violation of the ownership limits and restrictions on transfer of our stock contained in our charter.
If
(i) we have given a notice of redemption, (ii) we have set aside sufficient funds for the redemption of the shares of Series A Preferred
Stock called for redemption and (iii) irrevocable instructions have been given to pay the redemption price and all applicable accrued
and unpaid dividends, then from and after the redemption date, those shares of Series A Preferred Stock will no longer be outstanding,
no further dividends will accrue on them and all other rights of the holders of those shares of Series A Preferred Stock will terminate,
except the right to receive the redemption price, without interest.
A
“Change of Control” occurs when, after the original issuance of the Series A Preferred Stock, the following have occurred
and are continuing:
| |
● |
the
acquisition by any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Exchange
Act, of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases,
mergers or other acquisition transactions of shares of our stock entitling that person to exercise more than 50% of the total voting
power of all outstanding shares of our stock entitled to vote generally in the election of trustees (except that such person will
be deemed to have beneficial ownership of all securities that such person has the right to acquire, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent condition); and |
| |
|
|
| |
● |
following
the closing of any transaction referred to in the bullet point above, neither we nor the acquiring or surviving entity has a class
of common securities (or ADRs representing such securities) listed on the NYSE AMERICAN, the NYSE, NASDAQ or an exchange or quotation
system that is a successor to the NYSE AMERICAN, the NYSE or NASDAQ. |
All
shares of the Series A Preferred Stock that we redeem or repurchase will be retired and restored to the status of authorized but unissued
shares of common stock, without designation as to series or class.
Conversion
Rights
Upon
the occurrence of a Delisting Event or a Change of Control, as applicable, each holder of Series A Preferred Stock will have the right,
unless prior to the Delisting Event Conversion Date or Change of Control Conversion Date, as applicable, we provide notice of our election
to redeem such shares of Series A Preferred Stock as described under “— Optional Redemption” or “—Special
Optional Redemption,” to convert all or part of the shares of Series A Preferred Stock held by such holder (the “Delisting
Event Conversion Right” or “Change of Control Conversion Right”, as applicable) on the Delisting Event Conversion Date
or Change of Control Conversion Date, as applicable, into a number of shares of common stock per share of Series A Preferred Stock (the
“Common Stock Conversion Consideration”) equal to the lesser of:
| |
● |
the
quotient obtained by dividing (i) the sum of the $25.00 liquidation preference per share of Series A Preferred Stock to be converted
plus the amount of any accrued and unpaid dividends (whether or not declared) to, but not including, the Delisting Event Conversion
Date or Change of Control Conversion Date, as applicable (unless the Delisting Event Conversion Date or Change of Control Conversion
Date, as applicable, is after a record date for a Series A Preferred Stock declared dividend payment and prior to the corresponding
Series A Preferred Stock dividend payment date, in which case no additional amount for such accrued and unpaid dividend to be paid
on such dividend payment date will be included in this sum), by (ii) the Common Stock Price, as defined below (such quotient, the
“Conversion Rate”); and |
| |
|
|
| |
● |
5,
which we refer to as the “Share Cap.” |
The
Share Cap will be subject to pro rata adjustments for any share splits (including those effected pursuant to a common stock dividend),
subdivisions or combinations (in each case, a “Share Split”) with respect to shares of our common stock as follows: the adjusted
Share Cap as the result of a Share Split will be the number of shares of our common stock that is equivalent to the product of (i) the
Share Cap in effect immediately prior to such Share Split multiplied by (ii) a fraction, the numerator of which is the number of shares
of our common stock outstanding after giving effect to such Share Split and the denominator of which is the number of shares of our common
stock outstanding immediately prior to such Share Split.
In
the case of a Delisting Event or Change of Control pursuant to, or in connection with, which shares of our common stock will be converted
into cash, securities or other property or assets (including any combination thereof) (the “Alternative Form Consideration”),
a holder of shares of Series A Preferred Stock will receive upon conversion of such Series A Preferred Stock the kind and amount of Alternative
Form Consideration which such holder would have owned or been entitled to receive had such holder held a number of shares of our common
stock equal to the Common Stock Conversion Consideration immediately prior to the effective time of the Delisting Event or Change of
Control (the “Alternative Conversion Consideration”; and the Common Stock Conversion Consideration or the Alternative Conversion
Consideration, as may be applicable to a Delisting Event or Change of Control, is referred to as the “Conversion Consideration”).
If
the holders of shares of our Common Shares have the opportunity to elect the form of consideration to be received in connection with
the Delisting Event or Change of Control, the Conversion Consideration that holders of the Series A Preferred Stock will receive will
be the form of consideration elected by the holders of a plurality of the shares of Common Shares held by stockholders who participate
in the election and will be subject to any limitations to which all holders of shares of common stock are subject, including, without
limitation, pro rata reductions applicable to any portion of the consideration payable in connection with the Delisting Event or Change
of Control.
We
will not issue fractional Common Shares upon the conversion of our Series A Preferred Stock. Instead, we will pay the cash value of such
fractional shares.
Within
15 days following the occurrence of a Delisting Event or Change of Control, we will provide to holders of record of outstanding shares
of Series A Preferred Stock a notice of occurrence of the Delisting Event or Change of Control that describes the resulting Delisting
Event Conversion Right or Change of Control Conversion Right, as applicable. This notice will state the following:
| |
● |
the
events constituting the Delisting Event or Change of Control; |
| |
|
|
| |
● |
the
date of the Delisting Event or Change of Control; |
| |
|
|
| |
● |
the
last date on which the holders of shares of Series A Preferred Stock may exercise their Delisting Event Conversion Right or Change
of Control Conversion Right, as applicable; |
| |
|
|
| |
● |
the
method and period for calculating the Common Stock Price; |
| |
|
|
| |
● |
the
“Delisting Event Conversion Date” or “Change of Control Conversion Date,” as applicable, which will be a
business day fixed by our board of trustees that is not fewer than 20 or more than 35 days following the date of the notice; |
| |
|
|
| |
● |
that
if, prior to the Delisting Event Conversion Date or Change of Control Conversion Date, as applicable, we provide notice of our election
to redeem all or any portion of the shares of Series A Preferred Stock, whether pursuant to our special optional redemption right
or our optional redemption right, you will not have any right to convert the shares of Series A Preferred Stock so called for redemption
and such shares of Series A Preferred Stock will be redeemed on the related redemption date, even if they have already been tendered
for conversion pursuant to the Delisting Event Conversion Right or Change of Control Conversion Right, as applicable; |
| |
|
|
| |
● |
the
type and amount of Alternative Conversion Consideration entitled to be received per share of Series A Preferred Stock; |
| |
|
|
| |
● |
the
name and address of the paying agent and the conversion agent; and |
| |
|
|
| |
● |
the
procedures that the holders of shares of Series A Preferred Stock must follow to exercise the Delisting Event Conversion Right or
Change of Control Conversion Right, as applicable. |
We
will issue a press release for publication on or by Dow Jones & Company, Business Wire, PR Newswire or Bloomberg Business News (or,
if these organizations are not in existence at the time of issuance of the press release, such other news or press organization as is
reasonably calculated to broadly disseminate the relevant information to the public) containing the information stated in such a notice,
and post such a notice on our website, in any event prior to the opening of business on the first business day following any date on
which we provide the notice described above to the holders of record of Series A Preferred Stock.
To
exercise the Delisting Event Conversion Right or Change of Control Conversion Right, as applicable, a holder of record of Series A Preferred
Stock will be required to deliver, on or before the close of business on the Delisting Event Conversion Date or Change of Control Conversion
Date, as applicable, the certificates, if any, representing any certificated shares of Series A Preferred Stock to be converted, duly
endorsed for transfer, together with a completed written conversion notice and any other documents we reasonably require in connection
with such conversion, to our conversion agent. The conversion notice must state:
| |
● |
the
relevant Delisting Event Conversion Date or Change of Control Conversion Date, as applicable; and |
| |
|
|
| |
● |
the
number of shares of Series A Preferred Stock to be converted. |
The
“Common Stock Price” for any Change of Control will be (i) if the consideration to be received in the Change of Control by
holders of shares of our common stock is solely cash, the amount of cash consideration per share of common stock, and (ii) if the consideration
to be received in the Change of Control by holders of shares of our common stock is other than solely cash, the average of the closing
price per share of our common stock on the 10 consecutive trading days immediately preceding, but not including, the effective date of
the Change of Control. The “Common Stock Price” for any Delisting Event will be the average of the closing price per share
of our common stock on the 10 consecutive trading days immediately preceding, but not including, the effective date of the Delisting
Event.
Holders
of Series A Preferred Stock may withdraw any notice of exercise of a Delisting Event Conversion Right or Change of Control Conversion
Right, as applicable, in whole or in part, by a written notice of withdrawal delivered to our conversion agent prior to the close of
business on the business day prior to the Delisting Event Conversion Date or Change of Control Conversion Date, as applicable. The notice
of withdrawal must state:
| |
● |
the
number of withdrawn shares of Series A Preferred Stock; |
| |
|
|
| |
● |
if
certificated shares of Series A Preferred Stock have been tendered for conversion and are being withdrawn, the certificate numbers
of such certificated shares of Series A Preferred Stock; and |
| |
|
|
| |
● |
the
number of shares of Series A Preferred Stock, if any, which are still to be converted. |
Notwithstanding
the foregoing, if the Series A Preferred Stock are held in global form, the conversion notice and the notice of withdrawal, as applicable,
must comply with applicable procedures of The Depository Trust Company (DTC).
Shares
of Series A Preferred Stock as to which the Delisting Event Conversion Right or Change of Control Conversion Right, as applicable, has
been properly exercised and for which the conversion notice has not been properly withdrawn will be converted into the applicable Conversion
Consideration in accordance with the Delisting Event Conversion Right or Change of Control Conversion Right on the applicable Delisting
Event Conversion Date or Change of Control Conversion Date, unless prior to the applicable Delisting Event Conversion Date or Change
of Control Conversion Date we provide notice of our election to redeem such shares of Series A Preferred Stock, whether pursuant to our
optional redemption right or our special optional redemption right. If we elect to redeem shares of Series A Preferred Stock that would
otherwise be converted into the applicable Conversion Consideration on a Delisting Event Conversion Date or Change of Control Conversion
Date, as applicable, such shares of Series A Preferred Stock will not be so converted, the holders of such shares will not have any right
to convert such shares and the holders of such shares will be entitled to receive on the applicable redemption date the redemption price
for such shares.
We
will deliver amounts owing upon conversion no later than the third business day following the Delisting Event Conversion Date or Change
of Control Conversion Date, as applicable.
In
connection with the exercise of any Delisting Event Conversion Right or Change of Control Conversion Right, as applicable, we will comply
with all U.S. federal and state securities laws and stock exchange rules in connection with any conversion of shares of Series A Preferred
Stock into shares of common stock.
These
Change of Control and Delisting Event conversion and redemption features may not adequately compensate a holder of such securities upon
a Change of Control or Delisting Event and may make it more difficult for or discourage a party from taking over our trust. See the section
entitled “Risk Factors” with respect to the risks of an investment in our Series A Preferred Stock included in any applicable
prospectus supplement and under similar headings in the other documents that are incorporated by reference into this prospectus. Specifically,
see the following risk factor in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (as it may be amended from
time to time) filed with the SEC on March 24, 2021: “Risk Factors—The change of control conversion and delisting conversion
features of our Series A Preferred Stock may not adequately compensate a holder of such securities upon a Change of Control or Delisting
Event (as such terms as defined in regard to our Series A Preferred Stock), and the change of control conversion, delisting conversion
and redemption features of our Series A Preferred Stock may make it more difficult for a party to take over our trust or may discourage
a party from taking over our trust.
Except
as provided above in connection with a Delisting Event or Change of Control, the Series A Preferred Stock is not convertible into or
exchangeable for any other property or securities. Notwithstanding any other provision of our Series A Preferred Stock, no holder of
our Series A Preferred Stock will be entitled to convert such Series A Preferred Stock into shares of our common stock to the extent
that receipt of such shares of common stock would cause such holder (or any other person) to exceed the ownership limits and restrictions
on transfer of our stock contained in our charter. For further information regarding the limits on ownership and transfer restrictions
applicable to our stock, see “–Ownership Limits and Restrictions on Transfer.”
Voting
Rights
Except
as described below, holders of Series A Preferred Stock have no voting rights. On any matter in which the Series A Preferred Stock may
vote (as expressly provided in our charter), each share of Series A Preferred Stock shall entitle the holder thereof to cast one vote.
If
dividends on the Series A Preferred Stock are not paid, whether or not declared, for six or more quarterly periods, whether or not these
quarterly periods are consecutive, holders of Series A Preferred Stock (voting separately as a class with any other series of preferred
stock ranking equal to the Series A Preferred Stock as to dividends and upon liquidation and upon which like voting rights have been
conferred and are exercisable, which we refer to as “voting preferred stock”) will be entitled to vote, at any special meeting
called by our secretary at the request of holders of record of at least 10% of the outstanding shares of Series A Preferred Stock and
any such series of voting preferred stock (unless such request is received fewer than 90 days before our next annual meeting of stockholders
at which such vote shall occur) and at each annual meeting of stockholders, for the election of two additional trustees to serve on our
board of trustees. The right of holders of Series A Preferred Stock to vote in the election of such trustees will terminate when all
dividends accumulated on the outstanding shares of Series A Preferred Stock for all past dividend periods shall have been fully paid
or declared and a sum sufficient for the cash payment thereof set aside for payment. Unless the number of our trustees has previously
been increased pursuant to the terms of any series of voting preferred stock with which the holders of Series A Preferred Stock are entitled
to vote together as a single class in the election of such trustees, the number of our trustees will automatically increase by two at
such time as holders of Series A Preferred Stock become entitled to vote in the election of two additional trustees. Unless shares of
voting preferred stock remain outstanding and entitled to vote in the election of such trustees, the term of office of such trustees
will terminate, and the number of our trustees will automatically decrease by two, when all dividends accumulated for past dividend periods
on the Series A Preferred Stock have been fully paid or declared and a sum sufficient for the cash payment thereof set aside for payment.
If the rights of holders of Series A Preferred Stock to elect the two additional trustees terminate after the record date for the determination
of holders of shares of Series A Preferred Stock entitled to vote in any election of such trustees but before the closing of the polls
in such election, holders of Series A Preferred Stock outstanding as of such record date will not be entitled to vote in such election
of trustees. The right of the holders of Series A Preferred Stock to elect the additional trustees will again vest if and whenever dividends
are not paid for six quarterly periods, as described above. In no event will the holders of Series A Preferred Stock be entitled to nominate
or elect an individual as a trustee, and no individual shall be qualified to be so nominated for election or to so serve as a trustee,
if the individual’s service as a trustee would cause us to fail to satisfy a requirement relating to director independence of any
national securities exchange on which any class or series of our stock is listed. In class votes with shares of other series of voting
preferred stock, shares of different classes or series shall vote in proportion to the liquidation preference of the shares.
The
additional trustees will be elected by a plurality of the votes cast in the election of such trustees, and each such trustee will serve
until the next annual meeting of our shareholders and until his or her successor is duly elected and qualifies, or until such trustee’s
term of office terminates as described above. Any trustee elected by the holders of Series A Preferred Stock and any series of voting
preferred stock may be removed only by a vote of the holders of a majority of the outstanding shares of Series A Preferred Stock and
all series of voting preferred stock with which the holders of Series A Preferred Stock are entitled to vote together as a single class
in the election of such trustees. At any time that the holders of Series A Preferred Stock are entitled to vote in the election of the
two additional trustees, holders of Series A Preferred Stock will be entitled to vote in the election of a successor to fill any vacancy
on our board of trustees that results from the removal of such a trustee.
At
any time that holders of Series A Preferred Stock have the right to elect two additional trustees as described above but such trustees
have not been elected, our secretary must call a special meeting for the purpose of electing the additional trustees upon the written
request of the holders of record of 10% of the outstanding shares of Series A Preferred Stock and all series of voting preferred stock
with which the holders of Series A Preferred Stock are entitled to vote together as a single class with respect to the election of such
trustees, unless such a request is received less than 90 days before the date fixed for the next annual meeting of our shareholders,
in which case, the additional trustees may be elected at such annual meeting.
Any
amendment, alteration, repeal or other change to any provision of our charter, including the supplementary articles setting forth the
terms of the Series A Preferred Stock (whether by merger, consolidation, transfer or conveyance of all or substantially all of our assets
or otherwise) that would materially and adversely affect the rights, preferences, privileges or voting powers of the Series A Preferred
Stock must be approved by the affirmative vote of at least 66 2/3% of the votes entitled to be cast by the holders of Series A Preferred
Stock and any other series of voting preferred stock entitled to vote together with the holders of Series A Preferred Stock on the matter,
voting together as a single class. In addition, the creation, issuance or increase in the authorized number of shares of any class or
series of stock having a preference as to dividends or other distributions, whether upon liquidation, dissolution or otherwise, that
is senior to the Series A Preferred Stock (or any equity securities convertible or exchangeable into any such shares) requires approval
by the affirmative vote of at least 66 2/3% of the votes entitled to be cast by the holders of Series A Preferred Stock and any other
series of voting preferred stock entitled to vote together with the holders of Series A Preferred Stock on the matter, voting together
as a single class.
The
following actions will not be deemed to materially and adversely affect the rights, preferences, privileges or voting powers of the Series
A Preferred Stock:
| |
● |
any
increase or decrease in the number of authorized shares of common stock or preferred stock of any series or the classification or
reclassification of any unissued shares, or the creation or issuance of equity securities, of any class or series ranking, as to
dividends or liquidation preference, equal to, or junior to, the Series A Preferred Stock; or |
| |
|
|
| |
● |
any
amendment, alteration or repeal or other change to any provision of our charter, including the supplementary articles setting forth
the terms of the Series A Preferred Stock, as a result of a merger, consolidation, transfer or conveyance of all or substantially
all of our assets or other business combination, if the Series A Preferred Stock (or stock into which the Series A Preferred Stock
has been converted in any successor person or entity to us) remain outstanding with the terms thereof unchanged in all material respects
or are exchanged for stock of the successor person or entity with substantially identical rights, taking into account that, upon
the occurrence of an event described in this bullet point, we may not be the surviving entity. Furthermore, if the holders of the
Series A Preferred Stock receive the greater of the full trading price of the Series A Preferred Stock on the last date prior to
the first public announcement of an event described in this bullet point or the $25.00 liquidation preference per share of Series
A Preferred Stock plus accrued and unpaid dividends (whether or not declared) to, but not including, the date of such event, pursuant
to the occurrence of any of the events described in this bullet point (other than an Affiliate Transaction), then such holders will
not have any voting rights with respect to the events described in this bullet point. |
The
voting provisions above will not apply if, at or prior to the time when the act with respect to which the vote would otherwise be required
would occur, we have redeemed or called for redemption upon proper procedures all outstanding shares of Series A Preferred Stock.
No
Maturity, No Sinking Fund
The
Series A Preferred Stock has no stated maturity date and will not be subject to any sinking fund.
Ownership
Limits and Restrictions on Transfer
In
order to allow us to maintain our qualification as a REIT for federal income tax purposes, ownership and transfer by any person of our
outstanding equity securities is restricted in our charter. All certificates representing shares of Series A Preferred Stock will include
a legend regarding such restrictions.
To
qualify as a REIT under the Code, we must satisfy a number of statutory requirements as outlined in this prospectus supplement and the
accompanying prospectus, including a requirement that no more than 50% in value of our outstanding shares of stock may be owned, actually
or constructively, by five or fewer individuals (as defined by the Code to include certain entities) during the last half of a taxable
year. Our capital stock must also be beneficially owned by 100 or more persons during at least 335 days of a taxable year of twelve months
or during a proportionate part of a shorter taxable year.
Under
our charter, the trustees may redeem shares or restrict transfers of shares when the trustees, in good faith, believe that such redemption
or restriction is necessary to prevent disqualification of REIT status. Additionally, our charter prohibits any transfer of shares of
our stock or any other change in our capital structure that would result in:
| |
● |
any
person directly or indirectly acquiring beneficial or constructive ownership of more than 9.9% (in value or number of shares,
whichever is more restrictive) of the outstanding shares of our stock; |
| |
|
|
| |
● |
outstanding
shares of our stock being beneficially owned by fewer than 100 persons; |
| |
|
|
| |
● |
us
being “closely held” within the meaning of Section 856 of the Code; or |
| |
|
|
| |
● |
us
otherwise failing to qualify as a REIT under the Code. |
Our
charter requires that any person who acquires or attempts to acquire shares of our stock, in violation of these restrictions, which we
refer to as the ownership limits, give at least 15 days’ prior written notice to us. If any person attempts to effect a transfer
of shares of our stock, or attempts to cause any other event to occur, that would result in a violation of the ownership limits, then:
| |
● |
(i)
that number of shares the beneficial ownership or constructive ownership of which otherwise would cause such person to violate the
ownership limits shall be automatically transferred to a Charitable Trust for the benefit of a Charitable Beneficiary, as described
in our charter, effective as of the close of business on the business day prior to the date of such transfer, and such person shall
acquire no rights in such shares; or (ii) if the transfer to the Charitable Trust described in clause (i) of this sentence would
not be effective for any reason to prevent the violation of the ownership limits, then the transfer of that number of shares that
otherwise would cause a violation of the ownership limits shall be void ab initio, and the intended transferee shall acquire
no rights in such shares. |
| |
● |
our
board of trustees may take any action it deems advisable to refuse to give effect to, or to prevent, any such attempted transfer
or other event, including, without limitation, causing us to redeem the shares, refusing to give effect to such transfer on our books
or instituting proceedings to enjoin such transfer or other event; provided however, than any transfer or attempted transfer in violation
of the ownership limits shall automatically result in the transfer to the Charitable Trust described above and, where applicable,
such Transfer (or other event) shall be void ab initio as provided above irrespective of any action (or non-action) by the
board of trustees or a committee thereof. |
Shares
held by the Charitable Trustee shall be issued and outstanding shares of ours. The violating transferee shall have no rights in the shares
held by the Charitable Trustee. The violating transferee shall not benefit economically from ownership of any shares held in trust by
the Charitable Trustee, shall have no rights to dividends or other distributions and shall not possess any rights to vote or other rights
attributable to the shares held in the Charitable Trust. The violating transferee shall have no claim, cause of action, or any other
recourse whatsoever against the purported transferor of such shares.
Every
holder of more than 2% of the number or value of outstanding shares of our Series A Preferred Stock must give written notice to us stating
the name and address of such owner, the number of shares of stock beneficially or constructively owned and a description of the manner
in which the shares are owned. Our board of trustees may, in its sole and absolute discretion, exempt certain persons from the ownership
limitations contained in our charter if ownership of shares of capital stock by such persons would not disqualify us as a REIT under
the Code.
Further
Issuances
We
may create and issue additional shares of Series A Preferred Stock ranking equally with the Series A Preferred Stock offered by this
prospectus supplement in all respects, so that such additional shares of Series A Preferred Stock will form a single series with the
Series A Preferred Stock offered under this prospectus supplement and will have the same terms.
Conversion
The
Series A Preferred Stock will not be convertible into or exchangeable for any other property or securities, except as provided under
“—Conversion Rights.”
Information
Rights
During
any period in which we are not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act and any shares of Series
A Preferred Stock are outstanding, we will (i) transmit by mail or other permissible means under the Exchange Act to all holders of Series
A Preferred Stock as their names and addresses appear in our record books and without cost to such holders, copies of the Annual Reports
on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that we would have been required to file with the SEC pursuant
to Section 13 or 15(d) of the Exchange Act if we were subject thereto (other than any exhibits that would have been required) within
15 business days after the respective dates by which we would have been required to file such reports with the SEC if we were subject
to Section 13 or 15(d) of the Exchange Act and (ii) within 15 business days following written request, supply copies of such reports
to any prospective holder of the Series A Preferred Stock.
Listing
Our
Series A Preferred Stock is traded on the NYSE American under the ticker “PW PRA.” See “Risk Factors” with respect
to the risks of an investment in our Series A Preferred Stock included in any applicable prospectus supplement and under similar headings
in the other documents that are incorporated by reference into this prospectus.
Registrar,
Transfer Agent and Disbursing Agent
The
registrar, transfer agent and disbursing agent for dividends and other distributions in respect of our Series A Preferred Stock is Broadridge
Corporate Issuer Solutions, Inc.
DESCRIPTION
OF DEBT SECURITIES
We
may issue debt securities from time to time, in one or more series, as either senior or subordinated debt or as senior or subordinated
convertible debt. While the terms we have summarized below will apply generally to any debt securities that we may offer under this prospectus,
we will describe the particular terms of any debt securities that we may offer in more detail in the applicable prospectus supplement.
The terms of any debt securities offered under a prospectus supplement may differ from the terms described below. Unless the context
requires otherwise, whenever we refer to the indenture, we also are referring to any supplemental indentures that specify the terms of
a particular series of debt securities.
We
will issue the debt securities under the indenture that we will enter into with the trustee named in the indenture. The indenture will
be qualified under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”). We have filed the form of indenture
as an exhibit to the registration statement of which this prospectus is a part, and supplemental indentures and forms of debt securities
containing the terms of the debt securities being offered will be filed as exhibits to the registration statement of which this prospectus
is a part or will be incorporated by reference from reports that we file with the SEC.
The
following summary of material provisions of the debt securities and the indenture is subject to, and qualified in its entirety by reference
to, all of the provisions of the indenture applicable to a particular series of debt securities. We urge you to read the applicable prospectus
supplement and any related free writing prospectus related to the debt securities that we may offer under this prospectus, as well as
the complete indenture that contains the terms of the debt securities.
General
The
indenture will not limit the amount of debt securities that we may issue. It provides that we may issue debt securities up to the principal
amount that we may authorize and may be in any currency or currency unit that we may designate. Except for the limitations on consolidation,
merger and sale of all or substantially all of our assets contained in the indenture, the terms of the indenture do not contain any covenants
or other provisions designed to give holders of any debt securities protection against changes in our operations, financial condition
or transactions involving us.
We
may issue the debt securities issued under the indenture as “discount securities,” which means they may be sold at a discount
below their stated principal amount. These debt securities, as well as other debt securities that are not issued at a discount, may be
issued with “original issue discount,” or OID, for U.S. federal income tax purposes because of interest payment and other
characteristics or terms of the debt securities. Material U.S. federal income tax considerations applicable to debt securities issued
with OID will be described in more detail in any applicable prospectus supplement.
We
will describe in the applicable prospectus supplement the terms of the series of debt securities being offered, including:
| |
● |
the
title of the series of debt securities; |
| |
● |
any
limit upon the aggregate principal amount that may be issued; |
| |
● |
the
maturity date or dates; |
| |
● |
the
form of the debt securities of the series; |
| |
● |
the
applicability of any guarantees; |
| |
● |
whether
or not the debt securities will be secured or unsecured, and the terms of any secured debt; |
| |
● |
whether
the debt securities rank as senior debt, senior subordinated debt, subordinated debt or any combination thereof, and the terms of
any subordination; |
| |
|
|
| |
● |
if
the price (expressed as a percentage of the aggregate principal amount thereof) at which such debt securities will be issued is a
price other than the principal amount thereof, the portion of the principal amount thereof payable upon declaration of acceleration
of the maturity thereof, or if applicable, the portion of the principal amount of such debt securities that is convertible into another
security or the method by which any such portion shall be determined; |
| |
● |
the
interest rate or rates, which may be fixed or variable, or the method for determining the rate and the date interest will begin to
accrue, the dates interest will be payable and the regular record dates for interest payment dates or the method for determining
such dates; |
| |
● |
our
right, if any, to defer payment of interest and the maximum length of any such deferral period; |
| |
● |
if
applicable, the date or dates after which, or the period or periods during which, and the price or prices at which, we may, at our
option, redeem the series of debt securities pursuant to any optional or provisional redemption provisions and the terms of those
redemption provisions; |
| |
● |
the
date or dates, if any, on which, and the price or prices at which we are obligated, pursuant to any mandatory sinking fund or analogous
fund provisions or otherwise, to redeem, or at the holder’s option to purchase, the series of debt securities and the currency
or currency unit in which the debt securities are payable; |
| |
● |
the
denominations in which we will issue the series of debt securities, if other than denominations of $1,000 and any integral multiple
thereof; |
| |
● |
any
and all terms, if applicable, relating to any auction or remarketing of the debt securities of that series and any security for our
obligations with respect to such debt securities and any other terms which may be advisable in connection with the marketing of debt
securities of that series; |
| |
● |
any
and all terms, if applicable, relating to any auction or remarketing of the debt securities of that series and any security for our
obligations with respect to such debt securities and any other terms which may be advisable in connection with the marketing of debt
securities of that series; |
| |
● |
any
and all terms, if applicable, relating to any auction or remarketing of the debt securities of that series and any security for our
obligations with respect to such debt securities and any other terms which may be advisable in connection with the marketing of debt
securities of that series; |
| |
● |
whether
the debt securities of the series shall be issued in whole or in part in the form of a global security or securities; the terms and
conditions, if any, upon which such global security or securities may be exchanged in whole or in part for other individual securities;
and the depositary for such global security or securities; |
| |
● |
if
applicable, the provisions relating to conversion or exchange of any debt securities of the series and the terms and conditions upon
which such debt securities will be so convertible or exchangeable, including the conversion or exchange price, as applicable, or
how it will be calculated and may be adjusted, any mandatory or optional (at our option or the holders’ option) conversion
or exchange features, the applicable conversion or exchange period and the manner of settlement for any conversion or exchange; |
| |
● |
if
other than the full principal amount thereof, the portion of the principal amount of debt securities of the series which shall be
payable upon declaration of acceleration of the maturity thereof; |
| |
● |
additions
to or changes in the covenants applicable to the particular debt securities being issued, including, among others, the consolidation,
merger or sale covenant; |
| |
● |
additions
to or changes in the events of default with respect to the securities and any change in the right of the trustee or the holders to
declare the principal, premium, if any, and interest, if any, with respect to such securities to be due and payable; |
| |
● |
additions
to or changes in or deletions of the provisions relating to covenant defeasance and legal defeasance; |
| |
● |
additions
to or changes in the provisions relating to satisfaction and discharge of the indenture; |
| |
● |
additions
to or changes in the provisions relating to the modification of the indenture both with and without the consent of holders of debt
securities issued under the indenture; |
| |
● |
the
currency of payment of debt securities if other than U.S. dollars and the manner of determining
the equivalent amount in U.S. dollars; |
| |
● |
whether
interest will be payable in cash or additional debt securities at our or the holders’ option and the terms and conditions upon
which the election may be made; |
| |
● |
the
terms and conditions, if any, upon which we will pay amounts in addition to the stated interest, premium, if any and principal amounts
of the debt securities of the series to any holder that is not a “United States person” for federal tax purposes; |
| |
● |
any
restrictions on transfer, sale or assignment of the debt securities of the series; and |
| |
● |
any
other specific terms, preferences, rights or limitations of, or restrictions on, the debt
securities, any other additions or changes in the provisions of the indenture, and any terms
that may be required by us or advisable under applicable laws or regulations. |
Conversion
or Exchange Rights
We
will set forth in the applicable prospectus supplement the terms on which a series of debt securities may be convertible into or exchangeable
for our Common Shares or our other securities. We will include provisions as to settlement upon conversion or exchange and whether conversion
or exchange is mandatory, at the option of the holder or at our option. We may include provisions pursuant to which the number of our
Common Shares or our other securities that the holders of the series of debt securities receive would be subject to adjustment.
Consolidation,
Merger or Sale
Unless
we provide otherwise in the prospectus supplement applicable to a particular series of debt securities, the indenture will not contain
any covenant that restricts our ability to merge or consolidate, or sell, convey, transfer or otherwise dispose of our assets as an entirety
or substantially as an entirety. However, any successor to or acquirer of such assets (other than a subsidiary of ours) must assume all
of our obligations under the indenture or the debt securities, as appropriate.
Events
of Default under the Indenture
Unless
we provide otherwise in the prospectus supplement applicable to a particular series of debt securities, the following are events of default
under the indenture with respect to any series of debt securities that we may issue:
| |
● |
if
we fail to pay any installment of interest on any series of debt securities, as and when the same shall become due and payable, and
such default continues for a period of 90 days; provided, however, that a valid extension of an interest payment period by us in
accordance with the terms of any indenture supplemental thereto shall not constitute a default in the payment of interest for this
purpose; |
| |
● |
if
we fail to pay the principal of, or premium, if any, on any series of debt securities as and when the same shall become due and payable
whether at maturity, upon redemption, by declaration or otherwise, or in any payment required by any sinking or analogous fund established
with respect to such series; provided, however, that a valid extension of the maturity of such debt securities in accordance with
the terms of any indenture supplemental thereto shall not constitute a default in the payment of principal or premium, if any; |
| |
|
|
| |
● |
if
we fail to observe or perform any other covenant or agreement contained in the debt securities or the indenture, other than a covenant
specifically relating to another series of debt securities, and our failure continues for 90 days after we receive written notice
of such failure, requiring the same to be remedied and stating that such is a notice of default thereunder, from the trustee or holders
of at least 25% in aggregate principal amount of the outstanding debt securities of the applicable series; and |
| |
● |
if
specified events of bankruptcy, insolvency or reorganization occur. |
If
an event of default with respect to debt securities of any series occurs and is continuing, other than an event of default specified
in the last bullet point above, the trustee or the holders of at least 25% in aggregate principal amount of the outstanding debt securities
of that series, by notice to us in writing, and to the trustee if notice is given by such holders, may declare the unpaid principal of,
premium, if any, and accrued interest, if any, due and payable immediately. If an event of default specified in the last bullet point
above occurs with respect to us, the principal amount of and accrued interest, if any, of each issue of debt securities then outstanding
shall be due and payable without any notice or other action on the part of the trustee or any holder.
The
holders of a majority in principal amount of the outstanding debt securities of an affected series may waive any default or event of
default with respect to the series and its consequences, except defaults or events of default regarding payment of principal, premium,
if any, or interest, unless we have cured the default or event of default in accordance with the indenture. Any waiver shall cure the
default or event of default.
Subject
to the terms of the indenture, if an event of default under an indenture shall occur and be continuing, the trustee will be under no
obligation to exercise any of its rights or powers under such indenture at the request or direction of any of the holders of the applicable
series of debt securities, unless such holders have offered the trustee reasonable indemnity. The holders of a majority in principal
amount of the outstanding debt securities of any series will have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the trustee, or exercising any trust or power conferred on the trustee, with respect to the debt securities
of that series, provided that:
| |
● |
the
direction so given by the holder is not in conflict with any law or the applicable indenture; and |
| |
|
|
| |
● |
subject
to its duties under the Trust Indenture Act, the trustee need not take any action that might
involve it in personal liability
or
might be unduly prejudicial to the holders not involved in the proceeding. |
A
holder of the debt securities of any series will have the right to institute a proceeding under the indenture or to appoint a receiver
or trustee, or to seek other remedies only if:
| |
● |
the
holder has given written notice to the trustee of a continuing event of default with respect to that series; |
| |
|
|
| |
● |
the
holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series have made written request, |
| |
|
|
| |
● |
such
holders have offered to the trustee indemnity satisfactory to it against the costs, expenses and liabilities to be incurred by the
trustee in compliance with the request; and |
| |
|
|
| |
● |
the
trustee does not institute the proceeding, and does not receive from the holders of a majority in aggregate principal amount of the
outstanding debt securities of that series other conflicting directions within 90 days after the notice, request and offer. |
These
limitations do not apply to a suit instituted by a holder of debt securities if we default in the payment of the principal, premium,
if any, or interest on, the debt securities.
We
will periodically file statements with the trustee regarding our compliance with specified covenants in the indenture.
Modification
of Indenture; Waiver
We
and the trustee may change an indenture without the consent of any holders with respect to specific matters:
| |
● |
to
cure any ambiguity, defect or inconsistency in the indenture or in the debt securities of any series; |
| |
|
|
| |
● |
to
comply with the provisions described above under “Description of Debt Securities—Consolidation, Merger or Sale;” |
| |
|
|
| |
● |
to
provide for uncertificated debt securities in addition to or in place of certificated debt securities; |
| |
|
|
| |
● |
to
add to our covenants, restrictions, conditions or provisions such new covenants, restrictions, conditions or provisions for the benefit
of the holders of all or any series of debt securities, to make the occurrence, or the occurrence and the continuance, of a default
in any such additional covenants, restrictions, conditions or provisions an event of default or to surrender any right or power conferred
upon us in the indenture; |
| |
|
|
| |
● |
to
add to, delete from or revise the conditions, limitations, and restrictions on the authorized amount, terms, or purposes of issue,
authentication and delivery of debt securities, as set forth in the indenture; |
| |
● |
to
make any change that does not adversely affect the interests of any holder of debt securities of any series in any material respect; |
| |
|
|
| |
● |
to
provide for the issuance of and establish the form and terms and conditions of the debt securities of any series as provided above
under “Description of Debt Securities—General” to establish the form of any certifications required to be furnished
pursuant to the terms of the indenture or any series of debt securities, or to add to the rights of the holders of any series of
debt securities; |
| |
● |
to
evidence and provide for the acceptance of appointment under any indenture by a successor trustee; or |
| |
● |
to
comply with any requirements of the SEC in connection with the qualification of any indenture under the Trust Indenture Act. |
In
addition, under the indenture, the rights of holders of a series of debt securities may be changed by us and the trustee with the written
consent of the holders of at least a majority in aggregate principal amount of the outstanding debt securities of each series that is
affected. However, unless we provide otherwise in the prospectus supplement applicable to a particular series of debt securities, we
and the trustee may make the following changes only with the consent of each holder of any outstanding debt securities affected:
| |
● |
extending
the fixed maturity of any debt securities of any series; |
| |
|
|
| |
● |
reducing
the principal amount, reducing the rate of or extending the time of payment of interest, or reducing any premium payable upon the
redemption of any series of any debt securities; or |
| |
|
|
| |
● |
reducing
the percentage of debt securities, the holders of which are required to consent to any amendment, supplement, modification or waiver. |
Discharge
Each
indenture provides that we can elect to be discharged from our obligations with respect to one or more series of debt securities, except
for specified obligations, including obligations to:
| |
● |
provide
for payment; |
| |
|
|
| |
● |
register
the transfer or exchange of debt securities of the series; |
| |
|
|
| |
● |
replace
stolen, lost or mutilated debt securities of the series;
|
| |
● |
pay
principal of and premium and interest on any debt securities of the series; |
| |
|
|
| |
● |
maintain
paying agencies; |
| |
|
|
| |
● |
hold
monies for payment in trust; |
| |
|
|
| |
● |
recover
excess money held by the trustee; |
| |
|
|
| |
● |
compensate
and indemnify the trustee; and |
| |
|
|
| |
● |
appoint
any successor trustee. |
In
order to exercise our rights to be discharged, we must deposit with the trustee money or government obligations sufficient to pay all
the principal of, any premium, if any, and interest on, the debt securities of the series on the dates payments are due.
Form,
Exchange and Transfer
We
will issue the debt securities of each series only in fully registered form without coupons and, unless we provide otherwise in the applicable
prospectus supplement, in denominations of $1,000 and any integral multiple thereof. The indenture provides that we may issue debt securities
of a series in temporary or permanent global form and as book-entry securities that will be deposited with, or on behalf of, The Depository
Trust Company, or DTC, or another depositary named by us and identified in the applicable prospectus supplement with respect to that
series. To the extent the debt securities of a series are issued in global form and as book-entry, a description of terms relating such
securities will be set forth in the applicable prospectus supplement.
At
the option of the holder, subject to the terms of the indenture and the limitations applicable to global securities described in the
applicable prospectus supplement, the holder of the debt securities of any series can exchange the debt securities for other debt securities
of the same series, in any authorized denomination and of like tenor and aggregate principal amount.
Subject
to the terms of the indenture and the limitations applicable to global securities set forth in the applicable prospectus supplement,
holders of the debt securities may present the debt securities for exchange or for registration of transfer, duly endorsed or with the
form of transfer endorsed thereon duly executed if so required by us or the security registrar, at the office of the security registrar
or at the office of any transfer agent designated by us for this purpose. Unless otherwise provided in the debt securities that the holder
presents for transfer or exchange, we will impose no service charge for any registration of transfer or exchange, but we may require
payment of any taxes or other governmental charges.
We
will name in the applicable prospectus supplement the security registrar, and any transfer agent in addition to the security registrar,
that we initially designate for any debt securities. We may at any time designate additional transfer agents or rescind the designation
of any transfer agent or approve a change in the office through which any transfer agent acts, except that we will be required to maintain
a transfer agent in each place of payment for the debt securities of each series.
If
we elect to redeem the debt securities of any series, we will not be required to:
| |
● |
issue,
register the transfer of, or exchange any debt securities of that series during a period beginning at the opening of business 15
days before the day of mailing of a notice of redemption of any debt securities that may be selected for redemption and ending at
the close of business on the day of the mailing; or |
| |
|
|
| |
● |
register
the transfer of or exchange any debt securities so selected for redemption, in whole or in part, except the unredeemed portion of
any debt securities we are redeeming in part. |
Information
Concerning the Trustee
The
trustee, other than during the occurrence and continuance of an event of default under an indenture, undertakes to perform only those
duties as are specifically set forth in the applicable indenture. Upon an event of default under an indenture, the trustee must use the
same degree of care as a prudent person would exercise or use in the conduct of his or her own affairs. Subject to this provision, the
trustee is under no obligation to exercise any of the powers given it by the indenture at the request of any holder of debt securities
unless it is offered reasonable security and indemnity against the costs, expenses and liabilities that it might incur.
Payment
and Paying Agents
Unless
we otherwise indicate in the applicable prospectus supplement, we will make payment of the interest on any debt securities on any interest
payment date to the person in whose name the debt securities, or one or more predecessor securities, are registered at the close of business
on the regular record date for the interest.
We
will pay principal of and any premium and interest on the debt securities of a particular series at the office of the paying agents designated
by us, except that unless we otherwise indicate in the applicable prospectus supplement, we will make interest payments by check that
we will mail to the holder or by wire transfer to certain holders. Unless we otherwise indicate in the applicable prospectus supplement,
we will designate the corporate trust office of the trustee as our sole paying agent for payments with respect to debt securities of
each series. We will name in the applicable prospectus supplement any other paying agents that we initially designate for the debt securities
of a particular series. We will maintain a paying agent in each place of payment for the debt securities of a particular series.
All
money we pay to a paying agent or the trustee for the payment of the principal of or any premium or interest on any debt securities that
remains unclaimed at the end of two years after such principal, premium or interest has become due and payable will be repaid to us,
and the holder of the debt security thereafter may look only to us for payment thereof.
Governing
Law
The
indenture and the debt securities will be governed by and construed in accordance with the internal laws of the State of New York, except
to the extent that the Trust Indenture Act is applicable.
DESCRIPTION
OF WARRANTS
The
following description, together with the additional information we may include in any applicable prospectus supplement and in any related
free writing prospectus, summarizes the material terms and provisions of the warrants that we may offer under this prospectus, which
may consist of warrants to purchase Common Shares, preferred stock or debt securities and may be issued in one or more series. Warrants
may be offered independently or in combination with Common Shares, preferred stock or debt securities offered by any prospectus supplement.
While the terms we have summarized below will apply generally to any warrants that we may offer under this prospectus, we will describe
the particular terms of any series of warrants in more detail in the applicable prospectus supplement. The following description of warrants
will apply to the warrants offered by this prospectus unless we provide otherwise in the applicable prospectus supplement. The applicable
prospectus supplement for a particular series of warrants may specify different or additional terms.
We
have filed or will file forms of the warrant agreements and forms of warrant certificates containing the terms of the warrants that may
be offered as exhibits to the registration statement of which this prospectus is a part. We will file as exhibits to the registration
statement of which this prospectus is a part, or will incorporate by reference from reports that we file with the SEC, the form of warrant
and/or the warrant agreement and warrant certificate, as applicable, that contain the terms of the particular series of warrants we are
offering, and any supplemental agreements, before the issuance of such warrants. The following summaries of material terms and provisions
of the warrants are subject to, and qualified in their entirety by reference to, all the provisions of the form of warrant and/or the
warrant agreement and warrant certificate, as applicable, and any supplemental agreements applicable to a particular series of warrants
that we may offer under this prospectus. We urge you to read the applicable prospectus supplement related to the particular series of
warrants that we may offer under this prospectus, as well as any related free writing prospectus, and the complete form of warrant and/or
the warrant agreement and warrant certificate, as applicable, and any supplemental agreements, that contain the terms of the warrants.
General
We
will describe in the applicable prospectus supplement the terms of the series of warrants being offered, including, to the extent applicable:
| |
● |
the
offering price and aggregate number of warrants offered; |
| |
|
|
| |
● |
the
currency for which the warrants may be purchased; |
| |
|
|
| |
● |
the
designation and terms of the securities with which the warrants are issued and the number of warrants issued with each such security
or each principal amount of such security; |
| |
|
|
| |
● |
the
date on and after which the warrants and the related securities will be separately transferable; |
| |
|
|
| |
● |
in
the case of warrants to purchase debt securities, the principal amount of debt securities purchasable upon exercise of one warrant
and the price at, and currency in which, this principal amount of debt securities may be purchased upon such exercise; |
| |
|
|
| |
● |
in
the case of warrants to purchase Common Shares or preferred stock, the number of Common Shares or preferred stock, as the case may
be, purchasable upon the exercise of one warrant and the price at which these shares may be purchased upon such exercise; |
| |
|
|
| |
● |
the
effect of any merger, consolidation, sale or other disposition of our business on the warrant agreements and the warrants; |
| |
|
|
| |
● |
the
terms of any rights to redeem or call the warrants; |
| |
|
|
| |
● |
any
provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the warrants; |
| |
|
|
| |
● |
the
dates on which the right to exercise the warrants will commence and expire; |
| |
|
|
| |
● |
the
manner in which the warrant agreements and warrants may be modified; |
| |
|
|
| |
● |
a
discussion of material United States federal income tax consequences of holding or exercising the warrants; |
| |
● |
the
terms of the securities issuable upon exercise of the warrants; and |
| |
|
|
| |
● |
any
other specific terms, preferences, rights or limitations of or restrictions on the warrants. |
Before
exercising their warrants, holders of warrants will not have any of the rights of holders of the securities purchasable upon such exercise,
including:
| |
● |
in
the case of warrants to purchase Common Shares or preferred stock, the right to receive dividends, if any, or, payments upon our
liquidation, dissolution or winding up or to exercise voting rights, if any; or |
| |
|
|
| |
● |
in
the case of warrants to purchase debt securities, the right to receive payments of principal of, or premium, if any, or interest
on, the debt securities purchasable upon exercise or to enforce covenants in the applicable indenture. |
Exercise
of Warrants
Each
warrant will entitle the holder to purchase the securities that we specify in the applicable prospectus supplement at the exercise price
that we describe in the applicable prospectus supplement. Unless we otherwise specify in the applicable prospectus supplement, holders
of the warrants may exercise the warrants at any time up to the specified time on the expiration date that we set forth in the applicable
prospectus supplement. After the close of business on the expiration date, unexercised warrants will become void.
Unless
we otherwise specify in the applicable prospectus supplement, holders of the warrants may exercise the warrants by delivering the warrant
or warrant certificate representing the warrants to be exercised together with specified information, and paying the required amount
to the warrant agent, if applicable, in immediately available funds, as provided in the applicable prospectus supplement. We will set
forth on the reverse side of any warrant certificate and in the applicable prospectus supplement the information that the holder of the
warrant will be required to deliver to any warrant agent in connection with the exercise of the warrant.
Upon
receipt of payment and the warrant or warrant certificate, as applicable, properly completed and duly executed at the corporate trust
office of the warrant agent, if any, or any other office, including ours, indicated in the prospectus supplement, we will, as soon as
practicable, issue and deliver the securities purchasable upon such exercise. If fewer than all of the warrants (or the warrants represented
by such warrant certificate) are exercised, a new warrant or a new warrant certificate, as applicable, will be issued for the remaining
warrants.
Governing
Law
Unless
we provide otherwise in the applicable prospectus supplement, the warrants and warrant agreements, and any claim, controversy or dispute
arising under or related to the warrants or warrant agreements, will be governed by and construed in accordance with the laws of the
State of New York.
Enforceability
of Rights by Holders of Warrants
Each
warrant agent, if any, will act solely as our agent under the applicable warrant agreement and will not assume any obligation or relationship
of agency or trust with any holder of any warrant. A single bank or trust company may act as warrant agent for more than one issue of
warrants. A warrant agent will have no duty or responsibility in case of any default by us under the applicable warrant agreement or
warrant, including any duty or responsibility to initiate any proceedings at law or otherwise, or to make any demand upon us. Any holder
of a warrant may, without the consent of the related warrant agent or the holder of any other warrant, enforce by appropriate legal action
its right to exercise, and receive the securities purchasable upon exercise of, its warrants.
DESCRIPTION
OF UNITS
The
following description, together with the additional information we may include in any applicable prospectus supplement and related free
writing prospectus, summarizes the material terms and provisions of the units that we may offer under this prospectus. We may issue units
consisting of any combination of the other types of securities offered under this prospectus in one or more series. We will issue each
unit so that the holder of the unit is also the holder of each security included in the unit. As a result, the holder of a unit will
have the rights and obligations of a holder of each included security. The unit agreement under which a unit is issued may provide that
the securities included in the unit may not be held or transferred separately, at any time or at any time before a specified date. We
may evidence each series of units by unit certificates that we will issue under a separate agreement. We may enter into unit agreements
with a unit agent. Each unit agent will be a bank or trust company that we select. We will indicate the name and address of any unit
agent in the applicable prospectus supplement relating to a particular series of units. The summary below and that contained in any prospectus
supplement is qualified in its entirety by reference to all of the provisions of the unit agreement and/or unit certificate, and depositary
arrangements, if applicable. We urge you to read the applicable prospectus supplements and any related free writing prospectuses related
to the units that we may offer under this prospectus, as well as the complete unit agreement and/or unit certificate, and depositary
arrangements, as applicable, that contain the terms of the units.
We
will file as exhibits to the registration statement of which this prospectus is a part, or will incorporate by reference from reports
that we file with the SEC, the form of unit agreement and/or unit certificate, and depositary arrangements, as applicable, that contain
the terms of the particular series of units we are offering, and any supplemental agreements, before the issuance of such units.
We
will describe in the applicable prospectus supplement the terms of the series of units being offered, including:
| |
● |
the
designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those
securities may be held or transferred separately; |
| |
|
|
| |
● |
any
provisions for the issuance, payment, settlement, transfer, or exchange of the units or of the securities composing the units; |
| |
|
|
| |
● |
whether
the units will be issued in fully registered or global form; and |
| |
|
|
| |
● |
any
other terms of the units. |
LEGAL
OWNERSHIP OF SECURITIES
We
can issue securities in registered form or in the form of one or more global securities. We describe global securities in greater detail
below. We refer to those persons who have securities registered in their own names on the books that we or any applicable trustee, depositary
or warrant agent maintain for this purpose as the “holders” of those securities. These persons are the legal holders of the
securities. We refer to those persons who, indirectly through others, own beneficial interests in securities that are not registered
in their own names, as “indirect holders” of those securities. As we discuss below, indirect holders are not legal holders,
and investors in securities issued in book-entry form or in street name will be indirect holders.
Book-Entry
Holders
We
may issue securities in book-entry form only, as we will specify in the applicable prospectus supplement. This means securities may be
represented by one or more global securities registered in the name of a financial institution that holds them as depositary on behalf
of other financial institutions that participate in the depositary’s book-entry system. These participating institutions, which
are referred to as participants, in turn, hold beneficial interests in the securities on behalf of themselves or their customers.
Only
the person in whose name a security is registered is recognized as the holder of that security. Global securities will be registered
in the name of the depositary or its participants. Consequently, for global securities, we will recognize only the depositary as the
holder of the securities, and we will make all payments on the securities to the depositary. The depositary passes along the payments
it receives to its participants, which in turn pass the payments along to their customers who are the beneficial owners. The depositary
and its participants do so under agreements they have made with one another or with their customers; they are not obligated to do so
under the terms of the securities.
As
a result, investors in a global security will not own securities directly. Instead, they will own beneficial interests in a global security,
through a bank, broker or other financial institution that participates in the depositary’s book-entry system or holds an interest
through a participant. As long as the securities are issued in global form, investors will be indirect holders, and not legal holders,
of the securities.
Street
Name Holders
We
may terminate a global security or issue securities that are not issued in global form. In these cases, investors may choose to hold
their securities in their own names or in “street name.” Securities held by an investor in street name would be registered
in the name of a bank, broker or other financial institution that the investor chooses, and the investor would hold only a beneficial
interest in those securities through an account he or she maintains at that institution.
For
securities held in street name, we or any applicable trustee or depositary will recognize only the intermediary banks, brokers and other
financial institutions in whose names the securities are registered as the holders of those securities, and we or any such trustee or
depositary will make all payments on those securities to them. These institutions pass along the payments they receive to their customers
who are the beneficial owners, but only because they agree to do so in their customer agreements or because they are legally required
to do so. Investors who hold securities in street name will be indirect holders, not holders, of those securities.
Legal
Holders
Our
obligations, as well as the obligations of any applicable trustee or third party employed by us or a trustee, run only to the legal holders
of the securities. We do not have obligations to investors who hold beneficial interests in global securities, in street name or by any
other indirect means. This will be the case whether an investor chooses to be an indirect holder of a security or has no choice because
we are issuing the securities only in global form.
For
example, once we make a payment or give a notice to the holder, we have no further responsibility for the payment or notice even if that
holder is required, under agreements with its participants or customers or by law, to pass it along to the indirect holders but does
not do so. Similarly, we may want to obtain the approval of the holders to amend an indenture, to relieve us of the consequences of a
default or of our obligation to comply with a particular provision of an indenture, or for other purposes. In such an event, we would
seek approval only from the legal holders, and not the indirect holders, of the securities. Whether and how the legal holders contact
the indirect holders is up to the legal holders.
Special
Considerations for Indirect Holders
If
you hold securities through a bank, broker or other financial institution, either in book-entry form because the securities are represented
by one or more global securities or in street name, you should check with your own institution to find out:
| |
● |
how
it handles securities payments and notices; |
| |
|
|
| |
● |
whether
it imposes fees or charges; |
| |
● |
how
it would handle a request for the holders’ consent, if ever required; |
| |
|
|
| |
● |
whether
and how you can instruct it to send you securities registered in your own name so you can be a holder, if that is permitted in the
future; |
| |
|
|
| |
● |
how
it would exercise rights under the securities if there were a default or other event triggering the need for holders to act to protect
their interests; and |
| |
|
|
| |
● |
if
the securities are in book-entry form, how the depositary’s rules and procedures will affect these matters. |
Global
Securities
A
global security is a security that represents one or any other number of individual securities held by a depositary. Generally, all securities
represented by the same global securities will have the same terms.
Each
security issued in book-entry form will be represented by a global security that we issue to, deposit with and register in the name of
a financial institution or its nominee that we select. The financial institution that we select for this purpose is called the depositary.
Unless we specify otherwise in the applicable prospectus supplement, The Depository Trust Company, New York, New York, known as DTC,
will be the depositary for all securities issued in book-entry form.
A
global security may not be transferred to or registered in the name of anyone other than the depositary, its nominee or a successor depositary,
unless special termination situations arise. We describe those situations below under “—Special Situations When a Global
Security Will Be Terminated.” As a result of these arrangements, the depositary, or its nominee, will be the sole registered owner
and legal holder of all securities represented by a global security, and investors will be permitted to own only beneficial interests
in a global security. Beneficial interests must be held by means of an account with a broker, bank or other financial institution that
in turn has an account with the depositary or with another institution that does. Thus, an investor whose security is represented by
a global security will not be a legal holder of the security, but only an indirect holder of a beneficial interest in the global security.
If
the prospectus supplement for a particular security indicates that the security will be issued in global form only, then the security
will be represented by a global security at all times unless and until the global security is terminated. If termination occurs, we may
issue the securities through another book-entry clearing system or decide that the securities may no longer be held through any book-entry
clearing system.
Special
Considerations for Global Securities
As
an indirect holder, an investor’s rights relating to a global security will be governed by the account rules of the investor’s
financial institution and of the depositary, as well as general laws relating to securities transfers. We do not recognize an indirect
holder as a holder of securities and instead deal only with the depositary that holds the global security.
If
securities are issued only as global securities, an investor should be aware of the following:
| |
● |
an
investor cannot cause the securities to be registered in his or her name, and cannot obtain non-global certificates for his or her
interest in the securities, except in the special situations we describe below; |
| |
|
|
| |
● |
an
investor will be an indirect holder and must look to his or her own bank or broker for payments on the securities and protection
of his or her legal rights relating to the securities, as we describe above; |
| |
|
|
| |
● |
an
investor may not be able to sell interests in the securities to some insurance companies and to other institutions that are required
by law to own their securities in non-book-entry form; |
| |
|
|
| |
● |
an
investor may not be able to pledge his or her interest in the global security in circumstances where certificates representing the
securities must be delivered to the lender or other beneficiary of the pledge in order for the pledge to be effective; |
| |
|
|
| |
● |
the
depositary’s policies, which may change from time to time, will govern payments, transfers, exchanges and other matters relating
to an investor’s interest in the global security; |
| |
|
|
| |
● |
we
and any applicable trustee have no responsibility for any aspect of the depositary’s actions or for its records of ownership
interests in the global security, nor will we or any applicable trustee supervise the depositary in any way; |
| |
● |
the
depositary may, and we understand that DTC will, require that those who purchase and sell interests in the global security within
its book-entry system use immediately available funds, and your broker or bank may require you to do so as well; and |
| |
|
|
| |
● |
financial
institutions that participate in the depositary’s book-entry system, and through which an investor holds its interest in the
global security, may also have their own policies affecting payments, notices and other matters relating to the securities. |
There
may be more than one financial intermediary in the chain of ownership for an investor. We do not monitor and are not responsible for
the actions of any of those intermediaries.
Special
Situations When a Global Security Will Be Terminated
In
a few special situations described below, a global security will terminate and interests in it will be exchanged for physical certificates
representing those interests. After that exchange, the choice of whether to hold securities directly or in street name will be up to
the investor. Investors must consult their own banks or brokers to find out how to have their interests in securities transferred to
their own names, so that they will be direct holders. We have described the rights of holders and street name investors above.
Unless
we provide otherwise in the applicable prospectus supplement, a global security will terminate when the following special situations
occur:
| |
● |
if
the depositary notifies us that it is unwilling, unable or no longer qualified to continue as depositary for that global security
and we do not appoint another institution to act as depositary within 90 days; |
| |
|
|
| |
● |
if
we notify any applicable trustee that we wish to terminate that global security; or |
| |
|
|
| |
● |
if
an event of default has occurred with regard to securities represented by that global security and has not been cured or waived. |
The
applicable prospectus supplement may also list additional situations for terminating a global security that would apply only to the particular
series of securities covered by the applicable prospectus supplement. When a global security terminates, the depositary, and neither
we nor any applicable trustee, is responsible for deciding the names of the institutions that will be the initial direct holders.
PLAN
OF DISTRIBUTION
We
may sell the securities from time to time pursuant to underwritten public offerings, direct sales to the public, “at the market”
offerings, negotiated transactions, block trades or a combination of these methods. We may sell the securities to or through one or more
underwriters or dealers (acting as principal or agent), through agents, or directly to one or more purchasers. We may distribute securities
from time to time in one or more transactions:
| |
● |
at
a fixed price or prices, which may be changed; |
| |
|
|
| |
● |
at
market prices prevailing at the time of sale; |
| |
|
|
| |
● |
at
prices related to such prevailing market prices; or |
| |
|
|
| |
● |
at
negotiated prices. |
A
prospectus supplement or supplements (and any related free writing prospectus that we may authorize to be provided to you) will describe
the terms of the offering of the securities, including, to the extent applicable:
| |
● |
the
name or names of the underwriters, dealers, agents or other purchasers, if any; |
| |
|
|
| |
● |
the
purchase price of the securities or other consideration therefor, and the proceeds we will receive from the sale; |
| |
|
|
| |
● |
any
option to purchase additional shares or other options under which underwriters, dealers, agents or other purchasers may purchase
additional securities from us; |
| |
|
|
| |
● |
any
agency fees or underwriting discounts to be allowed or paid to the agent or underwriters and other items constituting agents’
or underwriters’ compensation; |
| |
|
|
| |
● |
any
public offering price; |
| |
|
|
| |
● |
any
discounts or concessions allowed or reallowed or paid to dealers; and |
| |
|
|
| |
● |
any
securities exchange or market on which the securities may be listed. |
Only
underwriters named in the prospectus supplement will be underwriters of the securities offered by the prospectus supplement. Dealers
and agents participating in the distribution of the securities may be deemed to be underwriters, and compensation received by them on
resale of the securities may be deemed to be underwriting discounts. If such dealers or agents were deemed to be underwriters, they may
be subject to statutory liabilities under the Securities Act.
If
underwriters are used in the sale, they will acquire the securities for their own account and may resell the securities from time to
time in one or more transactions at a fixed public offering price or at varying prices determined at the time of sale. The obligations
of the underwriters to purchase the securities will be subject to the conditions set forth in the applicable underwriting agreement.
We may offer the securities to the public through underwriting syndicates represented by managing underwriters or by underwriters without
a syndicate. Subject to certain conditions, the underwriters will be obligated to purchase all of the securities offered by the prospectus
supplement other than securities covered by any option to purchase additional shares or other option. If a dealer is used in the sale
of securities, we, or an underwriter, will sell the securities to the dealer, as principal. The dealer may then resell the securities
to the public at varying prices to be determined by the dealer at the time of resale. To the extent required, we will set forth in the
prospectus supplement the name of the dealer and the terms of the transaction. Any public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may change from time to time. We may use underwriters, dealers or agents with whom we have a
material relationship. We will describe in the prospectus supplement, naming the underwriter, dealer or agent, the nature of any such
relationship.
We
may sell securities directly or through agents we designate from time to time. We will name any agent involved in the offering and sale
of securities, and we will describe any commissions we will pay the agent in the prospectus supplement. Unless the prospectus supplement
states otherwise, the agent will act on a best-efforts basis for the period of its appointment.
We
may authorize agents or underwriters to solicit offers by certain types of institutional investors to purchase securities from us at
the public offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery
on a specified date in the future. We will describe the conditions to these contracts and the commissions we must pay for solicitation
of these contracts in the prospectus supplement.
We
may provide agents, dealers and underwriters with indemnification against civil liabilities, including liabilities under the Securities
Act, or contribution with respect to payments that the agents, dealers or underwriters may make with respect to these liabilities. Agents,
dealers and underwriters or their affiliates may engage in transactions with, or perform services for, us in the ordinary course of business.
All
securities we may offer, other than Common Shares or Series A Preferred Stock, will be new issues of securities with no established trading
market. Any underwriters may make a market in these securities, but will not be obligated to do so and may discontinue any market making
at any time without notice. We cannot guarantee the liquidity of the trading markets for any securities.
Any
underwriter may engage in overallotment, stabilizing transactions, short covering transactions and penalty bids. Overallotment involves
sales in excess of the offering size, which create a short position. Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified maximum price. Syndicate covering or other short-covering transactions
involve purchases of the securities, either through exercise of the option to purchase additional shares or in the open market after
the distribution is completed, to cover short positions. Short covering transactions involve purchases of the securities in the open
market after the distribution is completed to cover short positions. Penalty bids permit the underwriters to reclaim a selling concession
from a dealer when the securities originally sold by the dealer are purchased in a stabilizing or covering transaction to cover short
positions. Those activities may cause the price of the securities to be higher than it would otherwise be. If commenced, the underwriters
may discontinue any of the activities at any time. These transactions may be effected on any exchange or over-the-counter market or otherwise.
Any
underwriters, dealers or agents that are qualified market makers on the NYSE American may engage in passive market making transactions
in our Common Shares on the NYSE American in accordance Regulation M under the Exchange Act, during the business day prior to the pricing
of the offering, before the commencement offers or sales of the securities. Passive market makers must comply with applicable volume
and price limitations and must be identified as passive market makers. In general, a passive market maker must display its bid at a price
not in excess of the highest independent bid for such security; if all independent bids are lowered below the passive market maker’s
bid, however, the passive market maker’s bid must then be lowered when certain purchase limits are exceeded. Passive market making
may stabilize the market price of the securities at a level above that which might otherwise prevail in the open market and, if commenced,
may be discontinued at any time.
The
specific terms of any lock-up provisions in respect of any given offering will be described in the applicable prospectus supplement.
The
anticipated date of delivery offered securities will be set forth in the applicable prospectus supplement relating to each offer.
MATERIAL
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
Tax
Considerations
The
following is a summary of the material U.S. federal income tax consequences of the purchase, ownership and disposition of the securities
in this offering as applied to U.S. holders (as defined below) that hold such shares as a capital asset for federal income tax purposes.
Neuberger Quinn Gielen Rubin & Gibber P.A. has acted as our counsel, has reviewed this summary, and is of the opinion that the summary
of the material U.S. Federal income tax considerations contained herein is a fair and accurate summary of the U.S. federal income tax
considerations that are likely to be material to a holder of securities acquired pursuant to this offering. This summary is based upon
existing U.S. federal income tax law, which is subject to differing interpretations or change (possibly with retroactive effect). The
effects of other U.S. federal tax laws, such as estate and gift tax laws, and any applicable state, local or non- U.S. tax laws are not
discussed. Furthermore, this summary is for informational purposes only and is not intended as tax advice. We therefore recommend that
each holder of our securities consult its own tax advisor with respect to the particular tax consequences of this offering.
This
discussion is based upon the U.S. Internal Revenue Code of 1986, as amended, or Code, Treasury Regulations promulgated thereunder, judicial
decisions, and published rulings and administrative pronouncements of the U.S. Internal Revenue Service (“IRS”), in each
case in effect as of the date hereof. These authorities may change or be subject to differing interpretations. Any such change or differing
interpretation may be applied retroactively in a manner that could adversely affect a holder of our Common Shares or preferred stock.
This
summary does not address all aspects of federal income taxation that may be important or consequential to various holders responsive
to specific facts or circumstances or to holders who may be subject to special tax rules, including, without limitation, the following,
all of whom may be subject to tax rules that differ significantly from those summarized in this discussion:
| ● | U.S.
expatriates and former citizens or long-term residents of the United States; |
| ● | persons
holding our Common Shares or preferred stock as part of a hedge, straddle or other risk reduction
strategy or as part of a conversion transaction or other integrated investment; |
| ● | banks,
insurance companies, and other financial institutions; |
| ● | brokers,
dealers or traders in securities; |
| ● | “controlled
foreign corporations,” “passive foreign investment companies,” and corporations
that accumulate earnings to avoid U.S. federal income tax; |
| ● | partnerships
or other entities or arrangements treated as partnerships for U.S. federal income tax purposes
(and investors therein); |
| ● | tax-exempt
organizations or governmental organizations; |
| ● | persons
deemed to sell our Common Shares or preferred stock under the constructive sale provisions
of the Code; |
| ● | persons
for whom our capital stock constitutes “qualified small business stock” within
the meaning of Section 1202 of the Code; |
| ● | persons
who hold or receive our Common Shares or preferred stock pursuant to the exercise of any
employee stock option or otherwise as compensation; and |
| ● | tax-qualified
retirement plans. |
We
have not sought, and we will not seek, any rulings from the IRS regarding the federal income tax consequences of this offering or the
related share issuances.
For
purposes of this summary, a “U.S. holder” is a holder that is for U.S. federal income tax purposes:
| ● | an
individual who is a citizen or resident of the U.S.; |
| ● | a
corporation (or other entity treated as a corporation for U.S. federal income tax purposes)
created or organized under the laws of the United States, any state thereof, or the District
of Columbia; |
| ● | an
estate the income of which is subject to U.S. federal income taxation regardless of its source;
or |
| ● | a
trust that (1) is subject to the primary supervision of a U.S. court and the control of one
or more United States persons (within the meaning of Section 7701(a)(30) of the Code), or
(2) has made a valid election under applicable Treasury Regulations to continue to be treated
as a United States person. |
THE
FOLLOWING IS A DISCUSSION OF THE MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS OF THE RECEIPT OF SECURITIES IN THIS OFFERING AND OF
THE EXERCISE, SALE OR OTHER DISPOSITION AND EXPIRATION OF THOSE SECURITIES. EACH INVESTOR SHOULD CONSULT ITS OWN TAX ADVISOR AS TO PARTICULAR
TAX CONSEQUENCES TO IT OF THE RECEIPT OF UNITS IN THIS OFFERING AND OF THE EXERCISE, SALE OR OTHER DISPOSITION AND EXPIRATION OF THOSE
UNITS, INCLUDING THE APPLICABILITY AND EFFECTS OF ANY STATE, LOCAL OR FOREIGN TAX LAWS, AND OF ANY PROPOSED CHANGES IN APPLICABLE LAWS.
Tax
Considerations of our status as a Real Estate Investment Trust
The
following is a summary of the material U.S. federal income tax considerations associated with our qualification and taxation as a real
estate investment trust, or REIT, and the acquisition, ownership and disposition of our Common Shares and of our preferred stock, including
our Series A Preferred Stock. Supplemental U.S. federal income tax considerations relevant to the acquisition, ownership and disposition
of the other securities offered by this prospectus may be provided in the additional prospectus or prospectus supplement that relates
to those securities. For purposes of this summary, references to “the company,” “we,” “our” and “us”
mean only Power REIT and do not include any of its subsidiaries, except as otherwise indicated. This summary is based upon the Internal
Revenue Code of 1986 (the “Code”), Department of Treasury (“Treasury”) regulations promulgated under the Code
(the “Treasury Regulations”), and reported judicial and administrative rulings and decisions in effect as of the date of
this prospectus, all of which are subject to change, retroactively or prospectively, and to possibly differing interpretations. Any such
change could affect the validity of this summary.
This
summary does not address (i) U.S. federal taxes other than income taxes or (ii) state, local or non-U.S. taxes. In addition, this summary
does not purport to address the U.S. federal income or other tax considerations applicable to holders of shares of our capital stock
that are subject to special treatment under U.S. federal income tax law, including, for example:
| ● | financial
institutions; |
| | | |
| ● | partnerships
or entities treated as partnerships, S corporations or other pass-through entities for U.S.
federal income tax purposes; |
| | | |
| ● | insurance
companies; |
| | | |
| ● | pension
plans or other tax-exempt organizations, except to the extent summarized below; |
| | | |
| ● | “qualified
foreign pension funds” or entities wholly owned by a qualified foreign pension fund; |
| | | |
| ● | dealers
in securities or currencies; |
| | | |
| ● | traders
in securities that elect to use a mark to market method of accounting; |
| | | |
| ● | persons
that hold their shares as part of a straddle, hedge, constructive sale or conversion transaction; |
| | | |
| ● | persons
subject to special tax accounting rules under Section 451(b) of the Code; |
| | | |
| ● | regulated
investment companies; |
| | | |
| ● | REITs; |
| | | |
| ● | certain
U.S. expatriates; |
| | | |
| ● | persons
whose “functional currency” is not the U.S. dollar; and |
| | | |
| ● | persons
who acquired shares of our capital stock through the exercise of an employee stock option
or otherwise as compensation. |
No
ruling on the U.S. federal, state, or local tax considerations relevant to our operation or to the purchase, ownership or disposition
of shares of our capital stock, has been requested from the Internal Revenue Service (the “IRS”) or other tax authority.
No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax consequences
described below.
This
summary is also based upon the assumption that our operation, and the operation of our subsidiaries and other lower-tier and affiliated
entities, will in each case be in accordance with its applicable organizational documents or partnership agreements. This summary does
not discuss the impact that U.S. state and local taxes and taxes imposed by non-U.S. jurisdictions could have on the matters summarized
in this summary. In addition, this summary assumes that shareholders hold shares of our capital stock as a capital asset, which generally
means as property held for investment.
Prospective
investors are urged to consult their tax advisors to determine the U.S. federal, state, local, foreign and other tax consequences to
them of the purchase, ownership and disposition of shares of our capital stock, the tax treatment of a REIT and the effect of potential
changes in the applicable tax laws.
We
have elected to be taxed as a REIT under the applicable provisions of the Code and the Treasury Regulations, commencing with our taxable
year ended on December 31, 2011. We intend to continue operating as a REIT so long as our Board determines that REIT qualification remains
in our best interest. However, we cannot assure you that we will meet the applicable requirements under U.S. federal income tax laws,
which are highly technical and complex.
In
brief, a corporation that complies with the provisions in Code Sections 856 through 860 and qualifies as a REIT generally is not taxed
on its net taxable income to the extent such income is currently distributed to shareholders, thereby completely or substantially eliminating
the “double taxation” that a corporation and its shareholders generally bear together. However, as summarized in greater
detail below, a corporation could be subject to U.S. federal income tax in some circumstances even if it qualifies as a REIT and would
likely suffer adverse consequences, including reduced cash available for distribution to its shareholders, if it failed to qualify as
a REIT.
Neuberger
Quinn Gielen Rubin & Gibber P.A. has acted as our tax counsel in connection with this registration statement. Neuberger Quinn Gielen
Rubin & Gibber P.A. is of the opinion that commencing with our taxable year ended on December 31, 2011, we have been organized in
conformity with the requirements for qualification as a REIT under the Code, and our actual method of operation through the date hereof
has enabled us to meet and, assuming that our election to be treated as a REIT is not either revoked or intentionally terminated, our
proposed method of operation will enable us to continue to meet, the requirements for qualification and taxation as a REIT under the
Code This opinion is based and conditioned, in part, on various assumptions and representations as to factual matters and covenants made
to Neuberger Quinn Gielen Rubin & Gibber P.A. by us and based upon certain terms and conditions set forth in the opinion. Our qualification
as a REIT depends upon our ability to meet, through operation of the properties we own and our investment in other assets, the applicable
requirements under U.S. federal income tax laws, which are discussed below. Neuberger Quinn Gielen Rubin & Gibber P.A. has not reviewed
these operating results for compliance with the applicable requirements under U.S. federal income tax laws. Therefore, we cannot assure
you that our actual operating results allow us to satisfy the applicable requirements to qualify as a REIT under U.S. federal income
tax laws in any taxable year. Further, the anticipated U.S. federal income tax treatment summarized below may change, perhaps retroactively,
by legislative, administrative, or judicial action. Neuberger Quinn Gielen Rubin & Gibber P.A. has no obligation to update its opinion
subsequent to the date of the opinion.
General
The
term “REIT taxable income” means the taxable income as computed for a corporation that is not a REIT:
| |
● |
without
the deductions allowed by Code Sections 241 through 247, and 249 (relating generally to the deduction for dividends
received); |
| |
● |
excluding
amounts equal to the net income from foreclosure property and the net income derived from prohibited transactions; |
| |
● |
deducting
amounts equal to: the net loss from foreclosure property, the net loss derived from prohibited transactions, the tax imposed by Code
Section 857(b)(5) upon a failure to meet the 95% or the 75% Gross Income Tests (as defined below), the tax imposed by Code Section
856(c)(7)(C) upon a failure to meet the Asset Tests (as defined below), the tax imposed by Code Section 856(g)(5) for otherwise
avoiding REIT disqualification, and the tax imposed by Code Section 857(b)(7) on redetermined rents, redetermined deductions and
excess interest; |
| |
● |
deducting
the amount of dividends paid under Code Section 561, computed without regard to the amount of the net income from foreclosure
property (which is excluded from REIT taxable income); and without regard to any change of annual accounting period pursuant to Code
Section 443(b). |
In
any year in which we qualify as a REIT and have a valid election in place, we will claim deductions for the dividends we pay to the shareholders,
and therefore will not be subject to U.S. federal income tax on that portion of our taxable income or capital gain that is distributed
to our shareholders.
Although
we can eliminate or substantially reduce our U.S. federal income tax liability by maintaining our REIT qualification and paying sufficient
dividends, we will be subject to U.S. federal tax in the following circumstances:
| |
● |
We
will be taxed at normal corporate rates on any undistributed REIT taxable income or net capital gain. |
| |
● |
If
we fail to satisfy either the 95% Gross Income Test or the 75% Gross Income Test (each of which is described below), but our failure
is due to reasonable cause and not willful neglect, and we therefore maintain our REIT qualification, we will be subject to a tax
equal to the product of (a) the amount by which we failed the 75% or 95% Gross Income Test (whichever amount is greater) multiplied
by (b) a fraction intended to reflect our profitability. |
| |
● |
We
will be subject to an excise tax if we fail to currently distribute sufficient income. In order to make the “required distribution”
with respect to a calendar year, we must distribute the sum of (1) 85% of our REIT ordinary income for the calendar year, (2) 95%
of our REIT capital gain net income for the calendar year, and (3) the excess, if any, of the grossed up required distribution (as
defined in the Code) for the preceding calendar year over the distributed amount for that preceding calendar year. Any excise tax
liability would be equal to 4% of the difference between the amount required to be distributed under this formula and the amount
actually distributed and would not be deductible by us. |
| |
● |
If
we have net income from prohibited transactions such income would be subject to a 100% tax. See “ REIT Qualification Requirements — Prohibited
Transactions.” |
| |
● |
We
will be subject to U.S. federal income tax at the corporate rate on any non-qualifying income from foreclosure property. We will
not own any foreclosure property unless we make loans or accept purchase money notes secured by interests in real property and foreclose
on the property following a default on the loan, or foreclose on property pursuant to a default on a lease. |
| |
● |
If
we fail to satisfy any of the REIT Asset Tests (summarized below), other than a failure of the 5% or 10% REIT assets tests that does
not exceed a statutory de minimis amount as described more fully below, but our failure is due to reasonable cause and not
due to willful neglect and we nonetheless maintain our REIT qualification because of specified cure provisions, we will be required
to pay a tax equal to the greater of $50,000 or the amount determined by multiplying the corporate tax rate (currently 21%)
by the net income generated by the non-qualifying assets during the period in which we failed to satisfy the Asset Tests. |
| |
● |
If
we fail to satisfy any other provision of the Code that would result in our failure to continue to qualify as a REIT (other than
a requirement of the Gross Income Tests or the Asset Tests) and that violation is due to reasonable cause, we may retain our REIT
qualification, but we will be required to pay a penalty of $50,000 for each such failure. |
| |
● |
We
may be required to pay monetary penalties to the IRS in certain circumstances, including if we fail to meet record-keeping requirements
intended to monitor our compliance with rules relating to the composition of our shareholders. Such penalties generally would not
be deductible by us. |
| |
● |
If
we acquire any asset from a corporation that is subject to full corporate-level U.S. federal income tax in a transaction in which
our basis in the asset is determined by reference to the transferor corporation’s basis in the asset, and we recognize gain
on the disposition of such an asset during the five-year period beginning on the date we acquired such asset, then the excess of
the fair market value as of the beginning of the applicable recognition period over our adjusted basis in such asset at the beginning
of such recognition period will be subject to U.S. federal income tax at the corporate U.S. federal income tax rate. The results
described in this paragraph assume that the non-REIT corporation will not elect, in lieu of this treatment, to be subject to an immediate
tax when the asset is acquired by us. |
| |
● |
A
100% tax may be imposed on transactions between us and a taxable REIT subsidiary (a “TRS”) that do not reflect arm’s-length
terms. |
| |
● |
The
earnings of our subsidiaries that are C corporations, other than a subsidiary that is a qualified REIT subsidiary (a “QRS”),
including any subsidiary we may elect to treat as a TRS, will generally be subject to U.S. federal corporate income tax. |
| |
● |
We
may elect to retain and pay income tax on our net capital gain. In that case, a shareholder would include his, her or its proportionate
share of our undistributed net capital gain (to the extent we make a timely designation of such gain to the shareholder) in his,
her or its income as long-term capital gain, would be deemed to have paid the tax that we paid on such gain, and would be allowed
a credit for his, her or its proportionate share of the tax deemed to have been paid, and an adjustment would be made to increase
the shareholder’s basis in our shares. Shareholders that are U.S. corporations will also appropriately adjust their earnings
and profits for the retained capital gain in accordance with Treasury Regulations to be promulgated. |
In
addition, notwithstanding our qualification as a REIT, we and our subsidiaries may be subject to a variety of taxes, including state
and local and foreign income, property, payroll and other taxes on our assets and operations. We could also be subject to tax in situations
and on transactions not presently contemplated.
REIT
Qualification Requirements
Organizational
Requirements
The
Code defines a REIT as a corporation, trust or association:
| ● |
that
is managed by one or more trustees; |
| ● |
the
beneficial ownership of which is evidenced by transferable shares or by transferable certificates of beneficial interest; |
| ● |
that
would be taxable as a domestic corporation but for its qualification as a REIT; |
| ● |
that
is neither a financial institution nor an insurance company; |
| ● |
that
meets the gross income, asset and annual distribution requirements; |
| ● |
the
beneficial ownership of which is held by 100 or more persons on at least 335 days in each full taxable year, proportionately adjusted
for a short taxable year; |
● |
generally
in which, at any time during the last half of each taxable year, no more than 50% in value of the outstanding shares are owned, directly
or indirectly, by five or fewer individuals (as defined in the Code to include specified entities); |
| ● |
that
makes an election to be taxable as a REIT for the current taxable year, or has made this election for a previous taxable year, which
election has not been revoked or terminated, and satisfies all relevant filing and other administrative requirements established by
the IRS that must be met to maintain qualification as a REIT; and |
| ● |
that uses a calendar year for U.S. federal income tax
purposes |
Organizational
requirements (1) through (5) must be met during each taxable year for which REIT qualification is sought, while requirements (6) and
(7) do not have to be met until after the first taxable year for which a REIT election is made. We have adopted December 31 as our year
end, thereby satisfying requirement (9).
Ownership
of Interests in Partnerships, Limited Liability Companies and QRSs
A
REIT that is a partner in a partnership or a member in a limited liability company treated as a partnership for U.S. federal income tax
purposes, will be deemed to own its proportionate share of the assets of the partnership or limited liability company, as the case may
be, based on its interest in partnership capital, subject to the special rules relating to the 10% asset test described below, and will
be deemed to be entitled to its proportionate share of the income of that entity. The assets and gross income of the partnership or limited
liability company retain the same character in the hands of the REIT. Thus, our pro rata share of the assets and items of income of any
partnership or limited liability company treated as a partnership or disregarded entity for U.S. federal income tax purposes in which
we own an interest, is treated as our assets and items of income for purposes of the Asset Tests and Gross Income Tests (each as defined
below).
We
expect to control our subsidiary partnerships, and limited liability companies and intend to operate them in a manner consistent with
the requirements for our qualification as a REIT. If we become a limited partner or non-managing member in any partnership or limited
liability company and such entity takes or expects to take actions that could jeopardize our qualification as a REIT or require us to
pay tax, we may be forced to dispose of our interest in such entity. In addition, it is possible that a partnership or limited liability
company could take an action that could cause us to fail a Gross Income Test or Asset Test (each as defined below), and that we would
not become aware of such action in time to dispose of our interest in the partnership or limited liability company or take other corrective
action on a timely basis. In that case, we could fail to qualify as a REIT unless we were entitled to relief, as described below.
We
may from time to time own certain assets through subsidiaries that we intend to be treated as QRSs. A corporation will qualify as our
QRS if we own 100% of the corporation’s outstanding stock and do not elect with the subsidiary to treat it as a TRS, as described
below. A QRS is not treated as a separate corporation, and all assets, liabilities and items of income, gain, loss, deduction and credit
of a QRS are treated as assets, liabilities and items of income, gain, loss, deduction and credit of the parent REIT for purposes of
the Asset Tests and Gross Income Tests (each as defined below). A QRS is not subject to U.S. federal income tax, but may be subject to
state or local tax, and our ownership of the stock of a QRS will not violate the restrictions on ownership of securities, as described
below under “Asset Tests.”
We
may from time to time own certain assets through entities that we wholly own and that are disregarded as separate from us. If a disregarded
subsidiary ceases to be wholly owned by us (for example, if any equity interest in the subsidiary is acquired by a person other than
us or another one of our disregarded subsidiaries), the subsidiary’s separate existence would no longer be disregarded for U.S.
federal income tax purposes. Instead, it would have multiple owners and would be treated as either a partnership or a taxable corporation.
Such an event could, depending on the circumstances, adversely affect our ability to satisfy the Asset Tests and Gross Income Tests,
including the requirement that REITs generally may not own, directly or indirectly, more than 10% of the value or voting power of the
outstanding securities of another corporation. See “— Asset Tests” and “— Gross Income Tests.”
Ownership
of Interests in TRSs
We
currently do not currently own an interest in a TRS but may acquire securities in one or more TRSs in the future. A TRS is a corporation
other than a REIT in which a REIT directly or indirectly holds stock, and that has made a joint election with such REIT to be treated
as a TRS. If a TRS owns more than 35% of the total voting power or value of the outstanding securities of another corporation, that other
corporation also will be treated as a TRS. Other than some activities relating to lodging and health care facilities, a TRS generally
may engage in any business, including investing in assets and engaging in activities that could not be held or conducted directly by
us without jeopardizing our qualification as a REIT.
A
TRS is subject to U.S. federal income tax as a regular C corporation. A REIT’s ownership of securities of a TRS is not subject
to the 5% or 10% asset tests described below. However, no more than 20% of the gross value of a REIT’s assets may be comprised
of securities of one or more TRSs. See “— Asset Tests.”
Share
Ownership Requirements
The
shares that we issue must be held by a minimum of 100 persons (determined without attribution to the owners of any entity owning our
capital stock) for at least 335 days in each full taxable year, proportionately adjusted for partial taxable years. In addition, we cannot
be “closely-held,” which means that at all times during the second half of each taxable year, no more than 50% in value of
our capital stock may be owned, directly or indirectly, by five or fewer individuals (determined by applying certain attribution rules
under the Code to the owners of any entity owning our capital stock) as specifically defined for this purpose.
Our
charter contains certain provisions intended, among other purposes, to enable us to meet requirements (6) and (7) above. First, subject
to certain exceptions, our charter provides that no person may beneficially or constructively own (applying certain attribution rules
under the Code) more than 9.9% in value of the aggregate of our outstanding shares of capital stock and not more than 9.9% (in value
or in number of shares, whichever is more restrictive) of any class or series of our shares of capital stock without the approval of
our Board. See the section entitled “Description of Capital Stock — Restrictions on Transfer and Ownership
of Stock” in this prospectus. Additionally, our charter contains provisions requiring each holder of shares of our capital stock
to disclose, upon demand, constructive or beneficial ownership of shares as deemed necessary to comply with the requirements of the Code.
Furthermore, shareholders failing or refusing to comply with our disclosure request will be required, under Treasury Regulations, to
submit a statement of such information to the IRS at the time of filing their annual income tax returns for the year in which the request
was made.
Asset
Tests
At
the close of each calendar quarter of the taxable year, we must satisfy a number of tests, summarized below, based on the composition
of our assets (the “Asset Tests”). After initially meeting the Asset Tests at the close of any quarter, we will not lose
our qualification as a REIT for failure to satisfy the Asset Tests at the end of a later quarter solely due to changes in value of our
assets. In addition, if the failure to satisfy the Asset Tests results from an acquisition during a quarter, the failure generally can
be cured by disposing of non-qualifying assets within 30 days after the close of that quarter. We will continue to maintain adequate
records of the value of our assets to ensure compliance with these tests and will act within 30 days after the close of any quarter as
may be required to cure any noncompliance.
75%
Asset Test. At least 75% of the value of our assets must be represented by “real estate assets,” cash, cash items (including
receivables) and government securities, which we refer to as the 75% Asset Test. Real estate assets include (1) real property (including
interests in real property and interests in mortgages on real property or on interests in real property), (2) shares in other qualifying
REITs, (3) debt instruments issued by publicly offered REITs and (4) any property (not otherwise a real estate asset) attributable to
the temporary investment of “new capital” in stock or a debt instrument, but only for the one-year period beginning
on the date we received the new capital. Property will qualify as being attributable to the temporary investment of new capital if the
money used to purchase the stock or debt instrument is received by us in exchange for our capital stock or in a public offering of debt
obligations that have a maturity of at least five years. Assets that do not qualify for purposes of the 75% test are subject to the additional
asset tests described below under “— Additional Asset Tests.”
We
are currently invested in the real properties described in our filings with the SEC. In addition, we have invested and intend to invest
funds not used to acquire properties in cash sources, “new capital” investments or other liquid investments which allow us
to continue to qualify under the 75% Asset Test. Therefore, our investment in real properties should constitute “real estate assets”
and should allow us to meet the 75% Asset Test.
Additional
Asset Tests. Our assets that do not qualify for the 75% Asset Test are subject to the following additional asset tests. Not more
than 25% of the value of those assets may consist of securities, other than securities that qualify for the 75% Asset Test. Not more
than 20% (25% for taxable years beginning prior to January 1, 2018) of the value of those assets may consist of securities of one or
more TRSs. Not more than 25% of the value of those assets may be invested in publicly offered REIT debt instruments that do not otherwise
qualify as real estate assets under the 75% Asset Test (e.g., a debt instrument issued by a publicly offered REIT that is not secured
by a mortgage on real property). In addition, if we invest in any securities that do not otherwise qualify under the 75% Asset Test,
other than equity investments in QRSs and TRSs, those securities may not exceed (i) 5% of the value of our assets as to any one issuer
and (ii) 10% of the outstanding securities by vote and value of any one issuer. The 10% value test does not apply to certain “straight
debt” and other excluded securities, as described in the Code, such as any loan to an individual or estate, any obligation to pay
rents from real property and any security issued by a REIT. In addition, a partnership interest held by a REIT is not considered a “security”
for purposes of the 10% value test; instead, the REIT is treated as owning directly its proportionate share of the partnership’s
assets, which is based on the REIT’s proportionate interest in any securities issued by the partnership (disregarding for this
purpose the general rule that a partnership interest is not a security), but excluding certain securities described in the Code.
For
purposes of the 10% value test, “straight debt” means a written unconditional promise to pay on demand or on a specified
date a sum certain in money if (i) the debt is not convertible, directly or indirectly, into stock, (ii) the interest rate and
interest payment dates are not contingent on profits, the borrower’s discretion, or similar factors other than certain contingencies
relating to the timing and amount of principal and interest payments, as described in the Code and (iii) in the case of an issuer that
is a corporation or a partnership, securities that otherwise would be considered straight debt will not be so considered if we, and any
of our “controlled taxable REIT subsidiaries” as defined in the Code, hold any securities of the corporate or partnership
issuer that (a) are not straight debt or other excluded securities (prior to the application of this rule), and (b) have an aggregate
value greater than 1% of the issuer’s outstanding securities (including, for the purposes of a partnership issuer, our interest
as a partner in the partnership).
We
may make real estate related debt investments if the underlying real estate meets our criteria for direct investment. A real estate mortgage
loan that we own generally will be treated as a real estate asset for purposes of the 75% Asset Test if, on the date that we acquire
or originate the mortgage loan, the value of the real property securing the loan is equal to or greater than the principal amount of
the loan. Certain mezzanine loans we make or acquire may qualify for the safe harbor in Revenue Procedure 2003-65, 2003-2 C.B. 336, pursuant
to which certain loans secured by a first priority security interest in ownership interests in a partnership or limited liability company
will be treated as qualifying assets for purposes of the 75% Asset Test and the 10% vote or value test. We may hold some mezzanine loans
that do not qualify for that safe harbor. Furthermore, we may acquire distressed debt investments that require subsequent modification
by agreement with the borrower. If the outstanding principal balance of a mortgage loan exceeds the fair market value of the real property
securing the loan at the time we commit to acquire the loan, or agree to modify the loan in a manner that is treated as an acquisition
of a new loan for U.S. federal income tax purposes, then a portion of that loan may not be a qualifying real estate asset. Under current
law, it is unclear how to determine the portion of such loan that would be treated as a qualifying real estate asset. However, IRS guidance
provides that the IRS will not challenge a REIT’s treatment of a loan as being, in part, a real estate asset if the REIT treats
the loan as being a real estate asset in an amount that is equal to the lesser of (i) the fair market value of the real property
securing the loan, as of the date the REIT committed to acquire or modify the loan, and (ii) the fair market value of the loan. Nevertheless,
the application of this guidance is uncertain, particularly with respect to the proper treatment under the Asset Tests of mortgage loans
acquired at a discount that later increase in value. Accordingly, no assurance can be given that the IRS would not challenge our treatment
of such assets. Moreover, although we intend to make these investments in a manner so as not to fail the asset tests described above,
no assurance can be given that any such investments would not disqualify us as a REIT.
We
believe that our holdings of real estate assets and other securities comply with the foregoing REIT asset requirements, and we intend
to monitor compliance on an ongoing basis. There can be no assurance, however, that we will be successful in this effort. In this regard,
to determine compliance with these requirements, we will need to estimate the value of our assets, and we do not expect to obtain independent
appraisals to support our conclusions as to the total value of our assets or the value of any particular security or other asset. Moreover,
values of some assets, including our interests in TRSs, may not be susceptible to a precise determination and are subject to change in
the future. Although we are and will continue to be prudent in making these estimates, there can be no assurance that the IRS will agree
with these determinations and may assert that a different value is applicable, in which case we might not satisfy the Asset Tests, and
we could fail to qualify as a REIT.
A
REIT is able to cure certain asset test violations. As noted above, a REIT cannot own securities of any one issuer (other than those
qualifying under the 75% Asset Test or securities of one or more QRS or TRS) representing more than 5% of the total value of the REIT’s
assets or more than 10% of the outstanding securities, by vote or value, of any one issuer. However, a REIT would not lose its REIT qualification
for failing to satisfy these 5% or 10% asset tests in a quarter if the failure is due to the ownership of assets the total value of which
does not exceed the lesser of (1) 1% of the total value of the REIT’s assets at the end of the quarter for which the measurement
is done, and (2) $10 million; provided, that in either case the REIT either disposes of the assets within six months after the
last day of the quarter in which the REIT identifies the failure (or such other time period prescribed by the Treasury), or otherwise
meets the requirements of those rules by the end of that period.
If
a REIT fails to meet any of the asset test requirements for a quarter and the failure exceeds the de minimis threshold described above,
then the REIT still would be deemed to have satisfied the requirements if (1) following the REIT’s identification of the
failure, the REIT files a schedule with a description of each asset that caused the failure, in accordance with Treasury Regulations;
(2) the failure was due to reasonable cause and not to willful neglect; (3) the REIT disposes of the assets within six months after the
last day of the quarter in which the identification occurred or such other time period as is prescribed by the Treasury (or the requirements
of the rules are otherwise met within that period); and (4) the REIT pays a tax on the failure equal to the greater of (a) $50,000,
or (b) an amount determined (under Treasury Regulations) by multiplying (I) the highest rate of tax for corporations under Code Section
11, by (II) the net income generated by the assets that caused the failure for the period beginning on the first date of the failure
and ending on the date the REIT has disposed of the assets (or otherwise satisfies the requirements).
Gross
Income Tests
For
each calendar year, we must satisfy two separate tests based on the composition of our gross income, as defined under our method of accounting
(the “Gross Income Tests.”)
75%
Gross Income Test. At least 75% of our gross income for the taxable year (excluding gross income from prohibited transactions and
certain hedging and foreign currency transactions) must result from (1) rents from real property, (2) interest on obligations secured
by mortgages on real property or on interests in real property, (3) gains from the sale or other disposition of real property (including
interests in real property and interests in mortgages on real property) other than property held primarily for sale to customers in the
ordinary course of our trade or business, (4) dividends from other qualifying REITs and gain (other than gain from prohibited transactions)
from the sale of shares of other qualifying REITs, (5) income from other specified investments relating to real property or mortgages
thereon (which does not include gains from the sale of a non-qualified publicly offered REIT debt instrument), and (6) for a limited
time, temporary investment income (as described under the 75% Asset Test above). We refer to this requirement as the 75% Gross Income
Test. We intend to invest funds not otherwise invested in real properties in cash sources or other liquid investments, which will allow
us to realize income that satisfies the 75% Gross Income Test.
95%
Gross Income Test. At least 95% of our gross income (excluding gross income from prohibited transactions and certain hedging and
foreign currency transactions) for the taxable year must be derived from (1) sources that satisfy the 75% Gross Income Test, (2) dividends,
(3) interest, or (4) gain from the sale or disposition of stock or other securities that are not assets held primarily for sale to customers
in the ordinary course of our trade or business. We refer to this requirement as the 95% Gross Income Test. It is important to note that
dividends and interest on obligations not collateralized by an interest in real property qualify under the 95% Gross Income Test, but
not under the 75% Gross Income Test. We intend to invest funds not otherwise invested in properties in cash sources or other liquid investments,
which will allow us to realize income that satisfies the 95% Gross Income Test.
Rents
from Real Property. Income attributable to a lease of real property generally will qualify as “rents from real property”
under the 75% Gross Income Test and the 95% Gross Income Test if such lease is respected as a true lease for U.S. federal income tax
purposes and subject to the rules summarized below.
Rent
from a particular tenant will not qualify if we, or an owner of 10% or more of our capital stock, directly or indirectly, owns 10% or
more of the voting stock or the total number of shares of all classes of stock in, or 10% or more of the assets or net profits of, the
tenant (subject to certain exceptions). However, as described below, we expect that amounts received from TRSs we have formed and may
form to facilitate our acquisition of certain properties will satisfy the conditions of the exception for rents received from
a TRS, with the result that such amounts will be treated as rents from real property. The portion of rent attributable to personal property
rented in connection with real property will not qualify, unless the portion attributable to personal property is 15% or less of the
total rent received under, or in connection with, the lease.
Generally,
rent will not qualify if it is based in whole, or in part, on the income or profits of any person from the underlying property. However,
rent will not fail to qualify if it is based on a fixed percentage (or designated varying percentages) of receipts or sales, including
amounts above a base amount so long as the base amount is fixed at the time the lease is entered into, the provisions are in accordance
with normal business practice and the arrangement is not an indirect method for basing rent on income or profits.
If
a REIT operates or manages a property or furnishes or renders certain “impermissible services” to the tenants at the property,
and the income derived from the services exceeds 1% of the total amount received by that REIT with respect to the property, then no amount
received by the REIT with respect to the property will qualify as “rents from real property.” Impermissible services are
services other than services “usually or customarily rendered” in connection with the rental of real property and not otherwise
considered “rendered to the occupant.” For these purposes, the income that a REIT is considered to receive from the provision
of “impermissible services” will not be less than 150% of the cost of providing the service. If the amount so received is
1% or less of the total amount received by us with respect to the property, then only the income from the impermissible services will
not qualify as “rents from real property.” However, this rule generally will not apply if such services are provided to tenants
through an independent contractor from whom we derive no revenue, or through a TRS. With respect to this rule, tenants may receive some
services in connection with their leases of the real properties. Our intent is that the services we provide are those usually or customarily
rendered in connection with the rental of space in the geographic location in which the property is located, and therefore, providing
these services will not cause the rents received with respect to the properties to fail to qualify as rents from real property for purposes
of the 75% Gross Income Test and the 95% Gross Income Test described above. Our Board intends to hire qualifying independent contractors
or to utilize TRSs to render services which it believes, after consultation with our tax advisors, are not usually or customarily rendered
in connection with the rental of space.
In
addition, we have represented that, with respect to our leasing activities, we will not (1) charge rent for any property that is based
in whole or in part on the income or profits of any person (excluding rent based on a percentage of receipts or sales, as described above),
or (2) charge rent that will be attributable to personal property in an amount greater than 15% of the total rent received under the
applicable lease.
Amounts
received as rent from a TRS are not excluded from rents from real property by reason of the related party rules described above if the
activities of the TRS and the nature of the properties it leases meet certain requirements.
Interest
Income. It is possible that we will be paid interest on loans secured by real property. All interest income qualifies under the 95%
Gross Income Test, and interest on loans secured by real property or an interest in real property qualifies under the 75% Gross Income
Test; provided, that in both cases, the interest does not depend, in whole or in part, on the income or profits of any person
(excluding amounts based on a fixed percentage of receipts or sales). If a loan is secured by both real property and other property,
the interest on it may nevertheless qualify under the 75% Gross Income Test. Interest income constitutes qualifying mortgage interest
for purposes of the 75% Gross Income Test to the extent that the obligation upon which the interest is paid is secured by a mortgage
on real property. If we receive interest income with respect to a mortgage loan that is secured by both real property and other property,
and the highest principal amount of the loan outstanding during a taxable year exceeds the fair market value of the real property on
the date that we committed to acquire the loan, or agreed to modify the loan in a manner that is treated as an acquisition of a new loan
for U.S. federal income tax purposes, then the interest income will be apportioned between the real property and the other collateral,
and our income from the loan will qualify for purposes of the 75% Gross Income Test only to the extent that the interest is allocable
to the real property. For purposes of the preceding sentence, however, pursuant to IRS guidance, we do not need to re-determine the fair
market value of real property in connection with a loan modification that is occasioned by a default or made at a time when we reasonably
believe the modification to the loan will substantially reduce a significant risk of default on the original loan, and any such modification
will not be treated as a prohibited transaction. We intend to structure our loans secured by real property so that the amount of the
loan does not exceed the fair market value of the real property at the time of the loan commitment so that income generated through any
investments in loans secured by real property should be treated as qualifying income under the 75% Gross Income Test.
Dividend
Income. We may receive distributions from TRSs or other corporations that are not REITs or QRSs. These distributions are generally
classified as dividends to the extent of the earnings and profits of the distributing corporation. Such distributions generally constitute
qualifying income for purposes of the 95% Gross Income Test, but not the 75% Gross Income Test. Any dividends received by us from a REIT
will be qualifying income for purposes of both the 95% and 75% Gross Income Tests.
We
will monitor the amount of the dividend and other income from our TRSs and will take actions intended to keep this income, and any other
non-qualifying income, within the limitations of the Gross Income Tests. Although we intend to take these actions to prevent a violation
of the Gross Income Tests, we cannot guarantee that such actions will in all cases prevent such a violation.
Prohibited
Transaction Income. Any gain that we realize on the sale of an asset (other than foreclosure property) held as inventory or otherwise
held primarily for sale to customers in the ordinary course of business, either directly or through any subsidiary partnership or by
a borrower that has issued a shared appreciation mortgage or similar debt instrument to us, will be treated as income from a prohibited
transaction that is subject to a 100% penalty tax, unless certain safe harbor exceptions apply. Whether an asset is held as inventory
or primarily for sale to customers in the ordinary course of a trade or business is a question of fact that depends on all the facts
and circumstances surrounding the particular transaction. We intend to continue to conduct our operations so that no asset owned by us
is held as inventory or primarily for sale to customers, and that a sale of any asset owned by us will not be in the ordinary course
of business. However, the IRS may successfully contend that some or all of the sales made by us, our subsidiary partnerships, or by a
borrower that has issued a shared appreciation mortgage or similar debt instrument to us are prohibited transactions. In such case, we
would be required to pay the 100% penalty tax on our allocable share of the gains resulting from any such sales. The 100% tax will not
apply to gains from the sale of assets that are held through a TRS, although the gains of any TRS will be subject to tax at the regular
U.S. federal corporate income tax rate.
Foreclosure
Property. Foreclosure property is real property and any personal property incident to such real property (1) that is acquired by
a REIT as a result of the REIT having bid on the property at foreclosure or having otherwise reduced the property to ownership or possession
by agreement or process of law after there was a default (or default was imminent) on a lease of the property or a mortgage loan held
by the REIT and secured by the property, (2) for which the related loan or lease was acquired by the REIT at a time when default was
not imminent or anticipated and (3) for which such REIT makes a proper election to treat the property as foreclosure property. REITs
generally are subject to regular U.S. federal corporate income tax on any net income from foreclosure property, including any gain from
the disposition of the foreclosure property, other than income that would otherwise be qualifying income for purposes of the 75% Gross
Income Test. Any gain from the sale of property for which a foreclosure property election has been made will not be subject to the 100%
tax on gains from prohibited transactions described above, even if the property would otherwise constitute inventory or dealer property
in the hands of the selling REIT. If we believe we will receive any income from foreclosure property that is not qualifying income for
purposes of the 75% Gross Income Test, we intend to elect to treat the related property as foreclosure property.
Satisfaction
of the Gross Income Tests. Our share of income from the properties primarily will give rise to rental income and gains on sales of
the properties, substantially all of which generally will qualify under the 75% Gross Income and 95% Gross Income Tests. Based on our
historic and anticipated operations, it is likely that we will have little or no non-qualifying income for U.S. federal income tax purposes.
Moreover, as described above, we have established and may establish one or more TRSs with which we could enter into leases for any properties
in which we may invest. The gross income generated by our TRSs would not be included in our gross income. However, we would realize gross
income from the TRSs in the form of rents. In addition, any dividends from our TRS to us would be included in our gross income and qualify
for the 95% Gross Income Test, but not the 75% Gross Income Test.
If
we fail to satisfy either the 75% Gross Income or 95% Gross Income Tests for any taxable year, we may retain our qualification as a REIT
for such year if we (1) satisfy the IRS that the failure was due to reasonable cause and not due to willful neglect, (2) attach to our
U.S. federal income tax return a schedule describing the nature and amount of each item of our gross income, and (3) satisfy the IRS
that any incorrect information on such schedule was not due to fraud with intent to evade U.S. federal income tax. If this relief provision
is available, we would remain subject to tax equal to the greater of the amount by which we failed the 75% Gross Income Test or the 95%
Gross Income Test, as applicable, multiplied by a fraction meant to reflect our profitability.
Annual
Distribution Requirements
In
addition to the other tests described above, we are required to distribute dividends (other than capital gain dividends) to our shareholders
each year in an amount at least equal to the excess of: (1) the sum of: (a) 90% of our REIT taxable income (determined without regard
to the deduction for dividends paid and by excluding any net capital gain); and (b) 90% of the net income (after tax) from foreclosure
property; less (2) the sum of some types of items of non-cash income. Determining whether sufficient amounts have been distributed is
based on amounts paid in the taxable year to which they relate, or in the following taxable year if we: (1) declared a dividend before
the due date of our tax return (including extensions); (2) distribute the dividend within the 12-month period following the close of
the taxable year (and not later than the date of the first regular dividend payment made after such declaration); and (3) file an election
with our tax return. Additionally, dividends that we declare in October, November or December in a given year payable to shareholders
of record in any such month will be treated as having been paid on December 31st of that year so long as the dividends are actually paid
during January of the following year.
For
our taxable years commencing prior to January 1, 2015, for distributions to have been counted towards satisfying the annual distribution
requirements for REITs, and to provide us with a REIT-level tax deduction, the distributions must not have been “preferential dividends.”
A dividend was not a preferential dividend if the distribution was (1) pro rata among all outstanding shares of stock within a particular
class, and (2) in accordance with the preferences among different classes of stock as set forth in our organizational documents.
If
we do not distribute 100% of our REIT taxable income, we will be subject to U.S. federal income tax on the undistributed portion. We
also will be subject to an excise tax if we fail to currently distribute sufficient income. In order to make the “required distribution”
with respect to a calendar year and avoid the excise tax, we must distribute the sum of (1) 85% of our REIT ordinary income for
the calendar year, (2) 95% of our REIT capital gain net income for the calendar year, and (3) the excess, if any, of the grossed up required
distribution (as defined in the Code) for the preceding calendar year over the distributed amount for that preceding calendar year. Any
excise tax liability would be equal to 4% of the difference between the amount required to be distributed and the amount actually distributed
and would not be deductible by us.
We
intend to pay sufficient dividends each year to satisfy the annual distribution requirements and avoid U.S. federal income and excise
taxes on our earnings; however, it may not always be possible to do so. We may not have sufficient cash or other liquid assets to meet
the annual distribution requirements due to tax accounting rules and other timing differences. Other potential sources of non-cash taxable
income include:
| ● | “residual
interests” in REMICs or taxable mortgage pools; |
| | | |
| ● | loans
or mortgage-backed securities held as assets that are issued at a discount and require the
accrual of taxable economic interest in advance of receipt in cash; and |
| | | |
| ● | loans
on which the borrower is permitted to defer cash payments of interest, distressed loans on
which we may be required to accrue taxable interest income even though the borrower is unable
to make current servicing payments in cash, and debt securities purchased at a discount. |
For
taxable years beginning after December 31, 2017, and except as provided below, our deduction (and the deduction of any of our subsidiary
partnerships) for net business interest expense generally will be limited to 30% of taxable income, as adjusted for certain items of
income, gain, deduction or loss. Any business interest deduction that is disallowed due to this limitation may be carried forward to
future taxable years. If we or any of our subsidiary partnerships are subject to this interest expense limitation, our REIT taxable income
(and, in turn, our distribution requirements) for a taxable year may be increased. Taxpayers that conduct certain real estate businesses
may elect not to have this interest expense limitation apply to them, provided that they use an alternative depreciation system to depreciate
certain property. We believe that we and our subsidiary partnerships that are subject to this interest expense limitation will be eligible
to make this election. If this election is made, although we or such subsidiary partnership, as applicable, would not be subject to the
interest expense limitation described above, depreciation deductions may be reduced and, as a result, our REIT taxable income (and, in
turn, our distribution requirements) for a taxable year may be increased.
We
will closely monitor the relationship between our REIT taxable income and cash flow, and if necessary to comply with the annual distribution
requirements, will attempt to borrow funds to fully provide the necessary cash flow or to pay dividends in the form of taxable in-kind
distributions of property, including taxable stock dividends. If we fail to meet the annual distribution requirements as a result of
an adjustment to our U.S. federal income tax return by the IRS, or under certain other circumstances, we may cure the failure by paying
a “deficiency dividend” (plus penalties and interest to the IRS) within a specified period.
Failure
to Qualify
If
we fail to continue to qualify as a REIT in any taxable year, we may be eligible for relief provisions if the failures are due to reasonable
cause and are not due to willful neglect, and if a penalty tax is paid with respect to each failure to satisfy the applicable requirements.
If the applicable relief provisions are not available or cannot be met, we will not be able to deduct our dividends and will be subject
to U.S. federal income tax on our taxable income at the regular corporate rate, thereby reducing cash available for distributions. In
such event, all distributions to shareholders (to the extent of our current and accumulated earnings and profits) will be taxable as
ordinary dividend income. This “double taxation” results from our failure to continue to qualify as a REIT. Unless entitled
to relief under specific statutory provisions, we will not be eligible to elect REIT qualification for the four taxable years following
the year during which qualification was lost.
Recordkeeping
Requirements
We
are required to maintain records and request on an annual basis information from specified shareholders. These requirements are designed
to assist us in determining the actual ownership of our outstanding shares and maintaining our qualification as a REIT.
Prohibited
Transactions
As
mentioned above, we will be subject to a 100% U.S. federal income tax on any net income derived from “prohibited transactions.”
Net income derived from prohibited transactions arises from the sale or exchange of property held for sale to customers in the ordinary
course of our business which is not foreclosure property. There is an exception to this rule for the sale of property that:
| ● | is
a real estate asset under the 75% Asset Test; |
| ● | generally
has been held for at least two years; |
| ● | has
aggregate expenditures that are includable in the basis of the property not in excess of
30% of the net selling price; |
| ● | in
some cases, was held for production of rental income for at least two years; |
| ● | in
some cases, substantially all of the marketing and development expenditures were made through
an independent contractor; and |
| ● | when
combined with other sales in the year, either does not cause us to have made more than seven
sales of property during the taxable year (excluding sales of foreclosure property or in
connection with an involuntary conversion), occurs in a year when we dispose of less than
10% of our assets (measured by U.S. federal income tax basis or fair market value, and ignoring
involuntary dispositions and sales of foreclosure property), or occurs in a year when we
dispose of less than 20% of our assets as well as 10% or less of our assets based on a three-year
average (measured by U.S. federal income tax basis or fair market value, and ignoring involuntary
dispositions and sales of foreclosure property). |
Although
we may eventually sell each of the properties, our primary intention in acquiring and operating the properties is the production of rental
income and we do not expect to hold any property for sale to customers in the ordinary course of our business. The 100% tax will not
apply to gains from the sale of property that is held through a TRS or other taxable corporation, although such income will be subject
to tax in the hands of the corporation at regular corporate income tax rates. As a general matter, any condominium conversions we might
undertake must satisfy these restrictions to avoid being “prohibited transactions,” which will limit the annual number of
transactions. See “REIT Qualification Requirements — Ownership of Interests in TRSs,” above.
Characterization
of Property Leases
We
have acquired and intend to acquire and own commercial properties subject to net leases. We have structured and currently intend to structure
our leases so that they qualify as true leases for U.S. federal income tax purposes. For example, with respect to each lease, we generally
expect that:
| ● | our
property owning subsidiary and the lessee will intend for their relationship to be that of
a lessor and lessee, and such relationship will be documented by a lease agreement; |
| ● | the
lessee will have the right to exclusive possession and use and quiet enjoyment of the properties
covered by the lease during the term of the lease; |
| ● | the
lessee will bear the cost of, and will be responsible for, day-to-day maintenance and repair
of the properties other than the cost of certain capital expenditures, and will dictate through
the property managers, who will work for the lessee during the terms of the leases, and how
the properties will be operated and maintained; |
| ● | the
lessee will bear all of the costs and expenses of operating the properties, including the
cost of any inventory used in their operation, during the term of the lease, other than the
cost of certain furniture, fixtures and equipment, and certain capital expenditures; |
| ● | the
lessee will benefit from any savings and will bear the burdens of any increases in the costs
of operating the properties during the term of the lease; |
| ● | in
the event of damage or destruction to a property, the lessee will be at economic risk because
it will bear the economic burden of the loss in income from operation of the properties subject
to the right, in certain circumstances, to terminate the lease if the lessor does not restore
the property to its prior condition; |
| ● | the
lessee will indemnify the lessor against all liabilities imposed on the lessor during the
term of the lease by reason of (A) injury to persons or damage to property occurring
at the properties or (B) the lessee’s use, management, maintenance or repair of the
properties; |
| ● | the
lessee will be obligated to pay, at a minimum, substantial base rent for the period of use
of the properties under the lease; |
| ● | the
lessee will stand to incur substantial losses or reap substantial gains depending on how
successfully it, through the property managers, who work for the lessees during the terms
of the leases, operates the properties; |
| ● | we
expect that each lease that we enter into, at the time we enter into it (or at any time that
any such lease is subsequently renewed or extended) will enable the tenant to derive a meaningful
profit, after expenses and taking into account the risks associated with the lease, from
the operation of the properties during the term of its leases; and |
| ● | upon
termination of each lease, the applicable property will be expected to have a remaining useful
life equal to at least 20% of its expected useful life on the date the lease is entered into,
and a fair market value equal to at least 20% of its fair market value on the date the lease
was entered into. |
If,
however, the IRS were to recharacterize our leases as service contracts, partnership agreements or otherwise, rather than true leases,
or disregard the leases altogether for tax purposes, all or part of the payments that we receive from the lessees would not be considered
rent and might not otherwise satisfy the various requirements for qualification as “rents from real property.” In that case,
we would not be able to satisfy either the 75% or 95% Gross Income Tests and, as a result, could lose our REIT qualification.
Hedging
Transactions
We
and our subsidiaries have, in the past, entered and may continue to enter into hedging transactions with respect to interest rate exposure
or currency rate fluctuations on one or more of our assets or liabilities that qualify as “hedging transactions” under the
Code and Treasury Regulations. These hedging transactions can take a variety of forms, including the use of derivative instruments such
as interest rate swap contracts, interest rate cap or floor contracts, futures or forward contracts and options. Income from a hedging
transaction, including gain from the sale or disposition of the financial instrument or any periodic income from the instrument, that
is clearly identified as a hedging transaction as specified in the Code, will not constitute gross income for purposes of the 95% Gross
Income Test or 75% Gross Income Test. The term “hedging transaction” for these purposes generally means (1) any transaction
we enter into in the normal course of our business primarily to manage risk of (a) interest rate changes or fluctuation on indebtedness
incurred or to be incurred by us to acquire or carry real estate assets or (b) currency fluctuations with respect to any item of income
that would qualify under the 75% Gross Income Test or the 95% Gross Income Test or any property which generates such income and (2) new
transactions entered into to hedge the income or loss from prior hedging transactions, where the property or indebtedness which was the
subject of the prior hedging transaction was extinguished or disposed of. We intend to structure any hedging transactions in a manner
that does not jeopardize our status as a REIT. We may conduct some or all of our hedging activities through a TRS or other corporate
entity, the income from which may be subject to U.S. federal income tax, rather than participating in the arrangements directly or through
pass-through subsidiaries to the extent such income would jeopardize our REIT status. However, it is possible that our hedging activities
may give rise to income that does not qualify for purposes of either or both of the Gross Income Tests, and may adversely affect our
ability to satisfy the REIT qualification requirements.
Tax
Aspects of Investments in Partnerships
General.
We may hold direct or indirect interests in one or more partnerships (and limited liability companies that may be treated as partnerships
for U.S. federal income tax purposes), which, in turn, own properties and may possibly own interests in other non-corporate entities
that own properties. Such non-corporate entities would generally be organized as limited liability companies, partnerships or trusts
and would either be disregarded for U.S. federal income tax purposes (if such entity were the sole owner) or treated as partnerships
for U.S. federal income tax purposes.
The
following is a summary of the U.S. federal income tax consequences if our investments are held via partnerships (or limited liability
companies treated as partnerships for U.S. federal income tax purposes). This summary should also generally apply to any investment by
us in other entities taxable as partnerships for such purposes, including multi-member limited liability companies.
A
partnership (that is not a publicly traded partnership taxed as a corporation) is not subject to tax as an entity for U.S. federal income
tax purposes. Rather, partners are allocated their allocable share of the items of income, gain, loss, deduction and credit of the partnership,
and are potentially subject to tax thereon, without regard to whether the partners receive any distributions from the partnership. We
are required to take into account our allocable share of the foregoing items for purposes of the Gross Income Tests and Asset Tests,
and in the computation of our REIT taxable income and U.S. federal income tax liability. Further, there can be no assurance that distributions
from a partnership will be sufficient to pay the tax liabilities resulting from an investment in such partnership.
Generally,
an entity with two or more members formed as a partnership or limited liability company under state law will be taxed as a partnership
for U.S. federal income tax purposes unless it specifically elects otherwise. We intend that interests in any of our partnerships will
fall within one of the “safe harbors” for the partnership to avoid being classified as a publicly traded partnership. However,
our ability to satisfy the requirements of some of these safe harbors depends on the results of actual operations and accordingly no
assurance can be given that any such partnership will at all times satisfy one of such safe harbors. We reserve the right to not satisfy
any safe harbor. Even if a partnership is a publicly traded partnership, it generally will not be treated as a corporation if at least
90% of its gross income in each taxable year is from certain sources, which generally include rents from real property and other types
of passive income. We believe that the partnerships in which we currently hold interests have and will continue to have sufficient qualifying
income so that such entities would be taxed as a partnership, even if it were treated as a publicly traded partnership.
If
for any reason any partnership in which we hold equity interests is taxable as a corporation for U.S. federal income tax purposes, the
character of our assets and items of gross income would change, and as a result, we would most likely be unable to satisfy the applicable
REIT requirements under U.S. federal income tax laws summarized above. In addition, any change in the status of any partnership may be
treated as a taxable event, in which case we could incur a tax liability without a related cash distribution. Further, if any partnership
were treated as a corporation, items of income, gain, loss, deduction and credit of such partnership would be subject to corporate income
tax, and the partners of any such partnership would be treated as shareholders, with distributions to such partners being treated as
dividends.
Anti-abuse
Treasury Regulations have been issued under the partnership provisions of the Code that authorize the IRS, in some abusive transactions
involving partnerships, to disregard the form of a transaction and recast it as it deems appropriate. The anti-abuse regulations apply
where a partnership is utilized in connection with a transaction (or series of related transactions) with a principal purpose of substantially
reducing the present value of the partners’ aggregate U.S. federal tax liability in a manner inconsistent with the intent of the
partnership provisions. The anti-abuse regulations contain an example in which a REIT contributes the proceeds of a public offering to
a partnership in exchange for a general partnership interest. The limited partners contribute real property assets to the partnership,
subject to liabilities that exceed their respective aggregate bases in such property. The example concludes that the use of the partnership
is not inconsistent with the intent of the partnership provisions, and thus, cannot be recast by the IRS. However, the anti-abuse regulations
are extraordinarily broad in scope and are applied based on an analysis of all the facts and circumstances. As a result, we cannot assure
you that the IRS will not attempt to apply the anti-abuse regulations to us. Any such action could potentially jeopardize our qualification
as a REIT and materially affect the tax consequences and economic return resulting from an investment in us.
Income
Taxation of Partnerships and their Partners. Although a partnership agreement generally will determine the allocation of a partnership’s
income and losses among the partners, such allocations may be disregarded for U.S. federal income tax purposes under Code Section 704(b)
and the Treasury Regulations promulgated thereunder. If any allocation is not recognized for U.S. federal income tax purposes, the item
subject to the allocation will be reallocated in accordance with the partners’ economic interests in the partnership.
In
some cases, special allocations of net profits or net losses will be required to comply with the U.S. federal income tax principles governing
partnership tax allocations. Additionally, pursuant to Code Section 704(c), income, gain, loss and deduction attributable to property
contributed to a partnership in exchange for units must be allocated in a manner so that the contributing partner is charged with, or
benefits from, the unrealized gain or loss attributable to the property at the time of contribution. The amount of such unrealized gain
or loss is generally equal to the difference between the fair market value and the adjusted basis of the property at the time of contribution.
These allocations are designed to eliminate book-tax differences by allocating to contributing partners lower amounts of depreciation
deductions and increased taxable income and gain attributable to the contributed property than would ordinarily be the case for economic
or book purposes. With respect to any property purchased by a partnership, such property generally will have an initial tax basis equal
to its fair market value, and accordingly, Code Section 704(c) will not apply, except as described further below in this paragraph. The
application of the principles of Code Section 704(c) in tiered partnership arrangements is not entirely clear. Accordingly, the IRS may
assert a different allocation method than the one selected by any such partnership to cure any book-tax differences. In certain circumstances,
we create book-tax differences by adjusting the values of properties for economic or book purposes and generally the rules of Code Section
704(c) would apply to such differences as well.
For
properties contributed to a partnership, depreciation deductions are calculated based on the transferor’s basis and depreciation
method. Because depreciation deductions are based on the transferor’s basis in the contributed property, such partnership generally
would be entitled to less depreciation than if the properties were purchased in a taxable transaction. The burden of lower depreciation
generally will fall first on the contributing partner, but also may reduce the depreciation allocated to other partners.
Gain
on the sale or other disposition of depreciable property is characterized as ordinary income (rather than capital gain) to the extent
of any depreciation recapture. Buildings and improvements depreciated under the straight-line method of depreciation are generally not
subject to depreciation recapture unless the property was held for less than one year. However, individuals, trusts and estates that
hold shares of our capital stock either directly or through a pass-through entity may be subject to tax on the disposition of depreciable
property at a rate of 25% rather than at the normal capital gains rate, to the extent that such assets have been depreciated.
Some
expenses incurred in the conduct of a partnership’s activities may not be deducted in the year they were paid. To the extent this
occurs, the taxable income of such partnership may exceed its cash receipts for the year in which the expense is paid. As summarized
above, the costs of acquiring properties must generally be recovered through depreciation deductions over a number of years. Prepaid
interest and loan fees, and prepaid management fees are other examples of expenses that may not be deducted in the year they were paid.
Partnership
Audit Rules. Any audit adjustment to items of income, gain, loss, deduction, or credit of a partnership (and any partner’s
distributive share thereof) is determined, and taxes, interest, or penalties attributable thereto are assessed and collected, at the
partnership level. These rules could result in partnerships in which we directly or indirectly invest being required to pay additional
taxes, interest and penalties as a result of an audit adjustment, and we, as a direct or indirect partner of these partnerships, could
be required to bear the economic burden of those taxes, interest, and penalties even though we, as a REIT, may not otherwise have been
required to pay additional corporate-level taxes as a result of the related audit adjustment. Investors are urged to consult their tax
advisors with respect to these changes and their potential impact on their investment in shares of our capital stock.
Tax
Consequences of Exercise of Exchange Rights. One or more of the partnership agreements may give holders of limited partnership units
the right to exchange their units into cash, subject to our right to pay for the units our Common Shares rather than with cash. The exchange
of units into shares would be treated as a taxable sale of the units to us on which the unit owners would generally recognize gain in
an amount equal to the value of the our Common Shares received plus the amount of liabilities of the applicable partnership allocable
to the units being exchanged, less the unit holder’s tax basis in those units. To the extent that the unit holder’s amount
realized on the transaction is attributable to the unit holder’s share of inventory or unrealized receivables of such partnership,
that portion may be recharacterized as ordinary income. No gain or loss would be recognized by us in such event. Our basis in such units
would be increased by the amount of cash and the market price of the shares used to acquire the units, and adjusted to reflect changes
in the liabilities of such partnership allocated to us as a result of acquiring such units.
Taxation
of U.S. Shareholders
Taxation
of Taxable U.S. Shareholders
The
following section applies to you only if you are a U.S. Shareholder. Generally, for purposes of this summary, a “U.S. Shareholder”
is a person (other than a partnership or entity treated as a partnership for U.S. federal income tax purposes) that is, for U.S. federal
income tax purposes:
| ● | an
individual citizen or resident of the United States for U.S. federal income tax purposes; |
| ● | a
corporation, or other entity taxable as a corporation, created or organized in or under the
laws of the United States, any state thereof or the District of Columbia; |
| ● | an
estate the income of which is subject to U.S. federal income taxation regardless of its source;
or |
| ● | a
trust if (1) a court within the United States is able to exercise primary supervision
over its administration and one or more U.S. persons have the authority to control all substantial
decisions of the trust or (2) the trust has a valid election in effect under current Treasury
Regulations to be treated as a U.S. person. |
If
a partnership or entity treated as a partnership for U.S. federal income tax purposes holds shares of our capital stock, the U.S. federal
income tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership. A partner
of a partnership holding shares of our capital stock should consult his, her or its own tax advisor regarding the U.S. federal income
tax consequences to the partner of the acquisition, ownership and disposition of such shares of our capital stock by the partnership.
Distributions.
Distributions (including any deemed distributions) that we make to our U.S. Shareholders and that we do not designate as “capital
gain dividends” or “qualified dividend income” (as described below) will be treated as dividends of ordinary income
to the extent they are made out of our current or accumulated earnings and profits. Our earnings and profits generally will be allocated
first to distributions on shares of our preferred stock and then to distributions on our Common Shares. In addition, for taxable years
beginning before January 1, 2026, individuals, trusts and estates generally are entitled to up to a 20% pass-through deduction with respect
to that ordinary dividend income for purposes of determining their U.S. federal income tax (but not for purposes of the 3.8% Medicare
tax), so long as certain holding period requirements have been met. Corporate shareholders are not entitled to the pass-through deduction
or the dividends-received deduction with respect to our distributions. A noncorporate U.S. Shareholder’s ability to claim the deduction
equal to 20% of qualifying dividends received may be limited by the U.S. Shareholder’s particular circumstances. In addition, for
any noncorporate U.S. Shareholder that claims a deduction in respect of qualifying dividends, the maximum threshold for the accuracy-related
penalty with respect to substantial understatements of income tax could be reduced from 10% to 5%. Distributions in excess of our current
and accumulated earnings and profits are treated first as a tax-deferred return of capital to the U.S. Shareholder, reducing the U.S.
Shareholder’s tax basis in his, her or its shares of our capital stock by the amount of such distribution, but not below zero,
and then as capital gain. Because our earnings and profits are reduced for depreciation and other non-cash items, it is possible that
a portion of each distribution will constitute a tax-deferred return of capital. Additionally, because distributions in excess of our
earnings and profits reduce the U.S. Shareholder’s tax basis in shares of our capital stock, this will increase the U.S. Shareholder’s
gain, or reduce the U.S. Shareholder’s loss, on any subsequent sale of shares of our capital stock.
Distributions
that are designated as capital gain dividends will be taxed as long-term capital gain to the extent they do not exceed our actual net
capital gain for the taxable year, without regard to the period for which the U.S. Shareholder that receives such distribution has held
its shares of our capital stock. However, corporate shareholders may be required to treat up to 20% of some types of capital gain dividends
as ordinary income. We also may decide to retain, rather than distribute, our net capital gain and pay any tax thereon. In such instances,
U.S. Shareholders would include their proportionate shares of such gain in income as long-term capital gain, receive a credit on their
returns for their proportionate share of our tax payments, and increase the tax basis of their shares of our capital stock by the after-tax
amount of such gain. Capital gains that we distribute, or are treated as distributing, to our shareholders must be allocated between
shares of our preferred stock and our Common Shares. We intend to allocate capital gains dividends based on the relative amount of total
dividends paid or deemed paid for U.S. federal income tax purposes to holders of all classes of our capital stock for the year.
With
respect to U.S. Shareholders who are taxed at the rates applicable to individuals, we may elect to designate a portion of our distributions
(including any deemed distributions) paid to such U.S. Shareholders as qualified dividend income. A portion of a distribution that is
properly designated as qualified dividend income is taxable to non-corporate U.S. Shareholders as capital gain; provided, that
the U.S. Shareholder has held the shares of our capital stock with respect to which the distribution is made for more than 60 days during
the 121-day period beginning on the date that is 60 days before the date on which such shares of our capital stock became ex-dividend
with respect to the relevant distribution. The maximum amount of our distributions eligible to be designated as qualified dividend income
for a taxable year is equal to the sum of:
| ● | the
qualified dividend income received by us during such taxable year from C corporations (including
any TRSs); |
| ● | the
excess of any “undistributed” REIT taxable income recognized during the immediately
preceding year over the U.S. federal income tax paid by us with respect to such undistributed
REIT taxable income; and |
| ● | the
excess of any income recognized during the immediately preceding year attributable to the
sale of a built-in-gain asset that was acquired in a carry-over basis transaction from a
non-REIT corporation or had appreciated at the time our REIT election became effective over
the U.S. federal income tax paid by us with respect to such built-in gain. |
Although
U.S. Shareholders generally will recognize taxable income in the year that a distribution is received, any distribution that we declare
in October, November or December of any year that is payable to a U.S. Shareholder of record on a specific date in any such month will
be treated as both paid by us and received by the U.S. Shareholder on December 31 of the year it was declared even if paid by us during
January of the following calendar year.
We
have the ability to declare and pay a large portion of a distribution on our Common Shares in shares of our Common Shares. As long as
a portion of such distribution is paid in cash (which portion can be as low as 20%) and certain requirements are met, the entire distribution
(to the extent of our current or accumulated earnings and profits) will be treated as a dividend for U.S. federal income tax purposes.
As a result, U.S. Shareholders will be taxed on 100% of the dividend in the same manner as a cash dividend, even though most of the dividend
was paid in shares of our capital stock. In general, any distribution on shares of our capital stock will be taxable as a dividend, unless
the entire distribution is paid in shares of our Common Shares, which would be treated as a non-taxable distribution.
Distributions
that we make and gains arising from the sale or exchange by a U.S. Shareholder of our capital stock will not be treated as passive activity
income. As a result, U.S. Shareholders will not be able to apply any “passive losses” against income or gain relating to
our capital stock. To the extent that distributions we make do not constitute a return of capital, they will be treated as investment
income for purposes of computing the investment interest limitation.
Any
net operating losses or capital losses we have that are carried forward to future tax years may be used in those later years, subject
to limitations, to reduce the amount of distributions required to satisfy the REIT distribution requirements. However, because we are
not a pass-through entity for U.S. federal income tax purposes, U.S. Shareholders may not use any of our operating or capital losses
to reduce their tax liabilities.
Sales
of Shares. The amount of net capital gain or loss recognized upon the sale or other disposition of shares of our capital stock by
a U.S. Shareholder generally would equal the difference between (x) the amount of cash and fair market value of any property received
in the sale and (y) the U.S. Stockholder’s tax basis in the shares sold. Gain on a sale of shares of our capital stock by a U.S.
non-corporate investor generally will qualify for reduced U.S. federal income tax rates applicable to long-term net capital gain, provided
that the investor held the shares of our capital stock for longer than one year prior to the sale. However, any loss from a sale or exchange
of shares of our capital stock by a U.S. Shareholder who has held the shares of our capital stock for one year or less generally will
be treated as a long-term capital loss to the extent that the U.S. Shareholder treated our distributions as long-term capital gain. The
use of capital losses is subject to limitations. Gains recognized by U.S. Shareholders that are corporations are subject to U.S. federal
income tax at the corporate tax rate. Except in limited circumstances, as summarized above with respect to capital gains dividends or
qualified dividend income, the reduced tax rate for long-term net capital gains will not apply to dividends paid by us.
Redemption
of Shares of Our Preferred Stock. A redemption of shares of our preferred stock will be treated under Code Section 302 as a distribution
that is taxable as dividend income (to the extent of our current or accumulated earnings and profits), unless the redemption satisfies
one or more of certain tests set forth in Code Section 302(b) enabling the redemption to be treated as a sale or exchange of the redeemed
shares. The redemption will satisfy one of these tests if it (i) is “substantially disproportionate” with respect to the
U.S. Shareholder’s interest in shares of our capital stock, (ii) results in a “complete termination” of the U.S. Shareholder’s
interest in all shares of our classes or series of capital stock, or (iii) is “not essentially equivalent to a dividend”
with respect to the U.S. Shareholder, all within the meaning of Code Section 302(b). In determining whether one of these tests has been
met, a U.S. Shareholder generally must include shares of our capital stock considered to be owned by the U.S. Shareholder by reason of
certain constructive ownership rules set forth in the Code, as well as shares of our capital stock actually owned by the U.S. Shareholder.
If a U.S. Shareholder actually or constructively owns none of our Common Shares, a redemption of the U.S. Stockholder’s preferred
stock will qualify for sale or exchange treatment because the redemption would not be “essentially equivalent to a dividend”
as defined by the Code. Because the determination as to whether any of the three alternative tests of Code Section 302(b) described above
will be satisfied with respect to any particular U.S. Shareholder of shares of our preferred stock depends upon the facts and circumstances
at the time that the determination must be made, prospective investors are urged to consult their tax advisors to determine the tax treatment
to the prospective investor of a redemption of shares of our preferred stock.
If
a redemption of shares of our preferred stock does not meet any of the three tests described above, the redemption proceeds will be treated
as a taxable distribution, as described above. In that case, a U.S. Shareholder’s adjusted tax basis in the redeemed shares of
our preferred stock will be transferred to the remaining shares of our capital stock held by the U.S. Shareholder. If the U.S. Shareholder
does not retain any shares of our capital stock, the tax basis could be transferred to a related person that holds shares of our capital
stock or the tax basis may be lost.
Conversion
of Shares of Our Preferred Stock. Upon the occurrence of a Change of Control during a continuing Delisting Event, unless we have
elected to exercise our redemption right, each holder of preferred stock will, under certain circumstances, have the right to convert
some of or all the shares of the Series A Preferred Stock held by the holder into shares of our Common Shares. Except as provided below,
(i) a U.S. Shareholder generally will not recognize gain or loss upon the conversion of shares of our preferred stock into shares of
our Common Shares, and (ii) a U.S. Shareholder’s tax basis and holding period in our Common Shares received upon conversion generally
will be the same as those of the converted shares of our preferred stock (but the tax basis will be reduced by the portion of adjusted
tax basis allocated to any fractional share exchanged for cash). Any of our Common Shares received in a conversion that are attributable
to accumulated and unpaid dividends on the converted shares of our preferred stock will be treated as a distribution that is potentially
taxable as a dividend. Cash received upon conversion in lieu of a fractional share generally will be treated as a payment in a taxable
exchange for the fractional share, and gain or loss will be recognized on the receipt of cash in an amount equal to the difference between
the amount of cash received and the adjusted tax basis allocable to the fractional share deemed exchanged. This gain or loss will be
long-term capital gain or loss if the U.S. Shareholder has held the shares of our preferred stock for more than one year at the time
of conversion. U.S. Shareholders are urged to consult with their tax advisors regarding the U.S. federal income tax consequences of any
transaction by which the holder exchanges of our Common Shares received on a conversion of shares of our preferred stock for cash or
other property.
Taxation
of Tax-Exempt U.S. Shareholders
U.S.
tax-exempt entities, including qualified employee pension and profit-sharing trusts and individual retirement accounts, generally are
exempt from U.S. federal income tax except with respect to their unrelated business taxable income (“UBTI”). While many investments
in real estate may generate UBTI, distributions paid on shares of our capital stock should not constitute UBTI unless the tax-exempt
entity (i) has borrowed funds or otherwise incurred acquisition indebtedness to acquire its shares of stock, or (ii) otherwise uses the
shares of stock in an unrelated trade or business.
In
certain circumstances, a pension trust that owns more than 10% of our capital stock could be required to treat a percentage of the dividends
it receives from us as UBTI, if we are a “pension-held REIT.” We will not be a pension-held REIT unless either (1) one pension
trust owns more than 25% of the value of our capital stock, or (2) a group of pension trusts, each individually holding more than 10%
of the value of our capital stock, collectively owns more than 50% of our capital stock. Certain restrictions on ownership and transfer
of our capital stock generally should prevent a tax-exempt entity from owning more than 10% of the value of our capital stock and, in
turn, should prevent us from becoming a pension-held REIT.
Prospective
tax-exempt purchasers should consult their own tax advisors and financial planners as to the applicability of these rules and consequences
to their particular circumstances.
Backup
Withholding and Information Reporting
We
will report to our U.S. Shareholders and the IRS the amount of dividends (including deemed dividends) paid during each calendar year
and the amount (if any) of any tax withheld. Under the backup withholding rules, a U.S. Shareholder may be subject to backup withholding
at the current rate of 24% until December 31, 2025 and 28% thereafter with respect to dividends (including any deemed dividends) paid
unless the U.S. Shareholder (1) is a corporation or comes within other exempt categories and, when required, demonstrates this fact or
(2) provides a taxpayer identification number or social security number, certifies under penalties of perjury that such number is correct
and that such U.S. Shareholder is not subject to backup withholding and otherwise complies with applicable requirements of the backup
withholding rules. A U.S. Shareholder that does not provide his, her or its correct taxpayer identification number or social security
number also may be subject to penalties imposed by the IRS. In addition, we may be required to withhold a portion of capital gain distribution
to any U.S. Shareholder who fails to certify their non-foreign status or with respect to which the IRS notifies us that such U.S. Shareholder
is subject to backup withholding. See the “— Taxation of Non-U.S. Shareholders” portion of this section.
Backup
withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit
against such U.S. Stockholder’s U.S. federal income tax liability, provided the required information is timely furnished to the
IRS.
Taxation
of Non-U.S. Shareholders
Generally,
for purposes of this summary, a “Non-U.S. Stockholder” means a person (other than a partnership or entity treated as a partnership
for U.S. federal income tax purposes) that is not a U.S. Stockholder.
Distributions — In
General. Distributions that we make to our Non-U.S. Shareholders that are not attributable to gain from our sales or exchanges of
United States real property interests (“USRPIs”), and that are not designated by us as capital gain dividends will be treated
as dividends of ordinary income to the extent that they are made out of our current or accumulated earnings and profits. Our earnings
and profits generally will be allocated first to distributions on shares of our preferred stock before being allocated to distributions
on our Common Shares. Such ordinary dividends to Non-U.S. Shareholders generally are subject to a 30% withholding tax at the time of
distribution, unless this dividend is effectively connected with a U.S. trade or business of the Non-U.S. Shareholder or an applicable
tax treaty reduces or eliminates that tax. Under some treaties, however, lower rates generally applicable to dividends do not apply to
dividends from REITs. Any constructive dividends on the preferred stock also would be subject to U.S. federal withholding tax to the
same extent as an actual distribution. Because constructive dividends would not give rise to any cash from which any applicable withholding
tax could be satisfied, we may withhold the U.S. federal tax on such dividend from cash proceeds otherwise payable to a Non-U.S. Shareholder.
If
income from the investment in shares of our capital stock is treated as effectively connected with the Non-U.S. Shareholder’s conduct
of a U.S. trade or business, the Non-U.S. Shareholder generally will be subject to a tax at the graduated rates applicable to ordinary
income, in the same manner as U.S. Shareholders are taxed with respect to such dividends (and also may be subject to the 30% branch profits
tax in the case of a Non-U.S. Shareholder that is a foreign corporation that is not entitled to any treaty exemption). In general, Non-U.S.
Shareholders will not be considered to be engaged in a U.S. trade or business solely as a result of their ownership of shares of our
capital stock.
Distributions
in excess of our current and accumulated earnings and profits will not be taxable to a Non-U.S. Shareholder to the extent they do not
exceed the adjusted tax basis of the Non-U.S. Shareholder’s shares of our capital stock. Instead, they will reduce the adjusted
tax basis of such shares of our capital stock. To the extent that such distributions exceed the adjusted tax basis of a Non-U.S. Shareholder’s
shares of our capital stock, they will give rise to tax liability if the Non-U.S. Shareholder would otherwise be subject to tax on any
gain from the sale or disposition of its shares of our capital stock, as described in the “Sales of Shares” portion of this
Section below.
Distributions
Attributable to Sale or Exchange of Real Property. Pursuant to the Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”),
distributions that are attributable to gain from our sales or exchanges of USRPIs (“USRPI capital gain”) will, except as
described below, be taxed to a Non-U.S. Shareholder as if such gain were effectively connected with a U.S. trade or business. Non-U.S.
Shareholders therefore would be taxed at the normal capital gain rates applicable to U.S. Shareholders (without regard to whether we
designate the distribution as a capital gain dividend), and would be subject to a special alternative minimum tax in the case of nonresident
alien individuals. Also, such distributions may be subject to a 30% branch profits tax in the hands of a corporate Non-U.S. Shareholder
not entitled to any treaty exemption. We (or applicable withholding agent) are required by the Treasury Regulations to withhold 21% of
any distribution that we could designate as a capital gain dividend. However, if we designate as a capital gain dividend a distribution
made before the day we actually effect the designation, then although the distribution may be taxable to a Non-U.S. Shareholder, withholding
would not apply to the distribution under FIRPTA. Rather, we must effect the withholding from distributions made on and after the date
of the designation, until the distributions so withheld equal the amount of the prior distribution designated as a capital gain dividend.
The Non-U.S. Shareholder may credit the amount withheld against the Non-U.S. Shareholder’s U.S. tax liability. Such withheld amounts
do not represent actual tax liabilities and are creditable by the Non-U.S. Shareholder against its actual U.S. federal income tax liabilities.
The Non-U.S. Shareholder would be entitled to a refund of any amounts withheld in excess of such Non-U.S. Shareholder’s actual
U.S. federal income tax liabilities, provided that the Non-U.S. Shareholder files applicable returns or refund claims with the IRS. We
anticipate that distributions in respect of our Common Shares will be subject to the rules set forth in this paragraph.
However,
generally, pursuant to FIRPTA, distributions of USRPI capital gains are not treated as effectively connected income for a Non-U.S. Shareholder
and instead are treated and taxed as ordinary dividends if (a) the distribution is received with respect to a class of stock
that is regularly traded on an established securities market located in the United States; and (b) the Non-U.S. Shareholder does not
own more than 10% of that class of stock at any time during the one-year period ending on the date of such distribution. Distributions
that qualify for this exception are subject to withholding tax in the manner described above as dividends of ordinary income. We anticipate
that shares of our Series A Preferred Stock will be “regularly traded” on an established securities market for the foreseeable
future, although, no assurance can be given that this will be the case.
In
addition, distributions to certain non-U.S. publicly traded shareholders that meet certain record-keeping and other requirements (“qualified
shareholders”) are exempt from FIRPTA, except to the extent owners of those qualified shareholders that are not also qualified
shareholders own, actually or constructively, more than 10% of our capital stock. Furthermore, distributions to “qualified foreign
pension funds” or entities all of the interests of which are held by “qualified foreign pension funds” are exempt from
FIRPTA. Non-U.S. Shareholders should consult their tax advisors regarding the application of these rules.
A
distribution is not attributable to USRPI capital gain if we held an interest in the underlying asset solely as a creditor. Capital gain
dividends received by a Non-U.S. Shareholder that are attributable to dispositions of our assets other than USRPIs are not subject to
U.S. income or withholding tax, unless (1) the gain is effectively connected with the Non-U.S. Shareholder’s U.S. trade or business,
in which case the Non-U.S. Shareholder would be subject to the same treatment as U.S. Shareholders with respect to such gain, or (2)
the Non-U.S. Shareholder is a nonresident alien individual who was present in the United States for 183 days or more during the taxable
year and has a “tax home” in the United States, in which case the Non-U.S. Shareholder will incur tax on his or her capital
gains.
Sales
of Shares. Gain recognized by a Non-U.S. Shareholder upon a sale of shares of our capital stock generally will not be subject to
U.S. federal income taxation; provided, that: (1) such gain is not effectively connected with the conduct by such Non-U.S. Shareholder
of a trade or business within the U.S.; (2) the Non-U.S. Shareholder is an individual and is not present in the U.S. for 183 days or
more during the taxable year and certain other conditions apply; and (3)(A) our REIT is “domestically controlled,” which
generally means that less than 50% in value of our capital stock continues to be held directly or indirectly by foreign persons during
a continuous five-year period ending on the date of disposition or, if shorter, during the entire period of our existence, or (B) the
shares sold are of a class of our capital stock that is “regularly traded” on an established securities market and the selling
Non-U.S. Shareholder has not held more than 10% of our outstanding shares of that class of stock at any time during the five-year period
ending on the date of the sale.
We
believe that we qualify as “domestically controlled.” However, even if we were not domestically controlled, we anticipate
that shares of our Series A Preferred Stock (but not our Common Shares) will be “regularly traded” on an established securities
market for the foreseeable future, although no assurance can be given that this will be the case. If the gain on the sale of shares of
our capital stock were to be subject to U.S. federal income taxation, the Non-U.S. Shareholder would be subject to the same treatment
as U.S. Shareholders with respect to such gain, and the purchaser of such shares of our capital stock may be required to withhold a portion
of the gross purchase price.
In
addition, dispositions of our capital stock by qualified shareholders are exempt from FIRPTA, except to the extent owners of those qualified
shareholders that are not also qualified shareholders own, actually or constructively, more than 10% of our capital stock. Furthermore,
dispositions of our capital stock by “qualified foreign pension funds” or entities all of the interests of which are held
by “qualified foreign pension funds” are exempt from FIRPTA. Non-U.S. Shareholders should consult their tax advisors regarding
the application of these rules.
Medicare
Tax
Certain
net investment income earned by U.S. citizens and resident aliens and certain estates and trusts is subject to a 3.8% Medicare tax. Net
investment income includes, among other things, dividends on and capital gains from the sale or other disposition of shares of our capital
stock. Holders of shares of our capital stock should consult their tax advisors regarding the effect, if any, of this tax on their ownership
and disposition of such shares.
Foreign
Account Tax Compliance Act (“FATCA”)
Withholding
taxes may apply to certain types of payments made to “foreign financial institutions” (including investment entities) and
certain other non-U.S. entities as designated in the Code, the Treasury Regulations, or applicable intergovernmental agreement between
the United States and a foreign country. A withholding tax of 30% generally will be imposed on dividends on, and gross proceeds from
the sale or other disposition of, shares of our capital stock paid to (a) a foreign financial institution (as the beneficial owner or
as an intermediary for the beneficial owners) unless such foreign financial institution agrees to verify, report and disclose its U.S.
accountholders and meets certain other specified requirements or (b) a non-financial foreign entity that is the beneficial owner of the
payment unless such entity certifies that it does not have any substantial U.S. owners or furnishes identifying information regarding
each substantial U.S. owner and such entity meets certain other specified requirements. The Treasury Regulations provide that these rules
generally apply to payments of dividends on shares of our capital stock. We will not pay any additional amounts in respect of any amounts
withheld. U.S. Shareholders and Non-U.S. Shareholders are encouraged to consult their tax advisors regarding the particular consequences
to them of this legislation and guidance.
Other
Tax Considerations
State,
Local and Foreign Taxes. We and you may be subject to state, local or foreign taxation in various jurisdictions, including those
in which we transact business or reside. Our and your state, local and foreign tax treatment may not conform to the U.S. federal income
tax consequences summarized above. Any foreign taxes incurred by us would not pass through to U.S. Shareholders as a credit against their
U.S. federal income tax liability. You should consult your own tax advisors and financial planners regarding the effect of state, local
and foreign tax laws on an investment in shares of our capital stock.
Legislative
Proposals. You should recognize that our and your present U.S. federal income tax treatment may be modified by legislative, judicial
or administrative actions at any time, which may be retroactive in effect. The rules dealing with U.S. federal income taxation are constantly
under review by Congress, the IRS and the Treasury, and statutory changes as well as promulgation of new regulations, revisions to existing
statutes, and revised interpretations of established concepts occur frequently. We are not aware of any pending legislation that would
materially affect our or your taxation as described in this prospectus. You should, however, consult your advisors concerning the status
of legislative proposals that may pertain to a purchase of our securities.
LEGAL
MATTERS
Blank
Rome LLP, New York, New York has acted as our securities counsel. Certain matters of Maryland law will be passed upon for us by Gordon
Feinblatt LLC, Baltimore, Maryland and certain tax matters will be passed upon for us by Neuberger Quinn Gielen Rubin Gibber P.A., Baltimore,
Maryland. In addition, counsel that will be named in the applicable prospectus supplement will pass upon the validity of any securities
offered under the applicable prospectus supplement for any underwriters or agents.
EXPERTS
The
consolidated financial statements of Power REIT incorporated in this prospectus by reference to the Annual Report on Form 10-K for the
year ended December 31, 2023 have been so incorporated in reliance on the report (which contains an explanatory paragraph regarding the
Company’s ability to continue as a going concern) of MaloneBailey, LLP, an independent registered public accounting firm, given
on the authority of said firm as experts in auditing and accounting.
WHERE
YOU CAN FIND MORE INFORMATION
This
prospectus is part of a registration statement we filed with the SEC. This prospectus does not contain all of the information set forth
in the registration statement and the exhibits to the registration statement. For further information with respect to us and the securities
we are offering under this prospectus, we refer you to the registration statement and the exhibits and schedules filed as a part of the
registration statement. Neither we nor any agent, underwriter or dealer has authorized any person to provide you with different information.
We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information
in this prospectus is accurate as of any date other than the date on the front page of this prospectus, regardless of the time of delivery
of this prospectus or any sale of the securities offered by this prospectus.
We
file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the
public at the SEC’s website at www.sec.gov. Additional information about Power REIT is contained at our website, www.pwreit.com.
Information on our website is not incorporated by reference into this prospectus. We make available on our website our SEC filings as
soon as reasonably practicable after those reports are filed with the SEC.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The
SEC allows us to “incorporate by reference” information into this prospectus, which means that we can disclose important
information to you by referring you to another document filed separately with the SEC. The SEC file number for the documents incorporated
by reference in this prospectus is 001-36312. The documents incorporated by reference into this prospectus contain important information
that you should read about us.
The
following documents are incorporated by reference into this prospectus:
| |
● |
Our
Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on March 29, 2024; |
| |
|
|
| |
● |
Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 2024, filed with the SEC on October 31, 2024; |
| |
|
|
| |
● |
Our
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2024, filed with the SEC on August 7, 2024 and our Quarterly
Report on Form 10-Q/A (Amendment No. 1) for the fiscal quarter ended June 30, 2024, filed with the SEC on September 24, 2024; |
| |
|
|
| |
● |
Our
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024, filed with the SEC on May 10, 2024; |
| |
|
|
| |
● |
Our
Current Reports on Form 8-K filed with the SEC on January
9, 2024, January
31, 2024, August
16, 2024, September
4, 2024, September
24, 2024, September
26, 2024 (other than as indicated therein), September
26, 2024 and January 24, 2025; |
| |
|
|
| |
● |
Our
Definitive Proxy Statement on Schedule 14A filed on August 30, 2024; and |
| |
|
|
| |
● |
The
description of our Common Shares set forth in: (i) our registration statement on Form 8-A filed with the SEC on February 11, 2014,
including any amendments thereto or reports filed for the purposes of updating this description, and (ii) Exhibit 4.1 to our Annual
Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on March 24, 2021. |
We
also incorporate by reference into this prospectus all documents (other than portions of those documents not deemed filed) that are filed
by us with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (Commission File Number 001-36312): (i) on or after
the date of the initial filing of the registration statement of which this prospectus forms a part and prior to effectiveness of such
registration statement, and (ii) on or after the date of this prospectus but prior to the termination of the offering (i.e., until the
earlier of the date on which all of the securities registered hereunder have been sold or the registration statement of which this prospectus
forms a part has been withdrawn). These documents include periodic reports, such as Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K, as well as proxy statements. Information in such future filings updates and supplements the
information provided in this prospectus.
We
will provide to each person, including any beneficial owner, to whom a prospectus is delivered, without charge upon written or oral request,
a copy of any or all of the documents that are incorporated by reference into this prospectus but not delivered with this prospectus,
including exhibits that are specifically incorporated by reference into such documents. You can request a copy of these filings, at no
cost, by writing or telephoning us at the following address or telephone number:
Power
REIT
301
Winding Road
Old
Bethpage, NY 11804
(212)
750-0371
Any
statement contained in this prospectus or in a document incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or in any other
subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes that statement.
Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
You
may also access these documents, free of charge, on the SEC’s website at www.sec.gov or on our website at www.pwreit.com.
The information contained in, or that can be accessed through, our website is not incorporated by reference in, and is not part of, this
prospectus or any accompanying prospectus supplement.
In
accordance with Rule 412 of the Securities Act, any statement contained in a document incorporated by reference herein shall be deemed
modified or superseded to the extent that a statement contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such statement.
You
should rely only on information contained in, or incorporated by reference into, this prospectus and any prospectus supplement. We have
not authorized anyone to provide you with information different from that contained in this prospectus or incorporated by reference into
this prospectus. We are not making offers to sell the securities in any jurisdiction in which such an offer or solicitation is not authorized
or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such an
offer or solicitation.
The
information contained in this prospectus is not complete and may be changed. These securities may not be sold until the registration
statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and
is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject
to Completion, Dated January 24, 2025
PROSPECTUS
Up
to $2,100,000 of
Common
Shares
We
have entered into a sales agreement, dated January 24, 2025 (the “Sales Agreement”), with A.G.P./Alliance Global Partners
(“A.G.P.” or the “Sales Agent”) pursuant to which we may, from time to time, issue and sell our common shares,
par value $0.001 per share (the “Common Shares”), covered by this prospectus from time to time through or to the Sales Agent,
acting as our agent or principal.
Sales
of our Common Shares, if any, under this prospectus will be made in sales deemed to be an “at the market offering” as defined
in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended (the “Securities Act”). The Sales Agent is not
required to sell any specific amount, but will act as Sales Agent on a commercially reasonable efforts basis consistent with their normal
trading and sales practices, on mutually agreed terms between the Sales Agent and us. There is no arrangement for funds to be received
in any escrow, trust or similar arrangement.
As
Sales Agent, A.G.P. is entitled to compensation at a fixed commission rate equal to 3.0% of the gross proceeds of each sale of our Common
Shares under the Sales Agreement. In connection with the sale of our Common Shares on our behalf, the Sales Agent will be deemed to be
an “underwriter” within the meaning of the Securities Act and the compensation of the Sales Agent will be deemed to be underwriting
commissions or discounts. We have also agreed to provide indemnification and contribution to the Sales Agent with respect to certain
liabilities, including liabilities under the Securities Act.
Our
Common Shares are listed on the NYSE American under the symbol “PW.” On January 21, 2025, the last reported sale price of
our Common Shares on the NYSE American was $1.22 per share.
As
of the date of this prospectus, the aggregate market value of our outstanding Common Shares held by non-affiliates is approximately $6,300,659,
which is calculated based on 2,775,621 outstanding Common Shares held by non-affiliates and a price of $2.27 per share, the closing price
of our Common Shares on December 5, 2024, which is the highest closing sale price of our Common Shares on the NYSE American within the
prior 60 days of this prospectus. During the prior twelve calendar month period that ends on and includes the date hereof, we have not
offered or sold any of our Common Shares pursuant to General Instruction I.B.6 to Form S-3. Pursuant to General Instruction I.B.6 of
Form S-3, in no event will we sell securities pursuant to this prospectus with a value of more than one-third of the aggregate market
value of our Common Shares held by non-affiliates in any 12-month period, so long as the aggregate market value of our Common Shares
held by non-affiliates is less than $75 million.
Investing
in our Common Shares involves a high degree of risk. Before making an investment decision, please read the information under the heading
“Risk Factors” beginning on page S-7 of this prospectus and in the documents incorporated by reference into this prospectus.
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.
A.G.P.
The
date of this prospectus is , 2025
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS
This
prospectus relates to part of a registration statement on Form S-3 that we have filed with the Securities and Exchange Commission (the
“SEC”) utilizing a “shelf” registration process. Under this shelf registration process, we may sell any combination
of the securities described in our base prospectus included in the shelf registration statement in one or more offerings up to a total
aggregate offering price of $50,000,000. The $2,100,000 of Common Shares that may be offered, issued and sold under this prospectus is
included in the $50,000,000 of securities that may be offered, issued and sold by us pursuant to our shelf registration statement. In
connection with such offers and when accompanied by the base prospectus included in the registration statement of which this prospectus
is a part, this prospectus will be deemed a prospectus supplement to such base prospectus.
This
prospectus relates to the offering of our Common Shares. Before buying any of our Common Shares that we are offering, we urge you to
carefully read this prospectus, together with the information incorporated by reference as described under the headings “Where
You Can Find More Information” and “Incorporation of Certain Information by Reference” in this prospectus. These documents
contain important information that you should consider when making your investment decision.
This
prospectus describes the terms of this offering of our Common Shares and also adds to and updates information contained in the documents
incorporated by reference into this prospectus. To the extent there is a conflict between the information contained in this prospectus,
on the one hand, and the information contained in any document incorporated by reference into this prospectus that was filed with the
SEC before the date of this prospectus, on the other hand, you should rely on the information in this prospectus. If any statement in
one of these documents is inconsistent with a statement in another document having a later date (for example, a document incorporated
by reference into this prospectus) the statement in the document having the later date modifies or supersedes the earlier statement.
You
should rely only on the information contained in or incorporated by reference in this prospectus and in any free writing prospectus that
we have authorized for use in connection with this offering. We have not, and the Sales Agent have not, authorized anyone to provide
you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are
not, and the Sales Agent is not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted.
You should assume that the information appearing in this prospectus, the documents incorporated by reference in this prospectus, and
in any free writing prospectus that we have authorized for use in connection with this offering, is accurate only as of the date of those
respective documents. Our business, financial condition, results of operations and prospects may have changed since those dates. You
should carefully read this prospectus, the documents incorporated by reference in this prospectus, and any free writing prospectus that
we have authorized for use in connection with this offering, in their entirety before making an investment decision.
We
further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document
that is incorporated by reference in this prospectus were made solely for the benefit of the parties to such agreement, including, in
some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation,
warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly,
such representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.
This
prospectus contains and incorporates by reference market data and industry statistics and forecasts that are based on independent industry
publications and other publicly available information. Although we believe that these sources are reliable, we do not guarantee the accuracy
or completeness of this information and we have not independently verified this information. Although we are not aware of any misstatements
regarding the market and industry data presented in this prospectus and the documents incorporated herein by reference, these estimates
involve risks and uncertainties and are subject to change based on various factors, including those discussed under the heading “Risk
Factors” in this prospectus and under similar headings in the other documents that are incorporated by reference into this prospectus.
Accordingly, investors should not place undue reliance on this information.
Except
as otherwise indicated herein or as the context otherwise requires, references in this prospectus to “Power REIT,” the “Company,”
“we,” “us,” “our” and similar references refer to Power REIT, an entity incorporated under the laws
of the State of Maryland, and where appropriate our consolidated subsidiaries.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus, including the documents that we incorporate by reference herein, may contain, forward-looking statements within the meaning
of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (“the Exchange Act”),
including statements regarding our future financial condition, business strategy and plans and objectives of management for future operations.
Forward-looking statements include all statements that are not historical facts. In some cases, you can identify forward-looking statements
by terminology such as “believe,” “will,” “may,” “estimate,” “continue,”
“anticipate,” “intend,” “should,” “plan,” “might,” “approximately,”
“expect,” “predict,” “could,” “potentially” or the negative of these terms or other similar
expressions. Forward-looking statements include statements regarding our intentions, beliefs, projections, outlook, analyses or current
expectations.
Discussions
containing these forward-looking statements may be found, among other places, in the sections entitled “Business,” “Risk
Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained
in the documents incorporated by reference in this prospectus, including our most recent Annual Report on Form 10-K and our Quarterly
Reports on Form 10-Q, as well as any amendments thereto.
These
statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors
that could cause our actual results, levels of activity, performance or achievement to differ materially from those expressed or implied
by these forward-looking statements. We discuss in greater detail, and incorporate by reference into this prospectus in their entirety,
many of these risks and uncertainties under the section entitled “Risk Factors” included in our most recent Annual Report
on Form 10-K and our Quarterly Reports on Form 10-Q, as well as any amendments thereto, filed with the SEC, which are incorporated by
reference into this prospectus. Additional factors are discussed under the section entitled “Risk Factors” in this prospectus
and any free writing prospectus and under similar headings in the other documents that are incorporated by reference into this prospectus.
These statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties.
New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. We
undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required
by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. All
forward-looking statements are qualified in their entirety by this cautionary statement.
PROSPECTUS
SUMMARY
The
following summary highlights information contained elsewhere in this prospectus or incorporated by reference herein and does not contain
all the information that may be important to purchasers of our securities. This summary is not intended to be complete and does not contain
all of the information that you should consider before deciding to invest in our securities. You should read this entire prospectus carefully,
especially the “Risk Factors” section beginning on page S-7 and other documents or information included or incorporated by
reference in this prospectus before making an investment decision.
Overview
of the Company
Power
REIT (the “Registrant” or the “Trust”, and together with its consolidated subsidiaries, “we”, “us”,
or “Power REIT”, unless the context requires otherwise) is a Maryland-domiciled, internally-managed real estate investment
trust (a “REIT”) that owns a portfolio of real estate assets related to transportation, energy infrastructure and Controlled
Environment Agriculture (“CEA”) in the United States.
We
are structured as a holding company and own our assets through twenty-four direct and indirect wholly owned, special purpose subsidiaries
that have been formed in order to hold real estate assets, obtain financing and generate lease revenue. As of September 30, 2024, the
Trust’s assets consisted of approximately 112 miles of railroad infrastructure and related real estate which is owned by its subsidiary
Pittsburgh & West Virginia Railroad (“P&WV”), approximately 447 acres of fee simple land leased to a number of utility
scale solar power generating projects with an aggregate generating capacity of approximately 82 Megawatts (“MW”) and approximately
249 acres of land with approximately 2,112,000 square feet of existing or under construction CEA properties in the form of greenhouses.
In
2019, Power REIT pivoted to focus on greenhouses as a technology play in the form of real estate. Over the past five years, a significant
amount of capital flowed into the CEA sector in the United States. CEA facilities generally are either indoor warehouse facilities that
require lights for plant growth and heating, ventilation and air conditioning to maintain the climate or greenhouses, which benefit from
free and natural sunlight and proven approaches to maintain a proper growing environment. Our investment thesis was based on greenhouses
as sustainable approach to growing certain crops.
Power
REIT invested in greenhouses for state-licensed cannabis and food cultivation. Unfortunately, the market for both opportunities has been
challenging and the greenhouse portfolio has performed poorly with significant vacancy. Currently, the entire greenhouse portfolio is
being marketed for sale but the market to sell these properties is weak. We continue to explore all options to monetize these assets.
As previously disclosed in our SEC filings, the greenhouse portfolio secures a loan, which loan is currently in default. The loan is
non-recourse to Power REIT, which reduces our exposure.
While
we may continue to explore opportunities in the greenhouse and cannabis space, we are now exploring new opportunities. The real estate
market is in a state of transition and experiencing a wave of distressed properties due to several factors, including economic downturns,
shifting property demand in a post-COVID environment, rising interest rates and mortgage defaults. We believe the current environment
can create significant opportunities for Power REIT. We are focused on identifying special opportunities in the form of investing in
distressed situations including debt and other types of secured interests in real estate, distressed properties and real estate related
companies. As part of moving Power REIT forward, we are looking to selectively raise capital.
General
Corporate Information
Power
REIT is incorporated in the State of Maryland as a real estate investment trust. Power REIT was formed in August 2011 to effect a triangular
merger of the Pittsburgh & West Virginia Railroad (“Reorganization”). Pittsburgh & West Virginia Railroad was a publicly
traded REIT prior to the Reorganization and was listed on the American Stock Exchange in 1967. Concurrent with the Reorganization, which
was completed on December 2, 2011, Power REIT became listed on the NYSE American under the ticker symbol “PW” and Pittsburgh
& West Virginia Railroad survived the Reorganization as a wholly owned, special purpose subsidiary of Power REIT with a sole purpose
of owning and managing its railroad property. Power REIT is an internally managed REIT.
Our
principal executive offices are located at 301 Winding Road, Old Bethpage, New York 11804 and our offices can be reached by telephone
at (212) 750-0371. Our website address is http://www.pwreit.com. The information on, or otherwise accessible through, our website
does not constitute a part of this prospectus. We make our periodic and current reports that are filed with the Securities and Exchange
Commission (the “SEC”) available, free of charge, on our website as soon as reasonably practicable after such material is
electronically filed with, or furnished to, the SEC. The information contained in, and that can be accessed through, our website is not
incorporated into and is not a part of this prospectus.
Smaller
Reporting Company
We
are a “smaller reporting company” as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
As a result, we may take advantage of certain reduced disclosure obligations available to smaller reporting companies, including the
exemption from compliance with the auditor attestation requirements pursuant to the Sarbanes-Oxley Act of 2022, reduced disclosure about
our executive compensation arrangements and the requirements to provide only two years of audited financial statements in our annual
reports and registration statements. We will continue to be a “smaller reporting company” as long as (1) we have a public
float (i.e., the market value of our Common Shares held by non-affiliates) less than $250 million calculated as of the last business
day of our most recently completed second fiscal quarter, or (2) our annual revenues are less than $100 million for our previous fiscal
year and we have either no public float or a public float of less than $700 million as of the end of that fiscal year’s second
fiscal quarter. Decreased disclosures in our SEC filings due to our status as a “smaller reporting company” may make it harder
for investors to analyze our results of operations and financial prospects.
THE
OFFERING
| Issuer |
|
Power
REIT |
| |
|
|
| Common
Shares to be offered by us pursuant to this prospectus |
|
Up
to 1,721,311 of our Common Shares having an aggregate offering price of up to approximately $2.1 million at an assumed offering price
of $1.22 per share, which was the last reported sale price of our Common Shares on the NYSE American on January 21, 2025. |
| |
|
|
Common
Shares to be outstanding
after
the offering |
|
Up
to 5,110,972 (as more fully described in the notes following this table), assuming sales of approximately $2.1 million of our Common
Shares, or 1,721,311 of our Common Shares in this offering at an assumed offering price of $1,22 per share, which was the last reported
sale price of our Common Shares on the NYSE American January 21, 2025. The actual number of shares issued will vary depending on
the sales price under this offering. |
| |
|
|
| Manner
offering |
|
“At
the market offering” that may be made from time to time for our Common Shares in the United States through A.G.P., as Sales
Agent. See the section entitled “Plan of Distribution.” |
| |
|
|
| Use
of proceeds |
|
We
currently intend to use the net proceeds from this offering primarily for working capital and general corporate purposes, including
making investments and share repurchases. See “Use of Proceeds.” |
| |
|
|
| Risk
factors |
|
You
should read the “Risk Factors” section of this prospectus and in the documents incorporated by reference in this prospectus
for a discussion of factors to consider before deciding to purchase of our Common Shares. |
| |
|
|
NYSE
American
Trading
Symbol |
|
PW |
Unless
we indicate otherwise, all information in this prospectus is based on 3,389,661 shares outstanding as of January 21, 2025. The number
of shares outstanding as used throughout this prospectus, unless otherwise indicated, excludes:
| |
● |
192,778
Common Shares issuable upon the exercise of
stock options outstanding at a weighted average exercise price of $13.44 per share; and |
| |
|
|
| |
● |
1,925,002
Common Shares reserved for future issuance under the 2020 Equity Incentive Plan. |
We
do not have any outstanding warrants to purchase our Common Shares or restricted stock units.
RISK
FACTORS
Investing
in our Common Shares involves a high degree of risk, and you should be able to bear the complete loss of your investment. You should
consider carefully the risks described below and those described under the section captioned “Risk Factors” contained in
our Annual Report on Form 10-K for the year ended December 31, 2023, any subsequent Annual Reports on Form 10-K, any subsequent Quarterly
Reports on Form 10-Q or Current Reports on Form 8-K, and all other information contained or incorporated by reference into this prospectus
and documents incorporated by reference into this prospectus before deciding whether to purchase any of the Common Shares being offered
under this prospectus. If any of the risks actually occur, our business, consolidated financial condition or results of operations could
be adversely affected. In such case, the trading price of our Common Shares could decline and you could lose all or part of your investment.
Our actual results could differ materially from those anticipated in the forward-looking statements made throughout this prospectus as
a result of different factors, including the risks we face described below. Unless we have indicated otherwise or the context otherwise
requires, references in this prospectus or the documents incorporated by reference herein and therein to the “Company,” “Power
REIT,” “we,” “us” and “our” refer to Power REIT.
Risks
Related to this Offering
Our
management will have broad discretion over the use of proceeds from this offering and may not use the proceeds effectively.
Our
management will have broad discretion over the use of proceeds from this offering. We intend to use the net proceeds from this offering,
if any, primarily for working capital and general corporate purposes, including making investments and share repurchases. Our management
will have considerable discretion in the application of the net proceeds, and you will not have the opportunity, as part of your investment
decision, to assess whether the proceeds are being used appropriately. The net proceeds, if any, may be used for corporate purposes that
do not improve our operating results or enhance the value of our Common Shares. The failure of our management to use these funds effectively
could have a material adverse effect on our business and cause the market price of our Common Shares to decline. Pending their use, we
may invest the net proceeds from this offering in short-term, investment-grade, interest-bearing instruments and U.S. government securities.
These investments may not yield a favorable return to our shareholders.
Our
need for future financing may result in the issuance of additional securities which will cause investors to experience dilution.
Our
cash requirements may vary from those now planned depending upon numerous factors. We expect to require additional capital until our
operations generate sufficient revenue to cover our expenses. Accordingly, we will need to obtain substantial additional funding in connection
with our continuing operations. There are no other commitments by any person for future financing. Our securities may be offered to other
investors at a price lower than the price per share offered to current stockholders, or upon terms which may be deemed more favorable
than those offered to current stockholders. In addition, the issuance of securities in any future financing may dilute an investor’s
equity ownership and have the effect of depressing the market price for our securities. Moreover, we may issue derivative securities,
including options and/or warrants, from time to time, to procure qualified personnel or for other business reasons. The issuance of any
such derivative securities, which is at the discretion of our Board of trustees, may further dilute the equity ownership of our shareholders.
We
may sell shares or other securities in any other offering at a price per share that is less than the price per share paid by investors
in this offering, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders.
The price per share at which we sell additional of our Common Shares, or securities convertible or exchangeable into Common Shares, in
future transactions may be higher or lower than the price per share paid by investors in this offering. No assurance can be given as
to our ability to procure additional financing, if required, and on terms deemed favorable to us. To the extent additional capital is
required and cannot be raised successfully, we may then have to limit our then current operations and/or may have to curtail certain,
if not all, of our business objectives and plans.
We
have additional securities available for issuance, which, if issued, could adversely affect the rights of the holders of our Common Shares.
Our
Declaration of Trust authorizes the issuance of 98,325,000 of our Common Shares and 1,675,000 shares of Series A Preferred Stock. In
certain circumstances, of our Common Shares, as well as the awards available for issuance under our equity incentive plans, can be issued
by our Board of trustees, without stockholder approval. Any future issuances of such stock would further dilute the percentage ownership
of us held by holders of our Common Shares and preferred stock. In addition, the issuance of certain securities, including pursuant to
the terms of our stockholder rights plan, may be used as an “anti-takeover” device without further action on the part of
our shareholders, and may adversely affect the holders of the Common Shares.
Because
we do not intend to declare cash dividends on our Common Shares in the foreseeable future, stockholders must rely on appreciation of
the value of our Common Shares for any return on their investment.
As
stated above, we have never declared or paid cash dividends on our Common Shares. We currently anticipate that we will retain future
earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends in
the foreseeable future. As a result, we expect that only appreciation of the price of our Common Shares, if any, will provide a return
to investors in this offering for the foreseeable future.
Resales
of our Common Shares in the public market during this offering by our shareholders may cause the market price of our Common Shares to
fall.
We
may issue our Common Shares from time to time in connection with this offering. This issuance from time to time of our Common Shares,
or our ability to issue these of our Common Shares in this offering, could result in resales of our Common Shares by our current stockholders
concerned about the potential dilution of their holdings. In turn, these resales could have the effect of depressing the market price
for our Common Shares.
The
actual number of shares we will issue under the Sales Agreement, at any one time or in total, is uncertain.
Subject
to certain limitations in the Sales Agreement with the Sales Agent and compliance with applicable law, we have the discretion to deliver
placement notices to the Sales Agent at any time throughout the term of the Sales Agreement. The number of shares that are sold by the
Sales Agent after delivering a placement notice will fluctuate based on the market price of the Common Shares during the sales period
and limits we set with the Sales Agent.
The
Common Shares offered under this prospectus and documents incorporated by reference into this prospectus may be sold in “at the
market offerings,” and investors who buy shares at different times will likely pay different prices.
Investors
who purchase shares under this prospectus and documents incorporated by reference into this prospectus at different times will likely
pay different prices, and so may experience different outcomes in their investment results. We will have discretion, subject to market
demand, to vary the timing, prices, and numbers of shares sold, and there is no minimum or maximum sales price. Investors may experience
declines in the value of their shares as a result of share sales made at prices lower than the prices they paid.
USE
OF PROCEEDS
We
may issue and sell Common Shares having aggregate gross proceeds of up to $2,100,000 from time to time under this prospectus and the
documents incorporated by reference herein. Because there is no minimum offering amount required as a condition to close this offering,
the actual total offering amount, commissions and proceeds to us, if any, are not determinable at this time. The amount of proceeds from
this offering will depend upon the number of Common Shares sold and the market price at which they are sold. There can be no assurance
that we will be able to sell any Common Shares under or fully utilize the Sales Agreement with A.G.P. as a source of financing.
We
intend to use the net proceeds, if any, from the sales of our Common Shares offered by this prospectus primarily for working capital
and general corporate purposes, including making investments and share repurchases. We have broad discretion in determining how the proceeds
of this offering will be used, and our discretion is not limited by the aforementioned possible uses. Our Board of trustees believes
the flexibility in application of the net proceeds is prudent.
As
of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds to be received from
this offering. The amounts and timing of our actual expenditures will depend on numerous factors including our operating costs and the
amount of funding, if any, received from the proposed sale of certain of our assets. Accordingly, our management will have broad discretion
in the application of the net proceeds, and investors will be relying on the judgment of management regarding the application of the
net proceeds from the offering. We may find it necessary or advisable to reallocate the net proceeds of this offering; however, any such
reallocation would be substantially limited to the categories set forth above as we do not intend to use the net proceeds for other purposes.
Pending
application of cash proceeds, we will invest the net proceeds in interest-bearing accounts, money market accounts and interest-bearing
securities in a manner that is consistent with our intention to maintain our qualification for taxation as a REIT. Such investments may
include, for example, government and government agency certificates, government bonds, certificates of deposit, interest-bearing bank
deposits, money market accounts and mortgage loan participations. Further details regarding the use of the net proceeds from the sale
of a specific series or class of the securities will be set forth in the applicable prospectus supplement.
DISTRIBUTION
POLICY
Any
distributions that we make will be at the discretion of our Board of Trustees, and there can be no assurance that dividends will be paid
in any particular period or at any particular level, or sustained in future periods based on past timing of payments and payments levels.
Dividends on our Series A Preferred Stock are cumulative and must be paid in full and on a current basis in order for the Trust to pay
dividends on its Common Shares. Beginning in the fourth fiscal quarter of 2022, the Trust ceased to declare quarterly dividend payments
on its 7.75% Series A Cumulative Redeemable Perpetual Preferred Stock.
We
currently do not make regular quarterly distributions to holders of our Common Shares, but may elect to do so in the future. Distributions
declared by us will be authorized by our Board of Trustees in its sole discretion out of funds legally available therefor and will be
dependent upon a number of factors, including the capital requirements of our trust and meeting the distribution requirements necessary
to maintain our qualification as a REIT. We cannot assure that our intended distributions will be made or sustained or that our Board
of Trustees will not change our distribution policy in the future. Under some circumstances, we may be required to fund distributions
from working capital, liquidate assets at prices or times that we regard as unfavorable or borrow to provide funds for distributions,
or we may make distributions in the form of a taxable stock dividend. However, we have no current intention to use the net proceeds from
this offering to make distributions nor do we intend to make distributions using our Common Shares.
PLAN
OF DISTRIBUTION
On
January 24, 2025, we entered into a sales agreement with A.G.P./Alliance Global Partners, which we refer to as the “Sales
Agreement,” which provides for the issuance and sale by us of our Common Shares under this prospectus with an aggregate offering
price of up to $2.1 million from time to time through A.G.P., acting as Sales Agent. Under the terms of the Sales Agreement, we may also
sell shares to the Sales Agent as principal for its own account.
Upon
instructions from us, the Sales Agent will use commercially reasonable efforts, consistent with its normal sales and trading practices
and applicable law, to sell our Common Shares under the Sales Agreement pursuant to this prospectus. Sales of Common Shares, if any,
pursuant to this prospectus may be made by any method permitted by law deemed to be an “at the market offering” as defined
in Rule 415 under the Securities Act. If we and the Sales Agent agree on any method of distribution we will file a prospectus supplement
providing all information about such offering as required by Rule 424(b) under the Securities Act. To the extent required by Regulation
M, the Sales Agent will not engage in any transactions that stabilize our Common Shares while the offering is ongoing under this prospectus.
Under
the Sales Agreement, we will instruct the Sales Agent as to the maximum amount of our Common Shares to be sold by the Sales Agent , and
the minimum price per share at which such shares may be sold. The gross sales price of the shares sold will be the market price for of
our Common Shares sold by the Sales Agent on the trading market at the time of sale of the shares. We or the Sales Agent may suspend
the offering of our Common Shares upon proper notice and subject to certain other conditions.
The
Sales Agent will provide written confirmation to us following the close of trading on the NYSE American following each day on which our
Common Shares are sold under the Sales Agreement. Each confirmation will include the number of shares sold on the day, the aggregate
gross sales proceeds, the net proceeds to us and the compensation payable by us to the Sales Agent with respect to the sales.
The
Sales Agent will be entitled to compensation at a fixed commission rate of 3.0% of the gross proceeds from the sale of our Common Shares
on our behalf pursuant to the Sales Agreement. Pursuant to the terms of the Sales Agreement, we agreed to reimburse the Sales Agent for
its reasonable out-of-pocket expenses (including reasonable legal fees and expenses incurred in connection with entering into the transactions
contemplated by the Sales Agreement) in an amount not to exceed $50,000 in the aggregate, and up to an additional $5,000 per fiscal quarter
(and in no event more than $20,000 per fiscal year) for maintenance; provided such quarterly maintenance amount is only payable in the
event we conduct bring-down activities to maintain the “at the market offering” facility during the relevant quarter. We
will report at least quarterly the number of Common Shares sold through the Sales Agent under the Sales Agreement, the net proceeds to
us and the compensation paid by us to the Sales Agent in connection with the sales of the Common Shares.
Settlement
for sales of our Common Shares will occur on the first business day following the date on which any sales are made. There is no arrangement
for funds to be received in an escrow, trust or similar arrangement.
In
connection with the sale of our Common Shares on our behalf, the Sales Agent may be deemed to be an “underwriter” within
the meaning of the Securities Act, and the compensation of the Sales Agent may be deemed to be underwriting commissions or discounts.
We have agreed to provide indemnification and contribution to the Sales Agent with respect to certain civil liabilities, including liabilities
under the Securities Act and the Exchange Act.
We
estimate that the total expenses of the offering payable by us, excluding commissions and reimbursements payable to the Sales Agent under
the Sales Agreement, will be approximately $190,000.
The
offering of our Common Shares pursuant to the Sales Agreement will terminate upon the earlier of (1) the sale of all of our Common Shares
provided for in this prospectus, or (2) the termination of the Sales Agreement. The Sales Agreement will automatically terminate upon
the issuance and sale of all of the Common Shares pursuant to the Sales Agreement and may be terminated by us at any time in our sole
discretion by giving two (2) days’ written notice to the Sales Agent, or by the Sales Agent at any time in its sole discretion
by giving two (2) days’ written notice to us with respect to the Sales Agent’s participation in the offering. The Sales Agreement
will remain in full force and effect until the Sales Agreement is terminated in accordance with the terms thereof.
This
is a brief summary of the material provisions of the Sales Agreement and does not purport to be a complete statement of its terms and
conditions. A copy of the Sales Agreement is filed as an exhibit to the registration statement of which this prospectus forms a part.
The
Sales Agent and their respective affiliates may in the future provide various investment banking and other financial services for us
for which services they may in the future receive customary fees. The principal business address of A.G.P. is 590 Madison Avenue, 28th
Floor, New York, New York 10119.
LEGAL
MATTERS
Unless
otherwise indicated in the applicable prospectus supplement, the validity of the securities offered by this prospectus, and any supplement
thereto, will be passed upon for us by Blank Rome LLP, New York, New York. Certain matters of Maryland law will be passed upon for us
by Gordon Feinblatt LLC, Baltimore, Maryland and certain tax matters will be passed upon for us by Neuberger Quinn Gielen Rubin Gibber
P.A., Baltimore. Maryland. Duane Morris LLP, New York, New York, is acting as counsel to the Sales Agent in this offering.
EXPERTS
The
consolidated financial statements of Power REIT incorporated in this prospectus by reference to the Annual Report on Form 10-K for the
year ended December 31, 2023 have been so incorporated in reliance on the report (which contains an explanatory paragraph regarding the
Company’s ability to continue as a going concern) of MaloneBailey, LLP, an independent registered public accounting firm, given
on the authority of said firm as experts in auditing and accounting.
WHERE
YOU CAN FIND MORE INFORMATION
This
prospectus is part of a registration statement we filed with the SEC. This prospectus does not contain all of the information set forth
in the registration statement and the exhibits to the registration statement. For further information with respect to us and the securities
we are offering under this prospectus, we refer you to the registration statement and the exhibits and schedules filed as a part of the
registration statement. Neither we nor any agent, underwriter or dealer has authorized any person to provide you with different information.
We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information
in this prospectus is accurate as of any date other than the date on the front page of this prospectus, regardless of the time of delivery
of this prospectus or any sale of the securities offered by this prospectus.
We
file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the
public at the SEC’s website at www.sec.gov. Additional information about Power REIT is contained at our website, www.pwreit.com.
Information on our website is not incorporated by reference into this prospectus. We make available on our website our SEC filings as
soon as reasonably practicable after those reports are filed with the SEC.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The
SEC allows us to “incorporate by reference” information into this prospectus, which means that we can disclose important
information to you by referring you to another document filed separately with the SEC. The SEC file number for the documents incorporated
by reference in this prospectus is 001-36312. The documents incorporated by reference into this prospectus contain important information
that you should read about us.
The
following documents are incorporated by reference into this prospectus:
| |
● |
Our
Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on March 29, 2024; |
| |
|
|
| |
● |
Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 2024, filed with the SEC on October 31, 2024; |
| |
|
|
| |
● |
Our
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2024, filed with the SEC on August 7, 2024 and our Quarterly
Report on Form 10-Q/A (Amendment No. 1) for the fiscal quarter ended June 30, 2024, filed with the SEC on September 24, 2024; |
| |
|
|
| |
● |
Our
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024, filed with the SEC on May 10, 2024; |
| |
|
|
| |
● |
Our
Current Reports on Form 8-K filed with the SEC on January
9, 2024, January
31, 2024, August
16, 2024, September
4, 2024, September
24, 2024, September
26, 2024 (other than as indicated therein), September
26, 2024 and January 24, 2025; |
| |
|
|
| |
● |
Our
Definitive Proxy Statement on Schedule 14A filed on August 30, 2024; and |
| |
|
|
| |
● |
The
description of our Common Shares set forth in: (i) our registration statement on Form 8-A filed with the SEC on February 11, 2014,
including any amendments thereto or reports filed for the purposes of updating this description, and (ii) Exhibit 4.1 to our Annual
Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on March 24, 2021. |
We
also incorporate by reference into this prospectus all documents (other than portions of those documents not deemed filed) that are filed
by us with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (Commission File Number 001-36312) after (i) on
or after the date of the initial filing of the registration statement of which this prospectus forms a part and prior to effectiveness
of such registration statement, and (ii) on or after the date of this prospectus but prior to the termination of the offering (i.e.,
until the earlier of the date on which all of the securities registered hereunder have been sold or the registration statement of which
this prospectus forms a part has been withdrawn). These documents include periodic reports, such as Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K, as well as proxy statements. Information in such future filings updates and supplements
the information provided in this prospectus.
We
will provide to each person, including any beneficial owner, to whom a prospectus is delivered, without charge upon written or oral request,
a copy of any or all of the documents that are incorporated by reference into this prospectus but not delivered with this prospectus,
including exhibits that are specifically incorporated by reference into such documents. You can request a copy of these filings, at no
cost, by writing or telephoning us at the following address or telephone number:
Power
REIT
301
Winding Road
Old
Bethpage, New York 11804
(212)
750-0371
Any
statement contained in this prospectus or in a document incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or in any other
subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes that statement.
Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
In
accordance with Rule 412 of the Securities Act, any statement contained in a document incorporated by reference herein shall be deemed
modified or superseded to the extent that a statement contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such statement.
You
should rely only on information contained in, or incorporated by reference into, this prospectus and any prospectus supplement. We have
not authorized anyone to provide you with information different from that contained in this prospectus or incorporated by reference into
this prospectus. We are not making offers to sell the securities in any jurisdiction in which such an offer or solicitation is not authorized
or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such an
offer or solicitation.
Up
to $2,100,000 of
Common
Shares
Prospectus
A.G.P.
,
2025
PART
II
INFORMATION
NOT REQUIRED IN THE PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution.
The
following sets forth the estimated costs and expenses, all of which shall be borne by Power REIT (the “Registrant”), in connection
with the offering of the securities pursuant to this registration statement. As noted in footnote (1) below, all of the amounts will
be estimates based on the number and amount of securities issued and sold, except for the SEC registration fee and the FINRA filing fee.
| SEC registration fee | |
$ | 7,655 | |
| FINRA filing fee | |
| 8,000 | |
| Transfer agent and registrar expenses | |
| (1 | ) |
| Accounting fees and expenses | |
| (1 | ) |
| Legal fees and expenses | |
| (1 | ) |
| Printing and engraving expenses | |
| (1 | ) |
| Miscellaneous | |
| (1 | ) |
| Total | |
$ | (1 | ) |
(1)
|
These
fees are calculated based on the securities offered and the number of issuances and, accordingly, cannot be estimated at this time.
An estimate of the aggregate expenses in connection with the sale and distribution of securities being offered will be included in
the applicable prospectus supplement. |
Item
15. Indemnification of Directors and Officers.
The
Maryland REIT Law permits a Maryland real estate investment trust to include in its declaration of trust a provision limiting the liability
of its trustees, officers to the trust and its shareholders for money damages except for liability resulting from (a) actual receipt
of an improper benefit or profit in money, property or services or (b) active or deliberate dishonesty established in a judgment or other
final adjudication to be material to the cause of action. Our declaration of trust contains a provision that limits the liability of
our trustees and officers to the maximum extent permitted by Maryland law.
The
Maryland REIT Law permits a Maryland real estate investment trust to indemnify and advance expenses to its trustees, officers, employees
and agents to the same extent as permitted by the Maryland General Corporation Law (the “MGCL”) for directors and officers
of Maryland corporations. The MGCL permits a corporation to indemnify its present and former directors and officers, among others, against
judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which
they may be a party by reason of their service in those or other capacities unless it is established that (a) the act or omission of
the director or officer was material to the matter giving rise to the proceeding and (i) was committed in bad faith or (ii) was a result
of active and deliberate dishonesty, (b) the director or officer actually received an improper personal benefit in money, property or
services or (c) in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission
was unlawful. However, a Maryland corporation may not indemnify for an adverse judgment in a suit by or in the right of the corporation
or if the director or officer is adjudged to be liable to the corporation nor may a director be indemnified in circumstances in which
the director is found liable for an improper personal benefit. In accordance with the MGCL and our By-laws, our By-laws require us, as
a condition to the advancement of expenses, to obtain (a) a written affirmation by the trustee or officer of his good-faith belief that
he has met the standard of conduct necessary for indemnification and (b) a written statement by or on his behalf to repay the amount
paid or reimbursed by us if it shall ultimately be determined that the standard of conduct was not met.
Power
REIT’s declaration of trust provides that it shall indemnify, to the maximum extent permitted by Maryland law in effect from time
to time, any individual who is a present or former trustee or officer (including any individual who, at our request, serves or has served
as an officer, partner, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or any other
enterprise) from and against any claim or liability to which such person may become subject by reason of service in such capacity. Power
REIT has the authority, with the approval of its Board of Trustees, to provide indemnification and advancement of expenses to a present
or former trustee or officer who served a predecessor of Power REIT in any of the capacities described above and to any employee or agent
of Power REIT or a predecessor of Power REIT. Maryland law requires Power REIT to indemnify a trustee or officer who has been successful,
on the merits or otherwise, in the defense of any proceeding to which he or she is made a party by reason of his or her service in that
capacity.
Power
REIT maintains a directors’ and officers’ liability insurance policy which provides for the payment of certain losses of
the trustees and officers of Power REIT and its subsidiaries (other than in the case of matters uninsurable under law) arising from claims,
including claims arising under the Securities Act, for acts or omissions by such persons while acting as trustees or officers of Power
REIT and/or its subsidiaries, as the case may be.
Item
16. Exhibits.
The
exhibits to this registration statement are listed in the Exhibit Index to this registration statement, which immediately precedes the
Signature Page and which Exhibit Index is hereby incorporated by reference.
Item
17. Undertakings.
The
undersigned registrant hereby undertakes:
| |
(1) |
To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
| |
(i) |
To
include any prospectus required by Section 10(a)(3) of the Securities Act; |
| |
|
|
| |
(ii) |
To
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end
of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more than 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 the registration statement
or any material change to such information in the registration statement; |
provided,
however, that the undertakings set forth in paragraphs (1)(i), (1)(ii) and (1)(iii) above do not apply if the information required
to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are incorporated
by reference in this registration statement or are contained in a form of prospectus filed pursuant to Rule 424(b) that is part of this
registration statement.
| |
(2) |
That,
for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof. |
| |
|
|
| |
(3) |
To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the
termination of the offering. |
| |
|
|
| |
(4) |
That,
for the purpose of determining liability under the Securities Act to any purchaser: |
| |
(i) |
Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the
date the filed prospectus was deemed part of and included in the registration statement; and |
| |
(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 shall be deemed to be part of and
included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the
date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability
purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the
registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of
such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement
made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed
incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser
with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
|
| |
(5) |
That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
| |
(i) |
any
preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule
424; |
| |
|
|
| |
(ii) |
any
free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by
the undersigned registrant; |
| |
|
|
| |
(iii) |
the
portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant
or its securities provided by or on behalf of the undersigned registrant; and |
| |
|
|
| |
(iv) |
any
other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
| |
(6) |
That,
for purposes of determining any liability under the Securities Act, 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 the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof. |
| |
|
|
| |
(7) |
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 SEC under Section 305(b)(2) of the Trust Indenture
Act. |
| |
|
|
| |
(8) |
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the
SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue. |
EXHIBIT
INDEX
| Exhibit
No. |
|
Description |
| |
|
|
| 1.1 |
|
Sales Agreement, dated January 24, 2025, by and between Power REIT and A.G.P./Alliance Global Partners, incorporated herein by reference to Exhibit 1.1 to the Current Report on Form 8-K (File No. 001-36312) filed with the Securities and Exchange Commission on January 24, 2025. |
| |
|
|
| 1.2** |
|
Form
of Underwriting Agreement |
| |
|
|
| 3.1 |
|
Declaration of Trust of Power REIT, dated August 25, 2011, as amended and restated November 28, 2011 and as supplemented effective February 12, 2014, incorporated herein by reference to Exhibit 3.1 to the Annual Report on Form 10-K (File No. 000-54560) filed with the Securities and Exchange Commission as of April 1, 2014. |
| |
|
|
| 3.2 |
|
Bylaws of Power REIT, dated October 20, 2011, incorporated herein by reference to Exhibit 3.2 to the Registration Statement on Form S-4 (File No. 333-177802) filed with the Securities and Exchange Commission as of November 8, 2011. |
| |
|
|
| 3.3 |
|
Articles Supplementary 7.75% Series A Cumulative Redeemable Perpetual Preferred Stock Liquidation Preference $25.00 Per Share, incorporated herein by reference to Exhibit 3.3 to the Registrants Form 8-A12B (File No. 001-36312) filed with the Commission as of February 11, 2014. |
| |
|
|
| 4.1 |
|
Description of Capital Stock, incorporated herein by reference to Exhibit 4.1 to the Annual Report on Form 10-K (File No. 000-36312) filed with the Securities and Exchange Commission as of March 24, 2021. |
| |
|
|
| 4.2† |
|
Power REIT 2020 Equity Incentive Plan incorporated by reference to Appendix A to the Registrant’s Definitive Proxy Statement on Schedule 14A (File No. 001-36312) filed with the Commission on May 29, 2020. |
| |
|
|
| 4.3† |
|
Power REIT 2012 Equity Incentive Plan, incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K (File No. 000-54560) filed with the Securities and Exchange Commission as of March 29, 2013. |
| |
|
|
| 4.4* |
|
Form of Indenture |
| |
|
|
| 4.5** |
|
Form
of Debt Securities |
| |
|
|
| 4.6** |
|
Form
of Common Shares Warrant Agreement and Warrant Certificate |
| |
|
|
| 4.7** |
|
Form
of Preferred Stock Warrant Agreement and Warrant Certificate |
| |
|
|
| 4.8** |
|
Form
of Debt Securities Warrant Agreement and Warrant Certificate |
| |
|
|
| 4.9** |
|
Form
of Unit Agreement |
| |
|
|
| 5.1(a)* |
|
Opinion of Gordon Feinblatt LLC |
| |
|
|
| 5.1(b)* |
|
Opinion of Blank Rome LLP |
| |
|
|
| 8.1* |
|
Tax Opinion of Neuberger, Quinn, Gielen, Rubin & Gibber, P.A. |
| |
|
|
| 23.1* |
|
Consent of MaloneBailey, LLP, Independent Registered Public Accounting Firm |
| |
|
|
| 23.2* |
|
Consent of Gordon Feinblatt LLC (included in Exhibit 5.1(a)) |
| |
|
|
| 23.3* |
|
Consent of Blank Rome LLP (included in Exhibit 5.1(b)) |
| |
|
|
| 23.4* |
|
Consent of Neuberger, Quinn, Gielen, Rubin & Gibber, P.A. (included in Exhibit 8.1) |
| |
|
|
| 24.1* |
|
Power of Attorney (included on the signature page) |
| |
|
|
| 25.1*** |
|
Statement
of Eligibility of Trustee under the Indenture |
| |
|
|
| 107* |
|
Calculation of Filing Fee Table |
| 101.INS |
Inline
XBRL Instance Document |
| 101.SCH |
Inline
XBRL Taxonomy Extension Schema Document |
| 101.CAL |
Inline
XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF |
Inline
XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB |
Inline
XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE |
Inline
XBRL Taxonomy Extension Presentation Linkbase Document |
| * |
Filed
herewith. |
| ** |
To
be filed, if applicable, by amendment or by a report filed under the Exchange Act and incorporated herein by reference. |
| *** |
To
be filed separately, if applicable, in accordance with the requirements of Section 305(b)(2) of the Trust Indenture Act of 1939 as
amended, and the appropriate rules and regulations thereunder. |
| † |
Indicates
management contract or compensatory plan. |
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Old Bethpage, New York, on the 24th day of January, 2025.
| |
POWER
REIT |
| |
|
| |
By: |
/s/
David H. Lesser |
| |
Name: |
David
H. Lesser |
| |
Title: |
Chairman,
CEO, CFO, Secretary and Treasurer |
POWER
OF ATTORNEY
KNOW
ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints David H. Lesser as his
true and lawful agent, proxy and attorney-in-fact, with full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to (i) act on, sign and file with the Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration statement together with all schedules and exhibits thereto and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, together with all schedules and exhibits
thereto, (ii) act on, sign and file such certificates, instruments, agreements and other documents as may be necessary or appropriate
in connection therewith, (iii) act on and file any supplement to any prospectus included in this registration statement or any such amendment
or any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and (iv) take any
and all actions which may be necessary or appropriate to be done, as fully for all intents and purposes as he might or could do in person,
hereby approving, ratifying and confirming all that such agent, proxy and attorney-in-fact or any of his 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 by the following persons in the capacities
and on the dates indicated.
| Name |
|
Title |
|
Date |
| |
|
|
|
|
| /s/
David H. Lesser |
|
Trustee
and Chairman of the Board of Trustees, CEO, |
|
January
24, 2025 |
| David
H. Lesser |
|
CFO,
Secretary and Treasurer |
|
|
| |
|
|
|
|
| /s/
Susan Hollander |
|
Chief
Accounting Officer |
|
January
24, 2025 |
| Susan
Hollander |
|
|
|
|
| |
|
|
|
|
| /s/
William S. Susman |
|
Trustee |
|
January
24, 2025 |
| William
S. Susman |
|
|
|
|
| |
|
|
|
|
| /s/
Patrick R. Haynes, III |
|
Trustee |
|
January
24, 2025 |
| Patrick
R. Haynes, III |
|
|
|
|
| |
|
|
|
|
| /s/
Dionisio D’Aguilar |
|
Trustee |
|
January
24, 2025 |
| Dionisio
D’Aguilar |
|
|
|
|
Exhibit
4.4
POWER
REIT,
Issuer
AND
[TRUSTEE],
Trustee
INDENTURE
Dated
as of ______, 202_
Debt
Securities
TABLE
OF CONTENTS
| |
|
|
PAGE |
| ARTICLE
1 DEFINITIONS |
1 |
| |
|
|
|
| |
Section
1.01 |
Definitions
of Terms |
1 |
| |
|
|
|
| ARTICLE
2 ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES |
5 |
| |
|
|
|
| |
Section
2.01 |
Designation
and Terms of Securities |
5 |
| |
|
|
|
| |
Section
2.02 |
Form
of Securities and Trustee’s Certificate |
8 |
| |
|
|
|
| |
Section
2.03 |
Denominations:
Provisions for Payment |
9 |
| |
|
|
|
| |
Section
2.04 |
Execution
and Authentications |
10 |
| |
|
|
|
| |
Section
2.05 |
Registration
of Transfer and Exchange |
11 |
| |
|
|
|
| |
Section
2.06 |
Temporary
Securities |
12 |
| |
|
|
|
| |
Section
2.07 |
Mutilated,
Destroyed, Lost or Stolen Securities |
12 |
| |
|
|
|
| |
Section
2.08 |
Cancellation |
13 |
| |
|
|
|
| |
Section
2.09 |
Benefits
of Indenture |
14 |
| |
|
|
|
| |
Section
2.10 |
Authenticating
Agent |
14 |
| |
|
|
|
| |
Section
2.11 |
Global
Securities |
14 |
| |
|
|
|
| |
Section
2.12 |
CUSIP
Numbers |
15 |
| |
|
|
|
| ARTICLE
3 REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS |
16 |
| |
|
|
|
| |
Section
3.01 |
Redemption |
16 |
| |
|
|
|
| |
Section
3.02 |
Notice
of Redemption |
16 |
TABLE
OF CONTENTS
(CONTINUED)
| |
|
|
PAGE |
| |
Section
3.03 |
Payment
Upon Redemption |
17 |
| |
|
|
|
| |
Section
3.04 |
Sinking
Fund |
17 |
| |
|
|
|
| |
Section
3.05 |
Satisfaction
of Sinking Fund Payments with Securities |
18 |
| |
|
|
|
| |
Section
3.06 |
Redemption
of Securities for Sinking Fund |
18 |
| |
|
|
|
| ARTICLE
4 COVENANTS |
18 |
| |
|
|
|
| |
Section
4.01 |
Payment
of Principal, Premium and Interest |
18 |
| |
|
|
|
| |
Section
4.02 |
Maintenance
of Office or Agency |
19 |
| |
|
|
|
| |
Section
4.03 |
Paying
Agents |
19 |
| |
|
|
|
| |
Section
4.04 |
Appointment
to Fill Vacancy in Office of Trustee |
20 |
| |
|
|
|
| ARTICLE
5 SECURITYHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE |
20 |
| |
|
|
|
| |
Section
5.01 |
Company
to Furnish Trustee Names and Addresses of Securityholders |
20 |
| |
|
|
|
| |
Section
5.02 |
Preservation
Of Information; Communications With Securityholders |
21 |
| |
|
|
|
| |
Section
5.03 |
Reports
by the Company |
21 |
| |
|
|
|
| |
Section
5.04 |
Reports
by the Trustee |
22 |
| |
|
|
|
| ARTICLE
6 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT |
22 |
| |
|
|
|
| |
Section
6.01 |
Events
of Default |
22 |
| |
|
|
|
| |
Section
6.02 |
Collection
of Indebtedness and Suits for Enforcement by Trustee |
24 |
| |
|
|
|
| |
Section
6.03 |
Application
of Moneys Collected |
25 |
TABLE
OF CONTENTS
(CONTINUED)
| |
|
|
PAGE |
| |
Section
6.04 |
Limitation
on Suits |
26 |
| |
|
|
|
| |
Section
6.05 |
Rights
and Remedies Cumulative; Delay or Omission Not Waiver |
26 |
| |
|
|
|
| |
Section
6.06 |
Control
by Securityholders |
27 |
| |
|
|
|
| |
Section
6.07 |
Undertaking
to Pay Costs |
27 |
| |
|
|
|
| ARTICLE
7 CONCERNING THE TRUSTEE |
28 |
| |
|
|
|
| |
Section
7.01 |
Certain
Duties and Responsibilities of Trustee |
28 |
| |
|
|
|
| |
Section
7.02 |
Certain
Rights of Trustee |
29 |
| |
|
|
|
| |
Section
7.03 |
Trustee
Not Responsible for Recitals or Issuance or Securities |
31 |
| |
|
|
|
| |
Section
7.04 |
May
Hold Securities |
32 |
| |
|
|
|
| |
Section
7.05 |
Moneys
Held in Trust |
32 |
| |
|
|
|
| |
Section
7.06 |
Compensation
and Reimbursement |
32 |
| |
|
|
|
| |
Section
7.07 |
Reliance
on Officer’s Certificate |
33 |
| |
|
|
|
| |
Section
7.08 |
Disqualification;
Conflicting Interests |
33 |
| |
|
|
|
| |
Section
7.09 |
Corporate
Trustee Required; Eligibility |
33 |
| |
|
|
|
| |
Section
7.10 |
Resignation
and Removal; Appointment of Successor |
34 |
| |
|
|
|
| |
Section
7.11 |
Acceptance
of Appointment By Successor |
35 |
| |
|
|
|
| |
Section
7.12 |
Merger,
Conversion, Consolidation or Succession to Business |
36 |
| |
|
|
|
| |
Section
7.13 |
Preferential
Collection of Claims Against the Company |
37 |
| |
|
|
|
| |
Section
7.14 |
Notice
of Default |
37 |
TABLE
OF CONTENTS
(CONTINUED)
| |
|
|
PAGE |
| ARTICLE
8 CONCERNING THE SECURITYHOLDERS |
37 |
| |
|
|
|
| |
Section
8.01 |
Evidence
of Action by Securityholders |
37 |
| |
|
|
|
| |
Section
8.02 |
Proof
of Execution by Securityholders |
38 |
| |
|
|
|
| |
Section
8.03 |
Who
May be Deemed Owners |
38 |
| |
|
|
|
| |
Section
8.04 |
Certain
Securities Owned by Company Disregarded |
39 |
| |
|
|
|
| |
Section
8.05 |
Actions
Binding on Future Securityholders |
39 |
| |
|
|
|
| ARTICLE
9 SUPPLEMENTAL INDENTURES |
39 |
| |
|
|
|
| |
Section
9.01 |
Supplemental
Indentures Without the Consent of Securityholders |
39 |
| |
|
|
|
| |
Section
9.02 |
Supplemental
Indentures With Consent of Securityholders |
41 |
| |
|
|
|
| |
Section
9.03 |
Effect
of Supplemental Indentures |
41 |
| |
|
|
|
| |
Section
9.04 |
Securities
Affected by Supplemental Indentures |
41 |
| |
|
|
|
| |
Section
9.05 |
Execution
of Supplemental Indentures |
42 |
| |
|
|
|
| ARTICLE
10 SUCCESSOR ENTITY |
42 |
| |
|
|
|
| |
Section
10.01 |
Company
May Consolidate, Etc. |
42 |
| |
|
|
|
| |
Section
10.02 |
Successor
Entity Substituted |
43 |
| |
|
|
|
| ARTICLE
11 SATISFACTION AND DISCHARGE |
43 |
| |
|
|
|
| |
Section
11.01 |
Satisfaction
and Discharge of Indenture |
43 |
| |
|
|
|
| |
Section
11.02 |
Discharge
of Obligations |
44 |
| |
|
|
|
| |
Section
11.03 |
Deposited
Moneys to be Held in Trust |
44 |
| |
|
|
|
| |
Section
11.04 |
Payment
of Moneys Held by Paying Agents |
44 |
| |
|
|
|
| |
Section
11.05 |
Repayment
to Company |
45 |
TABLE
OF CONTENTS
(CONTINUED)
| |
|
|
PAGE |
| ARTICLE
12 IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS |
45 |
| |
|
|
|
| |
Section
12.01 |
No
Recourse |
45 |
| |
|
|
|
| ARTICLE
13 MISCELLANEOUS PROVISIONS |
45 |
| |
|
|
|
| |
Section
13.01 |
Effect
on Successors and Assigns |
45 |
| |
|
|
|
| |
Section
13.02 |
Actions
by Successor |
46 |
| |
|
|
|
| |
Section
13.03 |
Surrender
of Company Powers |
46 |
| |
|
|
|
| |
Section
13.04 |
Notices |
46 |
| |
|
|
|
| |
Section
13.05 |
Governing
Law; Jury Trial Waiver |
46 |
| |
|
|
|
| |
Section
13.06 |
Treatment
of Securities as Debt |
47 |
| |
|
|
|
| |
Section
13.07 |
Certificates
and Opinions as to Conditions Precedent |
47 |
| |
|
|
|
| |
Section
13.08 |
Payments
on Business Days |
47 |
| |
|
|
|
| |
Section
13.09 |
Conflict
with Trust Indenture Act |
47 |
| |
|
|
|
| |
Section
13.10 |
Counterparts |
48 |
| |
|
|
|
| |
Section
13.11 |
Separability |
48 |
| |
|
|
|
| |
Section
13.12 |
Compliance
Certificates |
48 |
| |
|
|
|
| |
Section
13.13 |
Patriot
Act |
48 |
| |
|
|
|
| |
Section
13.14 |
Force
Majeure |
48 |
| |
|
|
|
| |
Section
13.12 |
Table
of Contents; Headings |
48 |
INDENTURE
INDENTURE,
dated as of ______, 202__, by and among Power REIT, a Maryland-domiciled real estate investment trust (the “Company” or the
“REIT”), and [TRUSTEE], as trustee (the “Trustee”):
WHEREAS,
for its lawful corporate purposes, the REIT has duly authorized the execution and delivery of this Indenture to provide for the issuance
of debt securities (hereinafter referred to as the “Securities”), in an unlimited aggregate principal amount to be issued
from time to time in one or more series as in this Indenture provided, as registered Securities without coupons, to be authenticated
by the certificate of the Trustee;
WHEREAS,
to provide the terms and conditions upon which the Securities are to be authenticated, issued and delivered, the Company has duly authorized
the execution of this Indenture; and
WHEREAS,
all things necessary to make this Indenture a valid agreement of the REIT, in accordance with its terms, have been done.
NOW,
THEREFORE, in consideration of the premises and the purchase of the Securities by the holders thereof, it is mutually covenanted
and agreed as follows for the equal and ratable benefit of the holders of Securities:
ARTICLE
1
DEFINITIONS
Section
1.01 Definitions of Terms.
The
terms defined in this Section (except as in this Indenture or any indenture supplemental hereto otherwise expressly provided or unless
the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective
meanings specified in this Section and shall include the plural as well as the singular. All other terms used in this Indenture that
are defined in the Trust Indenture Act of 1939, as amended, or that are by reference in such Act defined in the Securities Act of 1933,
as amended (except as herein or any indenture supplemental hereto otherwise expressly provided or unless the context otherwise 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 the
execution of this instrument.
“Authenticating
Agent” means the Trustee or an authenticating agent with respect to all or any of the series of Securities appointed by
the Trustee pursuant to Section 2.10.
“Bankruptcy
Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.
“Board
Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been
duly adopted by the Board of Trustees (or duly authorized committee thereof) and to be in full force and effect on the date of such certification.
“Board
of Trustees” means the Board of Trustees (or the functional equivalent thereof) of the Company or any duly authorized committee
of such Board.
“Business
Day” means, with respect to any series of Securities, any day other than a day on which federal or state banking institutions
in the Borough of Manhattan, the City of New York, or in the city of the Corporate Trust Office of the Trustee, are authorized or obligated
by law, executive order or regulation to close.
“Commission”
means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after
the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
“Company”
means Power REIT, a Maryland-domiciled real estate investment trust, and, subject to the provisions of Article Ten, shall also include
its successors and assigns.
“Corporate
Trust Office” means the office of the Trustee at which, at any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at [_____].
“Custodian”
means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.
“Defaulted
Interest” has the meaning set forth in Section 2.03.
“Depositary”
means, with respect to Securities of any series for which the Company shall determine that such Securities will be issued as a Global
Security, The Depository Trust Company, another clearing agency, or any successor registered as a clearing agency under the Exchange
Act, or other applicable statute or regulation, which, in each case, shall be designated by the Company pursuant to either Section 2.01
or 2.11.
“Event
of Default” means, with respect to Securities of a particular series, any event specified in Section 6.01, continued for
the period of time, if any, therein designated.
“Exchange
Act” means the United States Securities and Exchange Act of 1934, as amended, and the rules and regulations promulgated
by the Commission thereunder.
The
term “given”, “mailed”, “notify” or “sent”
with respect to any notice to be given to a Securityholder pursuant to this Indenture, shall mean notice (x) given to the Depositary
(or its designee) pursuant to the standing instructions from the Depositary or its designee, including by electronic mail in accordance
with accepted practices or procedures at the Depositary (in the case of a Global Security) or (y) mailed to such Holder by first class
mail, postage prepaid, at its address as it appears on the Security Register (in the case of a definitive Security). Notice so “given”
shall be deemed to include any notice to be “mailed” or “delivered,” as applicable, under this Indenture.
“Global
Security” means a Security issued to evidence all or a part of any series of Securities which is executed by the Company
and authenticated and delivered by the Trustee to the Depositary or pursuant to the Depositary’s instruction, all in accordance
with the Indenture, which shall be registered in the name of the Depositary or its nominee.
“Governmental
Obligations” means securities that are (a) direct obligations of the United States of America for the payment of which
its full faith and credit is pledged or (b) obligations 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 that, in either case, are not callable or redeemable at the option of the issuer thereof at any time prior to the stated
maturity of the Securities, and shall also include a depositary receipt issued by a bank or trust company as custodian with respect to
any such Governmental Obligation or a specific payment of principal of or interest on any such Governmental Obligation held by such custodian
for the account of the holder of such depositary receipt; provided, however, that (except as required by law) such custodian is not authorized
to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect
of the Governmental Obligation or the specific payment of principal of or interest on the Governmental Obligation evidenced by such depositary
receipt.
“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.
“Indenture”
means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental
hereto entered into in accordance with the terms hereof and shall include the terms of particular series of Securities established as
contemplated by Section 2.01.
“Interest
Payment Date”, when used with respect to any installment of interest on a Security of a particular series, means the date
specified in such Security or in a Board Resolution or in an indenture supplemental hereto with respect to such series as the fixed date
on which an installment of interest with respect to Securities of that series is due and payable.
“Officer”
means, with respect to the Company, the chairman of the Board of Trustees, a chief executive officer, a president, a chief financial
officer, a chief operating officer, any executive vice president, any senior vice president, any vice president, the treasurer or any
assistant treasurer, the controller or any assistant controller or the secretary or any assistant secretary.
“Officer’s
Certificate” means a certificate signed by any Officer. Each such certificate shall include the statements provided for
in Section 13.07, if and to the extent required by the provisions thereof.
“Opinion
of Counsel” means an opinion in writing subject to customary exceptions of legal counsel, who may be an employee of or
counsel for the Company, that is delivered to the Trustee in accordance with the terms hereof. Each such opinion shall include the statements
provided for in Section 13.07, if and to the extent required by the provisions thereof.
“Outstanding”,
when used with reference to Securities of any series, means, subject to the provisions of Section 8.04, as of any particular time, all
Securities of that series theretofore authenticated and delivered by the Trustee under this Indenture, except (a) Securities theretofore
canceled by the Trustee or any paying agent, or delivered to the Trustee or any paying agent for cancellation or that have previously
been canceled; (b) Securities or portions thereof for the payment or redemption of which moneys or Governmental Obligations in the necessary
amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Company) or shall have been set aside
and segregated in trust by the Company (if the Company shall act as its own paying agent); provided, however, that if such Securities
or portions of such Securities are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided
in Article Three, or provision satisfactory to the Trustee shall have been made for giving such notice; and (c) Securities in lieu of
or in substitution for which other Securities shall have been authenticated and delivered pursuant to the terms of Section 2.07.
“Person”
means any individual, corporation, partnership, joint venture, joint-stock company, limited liability company, association, trust, unincorporated
organization, any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
“Predecessor
Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section
2.07 in lieu of a lost, destroyed or stolen Security shall be deemed to evidence the same debt as the lost, destroyed or stolen Security.
“Responsible
Officer” when used with respect to the Trustee means any officer within the Corporate Trust Office of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any
of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his or her knowledge of and familiarity with the particular subject and in each case who shall have direct
responsibility for the administration of this Indenture.
“Securities”
has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
“Securities
Act” means the Securities Act of 1933, as amended.
“Securityholder”,
“holder of Securities”, “registered holder”, or other similar term, means the Person
or Persons in whose name or names a particular Security is registered on the Security Register kept for that purpose in accordance with
the terms of this Indenture.
“Security
Register” and “Security Registrar” shall have the meanings as set forth in Section 2.05.
“Subsidiary”
means, with respect to any Person, any corporation, association, partnership or other business entity of which more than 50% of the total
voting power of shares of capital stock or other interests (including partnership interests) entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers, general partners or trustees thereof is at the time owned or controlled,
directly or indirectly, by (i) such Person; (ii) such Person and one or more Subsidiaries of such Person; or (iii) one or more Subsidiaries
of such Person.
“Trustee”
means, and, subject to the provisions of Article Seven, shall also include its successors and assigns, and, if at any time there is more
than one Person acting in such capacity hereunder, “Trustee” shall mean each such Person. The term “Trustee”
as used with respect to a particular series of the Securities shall mean the trustee with respect to that series.
“Trust
Indenture Act” means the Trust Indenture Act of 1939, as amended.
“U.S.A.
Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001, Pub. L. 107-56, as amended and signed into law October 26, 2001.
ARTICLE
2
ISSUE,
DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND
EXCHANGE
OF SECURITIES
Section
2.01 Designation and Terms of Securities.
(a)
The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited. The Securities
may be issued in one or more series up to the aggregate principal amount of Securities of that series from time to time authorized by
or pursuant to a Board Resolution or pursuant to one or more indentures supplemental hereto. Prior to the initial issuance of Securities
of any series, there shall be established in or pursuant to a Board Resolution, and set forth in an Officer’s Certificate, or established
in one or more indentures supplemental hereto:
(1)
the title of the Securities of the series (which shall distinguish the Securities of that series from all other Securities);
(2)
any limit upon the aggregate principal amount of the Securities of that 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 that series);
(3)
the maturity date or dates on which the principal of the Securities of the series is payable;
(4)
the form of the Securities of the series including the form of the certificate of authentication for such series;
(5)
the applicability of any guarantees;
(6)
whether or not the Securities will be secured or unsecured, and the terms of any secured debt;
(7)
whether the Securities rank as senior debt, senior subordinated debt, subordinated debt or any combination thereof, and the terms
of any subordination;
(8)
if the price (expressed as a percentage of the aggregate principal amount thereof) at which such Securities will be issued is a price
other than the principal amount thereof, the portion of the principal amount thereof payable upon declaration of acceleration of the
maturity thereof, or if applicable, the portion of the principal amount of such Securities that is convertible into another security
or the method by which any such portion shall be determined;
(9)
the interest rate or rates, which may be fixed or variable, or the method for determining the rate and the date interest will begin
to accrue, the dates interest will be payable and the regular record dates for interest payment dates or the method for determining such
dates;
(10)
the Company’s right, if any, to defer the payment of interest and the maximum length of any such deferral period;
(11)
if applicable, the date or dates after which, or the period or periods during which, and the price or prices at which, the Company
may at its option, redeem the series of Securities pursuant to any optional or provisional redemption provisions and the terms of those
redemption provisions;
(12)
the date or dates, if any, on which, and the price or prices at which the Company is obligated, pursuant to any mandatory sinking
fund or analogous fund provisions or otherwise, to redeem, or at the Securityholder’s option to purchase, the series of Securities
and the currency or currency unit in which the Securities are payable;
(13)
the denominations in which the Securities of the series shall be issuable, if other than denominations of one thousand U.S. dollars
($1,000) or any integral multiple thereof;
(14)
any and all terms, if applicable, relating to any auction or remarketing of the Securities of that series and any security for the
obligations of the Company with respect to such Securities and any other terms which may be advisable in connection with the marketing
of Securities of that series;
(15)
whether the Securities of the series shall be issued in whole or in part in the form of a Global Security or Securities; the terms
and conditions, if any, upon which such Global Security or Securities may be exchanged in whole or in part for other individual Securities;
and the Depositary for such Global Security or Securities;
(16)
if applicable, the provisions relating to conversion or exchange of any Securities of the series and the terms and conditions upon
which such Securities will be so convertible or exchangeable, including the conversion or exchange price, as applicable, or how it will
be calculated and may be adjusted, any mandatory or optional (at the Company’s option or the holders’ option) conversion
or exchange features, the applicable conversion or exchange period and the manner of settlement for any conversion or exchange, which
may, without limitation, include the payment of cash as well as the delivery of securities;
(17)
if other than the full 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 pursuant to Section 6.01;
(18)
additions to or changes in the covenants applicable to the series of Securities being issued, including, among others, the consolidation,
merger or sale covenant;
(19)
additions to or changes in the Events of Default with respect to the Securities and any change in the right of the Trustee or the
Securityholders to declare the principal, premium, if any, and interest, if any, with respect to such Securities to be due and payable;
(20)
additions to or changes in or deletions of the provisions relating to covenant defeasance and legal defeasance;
(21)
additions to or changes in the provisions relating to satisfaction and discharge of this Indenture;
(22)
additions to or changes in the provisions relating to the modification of this Indenture both with and without the consent of Securityholders
of Securities issued under this Indenture;
(23)
the currency of payment of Securities if other than U.S. dollars and the manner of determining the equivalent amount in U.S. dollars;
(24)
whether interest will be payable in cash or additional Securities at the Company’s or the Securityholders’ option and
the terms and conditions upon which the election may be made;
(25)
the terms and conditions, if any, upon which the Company shall pay amounts in addition to the stated interest, premium, if any and
principal amounts of the Securities of the series to any Securityholder that is not a “United States person” for federal
tax purposes;
(26)
any restrictions on transfer, sale or assignment of the Securities of the series; and
(27)
any other specific terms, preferences, rights or limitations of, or restrictions on, the Securities, any other additions or changes
in the provisions of this Indenture, and any terms that may be required by us or advisable under applicable laws or regulations.
All
Securities of any one series shall be substantially identical except as may otherwise be provided in or pursuant to any such Board Resolution
or in any indentures supplemental hereto.
If
any of the terms of the series are established by action taken pursuant to a Board Resolution of the Company, a copy of an appropriate
record of such action shall be certified by the secretary or an assistant secretary of the Company and delivered to the Trustee at or
prior to the delivery of the Officer’s Certificate of the Company setting forth the terms of the series.
Securities
of any particular series may be issued at various times, with different dates on which the principal or any installment of principal
is payable, with different rates of interest, if any, or different methods by which rates of interest may be determined, with different
dates on which such interest may be payable and with different redemption dates.
Section
2.02 Form of Securities and Trustee’s Certificate.
The
Securities of any series and the Trustee’s certificate of authentication to be borne by such Securities shall be substantially
of the tenor and purport as set forth in one or more indentures supplemental hereto or as provided in a Board Resolution, and set forth
in an Officer’s Certificate, and they may have such letters, numbers or other marks of identification or designation and such legends
or endorsements printed, lithographed or engraved thereon as the Company may deem appropriate and as are not inconsistent with the provisions
of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule
or regulation of any securities exchange on which Securities of that series may be listed, or to conform to usage.
Section
2.03 Denominations: Provisions for Payment.
The
Securities shall be issuable as registered Securities and in the denominations of one thousand U.S. dollars ($1,000) or any integral
multiple thereof, subject to Section 2.01(a)(13). The Securities of a particular series shall bear interest payable on the dates and
at the rate specified with respect to that series. Subject to Section 2.01(a)(23), the principal of and the interest on the Securities
of any series, as well as any premium thereon in case of redemption or repurchase thereof prior to maturity, and any cash amount due
upon conversion or exchange thereof, shall be payable in the coin or currency of the United States of America that at the time is legal
tender for public and private debt, at the office or agency of the Company maintained for that purpose. Each Security shall be dated
the date of its authentication. Interest on the Securities shall be computed on the basis of a 360-day year composed of twelve 30-day
months.
The
interest installment on any Security that is payable, and is punctually paid or duly provided for, on any Interest Payment Date for Securities
of that series shall be paid to the Person in whose name said Security (or one or more Predecessor Securities) is registered at the close
of business on the regular record date for such interest installment. In the event that any Security of a particular series or portion
thereof is called for redemption and the redemption date is subsequent to a regular record date with respect to any Interest Payment
Date and prior to such Interest Payment Date, interest on such Security will be paid upon presentation and surrender of such Security
as provided in Section 3.03.
Any
interest on any Security that is payable, but is not punctually paid or duly provided for, on any Interest Payment Date for Securities
of the same series (herein called “Defaulted Interest”) shall forthwith cease to be payable to the registered holder on the
relevant regular record date by virtue of having been such holder; and such Defaulted Interest shall be paid by the Company, at its election,
as provided in clause (1) or clause (2) below:
(1)
The Company may make payment of any Defaulted Interest on Securities to the Persons in whose names such Securities (or their respective
Predecessor Securities) are registered in the Security Register at the close of business on a special record date for the payment of
such Defaulted Interest, which shall be fixed in the following manner: the Company shall notify the Trustee in writing of the amount
of Defaulted Interest proposed to be paid on each such Security and the date of the proposed payment, and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited
to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a special record date for the payment of such Defaulted Interest which shall not be more than 15 nor less than 10 days prior
to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment.
The Trustee shall promptly notify the Company of such special record date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the special record date therefor to be sent, to each Securityholder not
less than 10 days prior to such special record date. Notice of the proposed payment of such Defaulted Interest and the special record
date therefor having been sent as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names such Securities (or
their respective Predecessor Securities) are registered in the Security Register on such special record date.
(2)
The Company may make payment of any Defaulted Interest on any Securities in any other lawful manner not inconsistent with the requirements
of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable
by the Trustee.
Unless
otherwise set forth in a Board Resolution or one or more indentures supplemental hereto establishing the terms of any series of Securities
pursuant to Section 2.01 hereof, the term “regular record date” as used in this Section with respect to a series of Securities
and any Interest Payment Date for such series shall mean either the fifteenth day of the month immediately preceding the month in which
an Interest Payment Date established for such series pursuant to Section 2.01 hereof shall occur, if such Interest Payment Date is the
first day of a month, or the first day of the month in which an Interest Payment Date established for such series pursuant to Section
2.01 hereof shall occur, if such Interest Payment Date is the fifteenth day of a month, whether or not such date is a Business Day.
Subject
to the foregoing provisions of this Section, each Security of a series delivered under this Indenture upon transfer of or in exchange
for or in lieu of any other Security of such series shall carry the rights to interest accrued and unpaid, and to accrue, that were carried
by such other Security.
Section
2.04 Execution and Authentications.
The
Securities shall be signed on behalf of the Company by one of its Officers. Signatures may be in the form of a manual or facsimile signature.
The
Company may use the facsimile signature of any Person who shall have been an Officer (at the time of execution), notwithstanding the
fact that at the time the Securities shall be authenticated and delivered or disposed of such Person shall have ceased to be such an
officer of the Company. The Securities may contain such notations, legends or endorsements required by law, stock exchange rule or usage.
Each Security shall be dated the date of its authentication by the Trustee.
A
Security shall not be valid until authenticated manually by an authorized signatory of the Trustee, or by an Authenticating Agent. Such
signature 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. At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with
a written order of the Company for the authentication and delivery of such Securities, signed by an Officer, and the Trustee in accordance
with such written order shall authenticate and deliver such Securities.
Upon
the Company’s delivery of any such authentication order to the Trustee at any time after the initial issuance of Securities under
this Indenture, the Trustee shall be provided with, and (subject to Sections 315(a) through 315(d) of the Trust Indenture Act) shall
be fully protected in relying upon, (1) an Opinion of Counsel or reliance letter and (2) an Officer’s Certificate stating that
all conditions precedent to the execution, authentication and delivery of such Securities are in conformity with the provisions of this
Indenture.
The
Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect
the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner that is not reasonably
acceptable to the Trustee.
Section
2.05 Registration of Transfer and Exchange.
(a)
Securities of any series may be exchanged upon presentation thereof at the office or agency of the Company designated for such purpose,
for other Securities of such series of authorized denominations, and for a like aggregate principal amount, upon payment of a sum sufficient
to cover any tax or other governmental charge in relation thereto, all as provided in this Section. In respect of any Securities so surrendered
for exchange, the Company shall execute, the Trustee shall authenticate and such office or agency shall deliver in exchange therefor
the Security or Securities of the same series that the Securityholder making the exchange shall be entitled to receive, bearing numbers
not contemporaneously outstanding.
(b)
The Company shall keep, or cause to be kept, at its office or agency designated for such purpose a register or registers (herein
referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company
shall register the Securities and the transfers of Securities as in this Article provided and which at all reasonable times shall be
open for inspection by the Trustee. The registrar for the purpose of registering Securities and transfer of Securities as herein provided
shall be appointed as authorized by Board Resolution or Supplemental Indenture (the “Security Registrar”).
Upon
surrender for transfer of any Security at the office or agency of the Company designated for such purpose, the Company shall execute,
the Trustee shall authenticate and such office or agency shall deliver in the name of the transferee or transferees a new Security or
Securities of the same series as the Security presented for a like aggregate principal amount.
The
Company initially appoints the Trustee as initial Security Registrar for each series of Securities.
All
Securities presented or surrendered for exchange or registration of transfer, as provided in this Section, shall be accompanied (if so
required by the Company or the Security Registrar) by a written instrument or instruments of transfer, in form satisfactory to the Company
or the Security Registrar, duly executed by the registered holder or by such holder’s duly authorized attorney in writing.
(c)
Except as provided pursuant to Section 2.01 pursuant to a Board Resolution, and set forth in an Officer’s Certificate, or established
in one or more indentures supplemental to this Indenture, no service charge shall be made for any exchange or registration of transfer
of Securities, or issue of new Securities in case of partial redemption of any series or repurchase, conversion or exchange of less than
the entire principal amount of a Security, but the Company may require payment of a sum sufficient to cover any tax or other governmental
charge in relation thereto, other than exchanges pursuant to Section 2.06, Section 3.03(b) and Section 9.04 not involving any transfer.
(d)
The Company and the Security Registrar shall not be required (i) to issue, exchange or register the transfer of any Securities during
a period beginning at the opening of business 15 days before the day of the sending of a notice of redemption of less than all the Outstanding
Securities of the same series and ending at the close of business on the day of such sending, nor (ii) to register the transfer of or
exchange any Securities of any series or portions
thereof
called for redemption or surrendered for repurchase, but not validly withdrawn, other than the unredeemed portion of any such Securities
being redeemed in part or not surrendered for repurchase, as the case may be. The provisions of this Section 2.05 are, with respect to
any Global Security, subject to Section 2.11 hereof.
The
Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between
or among Depositary participants or beneficial owners of interests in any Global Security) other than to require delivery of such certificates
and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture,
and to examine the same to determine substantial compliance as to form with the express requirements hereof.
Section
2.06 Temporary Securities.
Pending
the preparation of definitive Securities of any series, the Company may execute, and the Trustee shall authenticate and deliver, temporary
Securities (printed, lithographed or typewritten) of any authorized denomination. Such temporary Securities shall be substantially in
the form of the definitive Securities in lieu of which they are issued, but with such omissions, insertions and variations as may be
appropriate for temporary Securities, all as may be determined by the Company. Every temporary Security of any series shall be executed
by the Company and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with like effect,
as the definitive Securities of such series. Without unnecessary delay the Company will execute and will furnish definitive Securities
of such series and thereupon any or all temporary Securities of such series may be surrendered in exchange therefor (without charge to
the Securityholders), at the office or agency of the Company designated for the purpose, and the Trustee shall authenticate and such
office or agency shall deliver in exchange for such temporary Securities an equal aggregate principal amount of definitive Securities
of such series, unless the Company advises the Trustee to the effect that definitive Securities need not be executed and furnished until
further notice from the Company. Until so exchanged, the temporary Securities of such series shall be entitled to the same benefits under
this Indenture as definitive Securities of such series authenticated and delivered hereunder.
Section
2.07 Mutilated, Destroyed, Lost or Stolen Securities.
In
case any temporary or definitive Security shall become mutilated or be destroyed, lost or stolen, the Company (subject to the next succeeding
sentence) shall execute, and upon the Company’s request the Trustee (subject as aforesaid) shall authenticate and deliver, a new
Security of the same series, bearing a number not contemporaneously outstanding, in exchange and substitution for the mutilated Security,
or in lieu of and in substitution for the Security so destroyed,
lost
or stolen. In every case the applicant for a substituted Security shall furnish to the Company and the Trustee such security or indemnity
as may be required by them to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also
furnish to the Company and the Trustee evidence to their satisfaction of the destruction, loss or theft of the applicant’s Security
and of the ownership thereof. The Trustee may authenticate any such substituted Security and deliver the same upon the written request
or authorization of any officer of the Company. Upon the issuance of any substituted Security, the Company may require the payment of
a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
In
case any Security that has matured or is about to mature shall become mutilated or be destroyed, lost or stolen, the Company may, instead
of issuing a substitute Security, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated
Security) if the applicant for such payment shall furnish to the Company and the Trustee such security or indemnity as they may require
to save them harmless, and, in case of destruction, loss or theft, evidence to the satisfaction of the Company and the Trustee of the
destruction, loss or theft of such Security and of the ownership thereof.
Every
replacement Security issued pursuant to the provisions of this Section shall constitute an additional contractual obligation of the Company
whether or not the mutilated, destroyed, lost or stolen Security shall be found at any time, or be enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of the same series duly
issued hereunder. All Securities shall be held and owned upon the express condition that the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities, and shall preclude (to the extent lawful) 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
2.08 Cancellation.
All
Securities surrendered for the purpose of payment, redemption, repurchase, exchange, registration of transfer or conversion shall, if
surrendered to the Company or any paying agent (or any other applicable agent), 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 required
or permitted by any of the provisions of this Indenture. On request of the Company at the time of such surrender, the Trustee shall deliver
to the Company canceled Securities held by the Trustee. In the absence of such request the Trustee may dispose of canceled Securities
in accordance with its standard procedures and deliver a certificate of disposition to the Company. If the Company shall otherwise acquire
any of the Securities, however, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by
such Securities unless and until the same are delivered to the Trustee for cancellation.
Section
2.09 Benefits of Indenture.
Nothing
in this Indenture or in the Securities, express or implied, shall give or be construed to give to any Person, other than the parties
hereto and the holders of the Securities any legal or equitable right, remedy or claim under or in respect of this Indenture, or under
any covenant, condition or provision herein contained; all such covenants, conditions and provisions being for the sole benefit of the
parties hereto and of the holders of the Securities.
Section
2.10 Authenticating Agent.
So
long as any of the Securities of any series remain Outstanding there may be an Authenticating Agent for any or all such series of Securities
which the Trustee shall have the right to appoint. Said Authenticating Agent shall be authorized to act on behalf of the Trustee to authenticate
Securities of such series issued upon exchange, transfer or partial redemption, repurchase or conversion thereof, and Securities so authenticated
shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. All references in this Indenture to the authentication of Securities by the Trustee shall be deemed to include authentication
by an Authenticating Agent for such series. Each Authenticating Agent shall be acceptable to the Company and shall be a corporation that
has a combined capital and surplus, as most recently reported or determined by it, sufficient under the laws of any jurisdiction under
which it is organized or in which it is doing business to conduct a trust business, and that is otherwise authorized under such laws
to conduct such business and is subject to supervision or examination by federal or state authorities. If at any time any Authenticating
Agent shall cease to be eligible in accordance with these provisions, it shall resign immediately.
Any
Authenticating Agent may at any time resign by giving written notice of resignation to the Trustee and to the Company. The Trustee may
at any time (and upon request by the Company shall) terminate the agency of any Authenticating Agent by giving written notice of termination
to such Authenticating Agent and to the Company. Upon resignation, termination or cessation of eligibility of any Authenticating Agent,
the Trustee may appoint an eligible successor Authenticating Agent acceptable to the Company. Any successor Authenticating Agent, upon
acceptance of its appointment hereunder, shall become vested with all the rights, powers and duties of its predecessor hereunder as if
originally named as an Authenticating Agent pursuant hereto.
Section
2.11 Global Securities.
(a)
If the Company shall establish pursuant to Section 2.01 that the Securities of a particular series are to be issued as a Global Security,
then the Company shall execute and the Trustee shall, in accordance with Section 2.04, authenticate and deliver, a Global Security that
(i) shall represent, and shall be denominated in an amount equal to the aggregate principal amount of, all of the Outstanding Securities
of such series, (ii) shall be registered in the name of the Depositary or its nominee, (iii) shall be delivered by the Trustee to the
Depositary or pursuant to the Depositary’s instruction (or if the Depositary names the Trustee as its custodian, retained by the
Trustee), and (iv) shall bear a legend substantially to the following effect: “Except as otherwise provided in Section 2.11 of
the Indenture, this Security may be transferred, in whole but not in part, only to another nominee of the Depositary or to a successor
Depositary or to a nominee of such successor Depositary.”
(b)
Notwithstanding the provisions of Section 2.05, the Global Security of a series may be transferred, in whole but not in part and
in the manner provided in Section 2.05, only to another nominee of the Depositary for such series, or to a successor Depositary for such
series selected or approved by the Company or to a nominee of such successor Depositary.
(c)
If at any time the Depositary for a series of the Securities notifies the Company that it is unwilling or unable to continue as Depositary
for such series or if at any time the Depositary for such series shall no longer be registered or in good standing under the Exchange
Act, or other applicable statute or regulation, and a successor Depositary for such series is not appointed by the Company within 90
days after the Company receives such notice or becomes aware of such condition, as the case may be, or if an Event of Default has occurred
and is continuing and the Company has received a request from the Depositary or from the Trustee, this Section 2.11 shall no longer be
applicable to the Securities of such series and the Company will execute, and subject to Section 2.04, the Trustee will authenticate
and deliver the Securities of such series in definitive registered form without coupons, in authorized denominations, and in an aggregate
principal amount equal to the principal amount of the Global Security of such series in exchange for such Global Security. In addition,
the Company may at any time determine that the Securities of any series shall no longer be represented by a Global Security and that
the provisions of this Section 2.11 shall no longer apply to the Securities of such series. In such event the Company will execute and,
subject to Section 2.04, the Trustee, upon receipt of an Officer’s Certificate evidencing such determination by the Company, will
authenticate and deliver the Securities of such series in definitive registered form without coupons, in authorized denominations, and
in an aggregate principal amount equal to the principal amount of the Global Security of such series in exchange for such Global Security.
Upon the exchange of the Global Security for such Securities in definitive registered form without coupons, in authorized denominations,
the Global Security shall be canceled by the Trustee. Such Securities in definitive registered form issued in exchange for the Global
Security pursuant to this Section 2.11(c) shall be registered in such names and in such authorized denominations as the Depositary, pursuant
to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities
to the Depositary for delivery to the Persons in whose names such Securities are so registered.
Section
2.12 CUSIP Numbers.
The
Company in issuing the Securities may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP”
numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance
may be placed only on the other elements of identification printed on the Securities, and any such redemption shall not be affected by
any defect in or omission of such numbers. The Company will promptly notify the Trustee of any change in the “CUSIP” numbers.
ARTICLE
3
REDEMPTION
OF SECURITIES AND SINKING FUND PROVISIONS
Section
3.01 Redemption.
The
Company may redeem the Securities of any series issued hereunder on and after the dates and in accordance with the terms established
for such series pursuant to Section 2.01 hereof.
Section
3.02 Notice of Redemption.
(a)
In case the Company shall desire to exercise such right to redeem all or, as the case may be, a portion of the Securities of any
series in accordance with any right the Company reserved for itself to do so pursuant to Section 2.01 hereof, the Company shall, or shall
cause the Trustee to, give notice of such redemption to holders of the Securities of such series to be redeemed by mailing, first class
postage prepaid (or with regard to any Global Security held in book entry form, by electronic mail in accordance with the applicable
procedures of the Depositary), a notice of such redemption not less than 30 days and not more than 90 days before the date fixed for
redemption of that series to such Securityholders, unless a shorter period is specified in the Securities to be redeemed. Any notice
that is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the registered holder
receives the notice. In any case, failure duly to give such notice to the holder of any Security of any series designated for redemption
in whole or in part, or any defect in the notice, shall not affect the validity of the proceedings for the redemption of any other Securities
of such series or any other series. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officer’s
Certificate evidencing compliance with any such restriction.
Each
such notice of redemption shall identify the Securities to be redeemed (including CUSIP numbers, if any), specify the date fixed for
redemption and the redemption price at which Securities of that series are to be redeemed, and shall state that payment of the redemption
price of such Securities to be redeemed will be made at the office or agency of the Company, upon presentation and surrender of such
Securities, that interest accrued to the date fixed for redemption will be paid as specified in said notice, that from and after said
date interest will cease to accrue and that the redemption is from a sinking fund, if such is the case. If less than all the Securities
of a series are to be redeemed, the notice to the holders of Securities of that series to be redeemed in part shall specify the particular
Securities to be so redeemed.
In
case any Security is to be redeemed in part only, the notice that relates to such Security shall state the portion of the principal amount
thereof to be redeemed, and shall state that on and after the redemption date, 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.
(b)
If less than all the Securities of a series are to be redeemed, the Company shall give the Trustee at least 45 days’ notice
(unless a shorter notice shall be satisfactory to the Trustee) in advance of the date fixed for redemption as to the aggregate principal
amount of Securities of the series to be redeemed, and thereupon the Securities to be redeemed shall be selected, by lot, on a pro rata
basis, or in such other manner as the Company shall deem appropriate and fair in its discretion and that may provide for the selection
of a portion or portions (equal to one thousand U.S. dollars ($1,000) or any integral multiple thereof) of the principal amount of such
Securities of a denomination larger than $1,000, the Securities to be redeemed and shall thereafter promptly notify the Company in writing
of the numbers of the Securities to be redeemed, in whole or in part. The Company may, if and whenever it shall so elect, by delivery
of instructions signed on its behalf by an Officer, instruct the Trustee or any paying agent to call all or any part of the Securities
of a particular series for redemption and to give notice of redemption in the manner set forth in this Section, such notice to be in
the name of the Company or its own name as the Trustee or such paying agent may deem advisable. In any case in which notice of redemption
is to be given by the Trustee or any such paying agent, the Company shall deliver or cause to be delivered to, or permit to remain with,
the Trustee or such paying agent, as the case may be, such Security Register, transfer books or other records, or suitable copies or
extracts therefrom, sufficient to enable the Trustee or such paying agent to give any notice by mail that may be required under the provisions
of this Section.
Section
3.03 Payment Upon Redemption.
(a)
If the giving of notice of redemption shall have been completed as above provided, the Securities or portions of Securities of the
series to be redeemed 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, but excluding, the date fixed for redemption and interest on such Securities
or portions of Securities shall cease to accrue on and after the date fixed for redemption, unless the Company shall default in the payment
of such redemption price and accrued interest with respect to any such Security or portion thereof. On presentation and surrender of
such Securities on or after the date fixed for redemption at the place of payment specified in the notice, said Securities shall be paid
and redeemed at the applicable redemption price for such series, together with interest accrued thereon to, but excluding, the date fixed
for redemption (but if the date fixed for redemption is an Interest Payment Date, the interest installment payable on such date shall
be payable to the registered holder at the close of business on the applicable record date pursuant to Section 2.03).
(b)
Upon presentation of any Security of such series that is to be redeemed in part only, the Company shall execute and the Trustee shall
authenticate and the office or agency where the Security is presented shall deliver to the Securityholder thereof, at the expense of
the Company, a new Security of the same series of authorized denominations in principal amount equal to the unredeemed portion of the
Security so presented.
Section
3.04 Sinking Fund.
The
provisions of Sections 3.04, 3.05 and 3.06 shall be applicable to any sinking fund for the retirement of Securities of a series, except
as otherwise specified as contemplated by Section 2.01 for Securities of such series.
The
minimum amount of any sinking fund payment provided for by the terms of 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 Securities of any series is
herein referred to as an “optional sinking fund payment”. If provided for by the terms of Securities of any series, the cash
amount of any sinking fund payment may be subject to reduction as provided in Section 3.05. Each sinking fund payment shall be applied
to the redemption of Securities of any series as provided for by the terms of Securities of such series.
Section
3.05 Satisfaction of Sinking Fund Payments with Securities.
The
Company (i) may deliver Outstanding Securities of a series and (ii) may apply as a credit Securities of a series that have been redeemed
either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking
fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with
respect to the Securities of such series required to be made pursuant to the terms of such Securities as provided for by the terms of
such series, provided that such Securities have not been previously so credited. Such Securities shall be received and credited for such
purpose by the Trustee at the redemption price specified in such Securities for redemption through operation of the sinking fund and
the amount of such sinking fund payment shall be reduced accordingly.
Section
3.06 Redemption of Securities for Sinking Fund.
Not
less than 45 days prior to each sinking fund payment date for any series of Securities (unless a shorter period shall be satisfactory
to the Trustee), the Company will deliver to the Trustee an Officer’s Certificate specifying the amount of the next ensuing sinking
fund payment for that series pursuant to the terms of the series, the portion thereof, if any, that is to be satisfied by delivering
and crediting Securities of that series pursuant to Section 3.05 and the basis for such credit and will, together with such Officer’s
Certificate, deliver to the Trustee any Securities to be so delivered. Not less than 30 days before each such sinking fund payment date
the Securities to be redeemed upon such sinking fund payment date shall be selected in the manner specified in Section 3.02 and the Company
shall cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section
3.02. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in
Section 3.03.
ARTICLE
4
COVENANTS
Section
4.01 Payment of Principal, Premium and Interest.
The
Company will duly and punctually pay or cause to be paid the principal of (and premium, if any) and interest on the Securities of that
series at the time and place and in the manner provided herein and established with respect to such Securities. Payments of principal
on the Securities may be made at the time provided herein and established with respect to such Securities by U.S. dollar check drawn
on and mailed to the address of the Securityholder entitled thereto as such address shall appear in the Security Register, or U.S. dollar
wire transfer to, a U.S. dollar account if such Securityholder shall have furnished wire instructions to the Trustee no later
than 15 days prior to the relevant payment date. Payments of interest on the Securities may be made at the time provided herein and established
with respect to such Securities by U.S. dollar check mailed to the address of the Securityholder entitled thereto as such address shall
appear in the Security Register, or U.S. dollar wire transfer to, a U.S. dollar account if such Securityholder shall have furnished wire
instructions in writing to the Security Registrar and the Trustee no later than 15 days prior to the relevant payment date.
Section
4.02 Maintenance of Office or Agency.
So
long as any series of the Securities remain Outstanding, the Company agrees to maintain an office or agency with respect to each such
series and at such other location or locations as may be designated as provided in this Section 4.02, where (i) Securities of that series
may be presented for payment, (ii) Securities of that series may be presented as herein above authorized for registration of transfer
and exchange, and (iii) notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may
be given or served, such designation to continue with respect to such office or agency until the Company shall, by written notice signed
by any officer authorized to sign an Officer’s Certificate and delivered to the Trustee, designate some other office or agency
for such purposes or any of them. If at any time the Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, notices and demands.
The Company initially appoints the Corporate Trust Office of the Trustee as its paying agent with respect to the Securities.
Section
4.03 Paying Agents.
(a)
If the Company shall appoint one or more paying agents for all or any series of the Securities, other than the Trustee, the Company
will cause each 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:
(1)
that it will hold all sums held by it as such agent for the payment of the principal of (and premium, if any) or interest on the
Securities of that series (whether such sums have been paid to it by the Company or by any other obligor of such Securities) in trust
for the benefit of the Persons entitled thereto;
(2)
that it will give the Trustee notice of any failure by the Company (or by any other obligor of such Securities) to make any payment
of the principal of (and premium, if any) or interest on the Securities of that series when the same shall be due and payable;
(3)
that it will, at any time during the continuance of any failure referred to in the preceding paragraph (a)(2) above, upon the written
request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such paying agent; and
(4)
that it will perform all other duties of paying agent as set forth in this Indenture.
(b)
If the Company shall act as its own paying agent with respect to any series of the Securities, it will on or before each due date
of the principal of (and premium, if any) or interest on Securities of that series, set aside, segregate and hold in trust for the benefit
of the Persons entitled thereto a sum sufficient to pay such principal (and premium, if any) or interest so becoming due on Securities
of that series until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the
Trustee of such action, or any failure (by it or any other obligor on such Securities) to take such action. Whenever the Company shall
have one or more paying agents for any series of Securities, it will, prior to each due date of the principal of (and premium, if any)
or interest on any Securities of that series, deposit with the paying agent a sum sufficient to pay the principal (and premium, if any)
or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest,
and (unless such paying agent is the Trustee) the Company will promptly notify the Trustee of this action or failure so to act.
(c)
Notwithstanding anything in this Section to the contrary, (i) the agreement to hold sums in trust as provided in this Section is
subject to the provisions of Section 11.05, and (ii) the Company may at any time, for the purpose of obtaining the satisfaction and discharge
of this Indenture or for any other purpose, pay, or direct any paying agent to pay, to the Trustee all sums held in trust by the Company
or such paying agent, such sums to be held by the Trustee upon the same terms and conditions as those upon which such sums were held
by the Company or such paying agent; and, upon such payment by the Company or any paying agent to the Trustee, the Company or such paying
agent shall be released from all further liability with respect to such money.
Section
4.04 Appointment to Fill Vacancy in Office of Trustee.
The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.10,
a Trustee, so that there shall at all times be a Trustee hereunder.
ARTICLE
5
SECURITYHOLDERS’
LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section
5.01 Company to Furnish Trustee Names and Addresses of Securityholders.
The
Company will furnish or cause to be furnished to the Trustee (a) within 15 days after each regular record date (as defined in Section
2.03) a list, in such form as the Trustee may reasonably require, of the names and addresses of the holders of each series of Securities
as of such regular record date, provided that the Company shall not be obligated to furnish or cause to furnish such list at any time
that the list shall not differ in any respect from the most recent list furnished to the Trustee by the Company and (b) at such other
times as the Trustee may request in writing within 30 days after the receipt by the Company of any such request, a list of similar form
and content as of a date not more than 15 days prior to the time such list is furnished; provided, however, that, in either case, no
such list need be furnished for any series for which the Trustee shall be the Security Registrar.
Section
5.02 Preservation Of Information; Communications 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 5.01 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 5.01 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, and, in connection with any such communications, the Trustee shall satisfy
its obligations under Section 312(b) of the Trust Indenture Act in accordance with the provisions of Section 312(b) of the Trust Indenture
Act.
Section
5.03 Reports by the Company.
(a)
The Company will at all times comply with Section 314(a) of the Trust Indenture Act. The Company covenants and agrees to provide
(which delivery may be via electronic mail) to the Trustee within 30 days, after the Company files the same with the Commission, copies
of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) that the Company is required to file with the Commission pursuant
to Section 13 or Section 15(d) of the Exchange Act; provided, however, the Company shall not be required to deliver to the Trustee any
correspondence filed with the Commission or any materials for which the Company has sought and received confidential treatment by the
Commission; and provided further, that so long as such filings by the Company are available on the Commission’s Electronic Data
Gathering, Analysis and Retrieval System (EDGAR), or any successor system, such filings shall be deemed to have been filed with the Trustee
for purposes hereof without any further action required by the Company. For the avoidance of doubt, a failure by the Company to file
annual reports, information and other reports with the Commission within the time period prescribed thereof by the Commission shall not
be deemed a breach of this Section 5.03.
(b)
Delivery of reports, information and documents to the Trustee under Section 5.03 is for informational purposes only and the information
and the Trustee’s receipt of the foregoing shall not constitute constructive notice of any information contained therein, or determinable
from information contained therein including the Company’s compliance with any of their covenants thereunder (as to which the Trustee
is entitled to rely exclusively on an Officer’s Certificate). The Trustee is under no duty to examine any such reports, information
or documents delivered to the Trustee or filed with the Commission via EDGAR to ensure compliance with the provision of this Indenture
or to ascertain the correctness or otherwise of the information or the statements contained therein. The Trustee shall have no responsibility
or duty whatsoever to ascertain or determine whether the above referenced filings with the Commission on EDGAR (or any successor system)
has occurred.
Section
5.04 Reports by the Trustee.
(a)
If required by Section 313(a) of the Trust Indenture Act, the Trustee, within sixty (60) days after each May 1, shall send to the
Securityholders a brief report dated as of such May 1, which complies with Section 313(a) of the Trust Indenture Act.
(b)
The Trustee shall comply with Section 313(b) and 313(c) of the Trust Indenture Act.
(c)
A copy of each such report shall, at the time of such transmission to Securityholders, be filed by the Trustee with the Company,
with each securities exchange upon which any Securities are listed (if so listed) and also with the Commission. The Company agrees to
notify the Trustee when any Securities become listed on any securities exchange.
ARTICLE
6
REMEDIES
OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
Section
6.01 Events of Default.
(a)
Whenever used herein with respect to Securities of a particular series, “Event of Default” means any one or more of the
following events that has occurred and is continuing:
(1)
the Company defaults in the payment of any installment of interest upon any of the Securities of that series, as and when the same
shall become due and payable, and such default continues for a period of 90 days; provided, however, that a valid extension of an interest
payment period by the Company in accordance with the terms of any indenture supplemental hereto shall not constitute a default in the
payment of interest for this purpose;
(2)
the Company defaults in the payment of the principal of (or premium, if any, on) any of the Securities of that series as and when
the same shall become due and payable whether at maturity, upon redemption, by declaration or otherwise, or in any payment required by
any sinking or analogous fund established with respect to that series; provided, however, that a valid extension of the maturity of such
Securities in accordance with the terms of any indenture supplemental hereto shall not constitute a default in the payment of principal
or premium, if any;
(3)
the Company fails to observe or perform any other of its covenants or agreements with respect to that series contained in this Indenture
or otherwise established with respect to that series of Securities pursuant to Section 2.01 hereof (other than a covenant or agreement
that has been expressly included in this Indenture solely for the benefit of one or more series of Securities other than such series)
for a period of 90 days after the date on which written notice of such failure, requiring the same to be remedied and stating that such
notice is a “Notice of Default” hereunder, shall have been given to the Company by the Trustee, by registered or certified
mail, or to the Company and the Trustee by the holders of at least 25% in principal amount of the Securities of that series at the time
Outstanding;
(4)
the Company pursuant to or within the meaning of any Bankruptcy Law (i) commences a voluntary case, (ii) consents to the entry of
an order for relief against it in an involuntary case, (iii) consents to the appointment of a Custodian of it or for all or substantially
all of its property or (iv) makes a general assignment for the benefit of its creditors; or
(5)
a court of competent jurisdiction enters an order under any Bankruptcy Law that (i) is for relief against the Company in an involuntary
case, (ii) appoints a Custodian of the Company for all or substantially all of its property or (iii) orders the liquidation of the Company,
and the order or decree remains unstayed and in effect for 90 days.
(b)
In each and every such case (other than an Event of Default specified in clause (4) or clause (5) above), unless the principal of
all the Securities of that 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 that series then Outstanding hereunder, by notice in writing to the Company (and to the
Trustee if given by such Securityholders), may declare the principal of (and premium, if any, on) and accrued and unpaid interest on
all the Securities of that series to be due and payable immediately, and upon any such declaration the same shall become and shall be
immediately due and payable. If an Event of Default specified in clause (4) or clause (5) above occurs, the principal of and accrued
and unpaid interest on all the Securities of that series shall automatically be immediately due and payable without any declaration or
other act on the part of the Trustee or the holders of the Securities.
(c)
At any time after the principal of (and premium, if any, on) and accrued and unpaid interest on the Securities of that 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 holders of a majority in aggregate principal amount of the Securities of that series then Outstanding
hereunder, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if: (i) the
Company has paid or deposited with the Trustee a sum sufficient to pay all matured installments of interest upon all the Securities of
that series and the principal of (and premium, if any, on) any and all Securities of that series that shall have become due otherwise
than by acceleration (with interest upon such principal and premium, if any, and, to the extent that such payment is enforceable under
applicable law, upon overdue installments of interest, at the rate per annum expressed in the Securities of that series to the date of
such payment or deposit) and the amount payable to the Trustee under Section 7.06, and (ii) any and all Events of Default under the Indenture
with respect to such series, other than the nonpayment of principal on (and premium, if any, on) and accrued and unpaid interest on Securities
of that series that shall not have become due by their terms, shall have been remedied or waived as provided in Section 6.06.
No
such rescission and annulment shall extend to or shall affect any subsequent default or impair any right consequent thereon.
(d)
In case the Trustee shall have proceeded to enforce any right with respect to Securities of that series under this Indenture and
such proceedings shall have been discontinued or abandoned because of such rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case, subject to any determination in such proceedings, the Company
and the Trustee shall be restored respectively to their former positions and rights hereunder, and all rights, remedies and powers of
the Company and the Trustee shall continue as though no such proceedings had been taken.
Section
6.02 Collection of Indebtedness and Suits for Enforcement by Trustee.
(a)
The Company covenants that (i) in case it shall default in the payment of any installment of interest on any of the Securities of
a series, or in any payment required by any sinking or analogous fund established with respect to that series as and when the same shall
have become due and payable, and such default shall have continued for a period of 90 days, or (ii) in case it shall default in the payment
of the principal of (or premium, if any, on) any of the Securities of a series when the same shall have become due and payable, whether
upon maturity of the Securities of a series or upon redemption or upon declaration or otherwise then, upon demand of the Trustee, the
Company will pay to the Trustee, for the benefit of the holders of the Securities of that series, the whole amount that then shall have
been become due and payable on all such Securities for principal (and premium, if any) or interest, or both, as the case may be, with
interest upon the overdue principal (and premium, if any) and (to the extent that payment of such interest is enforceable under applicable
law) upon overdue installments of interest at the rate per annum expressed in the Securities of that series; and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of collection, and the amount payable to the Trustee under
Section 7.06.
(b)
If the Company shall fail to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express
trust, 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 proceeding to judgment or final decree, and may enforce any such judgment or final decree
against the Company or other obligor upon the Securities of that series and collect the moneys adjudged or decreed to be payable in the
manner provided by law or equity out of the property of the Company or other obligor upon the Securities of that series, wherever situated.
(c)
In case of any receivership, insolvency, liquidation, bankruptcy, reorganization, readjustment, arrangement, composition or judicial
proceedings affecting the Company, or its creditors or property, the Trustee shall have power to intervene in such proceedings and take
any action therein that may be permitted by the court and shall (except as may be otherwise provided by law) be entitled to file such
proofs of claim and other papers and documents as may be necessary or advisable in order to have the claims of the Trustee and of the
holders of Securities of such series allowed for the entire amount due and payable by the Company under the Indenture at the date of
institution of such proceedings and for any additional amount that may become due and payable by the Company after such date, and to
collect and receive any moneys or other property payable or deliverable on any such claim, and to distribute the same after the deduction
of the amount payable to the Trustee under Section 7.06; and any receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized by each of the holders of Securities of such series to make such payments to the Trustee, and, in the event that the Trustee
shall consent to the making of such payments directly to such Securityholders, to pay to the Trustee any amount due it under Section
7.06.
(d)
All rights of action and of asserting claims under this Indenture, or under any of the terms established with respect to Securities
of that series, may be enforced by the Trustee without the possession of any of such Securities, or the production thereof at any trial
or other proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment shall, after provision for payment to the Trustee of any amounts due under Section
7.06, be for the ratable benefit of the holders of the Securities of such series.
In
case of an Event of Default hereunder, 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 of 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 the 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.
Nothing
contained herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Securityholder
any plan of reorganization, arrangement, adjustment or composition affecting the Securities of that series or the rights of any Securityholder
thereof or to authorize the Trustee to vote in respect of the claim of any Securityholder in any such proceeding.
Section
6.03 Application of Moneys Collected.
Any
moneys collected by the Trustee pursuant to this Article with respect to a particular series of Securities 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 premium,
if any) or interest, upon presentation of the Securities of that series, and notation thereon of the payment, if only partially paid,
and upon surrender thereof if fully paid:
FIRST:
To the payment of costs and expenses of collection and of all amounts payable to the Trustee under Section 7.06;
SECOND:
To the payment of the amounts then due and unpaid upon Securities of such series for principal (and premium, if any) and interest, in
respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Securities for principal (and premium, if any) and interest, respectively; and
THIRD:
To the payment of the remainder, if any, to the Company or any other Person lawfully entitled thereto.
Section
6.04 Limitation on Suits.
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
suit, action or proceeding in equity or at law upon or under or with respect to this Indenture or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless (i) such Securityholder previously shall have given to the Trustee written notice
of an Event of Default and of the continuance thereof with respect to the Securities of such series specifying such Event of Default,
as hereinbefore provided; (ii) 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, suit or proceeding in its own name as Trustee hereunder; (iii)
such Securityholder or Securityholders shall have offered to the Trustee indemnity satisfactory to it against the costs, expenses and
liabilities to be incurred in compliance with such request; (iv) the Trustee for 90 days after its receipt of such notice, request and
offer of indemnity, shall have failed to institute any such action, suit or proceeding and (v) during such 90 day period, the holders
of a majority in principal amount of the Securities of that series do not give the Trustee a direction inconsistent with the request.
Notwithstanding
anything contained herein to the contrary or any other provisions of this Indenture, the right of any holder of any Security to receive
payment of the principal of (and premium, if any) and interest on such Security, as therein provided, on or after the respective due
dates expressed in such Security (or in the case of redemption, on the redemption date), or to institute suit for the enforcement of
any such payment on or after such respective dates or redemption date, shall not be impaired or affected without the consent of such
holder and by accepting a Security hereunder it is expressly understood, intended and covenanted by the taker and holder of every Security
of such series with every other such taker and holder and the Trustee, that no one or more holders of Securities of such series shall
have any right in any manner whatsoever by virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the
rights of the holders of any other of such 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 such 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
6.05 Rights and Remedies Cumulative; Delay or Omission Not Waiver.
(a)
Except as otherwise provided in Section 2.07, all powers and remedies given by this Article to the Trustee or to the Securityholders
shall, to the extent permitted by law, be deemed cumulative and not exclusive of any other powers and remedies available to the Trustee
or the holders of the Securities, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture or otherwise established with respect to such Securities.
(b)
No delay or omission of the Trustee or of any holder of any of the 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
default or an acquiescence therein; and, subject to the provisions of Section 6.04, every power and remedy given by this Article or by
law to the Trustee or the Securityholders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee
or by the Securityholders.
Section
6.06 Control by Securityholders.
The
holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding, determined in accordance
with Section 8.04, 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 such series; provided, however, that such direction
shall not be in conflict with any rule of law or with this Indenture or subject the Trustee in its sole discretion to personal liability.
Subject to the provisions of Section 7.01, the Trustee shall have the right to decline to follow any such direction if the Trustee in
good faith shall, by a Responsible Officer or officers of the Trustee, determine that the proceeding so directed, subject to the Trustee’s
duties under the Trust Indenture Act, would involve the Trustee in personal liability or might be unduly prejudicial to the Securityholders
not involved in the proceeding. The holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding
affected thereby, determined in accordance with Section 8.04, may on behalf of the holders of all of the Securities of such series waive
any past default in the performance of any of the covenants contained herein or established pursuant to Section 2.01 with respect to
such series and its consequences, except a default in the payment of the principal of, or premium, if any, or interest on, any of the
Securities of that series as and when the same shall become due by the terms of such Securities otherwise than by acceleration (unless
such default has been cured and a sum sufficient to pay all matured installments of interest and principal and any premium has been deposited
with the Trustee (in accordance with Section 6.01(c)). Upon any such waiver, the default covered thereby shall be deemed to be cured
for all purposes of this Indenture and the Company, the Trustee and the holders of the Securities of such series shall be restored to
their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other default or impair
any right consequent thereon.
Section
6.07 Undertaking to Pay Costs.
All
parties to this Indenture agree, and each holder of any Securities by such holder’s 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 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 and expenses, 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, holding more than 10% in aggregate principal amount of the Outstanding Securities
of any series, or to any suit instituted by any Securityholder for the enforcement of the payment of the principal of (or premium, if
any) 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
7
CONCERNING
THE TRUSTEE
Section
7.01 Certain Duties and Responsibilities of Trustee.
(a)
The Trustee, prior to the occurrence of an Event of Default with respect to the Securities of a series and after the curing of all
Events of Default with respect to the Securities of that series that may have occurred, shall undertake to perform with respect to the
Securities of such series such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants
shall be read into this Indenture against the Trustee. In case an Event of Default with respect to the Securities of a series has occurred
(that has not been cured or waived), the Trustee shall exercise with respect to Securities of that series 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 man would exercise or use under
the circumstances in the conduct of his or her own affairs.
(b)
No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(i)
prior to the occurrence of an Event of Default with respect to the Securities of a series and after the curing or waiving of all
such Events of Default with respect to that series that may have occurred:
(A)
the duties and obligations of the Trustee shall with respect to the Securities of such series be determined solely by the express
provisions of this Indenture, and the Trustee shall not be liable with respect to the Securities of such series except for the performance
of such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and
(B)
in the absence of bad faith on the part of the Trustee, the Trustee may with respect to the Securities of such series conclusively
rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Indenture;
(ii)
the Trustee shall not be liable to any Securityholder or to any other Person 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;
(iii)
the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the
direction of the holders of not less than a majority in principal amount of the Securities of any series at the time Outstanding 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 with respect to the Securities of that series;
(iv)
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 is reasonable
ground for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Indenture
or adequate indemnity against such risk is not reasonably assured to it;
(v)
The Trustee shall not be required to give any bond or surety in respect of the performance of its powers or duties hereunder;
(vi)
The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty of the Trustee; and
(vii)
No Trustee shall have any duty or responsibility for any act or omission of any other Trustee appointed with respect to a series
of Securities hereunder.
Section
7.02 Certain Rights of Trustee.
Except
as otherwise provided in Section 7.01:
(a)
The Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond, 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;
(b)
Any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by a Board Resolution or
an instrument signed in the name of the Company by any authorized Officer of the Company (unless other evidence in respect thereof is
specifically prescribed herein);
(c)
The Trustee may consult with counsel and the opinion or written advice of such counsel or, if requested, any Opinion of Counsel shall
be full and complete authorization and protection in respect of any action taken or suffered or omitted hereunder in good faith and in
reliance thereon;
(d)
The Trustee shall be under no obligation to exercise any of the rights 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 security or indemnity reasonably acceptable to the Trustee against the costs, expenses and liabilities that may be incurred
therein or thereby; nothing contained herein shall, however, relieve the Trustee of the obligation, upon the occurrence of an Event of
Default with respect to a series of the Securities (that has not been cured or waived), to exercise with respect to Securities of that
series such of the rights and powers vested in it by this Indenture, and to use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct of his or her own affairs;
(e)
The Trustee shall not be liable for any action taken or omitted to be taken by it in good faith and believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this Indenture;
(f)
The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond, security, or other papers or documents or inquire as to
the performance by the Company of one of its covenants under this Indenture, unless requested in writing so to do by the holders of not
less than a majority in principal amount of the Outstanding Securities of the particular series affected thereby (determined as provided
in Section 8.04); provided, however, 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 security or indemnity reasonably acceptable to
the Trustee against such costs, expenses or liabilities as a condition to so proceeding. The reasonable expense of every such examination
shall be paid by the Company or, if paid by the Trustee, shall be repaid by the Company upon demand;
(g)
The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents
or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder;
(h)
In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising
out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents,
acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or
malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use
reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable
under the circumstances;
(i)
In no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind
whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of
such loss or damage and regardless of the form of action; and
(j)
The Trustee agrees to accept and act upon instructions or directions pursuant to this Indenture sent by unsecured e-mail, facsimile
transmission or other similar unsecured electronic methods; provided, however, that such instructions or directions shall be signed by
an authorized representative of the party providing such instructions or directions. If the party elects to give the Trustee e-mail or
facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions,
the Trustee’s understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs
or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding
such instructions conflict or are inconsistent with a subsequent written instruction. The party providing electronic instructions agrees
to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including
without limitation the risk of the Trustee acting on unauthorized instructions, and the risk or interception and misuse by third parties.
The Trustee may request that the Company deliver an Officer’s Certificate setting forth the names of individuals and/or titles
of officers authorized at such time to furnish the Trustee with Officer’s Certificates, Company Orders and any other matters or
directions pursuant to this Indenture.
(k)
The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder and under the Securities,
and each agent, custodian or other person employed to act under this Indenture.
(l)
The Trustee shall not be deemed to have knowledge of any Default or Event of Default (other than an Event of Default constituting
the failure to pay the interest on, or the principal of, the Securities if the Trustee also serves the paying agent for such Securities)
until the Trustee shall have received written notification in the manner set forth in this Indenture or a Responsible Officer of the
Trustee shall have obtained actual knowledge.
Section
7.03 Trustee Not Responsible for Recitals or Issuance or Securities.
(a)
The recitals contained herein and in the Securities shall be taken as the statements of the Company, and the Trustee assumes no responsibility
for the correctness of the same. The Trustee shall not be responsible for any statement in any registration statement, prospectus, or
any other document in connection with the sale of Securities. The Trustee shall not be responsible for any rating on the Securities or
any action or omission of any rating agency.
(b)
The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities.
(c)
The Trustee shall not be accountable for the use or application by the Company of any of the Securities or of the proceeds of such
Securities, or for the use or application of any moneys paid over by the Trustee in accordance with any provision of this Indenture or
established pursuant to Section 2.01, or for the use or application of any moneys received by any paying agent other than the Trustee.
Section
7.04 May Hold Securities.
The
Trustee or any paying agent or Security Registrar, 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 Trustee, paying agent or Security Registrar.
Section
7.05 Moneys Held in Trust.
Subject
to the provisions of Section 11.05, 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 law. The
Trustee shall be under no liability for interest on any moneys received by it hereunder except such as it may agree with the Company
to pay thereon.
Section
7.06 Compensation and Reimbursement.
(a)
The Company shall pay to the Trustee for each of its capacities hereunder from time to time compensation for its services as the
Company and the Trustee shall from time to time agree upon in writing. The Trustee’s compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket
expenses incurred by it. Such expenses shall include the reasonable compensation and expenses of the Trustee’s agents and counsel.
(b)
The Company shall indemnify each of the Trustee in each of its capacities hereunder against any loss, liability or expense (including
the cost of defending itself and including the reasonable compensation and expenses of the Trustee’s agents and counsel) incurred
by it except as set forth in Section 7.06(c) in the exercise or performance of its powers, rights or duties under this Indenture as Trustee
or Agent. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. The Company shall defend the claim
and the Trustee shall cooperate in the defense. The Trustee may have one separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably
withheld. This indemnification shall apply to officers, directors, employees, shareholders and agents of the Trustee.
(c)
The Company need not reimburse any expense or indemnify against any loss or liability incurred by the Trustee or by any officer,
director, employee, shareholder or agent of the Trustee through negligence or bad faith.
(d)
To ensure the Company’s payment obligations in this Section, the Trustee shall have a lien prior to the Securities on all funds
or property held or collected by the Trustee, except that held in trust to pay principal of or interest on particular Securities. When
the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 6.01(4) or (5), the expenses
(including the reasonable fees and expenses of its counsel) and the compensation for services in connection therewith are to constitute
expenses of administration under any bankruptcy law. The provisions of this Section 7.06 shall survive the termination of this Indenture
and the resignation or removal of the Trustee.
Section
7.07 Reliance on Officer’s Certificate.
Except
as otherwise provided in Section 7.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it reasonably
necessary or desirable that a matter be proved or established prior to taking or suffering or omitting to take 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 to be taken by it under the provisions of this Indenture upon the faith thereof.
Section
7.08 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 Company shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act.
Section
7.09 Corporate Trustee Required; Eligibility.
There
shall at all times be a Trustee with respect to the Securities issued hereunder which shall at all times be a corporation organized and
doing business under the laws of the United States of America or any state or territory thereof or of the District of Columbia, or a
corporation or other Person permitted to act as trustee by the Commission, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least fifty million U.S. dollars ($50,000,000), and subject to supervision or examination
by federal, state, territorial, or District of Columbia authority.
If
such corporation or other Person publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation or other
Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Company
may not, nor may any Person directly or indirectly controlling, controlled by, or under common control with the Company, serve as Trustee.
In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect specified in Section 7.10.
Section
7.10 Resignation and Removal; Appointment of Successor.
(a)
The Trustee or any successor hereafter appointed may at any time resign with respect to the Securities of one or more series by giving
written notice thereof to the Company and the Securityholders of such series. Upon receiving such notice of resignation, the Company
shall promptly appoint a successor trustee with respect to Securities of such series by written instrument, in duplicate, executed by
order of the Board of Trustees, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor
trustee. If no successor trustee shall have been so appointed and have accepted appointment within 30 days after the sending of such
notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor trustee
with respect to Securities of such series, or any Securityholder of that series who has been a bona fide holder of a Security or Securities
for at least six months may on behalf of himself 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 one of the following shall occur:
(i)
the Trustee shall fail to comply with the provisions of Section 7.08 after written request therefor by the Company or by any Securityholder
who has been a bona fide holder of a Security or Securities for at least six months; or
(ii)
the Trustee shall cease to be eligible in accordance with the provisions of Section 7.09 and shall fail to resign after written request
therefor by the Company or by any such Securityholder; or
(iii)
the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or commence a voluntary bankruptcy proceeding,
or a receiver of the Trustee or of its property shall be appointed or consented to, 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,
the Company may remove the Trustee with respect to all Securities and appoint a successor trustee by written instrument, in duplicate,
executed by order of the Board of Trustees, one copy of which instrument shall be delivered to the Trustee so removed and one copy to
the successor trustee, or any Securityholder who has been a bona fide holder of a Security or Securities for at least six months may,
on behalf of that holder and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor trustee. 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 any series at the time Outstanding may at any time remove
the Trustee with respect to such series by so notifying the Trustee and the Company and may appoint a successor Trustee for such series
with the consent of the Company.
(d)
Any resignation or removal of the Trustee and appointment of a successor trustee with respect to the Securities of a series pursuant
to any of the provisions of this Section shall become effective upon acceptance of appointment by the successor trustee as provided in
Section 7.11.
(e)
Any successor trustee appointed pursuant to this Section may be appointed with respect to the Securities of one or more series or
all of such series, and at any time there shall be only one Trustee with respect to the Securities of any particular series.
Section
7.11 Acceptance of Appointment By Successor.
(a)
In case of the appointment hereunder of a successor trustee with respect to all Securities, every such successor trustee so appointed
shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon
the resignation or removal of the retiring Trustee shall become effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company
or the successor trustee, such retiring Trustee shall, upon payment of any amounts due to it pursuant to the provisions of Section 7.06,
execute and deliver an instrument transferring to such successor trustee all the rights, powers, and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor trustee all property and money held by such retiring Trustee hereunder.
(b)
In case of the appointment hereunder of a successor trustee with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor trustee with respect to the Securities of one or more series shall execute and deliver
an indenture supplemental hereto wherein each successor trustee shall accept such appointment and which (i) shall contain such provisions
as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor trustee all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor
trustee relates, (ii) shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is
not retiring shall continue to be vested in the retiring Trustee, and (iii) 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, that each such Trustee
shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such
Trustee and that no Trustee shall be responsible for any act or failure to act on the part of any other Trustee hereunder; and upon the
execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the
extent provided therein, such retiring Trustee shall with respect to the Securities of that or those series to which the appointment
of such successor trustee relates have no further responsibility for the exercise of rights and powers or for the performance of the
duties and obligations vested in the Trustee under this Indenture, and each such successor trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities
of that or those series to which the appointment of such successor trustee relates; but, on request of the Company or any successor trustee,
such retiring Trustee shall duly assign, transfer and deliver to such successor trustee, to the extent contemplated by such supplemental
indenture, the property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which
the appointment of such successor trustee relates.
(c)
Upon request of any such successor trustee, the Company shall execute any and all instruments for more fully and certainly vesting
in and confirming to such successor trustee all such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as
the case may be.
(d)
No successor trustee shall accept its appointment unless at the time of such acceptance such successor trustee shall be qualified
and eligible under this Article.
(e)
Upon acceptance of appointment by a successor trustee as provided in this Section, the Company shall send notice of the succession
of such trustee hereunder to the Securityholders. If the Company fails to transmit such notice within ten days after acceptance of appointment
by the successor trustee, the successor trustee shall cause such notice to be transmitted at the expense of the Company.
Section
7.12 Merger, Conversion, Consolidation or Succession to Business.
Any
corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from
any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Trustee, including the administration of the trust created by this Indenture, shall be the successor
of the Trustee hereunder, provided that such corporation shall be qualified under the provisions of Section 7.08 and eligible under the
provisions of Section 7.09, 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 any Securities shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and
deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.
Section
7.13 Preferential Collection of Claims Against the Company.
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.
Section
7.14 Notice of Default.
If
any Event of Default occurs and is continuing and if such Event of Default is known to a Responsible Officer of the Trustee, the Trustee
shall send to each Securityholder in the manner and to the extent provided in Section 313(c) of the Trust Indenture Act notice of the
Event of Default within the earlier of 90 days after it occurs and 30 days after it is known to a Responsible Officer of the Trustee
or written notice of it is received by the Trustee, unless such Event of Default has been cured; provided, however, that, except
in the case of a default in the payment of the principal of (or premium, if any) or interest on any Security, the Trustee shall be protected
in withholding such notice if and so long as the Responsible Officers of the Trustee in good faith determine that the withholding of
such notice is in the interest of the Securityholders.
ARTICLE
8
CONCERNING
THE SECURITYHOLDERS
Section
8.01 Evidence of Action by Securityholders.
Whenever
in this Indenture it is provided that the holders of a majority or specified percentage in aggregate principal amount of the Securities
of a particular series may take any action (including the making of any demand or request, the giving of any notice, consent or waiver
or the taking of any other action), the fact that at the time of taking any such action the holders of such majority or specified percentage
of that series have joined therein may be evidenced by any instrument or any number of instruments of similar tenor executed by such
holders of Securities of that series in person or by agent or proxy appointed in writing.
If
the Company shall solicit from the Securityholders of any series any request, demand, authorization, direction, notice, consent, waiver
or other action, the Company may, at its option, as evidenced by an Officer’s Certificate, fix in advance a record date for such
series for the determination of Securityholders entitled to give such request, demand, authorization, direction, notice, consent, waiver
or other action, but the Company shall have no obligation to do so. If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other action may be given before or after the record date, but only the Securityholders of record
at the close of business on the record date shall be deemed to be Securityholders for the purposes of determining whether Securityholders
of the requisite proportion of Outstanding Securities of that series have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other action, and for that purpose the Outstanding Securities of that series shall
be computed as of the record date; provided, however, that no such authorization, agreement or consent by such Securityholders on the
record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than six
months after the record date.
Section
8.02 Proof of Execution by Securityholders.
Subject
to the provisions of Section 7.01, proof of the execution of any instrument by a Securityholder (such proof will not require notarization)
or his or her agent or proxy and proof of the holding by any Person of any of the Securities shall be sufficient if made in the following
manner:
(a)
The fact and date of the execution by any such Person of any instrument may be proved in any reasonable manner acceptable to the
Trustee.
(b)
The ownership of Securities shall be proved by the Security Register of such Securities or by a certificate of the Security Registrar
thereof.
The
Trustee may require such additional proof of any matter referred to in this Section as it shall deem necessary.
Section
8.03 Who May be Deemed Owners.
Prior
to the due presentment for registration of transfer of any Security, the Company, the Trustee, any paying agent and any Security Registrar
may deem and treat the Person in whose name such Security shall be registered upon the books of the Security Registrar as the absolute
owner of such Security (whether or not such Security shall be overdue and notwithstanding any notice of ownership or writing thereon
made by anyone other than the Security Registrar) for the purpose of receiving payment of or on account of the principal of, premium,
if any, and (subject to Section 2.03) interest on such Security and for all other purposes; and neither the Company nor the Trustee nor
any paying agent nor any Security Registrar shall be affected by any notice to the contrary.
Section
8.04 Certain Securities Owned by Company Disregarded.
In
determining whether the holders of the requisite aggregate principal amount of Securities of a particular series have concurred in any
direction, consent or waiver under this Indenture, the Securities of that series that are owned by the Company or any other obligor on
the Securities of that series or by any Person directly or indirectly controlling or controlled by or under common control with the Company
or any other obligor on the Securities of that series 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 of such series that the Trustee actually knows are so owned shall be so disregarded. The Securities so owned
that have been pledged in good faith may be regarded as Outstanding for the purposes of this Section, if the pledgee shall establish
to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not a
Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any such other
obligor. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection
to the Trustee.
Section
8.05 Actions Binding on Future Securityholders.
At
any time prior to (but not after) the evidencing to the Trustee, as provided in Section 8.01, of the taking of any action by the holders
of the majority or percentage in aggregate principal amount of the Securities of a particular series specified in this Indenture in connection
with such action, any holder of a Security of that series that is shown by the evidence to be included in the Securities the holders
of which have consented to such action may, by filing written notice with the Trustee, and upon proof of holding as provided in Section
8.02, 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 Security issued in exchange
therefor, on registration of transfer thereof or in place thereof, irrespective of whether or not any notation in regard thereto is made
upon such Security. Any action taken by the holders of the majority or percentage in aggregate principal amount of the Securities of
a particular series specified in this Indenture in connection with such action shall be conclusively binding upon the Company, the Trustee
and the holders of all the Securities of that series.
ARTICLE
9
SUPPLEMENTAL
INDENTURES
Section
9.01 Supplemental Indentures Without the Consent of Securityholders.
In
addition to any supplemental indenture otherwise authorized by this Indenture, the Company and the Trustee may from time to time and
at any time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act
as then in effect), without the consent of the Securityholders, for one or more of the following purposes:
(a)
to cure any ambiguity, defect, or inconsistency herein or in the Securities of any series;
(b)
to comply with Article Ten;
(c)
to provide for uncertificated Securities in addition to or in place of certificated Securities;
(d)
to add to the covenants, restrictions, conditions or provisions relating to the Company for the benefit of the holders of all or
any series of Securities (and if such covenants, restrictions, conditions or provisions are to be for the benefit of less than all series
of Securities, stating that such covenants, restrictions, conditions or provisions are expressly being included solely for the benefit
of such series), to make the occurrence, or the occurrence and the continuance, of a default in any such additional covenants, restrictions,
conditions or provisions an Event of Default, or to surrender any right or power herein conferred upon the Company;
(e)
to add to, delete from, or revise the conditions, limitations, and restrictions on the authorized amount, terms, or purposes of issue,
authentication, and delivery of Securities, as herein set forth;
(f)
to make any change that does not adversely affect the rights of any Securityholder in any material respect;
(g)
to provide for the issuance of and establish the form and terms and conditions of the Securities of any series as provided in Section
2.01, to establish the form of any certifications required to be furnished pursuant to the terms of this Indenture or any series of Securities,
or to add to the rights of the holders of any series of Securities;
(h)
to evidence and provide for the acceptance of appointment hereunder by a successor trustee; or
(i)
to comply with any requirements of the Commission or any successor in connection with the qualification of this Indenture under the
Trust Indenture Act.
The
Trustee is hereby authorized to join with the Company in the execution of any such supplemental indenture, and to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into any such supplemental
indenture that 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 by the Company and the Trustee without the consent
of the holders of any of the Securities at the time Outstanding, notwithstanding any of the provisions of Section 9.02.
Section
9.02 Supplemental Indentures With Consent of Securityholders.
With
the consent (evidenced as provided in Section 8.01) of the holders of not less than a majority in aggregate principal amount of the Securities
of each series affected by such supplemental indenture or indentures at the time Outstanding, the Company, when authorized by a Board
Resolution, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto (which shall
conform to the provisions of the Trust Indenture Act as then in effect) 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 not covered
by Section 9.01 the rights of the holders of the Securities of such series under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the holders of each Security then Outstanding and affected thereby, (a) extend the fixed maturity
of any Securities of any series, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest
thereon, or reduce any premium payable upon the redemption thereof or (b) reduce the aforesaid percentage of Securities, the holders
of which are required to consent to any such supplemental indenture.
It
shall not be necessary for the consent of the Securityholders of any series affected thereby 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.
Section
9.03 Effect of Supplemental Indentures.
Upon
the execution of any supplemental indenture pursuant to the provisions of this Article or of Section 10.01, this Indenture shall, with
respect to such series, 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 Company and the holders of Securities of the 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
9.04 Securities Affected by Supplemental Indentures.
Securities
of any series affected by a supplemental indenture, authenticated and delivered after the execution of such supplemental indenture pursuant
to the provisions of this Article or of Section 10.01, may bear a notation in form approved by the Company, provided such form meets
the requirements of any securities exchange upon which such series may be listed, as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Securities of that series so modified as to conform, in the opinion of the Board of
Trustees, to any modification of this Indenture contained in any such supplemental indenture may be prepared by the Company, authenticated
by the Trustee and delivered in exchange for the Securities of that series then Outstanding.
Section
9.05 Execution of Supplemental Indentures.
Upon
the request of the Company, accompanied by its Board Resolutions authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Securityholders required to consent thereto as aforesaid, the Trustee shall
join with the Company 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. The Trustee, subject to the provisions of Section 7.01, shall receive an Officer’s
Certificate or an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article is authorized
or permitted by the terms of this Article and that all conditions precedent to the execution of the supplemental indenture have been
complied with; provided, however, that such Officer’s Certificate or Opinion of Counsel need not be provided in connection with
the execution of a supplemental indenture that establishes the terms of a series of Securities pursuant to Section 2.01 hereof.
Promptly
after the execution by the Company and the Trustee of any supplemental indenture pursuant to the provisions of this Section, the Company
shall (or shall direct the Trustee to) send a notice, setting forth in general terms the substance of such supplemental indenture, to
the Securityholders of all series affected thereby .as their names and addresses appear upon the Security Register. Any failure of the
Company to send, or cause the sending of, such notice, or any defect therein, shall not, however, in any way impair or affect the validity
of any such supplemental indenture.
ARTICLE
10
SUCCESSOR
ENTITY
Section
10.01 Company May Consolidate, Etc.
Nothing
contained in this Indenture shall prevent any consolidation or merger of the Company with or into any other Person (whether or not affiliated
with the Company) or successive consolidations or mergers in which the Company or its successor or successors shall be a party or parties,
or shall prevent any sale, conveyance, transfer or other disposition of the property of the Company or its successor or successors as
an entirety, or substantially as an entirety, to any other Person (whether or not affiliated with the Company or its successor or successors);
provided, however, the Company hereby covenants and agrees that, upon any such consolidation or merger (in each case, if the Company
is not the survivor of such transaction) or any such sale, conveyance, transfer or other disposition (other than a sale, conveyance,
transfer or other disposition to a Subsidiary of the Company), the due and punctual payment of the principal
of (premium, if any) and interest on all of the Securities of all series in accordance with the terms of each series, according to their
tenor, and the due and punctual performance and observance of all the covenants and conditions of this Indenture with respect to each
series or established with respect to such series pursuant to Section 2.01 to be kept or performed by the Company shall be expressly
assumed, by supplemental indenture (which shall conform to the provisions of the Trust Indenture Act, as then in effect) reasonably satisfactory
in form to the Trustee executed and delivered to the Trustee by the entity formed by such consolidation, or into which the Company shall
have been merged, or by the entity which shall have acquired such property.
Section
10.02 Successor Entity Substituted.
(a)
In case of any such consolidation, merger, sale, conveyance, transfer or other disposition and upon the assumption by the successor
entity by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the obligations set
forth under Section 10.01 on all of the Securities of all series Outstanding, such successor entity shall succeed to and be substituted
for the Company with the same effect as if it had been named as the Company herein, and thereupon the predecessor corporation shall be
relieved of all obligations and covenants under this Indenture and the Securities.
(b)
In case of any such consolidation, merger, sale, conveyance, transfer or other disposition, such changes in phraseology and form
(but not in substance) may be made in the Securities thereafter to be issued as may be appropriate.
(c)
Nothing contained in this Article shall require any action by the Company in the case of a consolidation or merger of any Person
into the Company where the Company is the survivor of such transaction, or the acquisition by the Company, by purchase or otherwise,
of all or any part of the property of any other Person (whether or not affiliated with the Company).
ARTICLE
11
SATISFACTION
AND DISCHARGE
Section
11.01 Satisfaction and Discharge of Indenture.
If
at any time: (a) the Company shall have delivered to the Trustee for cancellation all Securities of a series theretofore authenticated
and not delivered to the Trustee for cancellation (other than any Securities that shall have been destroyed, lost or stolen and that
shall have been replaced or paid as provided in Section 2.07 and Securities for whose payment money or Governmental Obligations have
theretofore been deposited in trust or segregated and held in trust by the Company and thereupon repaid to the Company or discharged
from such trust, as provided in Section 11.05); or (b) all such Securities of a particular 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 the Company
shall deposit or cause to be deposited with the Trustee as trust funds the entire amount in moneys or Governmental Obligations or a combination
thereof, sufficient in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay at maturity or upon redemption all Securities of that series not theretofore delivered to the
Trustee for cancellation, including principal (and premium, if any) and interest due or to become due to such date of maturity or date
fixed for redemption, as the case may be, and if the Company shall also pay or cause to be paid all other sums payable hereunder with
respect to such series by the Company then this Indenture shall thereupon cease to be of further effect with respect to such series except
for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03, 7.10, 11.5 and 13.04, that shall survive until the date of maturity
or redemption date, as the case may be, and Sections 7.06 and 11.05, that shall survive to such date and thereafter, and the Trustee,
on demand of the Company and at the cost and expense of the Company shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture with respect to such series.
Section
11.02 Discharge of Obligations.
If
at any time all such Securities of a particular series not heretofore delivered to the Trustee for cancellation or that have not become
due and payable as described in Section 11.01 shall have been paid by the Company by depositing irrevocably with the Trustee as trust
funds moneys or an amount of Governmental Obligations sufficient to pay at maturity or upon redemption all such Securities of that series
not theretofore delivered to the Trustee for cancellation, including principal (and premium, if any) and interest due or to become due
to such date of maturity or date fixed for redemption, as the case may be, and if the Company shall also pay or cause to be paid all
other sums payable hereunder by the Company with respect to such series, then after the date such moneys or Governmental Obligations,
as the case may be, are deposited with the Trustee the obligations of the Company under this Indenture with respect to such series shall
cease to be of further effect except for the provisions of Sections 2.03, 2.05, 2.07, 4,01, 4.02, 4,03, 7.06, 7.10, 11.05 and 13.04 hereof
that shall survive until such Securities shall mature and be paid.
Thereafter,
Sections 7.06 and 11.05 shall survive.
Section
11.03 Deposited Moneys to be Held in Trust.
All
moneys or Governmental Obligations deposited with the Trustee pursuant to Sections 11.01 or 11.02 shall be held in trust and shall be
available for payment as due, either directly or through any paying agent (including the Company acting as its own paying agent), to
the holders of the particular series of Securities for the payment or redemption of which such moneys or Governmental Obligations have
been deposited with the Trustee.
Section
11.04 Payment of Moneys Held by Paying Agents.
In
connection with the satisfaction and discharge of this Indenture all moneys or Governmental Obligations then held by any paying agent
under the provisions of this Indenture shall, upon demand of the Company, be paid to the Trustee and thereupon such paying agent shall
be released from all further liability with respect to such moneys or Governmental Obligations.
Section
11.05 Repayment to Company.
Any
moneys or Governmental Obligations deposited with any paying agent or the Trustee, or then held by the Company, in trust for payment
of principal of or premium, if any, or interest on the Securities of a particular series that are not applied but remain unclaimed by
the holders of such Securities for at least two years after the date upon which the principal of (and premium, if any) or interest on
such Securities shall have respectively become due and payable, or such other shorter period set forth in applicable escheat or abandoned
or unclaimed property law, shall be repaid to the Company on May 31 of each year or upon the Company’s request or (if then held
by the Company) shall be discharged from such trust; and thereupon the paying agent and the Trustee shall be released from all further
liability with respect to such moneys or Governmental Obligations, and the holder of any of the Securities entitled to receive such payment
shall thereafter, as a general creditor, look only to the Company for the payment thereof.
ARTICLE
12
IMMUNITY
OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS
Section
12.01 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, shareholder, officer or director, past, present or future as such,
of the Company or of any predecessor or successor corporation, either directly or through the Company 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, shareholders, officers or directors
as such, of the Company 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, shareholder, 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.
ARTICLE
13
MISCELLANEOUS
PROVISIONS
Section
13.01 Effect on Successors and Assigns.
All
the covenants, stipulations, promises and agreements in this Indenture made by or on behalf of the Company shall bind its successors
and assigns, whether so expressed or not.
Section
13.02 Actions by Successor.
Any
act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or officer
of the Company 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 Company.
Section
13.03 Surrender of Company Powers.
The
Company by instrument in writing executed by authority of its Board of Trustees and delivered to the Trustee may surrender any of the
powers reserved to the Company, and thereupon such power so surrendered shall terminate both as to the Company and as to any successor
corporation.
Section
13.04 Notices.
Except
as otherwise expressly provided herein, any notice, request or demand that by any provision of this Indenture is required or permitted
to be given, made or served by the Trustee, the Security Registrar, any paying or other agent under this Indenture or by the holders
of Securities or by any other Person pursuant to this Indenture to or on the Company may be given or served by being deposited in first
class mail, postage prepaid, addressed (until another address is filed in writing by the Company with the Trustee), as follows: . Any
notice, election, request or demand by the Company or any Securityholder or by any other Person pursuant to this Indenture to or upon
the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or made in writing at the Corporate Trust
Office of the Trustee.
Section
13.05 Governing Law; Jury Trial Waiver.
This
Indenture and each Security shall be governed by, and construed in accordance with, the internal laws of the State of New York, except
to the extent that the Trust Indenture Act is applicable.
EACH
PARTY HERETO, AND EACH HOLDER OF A SECURITY BY ACCEPTANCE THEREOF, HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS INDENTURE.
Section
13.06 Treatment of Securities as Debt.
It
is intended that the Securities will be treated as indebtedness and not as equity for federal income tax purposes. The provisions of
this Indenture shall be interpreted to further this intention.
Section
13.07 Certificates and Opinions as to Conditions Precedent.
(a)
Upon any application or demand by the Company to the Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officer’s Certificate stating that all conditions precedent provided for in this Indenture
(other than the certificate to be delivered pursuant to Section 13.12) relating to the proposed action have been complied with and, if
requested, 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.
(b)
Each certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition
or covenant in this Indenture (other than the certificate to be delivered pursuant to Section 13.12 of this Indenture or Section 314(a)(1)
of the Trust Indenture Act) shall include (i) a statement that the Person making such certificate or opinion has read such covenant or
condition; (ii) 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; (iii) a statement that, in the opinion of such Person, he has made such examination
or investigation as is reasonably necessary to enable him to express an informed opinion as to whether or not such covenant or condition
has been complied with; and (iv) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been
complied with.
Section
13.08 Payments on Business Days.
Except
as provided pursuant to Section 2.01 pursuant to a Board Resolution, and set forth in an Officer’s Certificate, or established
in one or more indentures supplemental to this Indenture, in any case where the date of maturity of interest or principal of any Security
or the date of redemption of any Security shall not be a Business Day, then payment of interest or principal (and premium, if any) may
be made on the next succeeding Business Day with the same force and effect as if made on the nominal date of maturity or redemption,
and no interest shall accrue for the period after such nominal date.
Section
13.09 Conflict with Trust Indenture Act.
If
and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed by Section 318(c) of the
Trust Indenture Act, such imposed duties shall control.
Section
13.10 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. The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall
constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture
for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for
all purposes.
Section
13.11 Separability.
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.
Section
13.12 Compliance Certificates.
The
Company shall deliver to the Trustee, within 120 days after the end of each fiscal year during which any Securities of any series were
outstanding, an officer’s certificate stating whether or not the signers know of any Event of Default that occurred during such
fiscal year. Such certificate shall contain a certification from the principal executive officer, principal financial officer or principal
accounting officer of the Company that a review has been conducted of the activities of the Company and the Company’s performance
under this Indenture and that the Company has complied with all conditions and covenants under this Indenture. For purposes of this Section
13.12, such compliance shall be determined without regard to any period of grace or requirement of notice provided under this Indenture.
If the officer of the Company signing such certificate has knowledge of such an Event of Default, the certificate shall describe any
such Event of Default and its status.
Section
13.13 U.S.A. Patriot Act.
The
parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions
and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that
identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. The parties to this Indenture
agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements
of the U.S.A. Patriot Act.
Section
13.14 Force Majeure.
In
no event shall the Trustee, the Security Registrar, any paying agent or any other agent under this Indenture be responsible or liable
for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces
beyond its control, including without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances,
nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions or utilities, communications or computer (software
and hardware) services; it being understood that the Trustee, the Security Registrar, any paying agent or any other agent under this
Indenture shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as
soon as practicable under the circumstances.
Section
13.15 Table of Contents; Headings.
The
table of contents and headings of the articles and sections of this Indenture have been inserted for convenience of reference only, are
not intended to be considered a part hereof, and will not modify or restrict any of the terms or provisions hereof.
[Signature
page follows]
IN
WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed all as of the day and year first above written.
| |
POWER
REIT |
| |
|
| |
By: |
|
| |
|
| |
Name: |
|
| |
|
| |
Title: |
|
| |
[TRUSTEE],
as Trustee |
| |
|
|
| |
By: |
|
| |
|
|
| |
Name: |
|
| |
|
|
| |
Title: |
|
CROSS-REFERENCE
TABLE(1)
| Section
of Trust Indenture Act of 1939, as Amended |
|
Section
of Indenture |
| 310(a) |
|
7.09 |
| 310(b) |
|
7.08 |
| |
|
7.10 |
| 310(c) |
|
Inapplicable |
| 311(a) |
|
7.13 |
| 311(b) |
|
7.13 |
| 311(c) |
|
Inapplicable |
| 312(a) |
|
5.01 |
| |
|
5.02(a) |
| 312(b) |
|
5.02(c) |
| 312(c) |
|
5.02(c) |
| 313(a) |
|
5.04(a) |
| 313(b) |
|
5.04(b) |
| 313(c) |
|
5.04(a) |
| |
|
5.04(b) |
| 313(d) |
|
5.04(c) |
| 314(a) |
|
5.03 |
| |
|
13.12 |
| 314(b) |
|
Inapplicable |
| 314(c) |
|
13.07(a) |
| 314(d) |
|
Inapplicable |
| 314(e) |
|
13.07(b) |
| 314(f) |
|
Inapplicable |
| 315(a) |
|
7.01(a) |
| |
|
7.01(b) |
| 315(b) |
|
7.14 |
| 315(c) |
|
7.01 |
| 315(d) |
|
7.01(b) |
| 315(e) |
|
6.07 |
| 316(a) |
|
6.06 |
| |
|
8.04 |
| 316(b) |
|
6.04 |
| 316(c) |
|
8.01 |
| 317(a) |
|
6.02 |
| 317(b) |
|
4.03 |
| 318(a) |
|
13.09 |
| (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. |
Exhibit
5.1(a)
|
1001
FLEET STREET
SUITE
700
BALTIMORE,
MARYLAND 21202-4346 |
January
24, 2025
Power
REIT
301
Winding Road
Old
Bethpage, New York 11804 |
|
| |
Re: |
Registration
Statement on Form S-3 |
Ladies
and Gentlemen:
We
are furnishing this opinion letter in accordance with the requirements of Item 601(b)(5) of Regulation S-K in connection with the Registration
Statement on Form S-3 of Power REIT, a Maryland real estate investment trust (the “Company”), filed with the U.S.
Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities
Act”), on the date hereof (the “Registration Statement”). The Registration Statement includes two prospectuses:
(i) a base prospectus (the “Base Prospectus”) covering up to $50,000,000 of (a) common shares of beneficial interest,
par value $.001 per share (“Common Shares”), of the Company (such Common Shares, the “Base Prospectus Common
Shares”), (b) preferred shares of beneficial interest, par value $0.001 per share (the “Preferred Shares”),
of the Company, which may be issued in one or more series, (c) debt securities (the “Debt Securities”) of the Company,
which may be issued in one or more series under one or more indentures or supplemental indentures (each, an “Indenture”),
(d) warrants to purchase Common Shares, Preferred Shares and/or Debt Securities (the “Warrants”), which may be issued
in one or more series, and (e) units consisting of any combination of Common Shares, Preferred Shares, Debt Securities and/or Warrants
(“Units”) that, in each case, may be directly sold by the Company; and (ii) a sales agreement prospectus (the “Sales
Agreement Prospectus”) covering up to $2,100,000 of Common Shares that may be sold under the Sales Agreement, dated January
24, 2025, with A.G.P./Alliance Global Partners (the “Sales Agreement”, and such Common Shares, the “Placement
Shares”). The Base Prospectus provides that it will be supplemented in the future by one or more prospectus supplements (each,
a “Prospectus Supplement”).
The
Base Prospectus Common Shares, the Preferred Shares, the Debt Securities, the Warrants, the Units, the Placement Shares, and such indeterminate
amount of Debt Securities and number of Common Shares or Preferred Shares as may be issued upon conversion, exchange or exercise of any
Debt Securities, Preferred Shares, Warrants, or Units are collectively referred to herein as the “Securities”. The
offers and sales of Securities contemplated by the Base Prospectus and the Sales Agreement Prospectus are collectively referred to herein
as the “Offering”.
 | Power REIT January 24, 2025 Page 2 |
We
have examined copies of the following documents (the “Documents”):
1. the
Registration Statement, the Base Prospectus, and the Sales Agreement Prospectus, each in the form in which it was filed with the Commission
(collectively, the “Offering Documents”);
2. Articles
of Amendment and Restatement filed by the Company with the State Department of Assessments and Taxation of Maryland (“SDAT”)
on November 30, 2011;
3. Articles
Supplementary filed by the Company with SDAT on February 12, 2014;
4. Articles
Supplementary filed by the Company with SDAT on January 8, 2021;
5. the
Bylaws of the Company adopted on October 20, 2011;
6. the
certificate of good standing issued by SDAT on January 21, 2025, with respect to the Company;
7.
the unanimous written consent in lieu of a meeting adopted by the Board of Trustees of the Company (the “Board”) on
January 24, 2025, that authorize and provide for the filing of the Registration Statement; and
8. the
Certificate of Secretary, dated as of the date hereof, issued to us by the Secretary of the Company with respect to certain factual matters
relevant to this opinion letter, which we have not independently verified.
In
expressing the opinions set forth below, we have assumed, and so far as is known to us there are no facts inconsistent therewith, that:
1. all
Documents submitted to us as originals are authentic;
2. all
Documents submitted to us as certified or photostatic copies conform to the original documents;
3. all
signatures on all such Documents are genuine;
4. all
public records reviewed or relied upon by us or on our behalf are accurate and complete;
5. all
statements and information contained in the Documents are accurate and complete;
| Power REIT January 24, 2025 Page 3 |
6. each
person who executed any of the Documents was authorized to do so;
7. each
natural person who executed any of the Documents was legally competent to do so and had knowledge about all matters stated therein; and
8. there
has been no oral or written modification of or amendment to any of the Documents, and there has been no waiver of any provision of any
of the Documents, in connection with this opinion letter, by action or omission of the parties thereto or otherwise;
9. the
Securities will, if and when issued, be issued in the manner stated in, and pursuant to, the Offering Documents;
10. upon
the issuance of any Common Shares pursuant to the Offering, the total number of issued and outstanding common shares of beneficial interest
will not exceed the total number of common shares of common shares of beneficial interest that the Company is then authorized to issue
under its organizational documents;
11. upon
the issuance of any Preferred Shares pursuant to the Offering, the total number of issued and outstanding preferred shares of beneficial
interest of the series so issued will not exceed the total number of preferred shares of beneficial interest of such series that the
Company is then authorized to issue under its organizational documents;
12. the
consideration received for the issuance and sale of any Common Shares (or Preferred Stock or Debt Securities convertible into, or Warrants
exercisable for, Common Shares) pursuant to the Offering will be in an amount that is not less than the par value of the Common Shares;
13. the
consideration received for the issuance and sale of any Preferred Shares (or Debt Securities convertible into, or Warrants exercisable
for, Preferred Shares) pursuant to the Offering will be in an amount that is not less than the par value of the Preferred Shares;
14. none
of the Common Shares or Preferred Shares issued pursuant to the Offering will be issued in violation of the restrictions on transfer
and ownership set forth in Article VII of the Company’s organizational documents as then in effect;
15. the
Company will remain duly organized, validly existing, and in good standing under the laws of the State of Maryland at the time that any
Securities are offered, sold, or issued by the Company pursuant to the Offering; and
| Power REIT January 24, 2025 Page 4 |
16. to
the extent that the obligations of the Company with respect to the Securities may be dependent upon such matters, we assume for purposes
of this opinion letter that (a) the other party under the applicable Indenture for any Debt Securities, Warrant Agreement (as defined
in Item III(4) below) for any of the Warrants, and Unit Agreement (as defined in Item III(5) below) for any of the Units,
in the case of an entity, is duly formed, validly existing, and in good standing under the laws of its jurisdiction of organization;
(b) such other party is duly qualified to engage in the activities contemplated by such Indenture, Warrant Agreement, Unit Agreement,
or other agreement, as applicable; (c) such Indenture, Warrant Agreement, Unit Agreement, or other agreement, as applicable, has been
duly authorized, executed, and delivered by the other party and constitutes the legal, valid, and binding obligation of the other party
enforceable against the other party in accordance with its terms; (d) such other party is in compliance with respect to performance of
its obligations under such Indenture, Warrant Agreement, Unit Agreement, or other agreement, as applicable, with all applicable laws
and regulations; and (e) such other party has the requisite organizational and legal power and authority to perform its obligations under
such Indenture, Warrant Agreement, Unit Agreement, or other agreement, as applicable.
As
to any facts material to this opinion letter that we did not independently establish or verify, we have relied upon statements and representations
of officers and other representatives of the Company and others.
Based
on the foregoing, and subject to the qualifications and assumptions set forth herein, we are of the opinion that:
1. with
respect to Base Prospectus Common Shares offered in the Offering, when (a) the Registration Statement, as finally amended (including
all necessary post-effective amendments), has become effective under the Securities Act, (b) an appropriate Prospectus Supplement with
respect to such Base Prospectus Shares has been prepared, delivered, and filed in compliance with the Securities Act and the applicable
rules and regulations thereunder, (c) the Board, including any appropriate committee appointed thereby, and appropriate officers of the
Company have taken all necessary action to approve the issuance of such Base Prospectus Common Shares, the consideration to be received
therefor, and related matters (and such action is in full force and effect at all times at which such Base Prospectus Common Shares are
offered or sold by the Company), (d) the terms of the issuance and sale of such Base Prospectus Common Shares have been duly established
in conformity with the organizational documents, as then in effect, of the Company, do not violate any applicable law or result in a
default under or breach of any agreement or instrument binding upon the Company, and comply with any requirement or restriction imposed
by any court or governmental body having jurisdiction over the Company, and (e) certificates in the form required under the laws of the
State of Maryland representing such Base Prospectus Common Shares, if then certificated, are duly executed, countersigned, registered,
and delivered upon payment of the agreed upon consideration therefor, such Base Prospectus Common Shares (including any Common Shares
duly issued upon conversion, exchange, or exercise of any Preferred Shares, Debt Securities, Warrants, or Units registered on the Registration
Statement), when issued and sold in accordance with the applicable definitive purchase, underwriting, or similar agreement, as applicable,
with respect to such Base Prospectus Common Shares, will be validly issued, fully paid, and nonassessable;
| Power REIT January 24, 2025 Page 5 |
2. with
respect to shares of any series of Preferred Stock to be offered by the Company pursuant to the Registration Statement, when (a) the
Registration Statement, as finally amended (including all necessary post-effective amendments), has become effective under the Securities
Act, (b) an appropriate Prospectus Supplement with respect to such Preferred Shares has been prepared, delivered, and filed in compliance
with the Securities Act and the applicable rules and regulations thereunder, (c) the Board, including any appropriate committee appointed
thereby, and appropriate officers of the Company have taken all necessary action to approve the issuance, terms, and sale of such Preferred
Shares, the consideration to be received therefor and related matters (and such action is in full force and effect at all times at which
such Preferred Shares are offered or sold by the Company), (d) Articles Supplementary conforming to the laws of the State of Maryland
regarding such series of Preferred Shares has been filed with, and accepted for record by, SDAT, (e) the terms of such Preferred Shares
and of their issuance and sale have been duly established in conformity with the terms of the particular series as established by the
Board, so as not to violate any applicable law or the organizational documents, as then in effect, of the Company or result in a default
under or breach of any agreement or instrument binding upon the Company, and so as to comply with any requirement or restriction imposed
by any court or governmental body having jurisdiction over the Company, and (f) certificates in the form required under the laws of the
State of Maryland representing such Offered Preferred Shares, if then certificated, are duly executed, countersigned, registered, and
delivered upon payment of the agreed-upon consideration therefor, such Preferred Shares (including any Preferred Shares duly issued upon
conversion, exchange, or exercise of any Preferred Shares, Debt Securities, Warrants, or Units), when issued or sold in accordance with
the applicable definitive purchase, underwriting, or similar agreement, as applicable, will be validly issued, fully paid, and nonassessable;
3. with
respect to any Warrants to be offered by the Company pursuant to the Registration Statement, when (a) the Registration Statement, as
finally amended (including all necessary post-effective amendments), has become effective under the Securities Act, (b) an appropriate
Prospectus Supplement with respect to such Warrants has been prepared, delivered, and filed in compliance with the Securities Act and
the applicable rules and regulations thereunder, (c) the Board, including any appropriate committee appointed thereby, and appropriate
officers of the Company have taken all necessary action to approve the issuance of such Warrants, the consideration to be received therefor,
and related matters (and such action is in full force and effect at all times at which such Warrants are offered or sold by the Company),
(d) the warrant certificate or agreement with respect to such Warrants (each, a “Warrant Agreement”) has been duly
authorized, executed, and delivered by the Company and the other parties thereto, (e) the terms of the issuance and sale of such Warrants
have been duly established in conformity with the Warrant Agreement, so as not to violate any applicable law or the organizational documents
of the Company, as then in effect, or result in a default under or breach of any agreement or instrument binding upon the Company, and
so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company, and
(f) such Warrants have been duly executed and delivered against payment therefor pursuant to the Warrant Agreement, such Warrants will
(1) have been duly authorized and (2) be valid and legally binding obligations of the Company, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium, and similar laws of general applicability relating to or affecting creditors’ rights and
to general equity principles; and
| Power REIT January 24, 2025 Page 6 |
4. with
respect to any Units to be offered by the Company pursuant to the Registration Statement, subject to Item IV(4) below, when (a)
the Registration Statement, as finally amended (including all necessary post-effective amendments), has become effective under the Securities
Act, (b) an appropriate Prospectus Supplement with respect to such Units has been prepared, delivered, and filed in compliance with the
Securities Act and the applicable rules and regulations thereunder, (c) the Board, including any appropriate committee appointed thereby,
and appropriate officers of the Company have taken all necessary corporate action to approve the issuance of such Units, the consideration
to be received therefor, and related matters (and such action is in full force and effect at all times at which such Units are offered
or sold by the Company), (d) the unit certificate or agreement with respect to such Units (the “Unit Agreement”) has
been duly authorized, executed, and delivered by the Company and the other parties thereto, (e) the terms of the issuance and sale of
such Units have been duly established in conformity with such Unit Agreement, so as not to violate any applicable law or the organizational
documents of the Company or result in a default under or breach of any agreement or instrument binding upon the Company, and so as to
comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company, and (f) such
Units have been duly executed and delivered against payment therefor pursuant to the Unit Agreement, the Units will (1) have been duly
authorized and (2) be valid and legally binding obligations of the Company, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium, and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles;
and
5. with
respect to Placement Shares, when (a) the Registration Statement, as finally amended (including all necessary post-effective amendments),
has become effective under the Securities Act, (b) the Board, including any appropriate committee appointed thereby, and appropriate
officers of the Company have taken all necessary action to approve the issuance of such Placement Shares, the consideration to be received
therefor and related matters (and such action is in full force and effect at all times at which the Placement Shares are offered or sold
by the Company), (c) the terms of the issuance and sale of such Placement Shares have been duly established in conformity with the organizational
documents, as then in effect, of the Company, do not violate any applicable law or result in a default under or breach of any agreement
or instrument binding upon the Company, and comply with any requirement or restriction imposed by any court or governmental body having
jurisdiction over the Company, and (d) certificates in the form required under the laws of the State of Maryland representing such Placement
Shares, if then certificated, are duly executed, countersigned, registered, and delivered upon payment of the agreed upon consideration
therefor, such Placement Shares, when issued and sold in accordance with the applicable definitive purchase, underwriting, or similar
agreement, as applicable, with respect to such Placement Shares, will be validly issued, fully paid, and nonassessable.
| Power REIT January 24, 2025 Page 7 |
In
addition to the assumptions set forth above, the opinions set forth herein are also subject to the following qualifications:
1. we
are opining only as to the matters expressly set forth herein, and no opinion should be inferred as to any other matters;
2. the
Registration Statement contemplates that the Securities may be issued and sold by the Company on a delayed or continuous basis pursuant
to applicable provisions of Rule 415 under the Securities Act; the opinions expressed in this letter are limited to the provisions of
the Maryland General Corporation Law and the applicable provisions of the Maryland Declaration of Rights, each as currently in effect
on the date hereof, and the reported judicial decisions interpreting these laws, which laws are subject to change with possible retroactive
effect; and we do not express any opinion herein concerning any other laws or the rules of any self-regulatory organization;
3. the
foregoing opinions are rendered as of the date first set forth above, and we undertake no obligation to advise you of any changes or
any new developments, including, without limitation, changes in the facts set forth in the Documents and/or to any applicable laws, that
might affect the opinions set forth herein; and
4. various
issues pertaining to the enforceability of the Debt Securities and related Indentures (including those that might be included as part
of a Unit) are addressed in the opinion letter filed as Exhibit 5.1(b) to the Registration Statement; we express no opinion with respect
to those matters.
We
hereby consent to the filing of this opinion letter as an exhibit to the Registration Statement and to the use of the name of our firm
therein. In issuing this opinion letter, we do not admit that we are within the category of persons whose consent is required by Section
7 of the Securities Act.
| |
Sincerely, |
| |
|
| |
/s/
Gordon Feinblatt LLC |
Exhibit
5.1(b)
| Phone: |
(212)
885-5000 |
| Fax: |
(215)
885-5001 |
| Email: |
www.blankrome.com |
January
24, 2025
The
Board of Directors
Power
REIT
301
Winding Road
Old
Bethpage, New York 11804
| Re: |
Registration
Statement on Form S-3 |
Ladies
and Gentlemen:
We
have acted as special counsel to Power REIT, a Maryland-domiciled real estate investment trust (the “Company”),
in connection with the filing by the Company with the Securities and Exchange Commission (the “Commission”)
of a Registration Statement on Form S-3 (as it may be amended or supplemented from time to time, the “Registration Statement”)
for the purpose of registering under the Securities Act of 1933, as amended (the “Securities Act”), up to $50,000,000
of any combination of the following securities: (i) common shares of beneficial interest, par value $0.001 per share (the “Common
Shares”), (ii) preferred shares of beneficial interest, par value $0.001 per share (the “Preferred Shares”),
(iii) debt securities, in one or more series (the “Debt Securities”), which may be issued pursuant to an indenture
to be dated on or about the date of the first issuance of Debt Securities thereunder, by and between a trustee to be selected by the
Company (the “Trustee”) and the Company, in the form filed as Exhibit 4.4 to the Registration Statement and
one or more indentures supplemental thereto with respect to any particular series of Debt Securities (the “Indenture”),
(iv) warrants (“Warrants”) to purchase Common Shares and/or Preferred Shares, which may be issued under one
or more warrant agreements (each, a “Warrant Agreement”) to be entered into between the Company and a warrant
agent to be named therein (the “Warrant Agent”); and (v) units comprised of two or more of the foregoing securities
(“Units” and, together with Common Shares, Preferred Shares, Warrants and Debt Securities, the “Securities”)
to be issued under one or more unit agreements (each, a “Unit Agreement”) to be entered into between the Company
and a bank or trust company, as unit agent (the “Unit Agent”). The Securities being registered will be offered
on a continuous or delayed basis pursuant to the provisions of Rule 415 under the Securities Act. This opinion is being furnished in
accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act.
In
rendering the opinions set forth herein, we have examined originals or copies, certified or otherwise identified to our satisfaction,
of the following: (i) Articles of Amendment and Restatement of the Declaration of Trust filed by the Company with the State Department
of Assessments and Taxation of Maryland (“SDAT”) on November 30, 2011, as supplemented by the Company with
SDSAT on February 12, 2014, and as supplemented by the Company on January 8, 2021 (collectively, the “Declaration of Trust”);
(ii) the Bylaws of the Company, adopted on October 20, 2011 (the “Bylaws”); (iii) the Registration Statement;
(iv) resolutions adopted by the Board of Trustees (the “Board”) of the Company; (v) an executed copy of the
certificate of the Chairman, Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer of the Company; and (vi) such
other documents, corporate records, certificates of public officials and other instruments as we have deemed necessary or advisable for
the purpose of rendering this opinion.
Power
REIT
January
24, 2025
Page 2
In
rendering this opinion, we have, without independent inquiry or investigation, assumed that (i) all documents submitted to us as originals
are authentic and complete, (ii) all documents submitted to us as copies conform to authentic, complete originals, (iii) all documents
filed as exhibits to the Registration Statement that have not been executed will conform to the forms thereof, (iv) all signatures on
all documents that we reviewed are genuine, (v) all natural persons executing documents had and have the legal capacity to do so, (vi)
all statements in certificates of public officials and officers of the Company that we reviewed were and are accurate, and (vii) all
representations made by the Company as to matters of fact in the documents that we reviewed were and are accurate.
In
connection with the opinion expressed below, we have assumed that, at or prior to the time of the delivery of any such Security, (i)
the Board shall have duly established the terms of such Security (and that such Security is governed by the laws of the State of New
York) and duly authorized the issuance and sale of such Security and such authorization shall not have been modified or rescinded; (ii)
the Company is and shall remain, a Maryland-domiciled real estate investment trust duly and validly existing under the laws of the State
of Maryland and is in good standing with the State Department of Assessments and Taxation of Maryland; (iii) the Registration Statement
shall have been declared effective and such effectiveness shall not have been terminated or rescinded; (iv) the Warrant Agreement, the
Indenture, and the Unit Agreement are each valid, binding and enforceable agreements of each party thereto (other than as expressly covered
below in respect of the Company); and (v) there shall not have occurred any change in law affecting the validity or enforceability of
such Security. We have also assumed that (i) the terms of any Security whose terms are established subsequent to the date hereof and
the issuance, execution, delivery and performance by the Company of such Security (a) are within its corporate powers, (b) do not contravene,
or constitute a default under, the Company’s Declaration of Trust, Bylaws or other constitutive documents of the Company, (c) require
no action by or in respect of, or filing with, any governmental body, agency or official and (d) do not contravene, or constitute a default
under, any provision of applicable law or public policy or regulation or any judgment, injunction, order or decree or any agreement or
other instrument binding upon the Company and (ii) any Warrant Agreement, Indenture and Unit Agreement will be governed by the laws of
the State of New York. As to any facts material to the opinion expressed herein that we have not independently established or verified,
we have relied upon, and assumed the accuracy of, statements and representations of officers and other representatives of the Company
and others.
Based
on the foregoing, and subject to the qualifications, exceptions and assumptions stated herein, we are of the opinion that:
| 1. | When
the Warrant Agreement to be entered into in connection with the issuance of any Warrants
has been duly authorized, executed and delivered by the Warrant Agent and the Company; the
specific terms of the Warrants have been duly authorized and established in accordance with
the Warrant Agreement; and such Warrants have been duly authorized, executed, issued and
delivered in accordance with the Warrant Agreement and the applicable underwriting or other
agreement, upon payment of the consideration provided for therein, such Warrants will constitute
valid and binding obligations of the Company, enforceable in accordance with their terms;
provided that no opinion is provided herein with respect to any Common Shares or Preferred
Shares that may be issued upon the exercise of the Warrants. |
Power REIT
January 24, 2025
Page 3
| 2. | When
the Indenture to be entered into in connection with respect to Debt Securities, when (i)
the Indenture has been duly authorized, executed and delivered by the Company and the Trustee;
(ii) the Board or a committee thereof has taken all necessary corporate action to approve
the issuance and terms of such Debt Securities, the terms of the offering thereof and related
matters; and (iii) such Debt Securities have been duly executed, authenticated, issued and
delivered in accordance with the provisions of the Indenture and in accordance with the applicable
purchase, underwriting, similar agreement or other security approved by the Board or a committee
thereof, then upon payment of the consideration provided for therein, such Debt Securities
will constitute valid and binding obligations of the Company. |
| | | |
| 3. | When
the Unit Agreement to be entered into in connection with the issuance of any Units has been
duly authorized, executed and delivered by the Unit Agent and the Company; the specific terms
of the Units have been duly authorized and established in accordance with the Unit Agreement;
and such Units have been duly authorized, executed, issued and delivered in accordance with
the Unit Agreement and the applicable underwriting or other agreement, upon payment of the
consideration provided for therein, such Units will constitute valid and binding obligations
of the Company, enforceable in accordance with their terms; provided that no opinion is provided
herein with respect to any Common Shares or Preferred Shares that may be included in the
Units. |
In
addition to the assumptions, comments, qualifications, limitations and exceptions set forth above, the opinions set forth herein are
further limited by, subject to and based upon the following:
| A. | Our
opinion herein reflects only the application of applicable laws of the State of New York,
and we have not considered, and we express no opinion as to the laws of any other jurisdiction.
The opinion set forth herein is made as of the date hereof and is subject to, and may be
limited by, future changes in the factual matters set forth herein, and we undertake no duty
to advise you of the same. The opinion expressed herein is based upon the law in effect (and
published or otherwise generally available) on the date hereof, which laws are subject to
change with possible retroactive effect, and we assume no obligation to revise or supplement
this opinion should such law be changed by legislative action, judicial decision or otherwise.
In rendering our opinion, we have not considered, and hereby disclaim any opinion as to,
the application or impact of any laws, cases, decisions, rules or regulations of any other
jurisdiction, court or administrative agency. |
| | | |
| B. | Our
opinion set forth above is subject to and may be limited by (i) applicable bankruptcy, insolvency,
reorganization, receivership, moratorium, receivership, rearrangement, liquidation, conservatorship
and other similar laws or equitable principles affecting or related to the rights and remedies
of creditors generally, including, without limitation, laws relating to fraudulent conveyances,
preferences and equitable subordination; (ii) general principles of equity (regardless of
whether considered in a proceeding in equity or at law), including, without limitation, concepts
of conscionability, materiality, reasonableness and impossibility of performance; (iii) public
policy considerations which may limit the rights of parties to obtain remedies; (iv) an implied
covenant of good faith and fair dealing; (v) requirements that a claim with respect to any
Securities denominated other than in United States dollars (or a judgment denominated other
than in United States dollars with respect to such a claim) be converted into United States
dollars at a rate of exchange prevailing on a date determined pursuant to applicable law;
(vi) governmental authority to limit, delay or prohibit the making of payments outside the
United States or in foreign currency or composite currency; and (vii) the availability of
equitable remedies, including, without limitation, specific performance or injunctive relief. |
Power REIT
January 24, 2025
Page 4
| C. | Our
opinion is further subject to the effect of generally applicable rules of law arising from
statutes, judicial and administrative decisions, and the rules and regulations of governmental
authorities that: (i) limit or affect the enforcement of provisions of a contract that purport
to require waiver of the obligations of good faith, fair dealing, diligence and reasonableness;
(ii) limit the availability of a remedy under certain circumstances where another remedy
has been elected; (iii) limit the enforceability of provisions releasing, exculpating or
exempting a party from, or requiring indemnification of a party for, liability for its own
action or inaction, to the extent the action or inaction involves negligence, recklessness,
willful misconduct or unlawful conduct; (iv) may, where less than all of the contract may
be unenforceable, limit the enforceability of the balance of the contract to circumstances
in which the unenforceable portion is not an essential part of the agreed exchange; and (v)
govern and afford judicial discretion regarding the determination of damages and entitlement
to attorneys’ fees. |
| | | |
| D. | We
express no opinion as to the enforceability of any rights to indemnification or contribution
provided for in any agreements which are violative of public policy underlying any law, rule
or regulation (including any federal or state securities law, rule or regulation) or the
legality of such rights. |
| | | |
| E. | We
express no opinion as to the enforceability of any provision in any agreements purporting
or attempting to (i) confer exclusive jurisdiction and/or venue upon certain courts or otherwise
waive the defenses of forum non conveniens or improper venue; (ii) confer subject
matter jurisdiction on a court not having independent grounds therefor; (iii) modify or waive
the requirements for effective service of process for any action that may be brought; (iv)
waive the right of the Company or any other person to a trial by jury; (v) provide that decisions
by a party are conclusive; or (vi) modify or waive the rights to claims, notice, legal defenses,
rights granted by law, subrogation, opportunity for hearing, evidentiary requirements, statutes
of limitations, other procedural rights or other benefits that cannot be waived under applicable
law. |
| | | |
| F. | We
express no opinion as to the enforceability of (i) consents to, or restrictions upon, judicial
relief; (ii) waivers of rights or defenses with respect to stay, extension or usury laws;
(iii) waivers of broadly or vaguely stated rights; (iv) provisions for exclusivity, election
or cumulation of rights or remedies; (v) provisions authorizing or validating conclusive
or discretionary determinations; (vi) grants of setoff rights; (vii) proxies, powers and
trusts; (viii) restrictions upon non-written modifications and waivers; (ix) provisions prohibiting,
restricting, or requiring consent to assignment or transfer of any right or property; or
(x) provisions for liquidated damages, default interest, late charges, monetary penalties,
make-whole premiums or other economic remedies to the extent such provisions are deemed to
constitute a penalty. |
| | | |
| G. | You
have informed us that you intend to issue the Securities from time to time on a delayed or
continuous basis, and this opinion is limited to the laws, including the rules and regulations,
as in effect on the date hereof. We understand that prior to issuing any Securities you will
afford us an opportunity to review the operative documents pursuant to which such Securities
are to be issued (including the applicable prospectus supplement) and will file such supplement
or amendment to this opinion (if any) as we may reasonably consider necessary or appropriate
by reason of the terms of such Securities. |
We
consent to the filing of this opinion as an exhibit to the Registration Statement. We also consent to any and all references to us in
the prospectus which is part of said Registration Statement. In giving this consent, we do not thereby admit that we are within the category
of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission promulgated
thereunder. This opinion letter is limited to the matters set forth herein, and no opinion may be inferred or implied beyond the matters
expressly set forth herein. This opinion letter is not a guaranty nor may one be inferred or implied.
| |
Very
truly yours, |
| |
|
| |
/s/ BLANK ROME LLP |
Exhibit
8.1
January
24, 2025
Power
REIT
301
Winding Road
Old
Bethpage, New York 11804
| |
Re: |
Opinion
of Neuberger, Quinn, Gielen, Rubin & Gibber, P.A. as to Tax Matters |
Ladies
and Gentlemen:
We
have acted as counsel to Power REIT, a Maryland-domiciled real estate investment trust (the “Company”), with respect
to certain tax matters in connection with the filing of its registration statement on Form S-3 (including any amendments thereto, the
“Registration Statement”) with the Securities and Exchange Commission (the “Commission”) on the
date hereof. In connection with the offering, issuance and sale from time to time of certain securities described in the Registration
Statement, including such currently undetermined amounts of common shares, $0.001 par value, preferred shares, debt securities and warrants
of the Company, either separately or in combination with one or more of the other securities, in the form of units or otherwise, up to
an aggregate of $50,000,000 (the “Shares”) as described in the prospectus (the “Prospectus”) included
as part of the Registration Statement, we have been asked to provide opinions regarding: (i) the classification of the Company as a real
estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”)
1 and (ii) the accuracy and fairness of the discussion in the Prospectus under the caption “Material United States Federal
Income Tax Considerations”.
The
opinions set forth in this letter are based on relevant provisions of the Code, Treasury Regulations issued thereunder (including Proposed
and Temporary Regulations), and interpretations of the foregoing as expressed in court decisions, administrative determinations, and
the legislative history as of the date hereof. These provisions and interpretations are subject to differing interpretations or change
at any time, which may or may not be retroactive in effect, and which might result in modifications of our opinions. In this regard,
an opinion of counsel with respect to an issue represents counsel’s best judgment as to the outcome on the merits with respect
to such issue, is not binding on the Internal Revenue Service (“IRS”) or the courts, and is not a guarantee that the
IRS will not assert a contrary position with respect to an issue, or that a court will not sustain such a position if asserted by the
IRS.
1
Unless otherwise stated, all Section references herein are to the Code.
Power
REIT
January
24, 2025
Page
2
In
rendering our opinions, we have made such factual and legal examinations, including an examination of such statutes, regulations, records,
certificates and other documents as we have considered necessary or appropriate, including, but not limited to, the following: (1) the
Registration Statement (including exhibits thereto) and the Prospectus; (2) the Declaration of Trust of Power REIT, dated August 25,
2011, as amended and restated on November 28, 2011, as supplemented on February 12, 2014, and as supplemented on January 8, 2021, which
have been filed with the Maryland State Department of Assessments and Taxation; (3) other public filings of the Company with the Commission
such as Forms 10-Q and 10-K; and (4) such other documents and corporate records as we have deemed necessary or appropriate for purposes
of our opinion. The opinions set forth in this letter also are based on certain written factual representations and covenants made by
an officer of the Company in a certificate of even date herewith (the “Officer’s Certificate”) relating to,
among other things, those factual matters as are germane to the determination that the Company, and the entities in which they hold direct
or indirect interests, have been and will be formed, owned and operated in such a manner that the Company has and will continue to satisfy
the requirements for qualification as a REIT under the Code (collectively, the Officer’s Certificate and the documents described
in the immediately preceding sentence are referred to herein as the “Transaction Documents”).
In
our review, we have assumed, with your consent, that all of the factual representations, covenants and statements set forth in the Transaction
Documents are true and correct, and all of the obligations imposed by any such documents on the parties thereto have been and will be
performed or satisfied in accordance with their terms. Moreover, we have assumed that the Company will be operated in the manner described
in the relevant Transaction Documents. We have, consequently, assumed and relied on your representations that the information presented
in the Transaction Documents (including, without limitation, the Officer’s Certificate and the exhibits thereto) accurately and
completely describe all material facts relevant to our opinion. We have not undertaken any independent inquiry into, or verification
of, these facts for the purpose of rendering this opinion. While we have reviewed all representations made to us to determine their reasonableness,
we have no assurance that they are or will ultimately prove to be accurate. No facts have come to our attention, however, that would
cause us to question the accuracy or completeness of such facts or Transaction Documents in a material way. Our opinion is conditioned
on the continuing accuracy and completeness of such representations, covenants and statements. Any material change or inaccuracy in the
facts referred to, set forth, or assumed herein or in the Transaction Documents may affect our conclusions set forth herein.
We
also have assumed the legal capacity of all natural persons, the genuineness of all signatures, the proper execution of all documents,
the authenticity of all documents submitted to us as originals, the conformity to originals of documents submitted to us as copies, and
the authenticity of the originals from which any copies were made. Where documents have been provided to us in draft form, we have assumed
that the final executed versions of such documents will not differ materially from such drafts.
Power
REIT
January
24, 2025
Page
3
Based
upon, and subject to the foregoing and the discussion below, we are of the opinion that:
| |
(i) |
commencing
with the Company’s taxable year ended on December 31, 2011, the Company has been organized in conformity with requirements
for qualification as a REIT under the Code, and the Company’s actual method of operation through the date hereof has enabled
it to meet and, assuming the Company’s election to be treated as a REIT is not either revoked or intentionally terminated,
the Company’s proposed method of operation will enable it to continue to meet, the requirements for qualification and taxation
as a REIT under the Code; |
| |
(ii) |
the
discussion in the Prospectus under the caption “Material United States Federal Income Tax Considerations” to the extent
it constitutes matters of U.S. federal tax law, including summaries of legal matters or legal conclusions, is a fair and accurate
summary of the U.S. federal income tax considerations that are likely to be material to a holder of securities acquired in the offering
pursuant to the Registration Statement. |
We
express no opinion on any issue relating to the Company, or the discussion in the Prospectus under the caption “Material United
States Federal Income Tax Considerations” other than as expressly stated above.
The
Company’s qualification and taxation as a REIT will depend upon the Company’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 its distributions to stockholders,
and the diversity of its stock ownership. Neuberger, Quinn, Gielen, Rubin & Gibber, P.A. will not review the Company’s compliance
with these requirements on a continuing basis. Accordingly, no assurance can be given that the actual results of the operations of the
Company, the sources of their income, the nature of their assets, the level of the Company’s distributions to stockholders and
the diversity of its stock ownership for any given taxable year will satisfy the requirements under the Code for the Company’s
qualification and taxation as a REIT.
This
opinion letter is rendered to you for your use in connection with the Registration Statement and may be relied on by you and your stockholders.
Except as provided in the next paragraph, this opinion letter may not be distributed, quoted in whole or in part or otherwise reproduced
in any document, filed with any governmental agency, or relied upon by any other person for any other purpose (other than as required
by law) without our express written consent.
Power
REIT
January
24, 2025
Page
4
We
consent to the use of our name under the captions “Material United States Federal Income Tax Considerations” and “Legal
Matters” in the Prospectus and to the use of these opinions for filing as Exhibit 8.1 to the Registration Statement. In giving
this consent, we do not hereby admit that we come within the category of persons whose consent is required under section 7 of the Securities
Act of 1933, or the rules and regulations of the Commission hereunder.
| |
Sincerely yours, |
| |
|
| |
/s/ Neuberger, Quinn, Gielen, |
| |
Rubin & Gibber, P.A. |
Exhibit
23.1
CONSENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We
consent to the incorporation by reference in this Registration Statement on Form S-3 and related Prospectus, of our report dated March
29, 2024, with respect to the consolidated financial statements of Power REIT and Subsidiaries as of December 31, 2023 and 2022, and
for the years then ended which report is included in the Annual Report on Form 10-K of Power REIT and Subsidiaries for the year ended
December 31, 2023, filed with the Securities and Exchange Commission. Our audit report includes an explanatory paragraph relating to
Power REIT and Subsidiaries ability to continue as a going concern.
We
also consent to the reference to us under the caption “Experts.”
/s/
MaloneBailey, LLP
Houston,
Texas
January
24, 2025
Exhibit
107
Calculation
of Filing Fee Tables
Form
S-3
(Form
Type)
POWER
REIT
(Exact
name of Registrant as specified in its charter)
Table
1: Newly Registered and Carry Forward Securities
| | |
Security
Type | |
Security
Class
Title | |
Fee
Calculation
or Carry
Forward
Rule | |
Amount
Registered(3) | |
Proposed
Maximum
Offering
Price Per Unit | |
Maximum
Aggregate
Offering
Price | |
Fee Rate | |
Amount of
Registration
Fee |
| Fees to be paid | |
Equity(1) | |
Common Shares, $0.001 par value per share | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
| Fees to be paid | |
Equity(1) | |
Preferred Stock, $0.001 par value per share(2)
| |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
| Fees to be paid | |
Debt(1) | |
Debt securities | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
| Fees to be paid | |
Other(1) | |
Warrants | |
| — | | |
| | | |
| — | | |
| — | | |
| — | | |
| — | |
| Fees to be paid | |
Other (1) | |
Units | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
| Fees to be paid | |
Unallocated (Universal) Shelf | |
Unallocated (Universal) Shelf | |
| 457 | (o) | |
| (3 | ) | |
| (3 | ) | |
$ | 50,000,000 | | |
$ | 0.00015310 | | |
$ | 7,655 | |
| | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
Total Offering Amounts | |
| | | |
| — | | |
| | | |
$ | 7,655 | |
| | |
Total Fees Previously Paid |
| | | |
| | | |
| | | |
$ | — | |
| | |
Total Fee Offsets | |
| | | |
| | | |
| | | |
| — | |
| | |
Net Fee Due |
| | | |
| | | |
| | | |
$ | 7,655 | |
| (1) |
Represents
securities that may be offered and sold from time-to-time in one or more offerings by Power REIT ( the “Registrant”). |
| |
|
(2)
|
Including
the Registrant’s 7.75% Series A Cumulative Redeemable Perpetual Preferred Stock,
$25.00 liquidation preference per share of Series A Preferred Stock per annum. |
| |
|
| (3) |
This registration statement covers an indeterminate amount
and number of securities of each identified class of securities up to a proposed maximum aggregate offering price of $50,000,000,
which may be offered from time to time in unspecified numbers and indeterminate prices, and as may be issued upon conversion, exchange,
or exercise of any securities registered hereunder, including any applicable anti-dilution provisions. Separate consideration may
or may not be received for securities that are issuable on conversion, redemption, repurchase or exchange of other securities. Pursuant
to Rule 416(a) promulgated under the Securities Act of 1933, as amended, this registration statement also covers an indeterminate
number of securities that may become issuable as a result of stock splits, stock dividends or similar transactions relating to the
securities registered hereunder by the Registrant. |
Power REIT (AMEX:PW)
Historical Stock Chart
From Dec 2024 to Jan 2025
Power REIT (AMEX:PW)
Historical Stock Chart
From Jan 2024 to Jan 2025
