As filed with the Securities and Exchange Commission
on February 21, 2025
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
INNOVATIVE INDUSTRIAL
PROPERTIES, INC.
IIP
OPERATING PARTNERSHIP, LP
(Exact Name of Registrant as Specified in its
Governing Instruments)
Maryland (Innovative Industrial
Properties, Inc.)
Delaware (IIP Operating
Partnership, LP) |
|
81-2963381
61-1800557 |
(State
or other jurisdiction of
incorporation or organization) |
|
(I.R.S.
Employer
Identification Number) |
1389 Center Drive, Suite 200
Park City, UT 84098
(858) 997-3332
(Address, Including Zip Code, and Telephone
Number,
Including Area Code, of Registrant’s Principal Executive Offices)
Paul E. Smithers
President and Chief Executive Officer
INNOVATIVE INDUSTRIAL PROPERTIES, INC.
1389 Center Drive, Suite 200
Park City, UT 84098
(858) 997-3332
(Name, Address, Including Zip Code, and
Telephone Number,
Including Area Code, of Agent for Service)
With copies to:
Carolyn Long, Esq.
Curt Creely, Esq.
FOLEY & LARDNER LLP
100 N. Tampa Street
Suite 2700
Tampa, Florida 33602
Tel: (813) 229-2300
Approximate date of commencement of proposed
sale to the public:
From time to time after the effective date of this registration statement.
If
the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please
check the following box: ¨
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check
the following box: x
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act,
check the following box and list the Securities Act registration statement number of the earlier effective registration statement for
the same offering. ¨
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box
and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If
this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall
become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box.
x
If
this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register
additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following
box. ¨
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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. (Check one):
Innovative Industrial Properties, Inc.:
| Large Accelerated filer x |
|
Accelerated filer ¨ |
|
Non-accelerated filer ¨ |
|
Smaller
reporting company ¨
Emerging
growth company ¨ |
IIP Operating Partnership, LP:
| Large Accelerated filer ¨ |
|
Accelerated filer ¨ |
|
Non-accelerated filer x |
|
Smaller
reporting company ¨
Emerging
growth company ¨ |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ¨
PROSPECTUS
Innovative Industrial Properties, Inc.
COMMON STOCK
PREFERRED STOCK
DEPOSITARY SHARES
WARRANTS
RIGHTS
UNITS
GUARANTEES OF DEBT
SECURITIES
IIP Operating Partnership,
LP
DEBT SECURITIES
We may offer and sell
the securities identified above from time to time in one or more offerings. IIP Operating Partnership, LP, a Delaware limited partnership
(our “Operating Partnership”), may offer from time to time debt securities in one or more series. The debt securities issued
by our Operating Partnership may be fully and unconditionally guaranteed by us. This prospectus may also be used to offer and sell any
of the securities for the account of persons other than us as provided in an applicable prospectus supplement.
This prospectus describes
some of the general terms and conditions that may apply to the securities. Each time we, our Operating Partnership, or our selling security
holders offer and sell securities, we will provide a supplement to this prospectus that contains specific terms and conditions of any
securities being offered. The specific amounts and terms of any securities to be offered, issued or sold, and the identity of any selling
security holders, will also be described in the applicable prospectus supplement. It is important that you read both this prospectus
and the applicable prospectus supplement before you invest in any of the securities.
We, our Operating Partnership,
or our selling security holders may offer the securities directly to investors, through agents designated from time to time by them or
us, or to or through underwriters or dealers on a continuous or delayed basis. If any agents, underwriters or dealers are involved in
the sale of any of the securities, their names and any applicable purchase price, fee, commission or discount arrangement with, between
or among them, will be set forth, or will be calculable from the information set forth, in an accompanying prospectus supplement. For
more detailed information, see “Plan of Distribution” beginning on page 54. No securities may be sold without delivery
of a prospectus supplement describing the method and terms of the offering of those securities.
Our common stock is
traded on the New York Stock Exchange (the “NYSE”) under the symbol “IIPR.” The last reported sale price of our
common stock on the NYSE on February 20, 2025 was $72.90 per share.
Our 9.0% Series A
Cumulative Redeemable Preferred Stock (the “Series A Preferred Stock”) is traded on the NYSE under the symbol “IIPR
Pr A.”
Investing in our
securities involves risks. Before making a decision to invest in our securities, you should carefully consider the risks described on
page 6 of this prospectus and in any accompanying prospectus supplement, as well as the risks described under the section entitled
“Risk Factors” included in our most recent Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q
and other documents filed by us with the Securities and Exchange Commission.
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 February 21, 2025.
TABLE OF CONTENTS
You should rely only on the information contained
in or incorporated by reference in this prospectus, any accompanying prospectus supplement and any related free writing prospectus that
we may authorize to be provided to you. We have not authorized anyone to provide you with different information. This prospectus and
any accompanying prospectus supplement do not constitute an offer to sell or the solicitation of an offer to buy any securities other
than the securities described in any applicable prospectus supplement or an offer to sell or the solicitation of an offer to buy such
securities in any circumstances in which such offer or solicitation is unlawful. You should assume that the information in this prospectus,
any applicable prospectus supplement or any related free writing prospectus is accurate only as of the date on the front of the document
and that any information we have incorporated by reference is accurate only as of the date of the document incorporated by reference,
regardless of the time of delivery of this prospectus, any applicable prospectus supplement or any related free writing prospectus, or
any sale of a security. Our business, financial condition, results of operations and prospects may have changed materially since those
dates.
FORWARD-LOOKING STATEMENTS
The statements contained or incorporated by reference
in this prospectus that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act
of 1995 are subject to risks and uncertainties. In particular, statements pertaining to our capital resources, portfolio performance
and results of operations contain forward-looking statements. Likewise, our statements regarding anticipated growth in our funds from
operations and anticipated market and regulatory conditions, our strategic direction, demographics, results of operations, plans and
objectives are forward-looking statements. Forward-looking statements involve numerous risks and uncertainties, and you should not rely
on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods which may be incorrect or
imprecise, and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described
(or that they will happen at all). You can identify forward-looking statements by the use of forward-looking terminology such as “believes,”
“expects,” “may,” “will,” “should,” “seeks,” “approximately,”
“intends,” “plans,” “estimates” or “anticipates” or the negative of these words and phrases
or similar words or phrases. You can also identify forward-looking statements by discussions of strategy, plans or intentions. The following
factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the
forward-looking statements:
| · | rates
of default on leases for our assets; |
| · | our
ability to re-lease properties upon tenant defaults or lease terminations for the rent we
currently receive, or at all; |
| · | concentration
of our portfolio of assets and limited number of tenants; |
| · | the
estimated growth in and evolving market dynamics of the regulated cannabis market; |
| · | the
demand for regulated cannabis cultivation and processing facilities; |
| · | the
impact of pandemics on us, our business, our tenants, or the economy generally; |
| · | war
and other hostilities, including the conflicts in Ukraine and Israel; |
| · | our
business and investment strategy; |
| · | our
projected operating results; |
| · | actions
and initiatives of the U.S. or state governments and changes to government policies and the
execution and impact of these actions, initiatives and policies, including the fact that
cannabis remains illegal under federal law; |
| · | availability
of suitable investment opportunities in the regulated cannabis industry; |
| · | our
understanding of our competition and our potential tenants’ alternative financing sources; |
| · | the
expected medical-use or adult-use cannabis legalization in certain states; |
| · | shifts
in public opinion regarding regulated cannabis; |
| · | the
potential impact on us from litigation matters, including rising liability and insurance
costs; |
| · | the
additional risks that may be associated with certain of our tenants cultivating, processing
and/or dispensing adult-use cannabis in our facilities; |
| · | the
state of the U.S. economy generally or in specific geographic areas; |
| · | economic
trends and economic recoveries; |
| · | our
ability to access equity or debt capital; |
| · | financing
rates for our target assets; |
| · | our
level of indebtedness, which could reduce funds available for other business purposes and
reduce our operational flexibility; |
| · | covenants
in our debt instruments, which may limit our flexibility and adversely affect our financial
condition; |
| · | our
ability to maintain our investment grade credit rating; |
| · | changes
in the values of our assets; |
| · | our
expected portfolio of assets; |
| · | our
expected investments; |
| · | interest
rate mismatches between our assets and our borrowings used to fund such investments; |
| · | changes
in interest rates and the market value of our assets; |
| · | the
degree to which any interest rate or other hedging strategies may or may not protect us from
interest rate volatility; |
| · | the
impact of and changes in governmental regulations, tax law and rates, accounting guidance
and similar matters; |
| · | how
and when any forward equity sales may settle; |
| · | our
ability to maintain our qualification as a real estate investment trust (“REIT”)
for U.S. federal income tax purposes; |
| · | our
ability to maintain our exemption from registration under the Investment Company Act of 1940; |
| · | availability
of qualified personnel; and |
| · | market
trends in our industry, interest rates, real estate values, the securities markets or the
general economy. |
Any forward-looking
statement made by us speaks only of the date on which we make it. We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise, except as may be required by law. Stockholders and investors
are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this prospectus and
any documents incorporated by reference.
Market data and industry
forecasts and projections used in this prospectus and documents incorporated by reference have been obtained from independent industry
sources. Forecasts, projections and other forward-looking information obtained from such sources are subject to similar qualifications
and uncertainties as other forward-looking statements in this prospectus and documents incorporated by reference.
INCORPORATION BY REFERENCE
The Securities and Exchange
Commission (the “SEC”) allows us to “incorporate by reference” the information that we file with it, which means
that we can disclose important information to you by referring you to other documents. The information incorporated by reference is an
important part of this prospectus. We incorporate by reference the following documents (other than information furnished rather than
filed):
| · | the
information specifically incorporated by reference into our Annual Report on Form 10-K for
the year ended December 31, 2023 from our Definitive Proxy Statement on Schedule 14A filed
with the SEC on April
1, 2024; |
| · | our Current Reports on Form 8-K filed with the SEC on January 6,
2025, and February 11,
2025 (other than documents or portions of those documents deemed to be furnished but not filed); |
| · | the
description of our common stock contained in the registration statement on Form 8-A
filed on November 17, 2016, as supplemented by the description of our common stock
contained in Exhibit 4.4 of our 2024 Form 10-K, including amendments or reports
filed for the purpose of updating that description; and |
| · | the
description of our Series A Preferred Stock, which is contained in the registration
statement on Form 8-A
filed on October 12, 2017, as supplemented by the description of our Series A
Preferred Stock contained in Exhibit 4.4 of our 2024 Form 10-K, including amendments
or reports filed for the purpose of updating that description. |
All reports and other
documents we subsequently file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”) (other than information furnished rather than filed), will also be incorporated by reference into this
prospectus and deemed to be part of this prospectus from the date of the filing of such reports and documents.
We will provide without
charge, upon written or oral request, a copy of any or all of the documents that are incorporated by reference into this prospectus and
a copy of any or all other contracts or documents which are referred to in this prospectus. Requests should be directed to Innovative
Industrial Properties, Inc., Attn: Secretary, 11440 West Bernardo Court, Suite 100, San Diego, CA 92127. You should not assume
that the information contained or incorporated by reference into this prospectus or any free writing prospectus is accurate as of any
date other than the dates specified on those respective documents.
OUR COMPANY
Unless the context
otherwise requires or indicates, references in this prospectus to “we,” “us,” “our,” and “our
company” refer to Innovative Industrial Properties, Inc., a Maryland corporation, together with its subsidiaries, including
our Operating Partnership, of which we are the sole general partner and through which we conduct our business.
Our Company
We are an internally-managed
REIT focused on the acquisition, ownership and management of specialized industrial properties in the United States. Our properties are
leased to experienced, state-licensed operators for their regulated cannabis facilities. We have acquired and intend to continue to acquire
our properties through sale-leaseback transactions and third-party purchases. We have leased and expect to continue to lease our properties
on a triple-net lease basis, where the tenant is responsible for all aspects of and costs related to the property and its operation during
the lease term, including structural repairs, maintenance, real estate taxes and insurance.
We were incorporated
in Maryland on June 15, 2016, and we elected to be taxed as a REIT for U.S federal income tax purposes, beginning with our taxable
year ended December 31, 2017. We conduct our business through a traditional umbrella partnership real estate investment trust, or
UPREIT structure, in which our properties are owned by our Operating Partnership, directly or through subsidiaries. We are the sole general
partner of our Operating Partnership and own, directly or through subsidiaries, 100% of the limited partnership interests in our Operating
Partnership. As of December 31, 2024, we had 22 full-time employees.
Our Properties
As of December 31, 2024, we owned 109 properties
comprising an aggregate of 9.0 million rentable square feet (including 666,000 rentable square feet under development/redevelopment)
in 19 states. As of December 31, 2024, we had invested an aggregate of $2.4 billion across our property portfolio (consisting of
purchase price and funding of draws for improvements submitted by tenants, if any, but excluding transaction costs) and had committed
an additional $38.3 million to fund draws to certain tenants and vendors for improvements at our properties. Of the $38.3 million committed
to fund draws to certain tenants and vendors for improvements at our properties, $11.4 million was incurred but not funded as of December 31,
2024.
Of these
109 properties, we include 106 properties in our operating portfolio, which were 98.3% leased as of December 31, 2024, with a weighted-average
remaining lease term of 13.7 years.
We do not include in
our operating portfolio the following properties (all of which were under development/redevelopment as of December 31, 2024, and
together are expected to comprise 491,000 rentable square feet upon completion of development/redevelopment):
| · | 63795
19th Avenue in Palm Springs, California (pre-leased); |
| · | Inland
Center Drive in San Bernardino, California; and |
| · | Leah
Avenue in San Marcos, Texas. |
Corporate Information
For a complete discussion
of our business and operations, see our most recent Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q,
which are incorporated by reference in this prospectus.
Our principal executive
offices are located at 1389 Center Drive, Suite 200, Park City, Utah 84098. Our telephone number is (858) 997-3332. Our website
is www.innovativeindustrialproperties.com. The information found on, or otherwise accessible through, our website is not
incorporated into, and does not form a part of, this prospectus or any other report or document we file with or furnish to the SEC.
RISK FACTORS
An investment in our
securities involves various risks. You should carefully consider the risk factors incorporated by reference to our most recent Annual
Report on Form 10-K and the other information contained in this prospectus, as updated by our Quarterly Reports on Form 10-Q
and subsequent filings under the Exchange Act and the risk factors and other information contained in the applicable prospectus supplement
before acquiring any of our securities.
ABOUT THIS PROSPECTUS
This prospectus is part
of a shelf registration statement. We may sell, from time to time, in one or more offerings, any combinations of the securities described
in this prospectus. This prospectus only provides you with a general description of the securities we may offer. Each time we sell securities
under this prospectus, we will provide a prospectus supplement that contains specific information about the terms of the securities.
The prospectus supplement may also add, update or change information contained in this prospectus. You should read both this prospectus
and any prospectus supplement together with the additional information described below under the heading “Where You Can Find Additional
Information.”
GUARANTOR DISCLOSURES
Innovative Industrial
Properties, Inc. may guarantee debt securities of the Operating Partnership as described in the section entitled “Description
of Debt Securities.” Any such guarantees will be full and unconditional and joint and several guarantees to the holders of each
series of such outstanding guaranteed debt securities. Innovative Industrial Properties, Inc. owns all of its assets and conducts
all of its operations through the Operating Partnership, and the Operating Partnership is consolidated into the financial statements
of Innovative Industrial Properties, Inc.
We have filed this prospectus
with the SEC registering, among other securities, debt securities of the Operating Partnership, which may be fully and unconditionally
guaranteed by Innovative Industrial Properties, Inc. Pursuant to Rule 3-10 of Regulation S-X, subsidiary issuers of obligations
guaranteed by the parent are not required to provide separate financial statements, provided that the subsidiary obligor is consolidated
into the parent company’s consolidated financial statements, the parent guarantee is “full and unconditional” and,
subject to certain exceptions as set forth below, the alternative disclosure required by Rule 13-01 of Regulation S-X is provided,
which includes narrative disclosure and summarized financial information. Accordingly, separate consolidated financial statements of
the Operating Partnership have not been presented.
Furthermore, as permitted
under Rule 13-01(a)(4)(vi) of Regulation S-X, we have excluded the summarized financial information for the Operating
Partnership because the assets, liabilities and results of operations of the Operating Partnership are not materially different than
the corresponding amounts in Innovative Industrial Properties, Inc.’s consolidated financial statements incorporated by reference
herein, and management believes such summarized financial information would be repetitive and would not provide incremental value to
investors.
USE OF PROCEEDS
Unless we specify otherwise
in the applicable prospectus supplement, we intend to use the net proceeds from the sale of the offered securities for general corporate
purposes, including funding our investment activity, the repayment or refinancing of outstanding indebtedness, working capital and other
general purposes. Any specific allocation of the net proceeds of an offering of securities will be determined at the time of such offering
and will be described in the applicable prospectus supplement.
We will not receive
proceeds from any sales of securities by the account of persons other than us.
DESCRIPTION OF CAPITAL STOCK
The following is a summary description of
our capital stock. This description does not purport to be complete and is subject to and qualified in its entirety by reference to the
Maryland General Corporation Law (the “MGCL”) and to our charter and our bylaws. For a more complete understanding of our
securities, we encourage you to read carefully this entire prospectus, as well as our charter and our bylaws, which are filed as exhibits
to the registration statement of which this prospectus forms a part. See “Where You Can Find Additional Information.”
General
Our charter provides
that we may issue up to 50,000,000 shares of common stock, $0.001 par value per share, and up to 50,000,000 shares of preferred stock,
$0.001 par value per share, of which 23,350,000 shares are designated as Series A Preferred Stock pursuant to articles supplementary
filed with the State of Maryland. Under Maryland law, our stockholders are not generally liable for our debts or obligations. Our charter
authorizes our board of directors to amend our charter to increase or decrease the aggregate number of shares of stock or the number
of shares of stock of any class or series that we are authorized to issue with the approval of a majority of our entire board of directors
and without stockholder approval.
As of February 20, 2025, 28,331,833 shares
of our common stock were issued and outstanding and 1,002,673 shares of our Series A Preferred Stock issued and outstanding.
Common Stock
Subject to the preferential
rights, if any, of holders of any other class or series of our stock (including our Series A Preferred Stock) and to the provisions
of our charter regarding the restrictions on ownership and transfer of our stock, holders of outstanding shares of common stock are entitled
to receive dividends on such shares of common stock out of assets legally available therefor if, as and when authorized by our board
of directors and declared by us, and the holders of outstanding shares of common stock are entitled to share ratably in our assets legally
available for distribution to our stockholders in the event of our liquidation, dissolution or winding up after payment of or adequate
provision for all our known debts and liabilities.
Subject to the provisions
of our charter regarding the restrictions on ownership and transfer of our stock and except as may otherwise be specified in the terms
of any class or series of stock, each outstanding share of common stock entitles the holder to one vote on all matters submitted to a
vote of stockholders, including the election of directors, and, except as provided with respect to any other class or series of shares
of our stock (including the Series A Preferred Stock), the holders of shares of common stock will possess the exclusive voting power.
A plurality of the votes cast in the election of directors is sufficient to elect a director and there is no cumulative voting in the
election of directors, which means that the holders of a majority of the outstanding shares of common stock can elect all of the directors
then standing for election, and the holders of the remaining shares will not be able to elect any directors.
Holders of shares of
common stock have no preference, conversion, exchange, sinking fund, redemption or appraisal rights and have no preemptive rights to
subscribe for any securities of our company. Subject to the provisions of our charter regarding the restrictions on ownership and transfer
of our stock, shares of common stock will have equal dividend, liquidation and other rights.
Under Maryland law,
a Maryland corporation generally cannot dissolve, amend its charter, merge, sell all or substantially all of its assets, engage in a
share exchange or engage in similar transactions outside the ordinary course of business, unless declared advisable by the board of directors
and approved by the affirmative vote of stockholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter.
However, a Maryland corporation may provide in its charter for approval of these matters by a lesser percentage, but not less than a
majority of all the votes entitled to be cast on the matter. Our charter provides for approval of these matters by the affirmative vote
of holders of shares entitled to cast a majority of all the votes entitled to be cast on the matter, except for amendments to our charter
that would alter only the contract rights, as expressly set forth in the charter, of a specified class or series of stock (including
the Series A Preferred Stock) with respect to which the holders of such class or series of stock have exclusive voting rights as
provided in our charter.
Also, our operating
assets are held by our subsidiaries and these subsidiaries may be able to merge or sell all or substantially all of their assets without
the approval of our stockholders.
Preferred Stock
Our board of directors
may authorize the issuance of preferred stock in one or more series and may determine, with respect to any such series, the rights, preferences,
privileges and restrictions of the preferred stock of that series, including:
| |
· |
redemption rights and terms of redemptions;
and |
| |
· |
liquidation preferences. |
The preferred stock
we may offer from time to time under this prospectus, when issued, will be duly authorized, fully paid and nonassessable, and holders
of preferred stock will not have any preemptive rights.
The issuance of preferred
stock could have the effect of delaying, deferring or preventing a change in control or other transaction that might involve a premium
price for our common stock or otherwise be in the best interests of our stockholders. In addition, any preferred stock that we issue
could rank senior to our common stock with respect to the payment of distributions, in which case we could not pay any distributions
on our common stock until full distributions have been paid with respect to such preferred stock.
The rights, preferences,
privileges and restrictions of each series of preferred stock will be fixed by articles supplementary relating to the series. We will
describe the specific terms of the particular series of preferred stock in the prospectus supplement relating to that series, which terms
will include:
| |
· |
the designation and par value of
the preferred stock; |
| |
· |
the voting rights, if any, of the
preferred stock; |
| |
· |
the number of preferred stock offered,
the liquidation preference per preferred stock and the offering price of the preferred stock; |
| |
· |
the distribution rate(s), period(s) and
payment date(s) or method(s) of calculation applicable to the preferred stock; |
| |
· |
whether distributions will be cumulative
or non-cumulative and, if cumulative, the date(s) from which distributions on the preferred stock will cumulate; |
| |
· |
the procedures for any auction and
remarketing for the preferred stock, if applicable; |
| |
· |
the provision for a sinking fund,
if any, for the preferred stock; |
| |
· |
the provision for, and any restriction
on, redemption, if applicable, of the preferred stock; |
| |
· |
the terms and provisions, if any,
upon which the preferred stock will be convertible into common stock, including the conversion price (or manner or calculation) and
conversion period; |
| |
· |
the terms under which the rights
of the preferred stock may be modified, if applicable; |
| |
· |
the relative ranking and preferences
of the preferred stock as to distribution rights and rights upon the liquidation, dissolution or winding up of our affairs; |
| |
· |
any limitation on issuance of any
other series of preferred stock, including any series of preferred stock ranking senior to or on parity with the series of preferred
stock as to distribution rights and rights upon the liquidation, dissolution or winding up of our affairs; |
| |
· |
any listing of the preferred stock
on any securities exchange; |
| |
· |
if appropriate, a discussion of
any additional material federal income tax considerations applicable to the preferred stock; |
| |
· |
information with respect to book-entry
procedures, if applicable; |
| |
· |
in addition to those restrictions
described below, any other restrictions on the ownership and transfer of the preferred stock; and |
| |
· |
any additional rights, preferences,
privileges or restrictions of the preferred stock. |
As of February 20, 2025, there were 1,002,673
shares of our Series A Preferred Stock issued and outstanding. We pay cumulative dividends on the Series A Preferred Stock,
when and as authorized by our board of directors, at a rate of 9.0% per annum of the $25.00 liquidation preference per share (equivalent
to the fixed annual rate of $2.25 per share). Dividends on the Series A Preferred Stock are payable quarterly in arrears on or about
the 15th day of January, April, July and October of each year. The Series A Preferred Stock ranks senior to our common
stock with respect to dividend rights and rights upon our liquidation, dissolution or winding-up. We may, at our option, upon not fewer
than 30 and not more than 60 days’ written notice, redeem the Series A Preferred Stock, in whole or in part, at any time
or from time to time, for cash at a redemption price of $25.00 per share, plus an amount equal to all accrued but unpaid dividends
(whether or not authorized or declared) to, but not including, the date fixed for redemption, without interest, to the extent we have
funds legally available for that purpose. If we do not exercise our right to redeem the Series A Preferred Stock upon a change of
control/delisting, the holders of Series A Preferred Stock have the right to convert some or all of their shares into a number of
shares of our common stock based on a defined formula subject to a cap. The Series A Preferred Stock has no stated maturity and
is not subject to mandatory redemption or any sinking fund. Holders of shares of the Series A Preferred Stock will generally have
no voting rights except for limited voting rights if we fail to pay dividends for six or more quarterly periods (whether or not consecutive)
and in certain other circumstances. In addition to any other class or series of preferred stock that we may offer, issue or sell pursuant
to this prospectus and any accompanying prospectus supplement, we may issue additional shares of Series A Preferred Stock.
Power to Reclassify Our Unissued Shares
of Stock
Our charter authorizes
our board of directors to classify and reclassify any unissued shares of common or preferred stock into other classes or series of stock,
including one or more classes or series of stock that have priority with respect to voting rights, dividends or upon liquidation over
our common stock, and authorize us to issue the newly-classified shares. Prior to the issuance of shares of each new class or series,
our board of directors is required by Maryland law and by our charter to set, subject to the provisions of our charter regarding the
restrictions on ownership and transfer of our stock, the preferences, conversion or other rights, voting powers, restrictions, limitations
as to dividends or other distributions, qualifications and terms or conditions of redemption for each class or series. Our board of directors
may take these actions without stockholder approval unless stockholder approval is required by the terms of any other class of series
of our stock or the rules of any stock exchange or automatic quotation system on which our securities may be listed or traded. Therefore,
our board could authorize the issuance of shares of common or preferred stock with terms and conditions that could have the effect of
delaying, deferring or preventing a change in control or other transaction that might involve a premium price for shares of our common
stock or otherwise be in the best interest of our stockholders.
Power to Increase or Decrease Authorized
Shares of Stock and Issue Additional Shares of Common and Preferred Stock
We believe that the
power of our board of directors to amend our charter to increase or decrease the number of authorized shares of our stock, to authorize
us to issue additional authorized but unissued shares of common or preferred stock and to classify or reclassify unissued shares of common
or preferred stock and thereafter to authorize us to issue such classified or reclassified shares of stock will provide us with increased
flexibility in structuring possible future financings and acquisitions and in meeting other needs that might arise. Subject to the rights
holders of the Series A Preferred Stock will have to approve the classification or issuance of shares of a class or series of our
stock ranking senior to the Series A Preferred Stock, the additional classes or series, as well as the additional shares of common
stock, will be available for issuance without further action by our stockholders, unless such approval is required by the terms of any
other class or series of our stock or the rules of any stock exchange or automated quotation system on which our securities may
be listed or traded. Although our board of directors does not intend to do so, it could authorize us to issue a class or series of stock
that could, depending upon the terms of the particular class or series, delay, defer or prevent a change in control or other transaction
that might involve a premium price for shares of our common stock or otherwise be in the best interest of our stockholders.
Restrictions on Ownership and Transfer
In order for us to qualify as a REIT under the
Internal Revenue Code of 1986, as amended (the “Code”), shares of our stock must be owned by 100 or more persons during at
least 335 days of a taxable year of 12 months (other than the first year for which an election to be taxed as a REIT has been made) or
during a proportionate part of a shorter taxable year. Also, under Section 856(h) of the Code, a REIT cannot be “closely
held.” In this regard, not more than 50% of the value of the outstanding shares of stock may be owned, directly or indirectly,
by five or fewer individuals (as defined in the Code to include certain entities) during the last half of a taxable year (other than
the first year for which an election to be a REIT has been made). See the section entitled “Material U.S. Federal Income Tax Considerations”
in this prospectus for further discussion on this topic.
Our charter contains restrictions on the ownership
and transfer of shares of our common stock and other outstanding shares of stock. The relevant sections of our charter provide that,
subject to the exceptions described below, no person or entity may own, or be deemed to own, by virtue of the applicable constructive
ownership provisions of the Code, more than 9.8% (in value or number of shares, whichever is more restrictive) of the aggregate of our
outstanding shares of stock or more than 9.8% (in value or number of shares, whichever is more restrictive) of our outstanding common
stock or any class or series of our outstanding preferred stock; we refer to these limitations as the “ownership limits.”
In addition, the Series A Preferred Stock articles supplementary provide that generally no person may own, or be deemed to own,
by virtue of the applicable constructive ownership provisions of the Code, more than 9.8% (in value or in number of shares, whichever
is more restrictive) of the outstanding Series A Preferred Stock.
The constructive ownership rules under the
Code are complex and may cause shares of stock owned actually or constructively by a group of related individuals or entities to be owned
constructively by one individual or entity. As a result, the acquisition of less than 9.8% in value of the aggregate of our outstanding
shares of stock and 9.8% (in value or in number of shares, whichever is more restrictive) of any class or series of our shares of stock
(or the acquisition of an interest in an entity that owns, actually or constructively, shares of our stock by an individual or entity),
could, nevertheless, cause that individual or entity, or another individual or entity, to violate the ownership limits.
Our board of directors may, upon receipt of certain
representations, undertakings and agreements and in its sole discretion, exempt (prospectively or retroactively) any person from the
ownership limits and establish a different limit, or excepted holder limit, for a particular person if the person’s ownership in
excess of the ownership limits will not then or in the future result in us failing the “closely held” test under Section 856(h) of
the Code (without regard to whether the person’s interest is held during the last half of a taxable year) or otherwise cause us
to fail to qualify as a REIT. In order to be considered by our board of directors for exemption, a person also must not own, actually
or constructively, an interest in one of our tenants (or a tenant of any entity which we own or control) that would cause us to own,
actually or constructively, more than a 9.9% interest in the tenant unless the revenue derived by us from such tenant is sufficiently
small that, in the opinion of our board of directors, rent from such tenant would not adversely affect our ability to qualify as a REIT.
The person seeking an exemption must provide such representations and undertakings to the satisfaction of our board of directors that
it will not violate these two restrictions. The person also must agree that any violation or attempted violation of these restrictions
will result in the automatic transfer to a trust of the shares of stock causing the violation. As a condition of granting an exemption
or creating an excepted holder limit, our board of directors may, but is not be required to, obtain an opinion of counsel or private
ruling from the Internal Revenue Service (the “Service”) satisfactory to our board of directors with respect to our qualification
as a REIT and may impose such other conditions or restrictions as it deems appropriate.
In connection with granting an exemption from
the ownership limits or establishing an excepted holder limit or at any other time, our board of directors may increase or decrease the
ownership limits. Any decrease in the ownership limits will not be effective for any person whose percentage ownership of shares of our
stock is in excess of such decreased limits until such person’s percentage ownership of shares of our stock equals or falls below
such decreased limits (other than a decrease as a result of a retroactive change in existing law, which will be effective immediately),
but any further acquisition of shares of our stock in excess of such percentage ownership will be in violation of the applicable limits.
Our board of directors may not increase or decrease the ownership limits if, after giving effect to such increase or decrease, five or
fewer persons could beneficially own or constructively own in the aggregate more than 49.9% in value of the shares of our stock then
outstanding. Prior to any modification of the ownership limits, our board of directors may require such opinions of counsel, affidavits,
undertakings or agreements as it may deem necessary or advisable in order to determine or ensure our qualification as a REIT.
Our charter further prohibits:
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any person from beneficially or constructively owning,
applying certain attribution rules of the Code, shares of our stock that would result in us failing the “closely held”
test under Section 856(h) of the Code (without regard to whether the stockholder’s interest is held during the last
half of a taxable year) or otherwise cause us to fail to qualify as a REIT; and |
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any person from transferring shares of our stock if
such transfer would result in shares of our stock to be beneficially owned by fewer than 100 persons (determined without reference
to any rules of attribution). |
Any person who acquires or attempts or intends
to acquire beneficial or constructive ownership of shares of our stock that will or may violate the ownership limits or any of the other
foregoing restrictions on ownership and transfer of our stock will be required to immediately give written notice to us or, in the case
of a proposed or attempted transaction, give at least 15 days’ prior written notice to us, and provide us with such other information
as we may request in order to determine the effect of such transfer on our qualification as a REIT. The ownership limits and the other
restrictions on ownership and transfer of our stock will not apply if our board of directors determines that it is no longer in our best
interests to continue to qualify as a REIT or that compliance with the restrictions on ownership and transfer of our stock is no longer
required in order for us to qualify as a REIT.
If any transfer of shares of our stock would
result in shares of our stock to be beneficially owned by fewer than 100 persons, such transfer will be void from the time of such purported
transfer and the intended transferee will acquire no rights in such shares. In addition, if any purported transfer of shares of our stock
or any other event would otherwise result in:
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any person violating the ownership limits or such other
limit established by our board of directors; or |
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our company to be “closely held” under
Section 856(h) of the Code (without regard to whether the stockholder’s interest is held during the last half of
a taxable year) or otherwise failing to qualify as a REIT, |
then that number of shares (rounded up to
the nearest whole share) that would cause us to violate such restrictions will automatically be transferred to, and held by, a charitable
trust for the exclusive benefit of one or more charitable organizations selected by us, and the intended transferee will acquire no rights
in such shares. The transfer will be deemed to be effective as of the close of business on the business day prior to the date of the
transfer in violation of the ownership limit or other event that results in the transfer to the charitable trust. A person who, but for
the transfer of the shares to the charitable trust, would have beneficially or constructively owned the shares so transferred, or a “prohibited
owner,” which, if appropriate in the context, also means any person who would have been the record owner of the shares that the
prohibited owner would have so owned. If the transfer to the charitable trust as described above would not be effective, for any reason,
to prevent violation of the applicable restriction on ownership and transfer contained in our charter, then our charter provides that
the transfer of the shares will be void from the time of such purported transfer.
Shares of stock transferred to a charitable trust
are deemed offered for sale to us, or our designee, at a price per share equal to the lesser of (1) the price paid per share
in the transaction that resulted in such transfer to the charitable trust (or, if the event that resulted in the transfer to the charitable
trust did not involve a purchase of such shares of stock at market price, defined generally as the last reported sales price reported
on the NYSE (or other applicable exchange), the market price per share of such stock on the day of the event which resulted in the transfer
of such shares of stock to the charitable trust) and (2) the market price on the date we, or our designee, accept such offer. We
may reduce the amount payable to the charitable trust by the amount of dividends and other distributions which have been paid to the
prohibited owner and are owed by the prohibited owner to the charitable trust as described below. We may pay the amount of such reduction
to the charitable trust for the benefit of the charitable beneficiary. We have the right to accept such offer until the trustee of the
charitable trust has sold the shares held in the charitable trust as discussed below.
Upon a sale to us, the interest of the charitable
beneficiary in the shares sold terminates, and the charitable trustee must distribute the net proceeds of the sale to the prohibited
owner.
Within 20 days of receiving notice from us of
the transfer of the shares to the charitable trust, the charitable trustee will sell the shares to a person or entity designated by the
charitable trustee who could own the shares without violating the ownership limits or the other restrictions on ownership and transfer
of our stock described above. After that, the charitable trustee must distribute to the prohibited owner an amount equal to the lesser
of (1) the price paid by the prohibited owner for the shares in the transaction that resulted in the transfer to the charitable
trust (or, if the event that resulted in the transfer to the charitable trust did not involve a purchase of such shares at market price,
the market price per share of such stock on the day of the event that resulted in the transfer to the charitable trust) and (2) the
sales proceeds (net of commissions and other expenses of sale) received by the charitable trust for the shares. The charitable trustee
may reduce the amount payable to the prohibited owner by the amount of dividends and other distributions which have been paid to the
prohibited owner and are owed by the prohibited owner to the charitable trust. Any net sales proceeds in excess of the amount payable
to the prohibited owner will be immediately paid to the charitable beneficiary, together with any dividends and other distributions thereon.
In addition, if, prior to discovery by us that shares of stock have been transferred to a charitable trust, such shares of stock are
sold by a prohibited owner, then such shares will be deemed to have been sold on behalf of the charitable trust and to the extent that
the prohibited owner received an amount for or in respect of such shares that exceeds the amount that such prohibited owner was entitled
to receive, such excess amount will be paid to the charitable trust upon demand by the charitable trustee. The prohibited owner will
have no rights in the shares held by the charitable trust.
The charitable trustee will be designated by
us and will be unaffiliated with us and with any prohibited owner. Prior to the sale of any shares by the charitable trust, the charitable
trustee will receive, in trust for the charitable beneficiary, all distributions made by us with respect to such shares and may also
exercise all voting rights with respect to such shares. Any dividend or other distribution paid prior to our discovery that shares of
stock have been transferred to the charitable trust will be paid by the recipient to the charitable trust upon demand by the charitable
trustee. These rights will be exercised for the exclusive benefit of the charitable beneficiary.
Subject to Maryland law, effective as of the
date that the shares have been transferred to the charitable trust, the charitable trustee will have the authority, at the charitable
trustee’s sole discretion:
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to rescind as void any vote cast by a prohibited owner
prior to our discovery that the shares have been transferred to the charitable trust; and |
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to recast the vote in accordance with the desires of
the charitable trustee acting for the benefit of the charitable beneficiary. |
However, if we have already taken irreversible
action, then the charitable trustee may not rescind and recast the vote.
If our board of directors determines in good
faith that a proposed transfer would violate the restrictions on ownership and transfer of our stock set forth in our charter, our board
of directors may take such action as it deems advisable to refuse to give effect to or to prevent such transfer, including, but not limited
to, causing us to redeem shares of stock, refusing to give effect to the transfer on our books or instituting proceedings to enjoin the
transfer.
Every owner of more than 5% (or such lower percentage
as required by the Code or the regulations promulgated thereunder) of the outstanding shares of all classes or series of our stock, including
common stock, will be required to give written notice to us within 30 days after the end of each taxable year stating the name and address
of such owner, the number of shares of each class and series of our stock that the person beneficially owns and a description of the
manner in which such shares are held. Each such owner will be required to provide to us such additional information as we may request
in order to determine the effect, if any, of such beneficial ownership on our qualification as a REIT and to ensure compliance with the
ownership limits. In addition, each stockholder will, upon demand, be required to provide to us such information as we may request, in
good faith, in order to determine our qualification as a REIT and to comply with the requirements of any taxing authority or governmental
authority or to determine such compliance.
Any certificates representing shares of our stock,
or any written statements of information delivered in lieu of certificates, will bear a legend referring to the restrictions described
above.
These restrictions on ownership and transfer
of our stock could delay, defer or prevent a transaction or a change in control that might involve a premium price for our common stock
or otherwise be in the best interest of our stockholders.
Transfer Agent and Registrar
The transfer agent and registrar for our common
stock and the Series A Preferred Stock is Continental Stock Transfer & Trust.
Listings
Our common stock is traded on the NYSE under
the ticker symbol “IIPR.” Our Series A Preferred Stock is traded on the NYSE under the ticker symbol “IIPR Pr
A.”
DESCRIPTION OF DEPOSITARY
SHARES
We may, at our option, elect to offer fractional
shares of preferred stock, or “depositary shares,” rather than full shares of preferred stock. In that event, we will issue
receipts for depositary shares, and each receipt will represent a fraction of a share of a particular series of preferred stock as described
in the applicable prospectus supplement.
The shares of any series of preferred stock represented
by depositary shares will be deposited under a deposit agreement to be entered into between us and the depositary named in the applicable
prospectus supplement. The deposit agreement will contain terms applicable to the holders of depositary shares in addition to the terms
stated in the depositary receipts. Subject to the terms of the deposit agreement, each owner of a depositary share will be entitled,
in proportion to the applicable fraction of the preferred share represented by such depositary share, to all the rights and preferences
of the preferred share, including dividend, voting, redemption, subscription and liquidation rights. The terms of any depositary shares
will be described in the applicable prospectus supplement and the provisions of the deposit agreement, which will be filed with the SEC.
You should carefully read the deposit agreement and the depositary receipt attached to the deposit agreement for a more complete description
of the terms of the depositary shares.
If any series of preferred stock underlying the
depositary shares may be converted or redeemed, each record holder of depositary receipts representing the shares of preferred stock
being converted or redeemed will have the right or obligation to convert or redeem the depositary shares represented by the depositary
receipts.
Whenever we redeem or convert shares of preferred
stock held by the depositary, the depositary will redeem or convert, at the same time, the number of depositary shares representing the
preferred stock to be redeemed or converted. The depositary will redeem or convert the depositary shares from the proceeds it receives
from the corresponding redemption or conversion of the applicable series of preferred stock. The redemption or conversion price per depositary
share will be equal to the applicable fraction of the redemption or conversion price per share of the applicable series of preferred
stock. If fewer than all the depositary shares are to be redeemed or converted, the depositary will select which shares are to be redeemed
or converted by lot on a pro rata basis or by any other equitable method as the depositary may decide.
After the redemption or conversion date, the
depositary shares called for redemption or conversion will no longer be outstanding. When the depositary shares are no longer outstanding,
all rights of the holders of such shares will end, except the right to receive money, securities or other property payable upon redemption
or conversion.
We will pay all fees, charges and expenses of
the depositary, including such fees, charges and expenses in connection with the initial deposit of preferred stock and any redemption
of the preferred stock. Holders of depositary shares will pay taxes and any other charges as are stated in the deposit agreement for
their accounts.
DESCRIPTION OF WARRANTS
This section describes the general terms and
provisions of our warrants. The applicable prospectus supplement will describe the specific terms of the warrants offered through that
prospectus supplement as well as any general terms described in this section that will not apply to those warrants.
We may issue warrants for the purchase of our
preferred stock or common stock. We may issue warrants independently or together with other securities, and they may be attached to or
separate from the other securities. Each series of warrants will be issued under a separate warrant agreement that we will enter into
with a bank or trust company, as warrant agent, as detailed in the applicable prospectus supplement. The warrant agent will act solely
as our agent in connection with the warrants and will not assume any obligation, or agency or trust relationship, with you.
The prospectus supplement relating to a particular
issue of warrants will describe the terms of those warrants, including, where applicable:
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the aggregate number of the securities covered by the
warrant; |
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the designation, amount and terms of the securities
purchasable upon exercise of the warrant; |
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the exercise price for shares of our preferred stock,
the number of shares of preferred stock to be received upon exercise, and a description of that series of our preferred stock; |
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the exercise price for shares of our common stock and
the number of shares of common stock to be received upon exercise; |
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the expiration date for exercising the warrant; |
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the minimum or maximum amount of warrants that may
be exercised at any time; |
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a discussion of federal income tax consequences; |
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whether the warrants shall be issued in book-entry
form; and |
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any other material terms of the warrants. |
After the warrants expire they will become void.
The prospectus supplement will describe how to exercise warrants. A holder must exercise warrants for our preferred stock or common stock
through payment in U.S. dollars. The prospectus supplement may provide for the adjustment of the exercise price of the warrants.
Until a holder exercises warrants to purchase
our preferred stock or common stock, that holder will not have any rights as a holder of our preferred stock or common stock by virtue
of ownership of warrants.
DESCRIPTION OF RIGHTS
We may issue rights to purchase our common stock
or preferred stock. The following description of rights to purchase such securities provides certain general terms and provisions of
such rights that we may offer. Our rights may be issued independently or together with any other security offered hereby and may or may
not be transferable by the person receiving the rights in such offering. In connection with any offering of rights, we may enter into
a standby arrangement with one or more underwriters or other purchasers pursuant to which the underwriters or other purchasers may be
required to purchase all or a portion of any securities remaining unsubscribed for after such offering. Certain other terms of any rights
will be described in the applicable prospectus supplement. To the extent that any particular terms of any rights described in a prospectus
supplement differ from any of the terms described in this prospectus, then those particular terms described in this prospectus shall
be deemed to have been superseded by that prospectus supplement. The description in the applicable prospectus supplement of any rights
we offer will not necessarily be complete and will be qualified in its entirety by reference to the applicable rights certificate and
the applicable rights agreement, which will be filed as an exhibit to the registration statement of which this prospectus is a part or
to a document that is incorporated or deemed to be incorporated by reference in this prospectus. For more information on how you may
obtain copies of any rights certificate or rights agreement applicable to any rights we may offer, see “Where You Can Find Additional
Information.” We urge you to read the applicable rights certificate, the applicable rights agreement and any applicable prospectus
supplement in their entirety.
The prospectus supplement relating to any rights
that we may offer will include specific terms relating to the offering, including, among other matters:
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the date of determining the security holders entitled
to the rights distribution; |
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the exercise price; |
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the conditions to completion of the rights offering; |
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the date on which the right to exercise the rights
will commence and the date on which the rights will expire; |
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a discussion of federal income tax consequences related
to the rights; and |
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any other material terms of the rights. |
Each right would entitle the holder of the rights
to purchase for cash the number of shares of common stock or preferred stock at the exercise price set forth in the applicable prospectus
supplement. Rights may be exercised at any time up to the close of business on the expiration date for such rights as provided in the
applicable prospectus supplement. After the close of business on the expiration date, all unexercised rights will become void.
DESCRIPTION OF UNITS
The following description, together with the
additional information we include in any applicable prospectus supplement, summarizes the material terms and provisions of the units
that we may offer under this prospectus. Units may be offered independently or together with common stock, preferred stock and/or warrants
offered by any prospectus supplement, and may be attached to or separate from those securities.
While the terms we have summarized below will
generally apply to any future units that we may offer under this prospectus, we will describe the particular terms of any series of units
that we may offer in more detail in the applicable prospectus supplement. The terms of any units offered under a prospectus supplement
may differ from the terms described below.
We will incorporate by reference into the registration
statement of which this prospectus is a part the form of unit agreement, including a form of unit certificate, if any, that describes
the terms of the series of units we are offering before the issuance of the related series of units. The following summaries of material
provisions of the units and the unit agreements are subject to, and qualified in their entirety by reference to, all the provisions of
the unit agreement applicable to a particular series of units. We urge you to read the applicable prospectus supplement related to the
units that we sell under this prospectus, as well as the complete unit agreements that contain the terms of the units.
General
We may issue units consisting of common stock,
preferred stock, depositary shares, warrants, rights or any combination thereof. Each unit will be issued so that the holder of the unit
is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder
of each included security. 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 will describe in the applicable prospectus
supplement the terms of the series of units, including the following:
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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; |
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any provisions of the governing unit agreement that
differ from those described below; |
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any provisions for the issuance, payment, settlement,
transfer, or exchange of the units or of the securities comprising the units; and |
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a discussion of federal income tax consequences related
to the rights. |
Issuance in Series
We may issue units in such amounts and in such
numerous distinct series as we determine.
Enforceability of Rights by Holders of
Units
Each unit agent will act solely as our agent
under the applicable unit agreement and will not assume any obligation or relationship of agency or trust with any holder of any unit.
A single bank or trust company may act as unit agent for more than one series of units. A unit agent will have no duty or responsibility
in case of any default by us under the applicable unit agreement or unit, including any duty or responsibility to initiate any proceedings
at law or otherwise, or to make any demand upon us. Any holder of a unit, without the consent of the related unit agent or the holder
of any other unit, may enforce by appropriate legal action its rights as holder under any security included in the unit.
Title
We, the unit agent and any of its agents may
treat the registered holder of any unit certificate as an absolute owner of the units evidenced by that certificate for any purposes
and as the person entitled to exercise the rights attaching to the units, despite any notice to the contrary.
DESCRIPTION OF DEBT SECURITIES
Please note that in this section, references
to “we,” “our” and “us” refer only to our Operating Partnership and not Innovative Industrial Properties, Inc.
(“IIP”) or its subsidiaries unless the context requires otherwise.
This prospectus describes general terms of our
debt securities. When we offer to sell a particular series of debt securities, we will describe the specific terms of those debt securities
in a supplement to this prospectus. Unless such prospectus supplement provides otherwise, the general terms and provisions described
in this prospectus will apply to the particular series of debt securities to which such supplement relates. To the extent the information
contained in the prospectus supplement differs from this summary description, you should rely on the information in the prospectus supplement.
The debt securities that we may issue may constitute
debentures, notes, bonds or other evidences of our indebtedness, to be issued in one or more series, which may include senior debt securities,
subordinated debt securities and senior subordinated debt securities, and, unless otherwise specified in a supplement to this prospectus,
the debt securities will be our direct, unsecured obligations and may be issued in one or more series.
Unless otherwise specified in a prospectus supplement,
the debt securities will be issued under an indenture between us and Argent Institutional Trust Company, as trustee, and Securities Transfer
Corporation, as registrar. The indenture is subject to and governed by the Trust Indenture Act of 1939, as amended (the “Trust
Indenture Act”), and may be supplemented or amended from time to time following its execution.
The following summary describes selected provisions
of the form of indenture. This summary does not describe every aspect of the debt securities or the indenture and is subject to, and
qualified in its entirety by reference to, all the provisions of the indenture, including the terms defined in the indenture. This summary
is also subject to, and qualified in its entirety by reference to, the description of the particular debt securities in the applicable
prospectus supplement. Capitalized terms used in the following summary and not defined in this prospectus have the meanings specified
in the indenture.
General
The terms of each series of debt securities will
be established by or pursuant to a resolution of the board of directors of IIP, as our sole general partner, and set forth or determined
in the manner provided in such resolution, in an officer’s certificate or by a supplemental indenture. The particular terms of
each series of debt securities will be described in a prospectus supplement relating to such series (including any pricing supplement
or term sheet).
Unless otherwise specified in a prospectus supplement,
the indenture will designate Argent Institutional Trust Company as the trustee for the indenture and Securities Transfer Corporation
as registrar with respect to one or more series of our debt securities. Argent Institutional Trust Company, or any other specified
trustee, may resign or be removed with respect to one or more series of our debt securities, and a successor trustee may be appointed
to act with respect to that series. Similarly, Securities Transfer Corporation, or any other specified registrar, may resign or be removed
with respect to one or more series of our debt securities, and a successor registrar may be appointed to act with respect to that series.
We can issue an unlimited amount of debt securities
under the indenture that may be in one or more series with the same or various maturities, at par, at a premium, or at a discount. We
will set forth in a prospectus supplement (including any pricing supplement or term sheet) relating to any series of debt securities
being offered, the aggregate principal amount and the following terms of the debt securities, if applicable:
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the title and ranking of the debt
securities (including the terms of any subordination provisions); |
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the price or prices (expressed as a percentage of the
principal amount) at which we will sell the debt securities; |
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any limit on the aggregate principal amount of the
debt securities; |
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the date or dates on which the principal of the securities
of the series is payable; |
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the rate or rates (which may be fixed or variable)
per annum or the method used to determine the rate or rates (including any commodity, commodity index, stock exchange index or financial
index) at which the debt securities will bear interest, the date or dates from which interest will accrue, the date or dates on which
interest will commence and be payable and any regular record date for the interest payable on any interest payment date; |
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the place or places where principal of, and any premium
and interest on, the debt securities will be payable (and the method of such payment), where the securities of such series may be
surrendered for registration of transfer or exchange, and where notices and demands to us in respect of the debt securities may be
delivered; |
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the period or periods within which, the price or prices
at which and the terms and conditions upon which we may redeem the debt securities; |
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any obligation we have to redeem or purchase the debt
securities pursuant to any sinking fund or analogous provisions or at the option of a holder of debt securities and the period or
periods within which, the price or prices at which and in the terms and conditions upon which securities of the series shall be redeemed
or purchased, in whole or in part, pursuant to such obligation; |
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the dates on which and the price or prices at which
we will repurchase debt securities at the option of the holders of debt securities and other detailed terms and provisions of these
repurchase obligations; |
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the denominations in which the debt securities will
be issued, if other than denominations of $1,000 and any integral multiple thereof; |
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whether the debt securities will be issued in the form
of certificated debt securities or global debt securities; |
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the portion of principal amount of the debt securities
payable upon declaration of acceleration of the maturity date, if other than the principal amount; |
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the currency of denomination of the debt securities,
which may be U.S. dollars or any foreign currency, and if such currency of denomination is a composite currency, the agency or organization,
if any, responsible for overseeing such composite currency; |
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the designation of the currency, currencies or currency
units in which payment of principal of, and any premium and interest on, the debt securities will be made; |
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if payments of principal of, or any premium or interest
on, the debt securities will be made in one or more currencies or currency units other than that or those in which the debt securities
are denominated, the manner in which the exchange rate with respect to these payments will be determined; |
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the manner in which the amounts of payment of principal
of, or any premium or interest on, the debt securities will be determined, if these amounts may be determined by reference to an
index based on a currency or currencies other than that in which the debt securities are denominated or designated to be payable
or by reference to a commodity, commodity index, stock exchange index or financial index; |
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any provisions relating to any security provided for
the debt securities or any guarantees; |
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any addition to, deletion of or change in the Events
of Default (as defined below) described in this prospectus or in the indenture with respect to the debt securities and any change
in the acceleration provisions described in this prospectus or in the indenture with respect to the debt securities; |
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any addition to, deletion of or change in the covenants
described in this prospectus or in the indenture with respect to the debt securities; |
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a discussion of any additional material U.S. federal
income tax considerations applicable to an investment in the debt securities; |
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any depositaries, interest rate calculation agents,
exchange rate calculation agents or other agents with respect to the debt securities; |
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the provisions, if any, relating to conversion or exchange
of any debt securities of such series, including if applicable, the conversion or exchange price and period, provisions as to whether
conversion or exchange will be mandatory, the events requiring an adjustment of the conversion or exchange price and provisions affecting
conversion or exchange; |
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any other terms of the debt securities, which may supplement,
modify or delete any provision of the indenture as it applies to that series, including any terms that may be required under applicable
law or regulations or advisable in connection with the marketing of the securities; |
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whether the debt securities are entitled to the benefits
of the guarantee of any guarantor, and whether any such guarantee is made on a senior or subordinated basis and, if applicable, a
description of the subordination terms of any such guarantee; |
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whether a person other than Argent Institutional Trust
Company is to act as trustee; |
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whether a person other than Securities Transfer Corporation
is to act as registrar; |
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the securities exchange, if any, on which the debt
securities may be listed; and |
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any change in the right of the trustee or the right
of the requisite holders to declare the principal amount of debt securities due and payable. |
We may issue debt securities that provide for
an amount less than their stated principal amount to be due and payable upon declaration of acceleration of their maturity pursuant to
the terms of the indenture. We will provide you with information on the other special considerations applicable to any of these debt
securities in the applicable prospectus supplement.
If we denominate the purchase price of any of
the debt securities in a foreign currency or currencies or a foreign currency unit or units, or if the principal of and any premium and
interest on any series of debt securities is payable in a foreign currency or currencies or a foreign currency unit or units, we will
provide you with information on the restrictions, elections, general tax considerations, specific terms and other information with respect
to that issue of debt securities and such foreign currency or currencies or foreign currency unit or units in the applicable prospectus
supplement.
Transfer and Exchange
Each debt security will be represented by either
one or more global securities registered in the name of The Depository Trust Company (the “Depositary”), or a nominee of
the Depositary (we will refer to any debt security represented by a global debt security as a “book-entry debt security”),
or a certificate issued in definitive registered form (we will refer to any debt security represented by a certificated security as a
“certificated debt security”) as set forth in the applicable prospectus supplement. Except as set forth below in the section
entitled “Description of Debt Securities – Transfer and Exchange – Global Debt Securities and Book-Entry System,”
book-entry debt securities will not be issuable in certificated form.
Certificated
Debt Securities. You may transfer or exchange certificated debt securities at any office we maintain for this purpose
in accordance with the terms of the indenture. No service charge will be made for any transfer or exchange of certificated debt securities,
but we may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with a transfer or
exchange.
You may effect the transfer of certificated debt
securities and the right to receive the principal of, and any premium and interest on, certificated debt securities only by surrendering
the certificate representing those certificated debt securities and either reissuance by us or the trustee of the certificate to the
new holder or the issuance by us or the trustee of a new certificate to the new holder.
Global
Debt Securities and Book-Entry System. Each global debt security representing book-entry debt securities will be
deposited with, or on behalf of, the Depositary, and registered in the name of the Depositary or a nominee of the Depositary. Please
see the section entitled “Book-Entry Securities.”
Covenants
Any restrictive covenants applicable to any issue
of debt securities will be set forth in the applicable prospectus supplement.
No Protection in the Event of a Change
of Control
Unless stated otherwise in the applicable prospectus
supplement, the debt securities will not contain any provisions that may afford holders of the debt securities protection in the event
we have a change in control or in the event of a highly leveraged transaction (whether or not such transaction results in a change in
control) that could adversely affect holders of debt securities.
Consolidation, Merger and Sale of Assets
We may not consolidate with or merge with or
into, or convey, transfer or lease all or substantially all of our properties and assets to any person (a “successor person”)
unless:
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we are the surviving person or the successor person
(if anyone other than us) is an entity organized and validly existing under the laws of any U.S. domestic jurisdiction and expressly
assumes our obligations on the debt securities and under the indenture; and |
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immediately after giving effect to the transaction,
no Default or Event of Default, shall have occurred and be continuing. |
Notwithstanding the above, any of our subsidiaries
may consolidate with, merge into or transfer all or part of its properties to us.
Guarantees
Unless otherwise described in the applicable
prospectus supplement, the debt securities issued by us will be fully and unconditionally guaranteed by IIP. If a series of debt securities
is so guaranteed, an indenture, a supplemental indenture thereto, and/or a notation of guarantee will be executed by the guarantor. The
obligations of the guarantor under the guarantee will be limited as necessary to prevent that guarantee from constituting a fraudulent
conveyance under applicable law. The terms of the guarantee will be set forth in the applicable prospectus supplement.
Events of Default
“Default” means any event which is,
or after notice or passage of time or both would be, an Event of Default.
“Event of Default” means with respect
to any series of debt securities, the occurrence of any of the following events, unless otherwise provided by resolution of the board
of directors of IIP, supplemental indenture or officer’s certificate:
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a default in the payment of any interest upon any debt
security of that series when it becomes due and payable, and continuance of such default for a period of 90 days (unless the entire
amount of the payment is deposited by us with the trustee or with a paying agent prior to the expiration of the 90-day period); |
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a default in the payment of principal of any debt security
of that series at its maturity; |
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a default in the performance or breach of any covenant
or warranty by us in the debt security of that series or the indenture (other than defaults pursuant to the first or second bullet
of this paragraph or pursuant to a covenant or warranty that has been included in the indenture solely for the benefit of a series
of debt securities other than that series), which default continues uncured for a period of 90 days after we receive written notice
from the trustee or we and the trustee receive written notice from the holders of not less than 25% in principal amount of the outstanding
debt securities of that series as provided in the indenture; |
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certain voluntary or involuntary events of bankruptcy,
insolvency or reorganization of us or any guarantor; and |
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any other Event of Default provided with respect to
debt securities of that series that is described in the applicable prospectus supplement. |
No Event of Default with respect to a particular
series of debt securities (except as to certain events of bankruptcy, insolvency or reorganization) necessarily constitutes an Event
of Default with respect to any other series of debt securities. The occurrence of certain Events of Default or an acceleration under
the indenture may constitute an event of default under certain indebtedness of ours or our subsidiaries outstanding from time to time.
If an Event of Default with respect to debt securities
of any series at the time outstanding occurs and is continuing, then in every such case the trustee or the holders of not less than 25%
in principal amount of the outstanding debt securities of that series may declare the principal amount (or, if any securities of that
series are discount securities, such portion of the principal amount as may be specified in the terms of such debt securities) of and
accrued and unpaid interest, if any, on all of the debt securities of that series to be due and payable immediately, by a notice in writing
to us (and to the trustee if given by holders), and upon any such declaration such principal amount (or specified amount) and accrued
and unpaid interest, if any, will become immediately due and payable. In the case of an Event of Default resulting from certain events
of bankruptcy, insolvency or reorganization, the principal amount (or such specified amount) of and accrued and unpaid interest, if any,
on all outstanding debt securities will become and be immediately due and payable without any declaration or other act on the part of
the trustee or any holder of outstanding debt securities. At any time after a declaration of acceleration with respect to debt securities
of any series has been made and before a judgment or decree for payment of the money due has been obtained by the trustee, the holders
of a majority in principal amount of the outstanding debt securities of that series, by notice in writing to us and the trustee, may
rescind and annul the acceleration if all Events of Default, other than the non-payment of accelerated principal and interest, if any,
with respect to debt securities of that series, have been cured or waived as provided in the indenture. We refer you to the prospectus
supplement relating to any series of debt securities that are discount securities for the particular provisions relating to acceleration
of a portion of the principal amount of such discount securities upon the occurrence of an Event of Default.
The indenture provides that the trustee will
be under no obligation to exercise any of its rights or powers under the indenture unless the trustee receives indemnity satisfactory
to it against any cost, liability or expense that might be incurred by it in performing such duty or exercising such right or power.
Subject to certain rights of the trustee, 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.
No holder of any debt security of any series
will have any right to institute any proceeding, judicial or otherwise, with respect to the indenture or for the appointment of a receiver
or trustee, or for any remedy under the indenture, unless:
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that holder has previously given to the trustee written
notice of a continuing Event of Default with respect to debt securities of that series; |
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the holders of not less than 25% in principal amount
of the outstanding debt securities have made written request to the trustee to institute proceedings in respect of such Event of
Default in its own name as trustee; |
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such holder or holders have offered to the trustee
indemnity or security reasonably satisfactory to the trustee against the costs, claims, expenses and liabilities that might be incurred
by the trustee in compliance with such request; |
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the trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and |
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no direction inconsistent with such written request
has been given to the trustee during such 60-day period by the holders of a majority in principal amount of the outstanding debt
securities. |
Notwithstanding any other provision in the indenture,
the holder of any debt security will have an absolute and unconditional right to receive payment of the principal of, and any premium
and interest on, that debt security on or after the due dates expressed in that debt security and to institute suit for the enforcement
of payment.
The indenture requires us, within 120 days after
the end of our fiscal year, to furnish to the trustee a statement as to compliance with the indenture. If a Default or Event of Default
occurs and is continuing with respect to the securities of any series and if a responsible officer of the trustee has written notice
from the Company or a holder as to such Default or Event of Default, the trustee shall mail to each holder of the securities of that
series notice of a Default or Event of Default within 90 days after it occurs or, if later, after a responsible officer of the trustee
has written notice from the Company or a holder as to such Default or Event of Default. The indenture provides that the trustee may withhold
notice to the holders of debt securities of any series of any Default or Event of Default (except in payment on any debt securities of
that series) with respect to debt securities of that series if the trustee determines in good faith that withholding notice is in the
interest of the holders of those debt securities.
Modification and Waiver
We and the trustee may modify, amend or supplement
the indenture or the debt securities of any series without the consent of any holder of any debt security:
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to cure any ambiguity, defect or inconsistency; |
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to comply with the covenants in the indenture described in the section entitled “Description of Debt Securities – Consolidation,
Merger and Sale of Assets;” |
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to provide for book-entry debt securities in addition to or in place of certificated debt securities; |
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to surrender any of our rights or powers under the indenture; |
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to add covenants or Events of Default for the benefit
of the holders of debt securities of any series; |
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to comply with the applicable procedures of the applicable
Depositary; |
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to make any change that does not adversely affect the
rights of any holder of debt securities; |
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to provide for the issuance of and establish the form
and terms and conditions of debt securities of any series as permitted by the indenture; |
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to effect the appointment of a successor trustee with
respect to the debt securities of any series and to add to or change any of the provisions of the indenture to provide for or facilitate
administration by more than one trustee; |
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to comply with requirements of the SEC in order to
effect or maintain the qualification of the indenture under the Trust Indenture Act; |
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to reflect the release of a guarantor of the debt securities
in accordance with the terms of the indenture; or |
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to add guarantors with respect to any or all of the
debt securities or to secure any or all of the debt securities or the guarantees. |
We may also modify and amend the indenture with
the consent of the holders of at least a majority in principal amount of the outstanding debt securities of each series affected by the
modifications or amendments. We may not make any modification or amendment without the consent of the holders of each affected debt security
then outstanding if that amendment will:
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reduce the principal amount of debt securities whose
holders must consent to an amendment, supplement or waiver; |
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reduce the rate of or extend the time for payment of
interest (including default interest) on any debt security; |
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reduce the principal of or premium, if any, on or change
the fixed maturity of any debt security or reduce the amount of, or postpone the date fixed for, the payment of any sinking fund
or analogous obligation with respect to any series of debt securities; |
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reduce the principal amount of discount securities
payable upon acceleration of maturity; |
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waive a Default or Event of Default in the payment
of the principal of, or any premium or interest on, any debt security (except a rescission of acceleration of the debt securities
of any series by the holders of at least a majority in aggregate principal amount of the then-outstanding debt securities of that
series and a waiver of the payment default that resulted from such acceleration); |
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make the principal of, or any premium or interest on,
any debt security payable in any currency other than that stated in the debt security; |
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make any change to certain provisions of the indenture
relating to, among other things, the right of holders of debt securities to receive payment of the principal of, or any premium or
interest on, those debt securities and to institute suit for the enforcement of any such payment and to waivers or amendments; |
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waive a redemption payment with respect to any debt
security, provided that such redemption is made at our option; or |
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if the debt securities of that series are entitled
to the benefit of a guarantee, release any guarantor of such series other than as provided in the indenture or modify the guarantee
in any manner adverse to the holders. |
Except for certain specified provisions, the
holders of at least a majority in principal amount of the outstanding debt securities of any series may on behalf of the holders of all
debt securities of that series waive our compliance with provisions of the indenture. The holders of a majority in principal amount of
the outstanding debt securities of any series may on behalf of the holders of all of the debt securities of such series waive any past
default under the indenture with respect to that series and its consequences, except a default in the payment of the principal of, or
any premium or interest on, any debt security of that series; provided, however, that the holders of a majority in principal amount of
the outstanding debt securities of any series may rescind an acceleration and its consequences, including any related payment default
that resulted from the acceleration.
Regarding the Trustee
Unless otherwise specified in a prospectus supplement,
Argent Institutional Trust Company will initially act as the trustee for the debt securities, subject to replacement at our option as
provided in the indenture. If an Event of Default occurs and is continuing, the trustee will be required to use the same degree of care
and skill a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs. The trustee
will become obligated to exercise any of its powers under the indenture at the request of any of the holders of the required percentage
under the indenture only after those holders have offered, and, if requested, provided the trustee indemnity satisfactory to it.
The indenture and provisions of the Trust Indenture
Act that are incorporated by reference therein contain limitations on the rights of the trustee, should it become one of our creditors,
to obtain payment of claims in certain cases or to realize on certain property received by it in respect of any such claim as security
or otherwise. The trustee is permitted to engage in other transactions with us or any of our affiliates; provided, however, that if it
acquires any conflicting interest (as defined in the indenture or in the Trust Indenture Act), it must eliminate such conflict or resign.
Defeasance of Debt Securities and Certain
Covenants in Certain Circumstances
Legal Defeasance
The indenture provides that, unless otherwise
provided by the terms of the applicable series of debt securities, we may be discharged from any and all obligations in respect of the
debt securities of any series (subject to certain exceptions). We will be so discharged upon the deposit with the trustee, in trust,
of money and/or U.S. government obligations or, in the case of debt securities denominated in a single currency other than U.S. dollars,
money and/or Foreign Government Obligations (as defined below) of the government that issued or caused to be issued such currency, that,
through the payment of interest and principal in accordance with their terms, will provide money in an amount sufficient in the opinion
of a nationally recognized firm of independent public accountants or investment bank to pay and discharge each installment of principal
of, any premium and interest on, and any mandatory sinking fund payments in respect of the debt securities of that series on the stated
maturity of those payments in accordance with the terms of the indenture and those debt securities.
This discharge may occur only if, among other
things, we have delivered to the trustee an opinion of counsel stating that we have received from, or there has been published by, the
Service, a ruling or, since the date of execution of the indenture, there has been a change in the applicable U.S. federal income tax
law, in either case to the effect that, and based thereon such opinion shall confirm that, the holders of the debt securities of that
series will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the deposit, defeasance and discharge
and will be subject to U.S. federal income tax on the same amounts and in the same manner and at the same times as would have been the
case if the deposit, defeasance and discharge had not occurred.
Defeasance of Certain Covenants
The indenture provides that, unless otherwise
provided by the terms of the applicable series of debt securities, upon compliance with certain conditions:
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we may omit to comply with the covenant described under
the heading “Consolidation, Merger and Sale of Assets” and certain other covenants set forth in the indenture, as well
as any additional covenants which may be described in the applicable prospectus supplement; and |
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any omission to comply with those covenants will not
constitute a Default or an Event of Default with respect to the debt securities of that series (“covenant defeasance”). |
The conditions include the following, among others:
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depositing with the trustee money and/or U.S. government
obligations or, in the case of debt securities denominated in a single currency other than U.S. dollars, money and/or Foreign Government
Obligations of the government that issued or caused to be issued such currency, that, through the payment of interest and principal
in accordance with their terms, will provide money in an amount sufficient in the opinion of a nationally recognized firm of independent
public accountants or investment bank to pay and discharge each installment of principal of, any premium and interest on, and any
mandatory sinking fund payments in respect of the debt securities of that series on the stated maturity of those payments in accordance
with the terms of the indenture and those debt securities, and |
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delivering to the trustee an opinion of counsel to
the effect that the holders of the debt securities of that series will not recognize income, gain or loss for U.S. federal income
tax purposes as a result of the deposit and related covenant defeasance and will be subject to U.S. federal income tax on the same
amounts and in the same manner and at the same times as would have been the case if the deposit and related covenant defeasance had
not occurred. |
Covenant Defeasance and Events of Default
In the event we exercise our option to effect
covenant defeasance with respect to any series of debt securities and the debt securities of that series are declared due and payable
because of the occurrence of any Event of Default, the amount of money and/or U.S. government obligations or money and/or Foreign Government
Obligations on deposit with the trustee will be sufficient to pay amounts due on the debt securities of that series at the time of their
stated maturity but may not be sufficient to pay amounts due on the debt securities of that series at the time of the acceleration resulting
from the Event of Default. In such a case, we would remain liable for those payments.
“Foreign Government Obligations”
means, with respect to debt securities of any series that are denominated in a currency other than U.S. dollars, direct obligations of,
or obligations guaranteed by, the government that issued or caused to be issued such currency for the payment of which obligations its
full faith and credit is pledged and which are not callable or redeemable at the option of the issuer thereof.
Satisfaction and Discharge
The indenture will be discharged and will cease
to be of further effect (except as to surviving rights or registration of transfer or exchange of the debt securities, as expressly provided
for in the indenture) as to all outstanding debt securities when:
either:
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all the debt securities theretofore authenticated and
delivered (except lost, stolen or destroyed debt securities which have been replaced or paid) have been delivered to the trustee
for cancellation; or |
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all debt securities not theretofore delivered to the
trustee for cancellation have become due and payable or will become due and payable at their maturity within one year, have been
called for redemption or are to be called for redemption within one year, or are deemed paid and discharged pursuant to the legal
defeasance provisions of the indenture, and we have irrevocably deposited or caused to be irrevocably deposited with the trustee
as trust funds in trust cash or noncallable U.S. government obligations in an amount sufficient to pay and discharge the entire indebtedness
on such debt securities not theretofore delivered to the trustee for cancellation, for principal and interest to the date of such
deposit (in the case of debt securities which have become due and payable) or to the maturity date or redemption date, as the case
may be; |
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we have paid or caused to be paid all other sums payable
under the indenture by us; and |
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we have delivered to the trustee an officer’s
certificate and an opinion of counsel, each stating that all conditions precedent provided for in the indenture relating to the satisfaction
and discharge of the indenture have been complied with. |
No Personal Liability of Directors, Officers,
Employees or Stockholders
No director, officer, employee, or stockholder
will have any liability for any of our obligations under the debt securities, the indenture, any guarantees or for any claim based on,
in respect of, or by reason of, such obligations or their creation. Each holder of debt securities by accepting a note waives and releases
all such liability.
The waiver and release are part of the consideration
for issuance of the debt securities. The waiver may not be effective to waive liabilities under the federal securities laws.
Governing Law
The indenture, the debt securities, and any guarantees
will be governed by, and construed in accordance with, the laws of the State of New York.
BOOK-ENTRY SECURITIES
The securities offered by means of this prospectus
may be issued in whole or in part in book-entry form, meaning that beneficial owners of the securities will not receive certificates
representing their ownership interests in the securities, except in the event the book-entry system for the securities is discontinued.
Securities issued in book entry form will be evidenced by one or more global securities that will be deposited with, or on behalf of,
a depositary identified in the applicable prospectus supplement relating to the securities. We expect that The Depository Trust Company
will serve as depositary. Unless and until it is exchanged in whole or in part for the individual securities represented by that security,
a global security may not be transferred except as a whole by the depositary for the global security to a nominee of that depositary
or by a nominee of that depositary to that depositary or another nominee of that depositary or by the depositary or any nominee of that
depositary to a successor depositary or a nominee of that successor. Global securities may be issued in either registered or bearer form
and in either temporary or permanent form. The specific terms of the depositary arrangement with respect to a class or series of securities
that differ from the terms described here will be described in the applicable prospectus supplement.
Unless otherwise indicated in the applicable
prospectus supplement, we anticipate that the provisions described below will apply to depositary arrangements.
Upon the issuance of a global security, the depositary
for the global security or its nominee will credit on its book-entry registration and transfer system the respective principal amounts
of the individual securities represented by that global security to the accounts of persons that have accounts with such depositary,
who are called “participants.” Those accounts will be designated by the underwriters, dealers or agents with respect to the
securities or by us if the securities are offered and sold directly by us. Ownership of beneficial interests in a global security will
be limited to the depositary’s participants or persons that may hold interests through those participants. Ownership of beneficial
interests in the global security will be shown on, and the transfer of that ownership will be effected only through, records maintained
by the applicable depositary or its nominee (with respect to beneficial interests of participants) and records of the participants (with
respect to beneficial interests of persons who hold through participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. These limits and laws may impair the ability to own, pledge
or transfer beneficial interest in a global security.
So long as the depositary for a global security
or its nominee is the registered owner of such global security, that depositary or nominee, as the case may be, will be considered the
sole owner or holder of the securities represented by that global security for all purposes under the applicable indenture or other instrument
defining the rights of a holder of the securities. Except as provided below or in the applicable prospectus supplement, owners of beneficial
interest in a global security will not be entitled to have any of the individual securities of the series represented by that global
security registered in their names, will not receive or be entitled to receive physical delivery of any such securities in definitive
form and will not be considered the owners or holders of that security under the applicable indenture or other instrument defining the
rights of the holders of the securities.
Payments of amounts payable with respect to individual
securities represented by a global security registered in the name of a depositary or its nominee will be made to the depositary or its
nominee, as the case may be, as the registered owner of the global security representing those securities. None of us, our officers and
directors or any trustee, paying agent or security registrar for an individual series of securities will have any responsibility or liability
for any aspect of the records relating to or payments made on account of beneficial ownership interests in the global security for such
securities or for maintaining, supervising or reviewing any records relating to those beneficial ownership interests.
We expect that the depositary for a series of
securities offered by means of this prospectus or its nominee, upon receipt of any payment of principal, premium, interest, dividend
or other amount in respect of a permanent global security representing any of those securities, will immediately credit its participants’
accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of that global security
for those securities as shown on the records of that depositary or its nominee. We also expect that payments by participants to owners
of beneficial interests in that global security held through those participants will be governed by standing instructions and customary
practices, as is the case with securities held for the account of customers in bearer form or registered in “street name.”
Those payments will be the responsibility of these participants.
If a depositary for a series of securities is
at any time unwilling, unable or ineligible to continue as depositary and a successor depositary is not appointed by us within 90 days,
we will issue individual securities of that series in exchange for the global security representing that series of securities. In addition,
we may, at any time and in our sole discretion, subject to any limitations described in the applicable prospectus supplement relating
to those securities, determine not to have any securities of that series represented by one or more global securities and, in that event,
will issue individual securities of that series in exchange for the global security or securities representing that series of securities.
CERTAIN PROVISIONS OF MARYLAND
LAW AND OUR CHARTER AND BYLAWS
The following description of the terms of
our stock and of certain provisions of Maryland law is only a summary. For a complete description, we refer you to the MGCL and to our
charter and our bylaws, the forms of which are filed as exhibits to the registration statement of which this prospectus forms a part.
Our Board of Directors
Our charter and bylaws provide that the number
of directors we have may be established only by our board of directors but may not be fewer than the minimum number required under the
MGCL, which is one, and our bylaws provide that the number of our directors may not be more than 15. Because our board of directors has
the power to amend our bylaws, it could modify the bylaws to change that range. Subject to the terms of any class or series of preferred
stock, vacancies on our board of directors may be filled only by a majority of the remaining directors, even if the remaining directors
do not constitute a quorum, and any director elected to fill a vacancy will hold office for the remainder of the full term of the directorship
in which the vacancy occurred and until his or her successor is duly elected and qualifies.
Except as may be provided with respect to any
class or series of our stock, under the MGCL at each annual meeting of our stockholders, each of our directors is elected by our stockholders
to serve until the next annual meeting of our stockholders and until his or her successor is duly elected and qualifies. A plurality
of the votes cast in the election of directors is sufficient to elect a director, and holders of shares of common stock have no right
to cumulative voting in the election of directors. Consequently, at each annual meeting of stockholders, the holders of a majority of
the shares of common stock entitled to vote are able to elect all of our directors.
The Series A Preferred Stock articles supplementary
provides that if dividends on the Series A Preferred Stock are in arrears for six or more quarterly periods, whether or not consecutive,
holders of shares of the Series A Preferred Stock (voting together as a class with other voting preferred stock) will be entitled
to vote for the election of two additional directors to serve on our board of directors. The Series A Preferred Stock articles supplementary
also separately provide for the election, term, removal and filling of any vacancy in the office of such directors elected by the holders
of the Series A Preferred Stock.
Removal of Directors
Our charter provides that, subject to the rights
of holders of any class or series of our preferred stock to elect or remove one or more directors, a director may be removed only with
cause and only by the affirmative vote of at least two-thirds of the votes entitled to be cast generally in the election of directors.
This provision, when coupled with the exclusive power of our board of directors to fill vacancies on our board of directors, precludes
stockholders from (i) removing incumbent directors except with cause and upon a substantial affirmative vote and (ii) filling
the vacancies created by such removal with their own nominees.
No Appraisal Rights
As permitted by the MGCL, our charter provides
that stockholders will not be entitled to exercise appraisal rights unless a majority of our board of directors determines that appraisal
rights apply, with respect to all or any classes or series of stock, to one or more transactions occurring after the date of such determination
in connection with which stockholders would otherwise be entitled to exercise appraisal rights.
Dissolution
Our dissolution must be declared advisable by
a majority of our board of directors and approved by the affirmative vote of stockholders entitled to cast not less than a majority of
the votes entitled to be cast on such matter.
Exclusive Forum for Certain Litigation
Our bylaws provide that, unless we consent in
writing to an alternative forum, the state and federal courts in Baltimore, Maryland are the exclusive forum for certain litigation,
including (i) derivative actions on our behalf, (ii) actions asserting claims of breach of any duty owed by any of our directors,
officers or employees, (iii) actions asserting a claim against us or any of our directors, officers or other employees arising under
the MGCL, our bylaws or our charter and (iv) actions governed by the internal affairs doctrine.
Business Combinations
Under the MGCL, certain “business combinations”
(including a merger, consolidation, statutory share exchange or, in certain circumstances, an asset transfer or issuance or reclassification
of equity securities) between a Maryland corporation and an interested stockholder (defined generally as any person who beneficially
owns, directly or indirectly, 10% or more of the voting power of the corporation’s outstanding voting stock or an affiliate or
associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10%
or more of the voting power of the then outstanding voting stock of the corporation) or an affiliate of such an interested stockholder
are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. Thereafter,
any such business combination must generally be recommended by the board of directors of such corporation and approved by the affirmative
vote of at least (1) 80% of the votes entitled to be cast by holders of outstanding voting stock of the corporation and (2) two-thirds
of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with
whom (or with whose affiliate) the business combination is to be effected or held by an affiliate or associate of the interested stockholder,
unless, among other conditions, the corporation’s common stockholders receive a minimum price (as defined in the MGCL) for their
shares and the consideration is received in cash or in the same form as previously paid by the interested stockholder for its shares.
A person is not an interested stockholder under the statute if the board of directors approved in advance the transaction by which the
person otherwise would have become an interested stockholder. A Maryland corporation’s board of directors may provide that its
approval is subject to compliance with any terms and conditions determined by it. These provisions of the MGCL do not apply, however,
to business combinations that are approved or exempted by a Maryland corporation’s board of directors prior to the time that the
interested stockholder becomes an interested stockholder.
Control Share Acquisitions
The MGCL provides that a holder of “control
shares” of a Maryland corporation acquired in a “control share acquisition” has no voting rights with respect to the
control shares except to the extent approved by the affirmative vote of at least two-thirds of the votes entitled to be cast on the matter,
excluding shares of stock in the corporation in respect of which any of the following persons is entitled to exercise or direct the exercise
of the voting power of such shares in the election of directors: (i) a person who makes or proposes to make a control share acquisition,
(ii) an officer of the corporation or (iii) an employee of the corporation who is also a director of the corporation. “Control
shares” are voting shares of stock which, if aggregated with all other such shares of stock owned by the acquirer, or in respect
of which the acquirer is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would
entitle the acquirer to exercise voting power in electing directors within one of the following ranges of voting power: (i) one-tenth
or more but less than one-third; (ii) one-third or more but less than a majority; or (iii) a majority or more of all voting
power. Control shares do not include shares that the acquiring person is then entitled to vote as a result of having previously obtained
stockholder approval or shares acquired directly from the corporation. A “control share acquisition” means the acquisition
of issued and outstanding control shares, subject to certain exceptions.
A person who has made or proposes to make a control
share acquisition, upon satisfaction of certain conditions (including an undertaking to pay expenses and delivering an “acquiring
person statement” as described in the MGCL), may compel the board of directors to call a special meeting of stockholders to be
held within 50 days of demand to consider the voting rights of the shares. If no request for a meeting is made, the corporation may itself
present the question at any stockholders meeting.
If voting rights are not approved at the meeting
or if the acquiring person does not deliver an “acquiring person statement” as required by the statute, then, subject to
certain conditions and limitations, the corporation may redeem any or all of the control shares (except those for which voting rights
have previously been approved) for fair value determined, without regard to the absence of voting rights for the control shares, as of
the date of the last control share acquisition by the acquirer or as of any meeting of stockholders at which the voting rights of such
shares are considered and not approved. If voting rights for control shares are approved at a stockholders meeting and the acquirer becomes
entitled to vote a majority of the shares entitled to vote, all other stockholders may exercise appraisal rights. The fair value of the
shares as determined for purposes of such appraisal rights may not be less than the highest price per share paid by the acquirer in the
control share acquisition.
The control share acquisition statute does not
apply to (i) shares acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction or (ii) acquisitions
approved or exempted by the charter or bylaws of the corporation. Our bylaws contain a provision exempting from the control share acquisition
statute any and all acquisitions by any person of shares of our stock. There can be no assurance that such provision will not be amended
or eliminated at any time in the future by our board of directors.
Subtitle 8
Subtitle 8 of the MGCL permits a Maryland corporation
with a class of equity securities registered under the Exchange Act and at least three independent directors to elect to be subject,
by provision in its charter or bylaws or a resolution of its board of directors and notwithstanding any contrary provision in the charter
or bylaws, to any or all of five provisions of the MGCL which provide for:
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a two-thirds vote requirement for removing a director; |
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a requirement that the number of directors be fixed
only by vote of the directors; |
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a requirement that a vacancy on the board of directors
be filled only by the remaining directors in office and (if the board of directors is classified) for the remainder of the full term
of the class of directors in which the vacancy occurred; and |
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a majority requirement for the calling of a stockholder-requested
special meeting of stockholders. |
Our charter provides that vacancies on our board
may be filled only by the remaining directors and for the remainder of the full term of the directorship in which the vacancy occurred.
Through provisions in our charter and bylaws unrelated to Subtitle 8, we already (i) require the affirmative vote of stockholders
entitled to cast not less than two-thirds of all of the votes entitled to be cast generally in the election of directors for the removal
of any director from the board, only with cause, (ii) vest in the board of directors the exclusive power to fix the number of directorships
and (iii) require, unless called by our chairman of the board, our chief executive officer or our board of directors, the written
request of stockholders entitled to cast not less than a majority of all votes entitled to be cast at such a meeting to call a special
meeting of our stockholders.
Meetings of Stockholders
Pursuant to our bylaws, a meeting of our stockholders
for the election of directors and the transaction of any business will be held annually on a date and at the time and place set by our
board of directors. The chairman of our board of directors, our chief executive officer or our board of directors may call a special
meeting of our stockholders. Subject to the procedural requirements specified in our bylaws, a special meeting of our stockholders to
act on any matter that may properly be brought before a meeting of our stockholders must also be called by our secretary upon the written
request of the stockholders entitled to cast a majority of all the votes entitled to be cast at the meeting on such matter and containing
the information required by our bylaws. Only the matters set forth in the notice of special meeting may be considered and acted upon
at such meeting. Additionally, the Series A Preferred Stock articles supplementary provides the holders of Series A Preferred
Stock certain rights to have a special meeting called upon their request in connection with the election of the preferred stock directors.
Amendment to Our Charter and Bylaws
Except for amendments to the provisions of our
charter relating to the removal of directors, and the vote required to amend this provision (which must be advised by our board of directors
and approved by the affirmative vote of stockholders entitled to cast not less than two-thirds of all the votes entitled to be cast on
the election), our charter generally may be amended only if advised by our board of directors and approved by the affirmative vote of
stockholders entitled to cast a majority of all of the votes entitled to be cast on the matter. As permitted by the MGCL, our charter
contains a provision permitting our directors, without any action by our stockholders, to amend the charter to increase or decrease the
aggregate number of shares of stock of any class or series that we have authority to issue.
Our bylaws may be adopted, altered or repealed
by the board of directors or by our stockholders, by the affirmative vote of a majority of the outstanding shares entitled to vote on
the matter.
Additionally, the Series A Preferred Stock
articles supplementary provides the holders of Series A Preferred Stock with voting rights with respect to certain amendments to
our charter.
Advance Notice of Director Nominations
and New Business
Our bylaws provide that, with respect to an annual
meeting of stockholders, nominations of individuals for election to our board of directors and the proposal of other business to be considered
by stockholders may be made only (i) pursuant to our notice of the meeting, (ii) by or at the direction of our board of directors
or (iii) by a stockholder who was a stockholder of record both at the time of giving the notice required by our bylaws and at the
time of the meeting, who is entitled to vote at the meeting on such business or in the election of such nominee and who has provided
notice to us within the time period, and containing the information and other materials, specified by the advance notice provisions set
forth in our bylaws.
With respect to special meetings of stockholders,
only the business specified in our notice of meeting may be brought before the meeting. Nominations of individuals for election to our
board of directors may be made only (i) by or at the direction of our board of directors or (ii) provided that the meeting
has been called for the purpose of electing directors, by a stockholder who was a stockholder of record both at the time of giving notice
and at the time of the special meeting, who is entitled to vote at the meeting in the election of such nominee and who has provided notice
to us within the time period, and containing the information and other materials, specified by the advance notice provisions set forth
in our bylaws.
Action by Stockholders
Our charter provides that stockholder action
can be taken at an annual or special meeting of stockholders and by consent in lieu of a meeting if such consent is approved unanimously.
These provisions, combined with the requirements of our bylaws regarding advance notice of nominations and other business to be considered
at a meeting of stockholders and the calling of a stockholder-requested special meeting of stockholders, may have the effect of delaying
consideration of a stockholder proposal.
Anti-Takeover Effect of Certain Provisions
of Maryland Law and of Our Charter and Bylaws
The provisions of the MGCL, our charter and our
bylaws described above including, among others, the restrictions on ownership and transfer of our stock, the exclusive power of our board
of directors to fill vacancies on the board and the advance notice provisions of our bylaws could delay, defer or prevent a change in
control or other transaction that might involve a premium price for shares of our common stock or otherwise be in the best interests
of our stockholders. Likewise, if our board of directors were to opt in to the classified board or other provisions of Subtitle 8 or
if our board of directors were to opt in to the control share acquisition of the MGCL, these provisions of the MGCL could have similar
anti-takeover effects.
Indemnification and Limitation of Directors’
and Officers’ Liability
Maryland law permits a Maryland corporation to
include in its charter a provision eliminating the liability of its directors and officers to the corporation and its stockholders for
money damages except for liability resulting from actual receipt of an improper benefit or profit in money, property or services or active
and deliberate dishonesty that was established by a final judgment and was material to the cause of action. Our charter contains a provision
that eliminates the liability of our directors and officers to the maximum extent permitted by Maryland law.
The MGCL requires us (unless our charter provides
otherwise, which our charter does not) to indemnify a director or officer who has been successful, on the merits or otherwise, in the
defense of any proceeding to which he or she is made a party by reason of his or her service in that capacity. The MGCL permits us to
indemnify our present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable
expenses actually incurred by them in connection with any proceeding to which they may be made or threatened to be made a party by reason
of their service in those or other capacities unless it is established that:
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act or omission of the director or officer was material
to the matter giving rise to the proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate
dishonesty; |
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the director or officer actually received an improper
personal benefit in money, property or services; or |
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in the case of any criminal proceeding, the director
or officer had reasonable cause to believe that the act or omission was unlawful. |
Under the MGCL, we may not indemnify a director
or officer in a suit by us or in our right in which the director or officer was adjudged liable to us or in a suit in which the director
or officer was adjudged liable on the basis that personal benefit was improperly received. Nevertheless, a court may order indemnification
if it determines that the director or officer is fairly and reasonably entitled to indemnification, even though the director or officer
did not meet the prescribed standard of conduct or was adjudged liable on the basis that personal benefit was improperly received. However,
indemnification for an adverse judgment in a suit by us or in our right, or for a judgment of liability on the basis that personal benefit
was improperly received, is limited to expenses.
In addition, the MGCL permits us to advance reasonable
expenses to a director or officer upon our receipt of:
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written affirmation by the director or officer of his
or her good faith belief that he or she has met the standard of conduct necessary for indemnification by us; and |
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a written undertaking by the director or officer or
on the director’s or officer’s behalf to repay the amount paid or reimbursed by us if it is ultimately determined that
the director or officer did not meet the standard of conduct. |
Our charter authorizes us to obligate ourselves
and our bylaws obligate us, to the fullest extent permitted by Maryland law in effect from time to time, to indemnify and, without requiring
a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of final
disposition of a proceeding to:
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any present or former director or officer who is made
or threatened to be made a party to or witness in the proceeding by reason of his or her service in that capacity; or |
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any individual who, while a director or officer of
our company and at our request, serves or has served as a director, officer, partner, manager, member or trustee of another corporation,
REIT, partnership, limited liability company, joint venture, trust, employee benefit plan or any other enterprise and who is made
or threatened to be made a party to or witness in the proceeding by reason of his or her service in that capacity. |
Our charter and bylaws also permit us to indemnify
and advance expenses to any individual who served any predecessor of our company, in any of the capacities described above and any employee
or agent of our company or a predecessor of our company.
We have entered into indemnification agreements
with each of our executive officers and directors, and expect to enter into indemnification agreements with future executive officers
and directors, that provide for indemnification to the maximum extent permitted by Maryland law.
Insofar as the foregoing provisions permit indemnification
of directors, officers or persons controlling us for liability arising under the Securities Act, we have been informed that, in the opinion
of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
REIT Qualification
Our charter provides that our board of directors
may authorize us to revoke or otherwise terminate our REIT election, without approval of our stockholders, if it determines that it is
no longer in our best interests to attempt to, or continue to, qualify as a REIT. Our charter also provides that our board of directors
may determine that compliance with any restriction or limitation on ownership and transfer of our stock is no longer required for us
to qualify as a REIT.
OUR OPERATING PARTNERSHIP
AND THE OPERATING PARTNERSHIP AGREEMENT
We have summarized the material terms and
provisions of the Agreement of Limited Partnership of IIP Operating Partnership, LP (the “Operating Partnership Agreement”).
This summary is not complete. For more detail, you should refer to the partnership agreement itself, which is incorporated by reference
as an exhibit to the registration statement of which this prospectus is a part. See the section entitled “Where You Can Find Additional
Information.”
Our Operating Partnership is a Delaware limited
partnership that was formed on June 20, 2016. We are the sole general partner of our Operating Partnership and own, directly or
through subsidiaries, 100% of the partnership interests in our Operating Partnership. Our Operating Partnership is treated as a partnership
for U.S. federal income tax purposes.
Description of Partnership Interests
Our Operating Partnership has two classes of
partnership interests: general partnership interests and limited partnership interests. General partnership interests represent an interest
as a general partner in our Operating Partnership and we, as general partner, hold all such interests.
Limited partnership interests represent an interest
as a limited partner in our Operating Partnership. Our Operating Partnership may issue, at the sole discretion of the General Partner,
additional partnership interests and classes of partnership interests with rights different from, and superior to, those of general partnership
interests and/or limited partnership interests.
Our Operating Partnership is treated as a partnership
for U.S. federal income tax purposes. See the section entitled “Material U.S. Federal Income Tax Considerations — Taxation
of Our Operating Partnership.”
Management of our Operating Partnership
Our Operating Partnership is organized as a Delaware
limited partnership pursuant to the terms of the Operating Partnership Agreement. We are the general partner of our Operating Partnership
and conduct substantially all of our business through it. Pursuant to the Operating Partnership Agreement, we, as the general partner,
have full, exclusive and complete responsibility and discretion in the management and control of our Operating Partnership.
Indemnification
To the extent permitted by law, the Operating
Partnership Agreement provides for indemnification of us when acting in good faith and in the best interests of our Operating Partnership
in our capacity as general partner. It also provides for indemnification of directors, officers and other persons that we may designate
under the same conditions, and subject to the same restrictions, applicable to the indemnification of officers, directors, employees
and stockholders under our charter. See the section entitled “Certain Provisions of Maryland Law and Our Charter and Bylaws —
Indemnification and Limitation of Directors’ and Officers’ Liability.”
Issuance of Additional Units
As general partner of our Operating Partnership,
we are able to cause our Operating Partnership to issue additional units representing general and/or limited partnership interests. A
new issuance may include preferred units, which may have rights which are different than, and/or superior to, those of general partnership
interests and limited partnership interests.
Capital Contributions
The Operating Partnership Agreement provides
that, if our Operating Partnership requires additional funds at any time, or from time to time, in excess of funds available to it from
prior borrowings, operating revenue or capital contributions, we, as general partner, have the right to raise additional funds required
by our Operating Partnership by causing it to borrow the necessary funds from third parties on such terms and conditions as we deem appropriate.
As an alternative to borrowing funds required by our Operating Partnership, we may contribute the amount of such required funds as an
additional capital contribution.
Liquidation
Upon the liquidation of our Operating Partnership,
after payment of debts and obligations, any remaining assets of the partnership will be distributed to partners pro rata in accordance
with their relative percentage interest ownership.
Distributions and Allocations
Distributions are made, and all items of net
income, net loss and any other individual items of income, gain, loss or deduction of our Operating Partnership are allocated to the
general partner and the limited partner based on their relative percentage interest ownership.
Term
Our Operating Partnership will continue in full
force and effect until December 31, 2099 or until sooner dissolved and terminated upon (i) our election to dissolve the Partnership;
(ii) the entry of a decree of judicial dissolution of our Operating Partnership; or (iii) by operation of law.
MATERIAL U.S. FEDERAL INCOME
TAX CONSIDERATIONS
This section summarizes the material U.S. federal
income tax considerations that you, as a prospective investor, may consider relevant in connection with the acquisition, ownership and
disposition of our common and preferred shares and warrants and our election to be taxed as a REIT. Supplemental material 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. As used in this section, the
terms “we” and “our” refer solely to Innovative Industrial Properties, Inc. and not any subsidiaries or
other lower-tier entities or affiliates, except as otherwise indicated.
This discussion does not exhaust all possible
tax considerations and does not provide a detailed discussion of any state, local or foreign tax considerations. Nor does this discussion
address all aspects of U.S. federal income taxation that may be relevant to particular investors in view of their personal investment
or tax circumstances, or to certain types of investors that are subject to special treatment under the U.S. federal income tax laws,
such as insurance companies, tax-exempt organizations, financial institutions, regulated investment companies, broker-dealers, partnerships
and other pass-through entities and trusts, persons holding our stock on behalf of other persons as nominees, persons who receive our
stock as compensation, persons subject to the alternative minimum tax, persons holding our stock as part of a hedge, straddle or other
risk reduction, constructive sale or conversion transaction, non-U.S. individuals and foreign corporations (except to the limited extent
discussed below under “— Taxation of Non-U.S. Holders”) and other persons subject to special tax rules. In addition,
the following summary does not address any U.S. federal income tax consequences to holders of our outstanding stock that could result
if we issue any redeemable preferred stock at a price that exceeds its redemption price by more than a de minimis amount or that otherwise
provides for dividends that are economically a return of the stockholders investment (rather than a return on the stockholder’s
investment), which preferred stock could be considered “fast-pay stock” under Treasury Regulations promulgated under Section 7701(l) of
the Code and treated under such regulations as a financing instrument among the holders of the fast-pay stock and our other stockholders.
Moreover, this summary assumes that holders will hold our shares as “capital assets” for U.S. federal income tax purposes,
which generally means property held for investment.
The statements in this section are based on the
current U.S. federal income tax laws, including the Code, the Treasury Regulations, rulings and other administrative interpretations
and practices of the Service, and judicial decisions, all as currently in effect, and all of which are subject to differing interpretations
or to change, possibly with retroactive effect. This discussion is for general purposes only and is not tax advice. We cannot assure
you that the Service would not assert, or that a court would sustain, a position contrary to any of the tax consequences described below.
Moreover, we cannot assure you that new laws, interpretations of law, or court decisions, any of which may take effect retroactively,
will not cause any statement in this section to be inaccurate.
The U.S. federal income tax treatment of holders
of our shares and warrants depends, in some instances, on determinations of fact and interpretations of complex provisions of U.S. federal
income tax law for which no clear precedent or authority may be available. In addition, the tax consequences to any particular holder
of our shares and warrants will depend on the holder’s particular tax circumstances. We urge you to consult your own tax advisors
regarding the U.S. federal, state, local, foreign, and other tax consequences of the acquisition, ownership and disposition of our shares
and of our intended election to be taxed as a REIT.
Taxation of Our Company
We were incorporated on June 15, 2016 as
a Maryland corporation. We have been organized to operate our business so as to qualify to be taxed as a REIT, for U.S. federal income
tax purposes, commencing with our taxable year ended December 31, 2017. Our ability to continue to qualify as a REIT depends upon
our ability to meet, on a continuing basis, various complex requirements under the Code relating to, among other things, the sources
of our gross income, the composition and values of our assets, our distribution levels and the diversity of ownership of our stock. No
assurances can be provided regarding our ability to maintain our qualification as a REIT because such qualification depends on our ability
to satisfy numerous asset, income, stock ownership and distribution tests described below, the satisfaction of which will depend, in
part, on our operating results.
The sections of the Code and Treasury Regulations
relating to qualification, operation and taxation as a REIT are highly technical and complex. The following discussion sets forth only
the material aspects of those sections. This summary is qualified in its entirety by the applicable Code provisions and the related Treasury
Regulations and administrative and judicial interpretations thereof.
In connection with the filing of the registration
statement of which this prospectus is a part, Foley & Lardner LLP has issued an opinion to us to the effect that, commencing
with our taxable year ended December 31, 2017, we have been organized and have operated in conformity with the requirements for
qualification and taxation as a REIT under the U.S. federal income tax laws, and our current and proposed method of operation will enable
us to continue to meet the requirements for qualification and taxation as a REIT under the U.S. federal income tax laws. You should be
aware that Foley & Lardner LLP’s opinion is based on the U.S. federal income tax laws governing qualification as a REIT
as of the date of such opinion (which are subject to change, possibly on a retroactive basis), is not binding on the Service or any court,
and speaks only as of the date issued. In addition, Foley & Lardner’s opinion is based on customary assumptions and
is conditioned upon certain representations made by us as to factual matters, including representations regarding the nature of our assets
and the future conduct of our business. Moreover, our qualification and taxation as a REIT will depend on our ability to meet, on a continuing
basis, through actual results, certain qualification tests set forth in the U.S. federal income tax laws. Those qualification tests involve,
among other things, the percentage of our gross income that we earn from specified sources, the percentage of our assets that fall within
specified categories, the diversity of our stock ownership and the percentage of our earnings that we distribute. Foley & Lardner
LLP will not review our compliance with those tests on a continuing basis. Accordingly, we cannot assure you that the actual results
of our operations for any particular taxable year will satisfy such requirements. Foley & Lardner LLP’s opinion does not
foreclose the possibility that we may have to use one or more of the REIT savings provisions described below, which may require us to
pay a material excise or penalty tax (and interest) in order to maintain our REIT qualification. For a discussion of the tax consequences
of our failure to maintain our qualification as a REIT, see the section entitled “Failure to Qualify” below.
Provided we continue to qualify for taxation
as a REIT, we generally will not be subject to U.S. federal income tax on the taxable income that we distribute to our stockholders because
we will be entitled to a deduction for dividends that we pay. Such tax treatment avoids the “double taxation,” or taxation
at both the corporate and stockholder levels, that generally results from owning stock in a corporation. In general, income generated
by a REIT is taxed only at the stockholder level if such income is distributed by the REIT to its stockholders. However, we will be subject
to U.S. federal income tax in the following circumstances:
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We will be subject to U.S. federal corporate income
tax on any REIT taxable income, including net capital gain, that we do not distribute to our stockholders during, or within a specified
time period after, the calendar year in which the income is earned. |
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We may be subject to corporate “alternative minimum
tax” for taxable years beginning before January 1, 2018. |
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We will be subject to tax, at the highest U.S. federal
corporate income tax rate (currently 21%), on net income from the sale or other disposition of property acquired through foreclosure
(“foreclosure property”) that we hold primarily for sale to customers in the ordinary course of business, and other non-qualifying
income from foreclosure property. |
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We will be subject to a 100% tax on net income from
“prohibited transactions,” which are, in general, sales or other dispositions of property, other than foreclosure property,
that we hold primarily for sale to customers in the ordinary course of business. |
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If we fail to satisfy one or both of the 75% gross
income test or the 95% gross income test, as described below under “— Gross Income Tests,” but nonetheless maintain
our qualification as a REIT because we meet certain other requirements, we will be subject to a 100% tax on: |
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the greater of the amount by which we fail the 75%
gross income test or the 95% gross income test, in either case, multiplied by |
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a fraction intended to reflect our profitability. |
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If we fail to distribute during a calendar year at
least the sum of: (1) 85% of our REIT ordinary income for the year, (2) 95% of our REIT capital gain net income for the
year, and (3) any undistributed taxable income required to be distributed from earlier periods, then we will be subject to a
4% nondeductible excise tax on the excess of the required distribution over the sum of (a) the amount we actually distributed;
and (b) the amounts we retained and upon which we paid income tax at the corporate level. |
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If we fail any of the asset tests, other than a de
minimis failure of the 5% asset test, the 10% vote test or the 10% value test, as described below under “— Asset Tests,”
as long as (1) the failure was due to reasonable cause and not to willful neglect, (2) we file a description of each asset
that caused such failure with the Service, and (3) we dispose of the assets causing the failure or otherwise comply with the
asset tests within six months after the last day of the quarter in which we identify such failure, we will pay a tax with respect
to such failure equal to the greater of $50,000 or the highest U.S. federal corporate income tax rate (currently 21%) multiplied
by the net income from the nonqualifying assets during the period in which we failed to satisfy the asset tests. |
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If we fail to satisfy one or more requirements for
REIT qualification, other than the gross income tests and the asset tests, and such failure is due to reasonable cause and not to
willful neglect, we will be required to pay a penalty of $50,000 for each such failure. |
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We will be subject to a 100% excise tax on transactions
with a TRS that are not conducted on an arm’s-length basis. |
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We may be required to pay monetary penalties to the
Service in certain circumstances, including if we fail to meet recordkeeping requirements intended to monitor our compliance with
rules relating to the composition of a REIT’s stockholders, as described below in “— Requirements for Qualification.” |
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If we acquired any asset while we were taxable as a
C corporation or we acquire any asset from a C corporation, or a corporation that generally is subject to full corporate-level tax,
in a merger or other transaction in which we acquire a basis in the asset that is determined by reference either to the C corporation’s
basis in the asset or to another asset, we will pay tax at the highest U.S. federal corporate income tax rate (currently 21%) applicable
if we recognize gain on the sale or disposition of the asset during the five-year period after we acquire the asset. The amount of
gain on which we will pay tax generally is the lesser of: |
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the amount of gain that we recognize at the time of
the sale or disposition, and |
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the amount of gain that we would have recognized if
we had sold the asset at the time we acquired it. |
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The earnings of our subsidiary entities that are C
corporations, including TRSs, will be subject to U.S. federal corporate income tax. |
In addition, we may be subject to a variety of
taxes, including payroll taxes and state, local and foreign income, property and other taxes on our assets and operations. We also could
be subject to tax in situations and on transactions not presently contemplated.
Requirements for Qualification as a REIT
A REIT is a corporation, trust or association
that satisfies each of the following requirements:
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(1) |
It is managed by one or more trustees or directors; |
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(2) |
Its beneficial ownership is evidenced by transferable
shares of stock, or by transferable shares or certificates of beneficial interest; |
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(3) |
It would be taxable as a domestic corporation, but
for Sections 856 through 860 of the Code, i.e., the REIT provisions; |
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(4) |
It is neither a financial institution nor an insurance
company subject to special provisions of the U.S. federal income tax laws; |
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(5) |
At least 100 persons are beneficial owners of its stock
or ownership shares or certificates (determined without reference to any rules of attribution); |
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(6) |
Not more than 50% in value of its outstanding stock
or shares of beneficial interest are owned, directly or indirectly, by five or fewer individuals, which the U.S. federal income tax
laws define to include certain entities, during the last half of any taxable year; |
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(7) |
It elects to be a REIT, or has made such election for
a previous taxable year, and satisfies all relevant filing and other administrative requirements established by the Service that
must be met to qualify to be taxed as a REIT for U.S. federal income tax purposes; |
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(8) |
It uses a calendar year for U.S. federal income tax
purposes and complies with the recordkeeping requirements of the U.S. federal income tax laws; |
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(9) |
It meets certain other requirements described below,
regarding the sources of its gross income, the nature and diversification of its assets and the distribution of its income; and |
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(10) |
It has no undistributed earnings and profits from any
non-REIT taxable year at the close of any taxable year. |
We must satisfy requirements 1 through 4, and
8 during our entire taxable year and must satisfy requirement 5 during at least 335 days of a taxable year of 12 months, or during a
proportionate part of a taxable year of less than 12 months. Requirements 5 and 6 applied to us beginning with our 2018 taxable year.
If we comply with certain requirements for ascertaining the beneficial ownership of our outstanding stock in a taxable year and have
no reason to know that we violated requirement 6, we will be deemed to have satisfied requirement 6 for that taxable year. For purposes
of determining stock ownership under requirement 6, an “individual” generally includes a supplemental unemployment compensation
benefits plan, a private foundation, or a portion of a trust permanently set aside or used exclusively for charitable purposes. An “individual,”
however, generally does not include a trust that is a qualified employee pension or profit sharing trust under the U.S. federal income
tax laws, and beneficiaries of such a trust will be treated as holding our stock in proportion to their actuarial interests in the trust
for purposes of requirement 6.
In addition, our charter provides for restrictions
regarding the ownership and transfer of shares of our capital stock. The restrictions in our charter are intended, among other things,
to assist us in satisfying requirements 5 and 6 described above. These restrictions, however, may not ensure that we will be able to
satisfy such share ownership requirements in all cases. If we fail to satisfy these share ownership requirements, our qualification as
a REIT may terminate.
To monitor compliance with the share ownership
requirements, we generally are required to maintain records regarding the actual ownership of our shares. To do so, we must demand written
statements each year from the record holders of significant percentages of our shares pursuant to which the record holders must disclose
the actual owners of the shares (i.e., the persons required to include our dividends in their gross income). We must maintain a list
of those persons failing or refusing to comply with this demand as part of our records. We could be subject to monetary penalties if
we fail to comply with these record-keeping requirements. If you fail or refuse to comply with the demands, you will be required by Treasury
Regulations to submit a statement with your tax return disclosing your actual ownership of our shares and other information. In addition,
we must satisfy all relevant filing and other administrative requirements that must be met to elect and maintain REIT status. We intend
to comply with these requirements.
For purposes of requirement 8, we have adopted
December 31 as our year end for U.S. federal income tax purposes, and thereby satisfy this requirement.
Qualified
REIT Subsidiaries. A “qualified REIT subsidiary” generally is a corporation, all of the stock
of which is owned, directly or indirectly, by a REIT and that is not treated as a TRS. A corporation that is a “qualified REIT
subsidiary” is treated as a division of the REIT that owns, directly or indirectly, all of its stock and not as a separate entity
for U.S. federal income tax purposes. Thus, all assets, liabilities, and items of income, deduction, and credit of a “qualified
REIT subsidiary” are treated as assets, liabilities, and items of income, deduction, and credit of the REIT that directly or indirectly
owns the qualified REIT subsidiary. Consequently, in applying the REIT requirements described herein, the separate existence of any “qualified
REIT subsidiary” that we own will be ignored, and all assets, liabilities, and items of income, deduction, and credit of such subsidiary
will be treated as our assets, liabilities, and items of income, deduction, and credit.
Other
Disregarded Entities and Partnerships. The following discussion summarizes certain U.S. federal income
tax considerations applicable to our direct or indirect investments in our Operating Partnership and any subsidiary partnerships or limited
liability companies that we form or acquire.
An unincorporated domestic entity, such as a
partnership or limited liability company, that has a single owner, as determined under U.S. federal income tax laws, generally is not
treated as an entity separate from its owner for U.S. federal income tax purposes. We own various direct and indirect interests in entities
that are classified as partnerships and limited liability companies for state law purposes. Nevertheless, many of these entities currently
are not treated as entities separate from their owners for U.S. federal income tax purposes because such entities are treated as having
a single owner for U.S. federal income tax purposes. Consequently, the assets and liabilities, and items of income, deduction, and credit,
of such entities will be treated as our assets and liabilities, and items of income, deduction, and credit, for U.S. federal income tax
purposes, including the application of the various REIT qualification requirements.
An unincorporated domestic entity with two or
more owners, as determined under the U.S. federal income tax laws, generally is taxed as a partnership for U.S. federal income tax purposes.
In the case of a REIT that is an owner in an entity that is taxed as a partnership for U.S. federal income tax purposes, the REIT is
treated as owning its proportionate share of the assets of the entity and as earning its allocable share of the gross income of the entity
for purposes of the applicable REIT qualification tests. Thus, our proportionate share of the assets and items of gross income of any
partnership, joint venture, or limited liability company that is taxed as a partnership for U.S. federal income tax purposes is treated
as our assets and items of gross income for purposes of applying the various REIT qualification tests. For purposes of the 10% value
test (described in “— Asset Tests”), our proportionate share is based on our proportionate interest in the equity interests
and certain debt securities issued by the entity. For all of the other asset and income tests, our proportionate share is based on our
proportionate interest in the capital of the entity.
In the event that a disregarded subsidiary of
ours ceases to be wholly-owned — for example, if any equity interest in the subsidiary is acquired by a person other than us or
another disregarded subsidiary of ours — the subsidiary’s separate existence would no longer be disregarded for U.S. federal
income tax purposes. Instead, the subsidiary 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 various asset and gross income requirements
applicable to REITs, including the requirement that REITs generally may not own, directly or indirectly, more than 10% of the total value
or total voting power of the outstanding securities of another corporation. See “— Asset Tests” and “—
Gross Income Tests.”
We may from time to time be a limited partner
or non-managing member in a partnership or limited liability company. If a partnership or limited liability company in which we own an
interest takes or expects to take actions that could jeopardize our status as a REIT or require us to pay tax, we may be forced to dispose
of our interest in such entity. In addition, it is possible that a partnership or limited liability company could take an action which
could cause us to fail a gross income or asset test, and that we would not become aware of such action in time to dispose of our interest
in the partnership or limited liability company or take other corrective action on a timely basis. In that case, we could fail to qualify
as a REIT unless we were entitled to relief, as described below.
Taxable
REIT Subsidiaries (“TRSs”). A REIT is permitted to own, directly or indirectly, up to 100%
of the stock of one or more TRSs. The subsidiary and the REIT generally must jointly elect to treat the subsidiary as a TRS. However,
a corporation of which a TRS directly or indirectly owns more than 35% of the voting power or value of the securities is automatically
treated as a TRS without an election. We generally may not own more than 10%, as measured by voting power or value, of the securities
of a corporation that is not a qualified REIT subsidiary or a REIT unless we and such corporation elect to treat such corporation as
a TRS. Generally, no more than 20% of the value of a REIT’s assets may consist of stock or securities of one or more TRSs.
Unlike a qualified REIT subsidiary, the separate
existence of a TRS is not ignored for U.S. federal income tax purposes and a TRS is a fully taxable corporation subject to U.S. federal
corporate income tax on its earnings. We will not be treated as holding the assets of any TRS or as receiving the income earned by any
TRS. Rather, we will treat the stock issued by any TRS as an asset and will treat any dividends paid to us from any TRS as income. This
treatment may affect our compliance with the gross income tests and asset tests.
Restrictions imposed on REITs and their TRSs
are intended to ensure that TRSs will be subject to appropriate levels of U.S. federal income taxation. These restrictions limit the
deductibility of interest paid or accrued by a TRS to its parent REIT and impose a 100% excise tax on transactions between a TRS and
its parent REIT or the REIT’s tenants that are not conducted on an arm’s-length basis, such as any redetermined rents, redetermined
deductions, excess interest or redetermined TRS service income. In general, redetermined rents are rents from real property that are
overstated as a result of any services furnished to any of our tenants by a TRS of ours, redetermined deductions and excess interest
represent any amounts that are deducted by a TRS of ours for amounts paid to us that are in excess of the amounts that would have been
deducted based on arm’s length negotiations, and redetermined TRS service income is income of a TRS that is understated as a result
of services provided to us or on our behalf. Rents we receive will not constitute redetermined rents if they qualify for certain safe
harbor provisions contained in the Code. Dividends paid to us from a TRS, if any, will be treated as dividend income received from a
corporation. The foregoing treatment of TRSs may reduce the cash flow generated by us and our subsidiaries in the aggregate and our ability
to make distributions to our stockholders and may affect our compliance with the gross income tests and asset tests.
A TRS generally may be used by a REIT to undertake
indirectly activities that the REIT requirements might otherwise preclude the REIT from doing directly, such as the provision of noncustomary
tenant services or other services that would give rise to income that would not qualify under the REIT rules, or the ownership of property
held for sale to customers. See “— Gross Income Tests — Rents from Real Property” and “— Gross Income
Tests — Prohibited Transactions.”
Gross Income Tests
We must satisfy two gross income tests annually
to qualify and maintain our qualification as a REIT. First, at least 75% of our gross income for each taxable year must consist of defined
types of income that we derive, directly or indirectly, from investments relating to real property or mortgage loans on real property
or qualified temporary investment income. Qualifying income for purposes of the 75% gross income test generally includes:
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rents from real property; |
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interest on debt secured by mortgages on real property
or on interests in real property, and interest on debt secured by mortgages on both real and personal property if the fair market
value of such personal property does not exceed 15% of the total fair market value of all such property; |
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dividends or other distributions on, and gain from
the sale of, shares in other REITs; |
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gain from the sale of real estate assets, other than
gain from the sale of a debt instrument issued by a “publicly offered REIT” (i.e., a REIT that is required to file annual
and periodic reports with the SEC under the Exchange Act) to the extent not secured by real property or an interest in real property,
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income and gain derived from foreclosure property (as
described below); |
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income derived from a REMIC in proportion to the real
estate assets held by the REMIC, unless at least 95% of the REMIC’s assets are real estate assets, in which case all of the
income derived from the REMIC; and |
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income derived from the temporary investment of new
capital that is attributable to the issuance of our shares or a public offering of our debt with a maturity date of at least five
years and that we receive during the one-year period beginning on the date on which we received such new capital. |
Second, in general, at least 95% of our gross
income for each taxable year must consist of income that is qualifying income for purposes of the 75% gross income test (except for income
derived from the temporary investment of new capital), other types of interest and dividends, gain from the sale or disposition of stock
or securities (including interest and gain from debt instruments issued by a “publicly offered REIT” to the extent not secured
by real property or an interest in real property) or any combination of these.
Certain income items do not qualify for either
gross income test. Other types of income are excluded from both the numerator and the denominator in one or both of the gross income
tests. For example, gross income from the sale of property that we hold primarily for sale to customers in the ordinary course of business,
income and gain from “hedging transactions,” as defined in “— Hedging Transactions,” and gross income attributable
to cancellation of indebtedness, or “COD,” income will be excluded from both the numerator and the denominator for purposes
of both the 75% and 95% gross income tests. For purposes of the 75% and 95% gross income tests, we are treated as receiving our proportionate
share of our Operating Partnership’s gross income. We will monitor the amount of our non-qualifying income and will seek to manage
our investment portfolio to comply at all time with the gross income tests. Under the Tax Cuts and Jobs Act, we would have to accrue
certain items of income before they would otherwise be taken into income under the Code if they are taken into account in our applicable
financial statements. The following paragraphs discuss the specific application of the gross income tests to us.
Dividends. Our
share of any dividends received from any corporation (including dividends from any TRS that we may form, but excluding any REIT) in which
we own an equity interest will qualify for purposes of the 95% gross income test but not for purposes of the 75% gross income test. Our
share of any dividends received from any other REIT in which we own an equity interest, if any, will be qualifying income for purposes
of both gross income tests.
Interest. The
term “interest,” as defined for purposes of both gross income tests, generally excludes any amount that is based in whole
or in part on the income or profits of any person. However, interest generally includes the following:
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an amount that is based on a fixed percentage or percentages
of receipts or sales; and |
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an amount that is based on the income or profits of
a debtor, as long as the debtor derives substantially all of its income from the real property securing the debt from leasing substantially
all of its interest in the property, and only to the extent that the amounts received by the debtor would be qualifying “rents
from real property” if received directly by a REIT. |
If a loan contains a provision that entitles
a REIT to a percentage of the borrower’s gain upon the sale of the real property securing the loan or a percentage of the appreciation
in the property’s value as of a specific date, income attributable to that loan provision will be treated as gain from the sale
of the property securing the loan, which generally is qualifying income for purposes of both gross income tests, provided that the property
is not inventory or dealer property in the hands of the borrower or the REIT.
Interest on debt secured by a mortgage on real
property or on interests in real property, including, for this purpose, market discount, original issue discount, discount points, prepayment
penalties, loan assumption fees, and late payment charges that are not compensation for services, generally is qualifying income for
purposes of the 75% gross income test. However, if the loan is secured by 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 securing the loan as of
(i) the date the REIT agreed to originate or acquire the loan or (ii) as discussed below, in the event of a “significant
modification,” the date we modified the loan, a portion of the interest income from such loan will not be qualifying income for
purposes of the 75% gross income test, but will be qualifying income for purposes of the 95% gross income test. The portion of the interest
income that will not be qualifying income for purposes of the 75% gross income test will be equal to the portion of the principal amount
of the loan that is not secured by real property — that is, the amount by which the loan balance exceeds the applicable value of
the real estate that secures the loan.
Interest on debt secured by mortgages on real
property or on interests in real property, including, for this purpose, prepayment penalties, loan assumption fees and late payment
charges that are not compensation for services, generally is qualifying income for purposes of the 75% gross income test. Under the applicable
Treasury Regulation (referred to as the “interest apportionment regulation”), 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 acquired the mortgage loan, the interest
income will be apportioned between the real property and the other collateral, and our income from the arrangement will qualify for purposes
of the 75% gross income test only to the extent that the interest is allocable to the real property. Even if a mortgage loan is not secured
by real property, or is undersecured, the income that it generates may nonetheless qualify for purposes of the 95% gross income test.
In Revenue Procedure 2014-51, the Service interpreted the “principal amount” of the loan for purposes of that test to be
the face amount of the loan, despite the Code’s requirement that taxpayers treat any market discount (discussed below) as interest
rather than principal. In the case of real estate mortgage loans secured by both real and personal property, if the fair market value
of such personal property does not exceed 15% of the total fair market value of all property securing the loan, then the personal property
securing the loan will be treated as real property for purposes of determining whether the interest income from such loan qualifies for
purposes of the 75% gross income test.
Hedging
Transactions. From time to time, we may enter into hedging transactions with respect to one or more of
our assets or liabilities. Our hedging activities may include entering into interest rate swaps, caps, and floors, options to purchase
such items, and futures and forward contracts. Income and gain from “hedging transactions” will be excluded from gross income
for purposes of both the 75% and 95% gross income tests. A “hedging transaction” means (1) any transaction entered into
in the normal course of our trade or business primarily to manage the risk of interest rate or price changes or currency fluctuations
with respect to borrowings made or to be made, or ordinary obligations incurred or to be incurred, to acquire or carry real estate assets,
(2) any transaction entered into primarily to manage the risk of currency fluctuations with respect to any item of income or gain
that would be qualifying income under the 75% or 95% gross income test (or any property which generates such income or gain) or (3) any
new transaction entered into to hedge the income or loss from a prior hedging transaction, where the property or indebtedness which was
the subject of the prior hedging transaction was extinguished or disposed of. We are required to clearly identify any such hedging transaction
before the close of the day on which it was acquired, originated, or entered into and to satisfy other identification requirements. To
the extent that we hedge for other purposes, or to the extent that we do not properly identify a hedging transaction, the income from
those transactions will likely be treated as non-qualifying income for purposes of both gross income tests. We intend to structure any
hedging transactions in a manner that does not jeopardize our qualification as a REIT; however, no assurance can be given that our hedging
activities will give rise to income that is excluded from gross income or qualifies for purposes of either or both of the gross income
tests. 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 by participating in the arrangements directly or through pass-through subsidiaries.
Rents
from Real Property. To the extent that we acquire real property or an interest therein, rents we receive
will qualify as “rents from real property” in satisfying the gross income requirements for a REIT described above only if
the following conditions are met:
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First, the amount of rent
must not be based in whole or in part on the income or profits of any person. An amount received or accrued generally will not be
excluded, however, from rents from real property solely by reason of being based on fixed percentages of receipts or sales. |
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Second, rents we receive from a “related party
tenant” will not qualify as rents from real property in satisfying the gross income tests unless the tenant is a TRS, at least
90% of the property is leased to unrelated tenants, the rent paid by the TRS is substantially comparable to the rent paid by the
unrelated tenants for comparable space and the rent is not attributable to an increase in rent due to a modification of a lease with
a “controlled TRS” (i.e., a TRS in which we own directly or indirectly more than 50% of the voting power or value of
the stock). A tenant is a related party tenant if the REIT, or an actual or constructive owner of 10% or more of the REIT, actually
or constructively owns 10% or more of the tenant. |
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Third, if rent attributable to personal property, leased
in connection with a lease of real property, is greater than 15% of the total rent received under the lease, then the portion of
rent attributable to the personal property will not qualify as rents from real property. |
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Fourth, we generally must not operate or manage our
real property or furnish or render services to our tenants, other than through an “independent contractor” who is adequately
compensated and from whom we do not derive revenue. We may, however, provide services directly to tenants if the services are “usually
or customarily rendered” in connection with the rental of space for occupancy only and are not considered to be provided for
the tenants’ convenience. In addition, we may provide a minimal amount of “non-customary” services to the
tenants of a property, other than through an independent contractor, as long as our income from the services does not exceed 1% of
our income from the related property. Furthermore, we may own up to 100% of the stock of a TRS, which may provide customary and non-customary
services to tenants without tainting our rental income from the related properties. |
If a portion of the rent that we receive from
a property does not qualify as “rents from real property” because the rent attributable to personal property exceeds 15%
of the total rent for a taxable year, the portion of the rent that is attributable to personal property will not be qualifying income
for purposes of either the 75% or 95% gross income test. Thus, if such rent attributable to personal property, plus any other income
that is non-qualifying income for purposes of the 95% gross income test, during a taxable year exceeds 5% of our gross income during
the year, we would lose our REIT qualification. Further, the rent from a particular property does not qualify as “rents from real
property” if (i) the rent is considered based on the income or profits of the tenant, (ii) the tenant either
is a related party tenant or fails to qualify for the exceptions to the related party tenant rule for qualifying taxable REIT subsidiaries
or (iii) we furnish non-customary services to the tenants of the property, or manage or operate the property, other than through
a qualifying independent contractor or a taxable REIT subsidiary.
In addition to the rent, the tenants may be required
to pay certain additional charges. To the extent that such additional charges represent reimbursements of amounts that we are obligated
to pay to third parties such charges generally will qualify as “rents from real property.” To the extent such additional
charges represent penalties for nonpayment or late payment of such amounts, such charges should qualify as “rents from real property.”
However, to the extent that late charges do not qualify as “rents from real property,” they instead may be treated as interest
that qualifies for the 95% gross income test.
Prohibited
Transactions. A REIT will incur a 100% tax on the net income derived from any sale or other disposition
of property, other than foreclosure property, that the REIT holds primarily for sale to customers in the ordinary course of a trade or
business. Any such income will be excluded from the application of the 75% and 95% gross income tests. Whether a REIT holds an asset
“primarily for sale to customers in the ordinary course of a trade or business” depends on the facts and circumstances in
effect from time to time, including those related to a particular asset. Although we do not presently intend to hold assets primarily
for sale to customers in the ordinary course of a trade or business, no assurance, however, can be given that the Service will not successfully
assert a contrary position, in which case we would be subject to the prohibited transaction tax on the sale of those assets. A safe harbor
to the characterization of the sale of property by a REIT as a prohibited transaction and the resulting imposition of the 100% prohibited
transactions tax is available, however, if the following requirements are met:
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the REIT has held the property for not less than two
years; |
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the aggregate expenditures made by the REIT, or any
partner of the REIT, during the two-year period preceding the date of the sale that are includable in the basis of the property do
not exceed 30% of the selling price of the property; |
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either (1) during the year in question, the REIT
did not make more than seven property sales other than sales of foreclosure property or sales to which Section 1033 of the Code
applies, (2) the aggregate adjusted bases of all such properties sold by the REIT during the year did not exceed 10% of the
aggregate bases of all of the assets of the REIT at the beginning of the year, (3) the aggregate fair market value of all such
properties sold by the REIT during the year did not exceed 10% of the aggregate fair market value of all of the assets of the REIT
at the beginning of the year or (4) either, (a) the REIT satisfies the requirements of clause (2) applied by substituting
“20%” for “10%” and the “3-year average adjusted bases percentage” (as defined in the Code) for
the taxable year does not exceed 10%, or (b) the REIT satisfies the requirements of clause (3) applied by substituting
“20%” for “10%” and the “3-year average fair market value percentage” (as defined in the Code)
for the taxable year does not exceed 10%; |
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in the case of property not acquired through foreclosure
or lease termination, the REIT has held the property for at least two years for the production of rental income; and |
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if the REIT has made more than seven property sales
(excluding sales of foreclosure property) during the taxable year, substantially all of the marketing and development expenditures
with respect to the property were made through an independent contractor from whom the REIT or a TRS derives no income. |
We will attempt to comply with the terms of the
safe-harbor provisions in the federal income tax laws prescribing when an asset sale will not be characterized as a prohibited transaction.
We cannot assure you, however, that we will be able to comply with the safe-harbor provisions or that we will avoid owning property that
may be characterized as property held “primarily for sale to customers in the ordinary course of a trade or business.” We
may hold and dispose of certain properties through a taxable REIT subsidiary if we conclude that the sale or other disposition of such
property may not fall within the safe-harbor provisions. The 100% prohibited transactions tax will not apply to gains from the sale of
property that is held through a taxable REIT subsidiary although such income will be taxed to the taxable REIT subsidiary at U.S. federal
corporate income tax rates.
Foreclosure
Property. We will be subject to tax at the maximum corporate rate on any income from foreclosure property,
other than income that otherwise would be qualifying income for purposes of the 75% gross income test, less expenses directly connected
with the production of that income. Gross income from foreclosure property will qualify, however, under the 75% and 95% gross income
tests. Foreclosure property is any real property, including interests in real property, and any personal property incident to such real
property:
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that is acquired by a REIT as the result of the REIT
having bid on such property at foreclosure, or having otherwise reduced such property to ownership or possession by agreement or
process of law, after there was a default or default was imminent on a lease of such property or on indebtedness that such property
secured; |
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for which the related loan or lease was acquired by
the REIT at a time when the default was not imminent or anticipated; and |
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for which the REIT makes a proper election to treat
the property as foreclosure property. |
A REIT will not be considered, however, to have
foreclosed on a property where the REIT takes control of the property as a mortgagee-in-possession and cannot receive any profit or sustain
any loss except as a creditor of the mortgagor. Property generally ceases to be foreclosure property at the end of the third taxable
year following the taxable year in which the REIT acquired the property, or longer if an extension is granted by the Secretary of the
U.S. Treasury Department. This grace period terminates and foreclosure property ceases to be foreclosure property on the first day:
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on which a lease is entered into for the property that, by its
terms, will give rise to income that does not qualify for purposes of the 75% gross income test (disregarding income from foreclosure
property), or any amount is received or accrued, directly or indirectly, pursuant to a lease entered into on or after such day that
will give rise to income that does not qualify for purposes of the 75% gross income test (disregarding income from foreclosure property);
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on which any construction takes place on the property, other than
completion of a building or any other improvement, where more than 10% of the construction was completed before default became imminent;
or
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which is more than 90 days after the day on which the
REIT acquired the property and the property is used in a trade or business that is conducted by the REIT, other than through an independent
contractor from whom the REIT itself does not derive or receive any income. |
Failure
to Satisfy Gross Income Tests. We intend to monitor our sources of income, including any nonqualifying
income received by us, and manage our assets so as to ensure our compliance with the gross income tests. If we fail to satisfy one or
both of the gross income tests for any taxable year, we nevertheless may qualify as a REIT for that year if we are entitled to qualify
for relief under certain provisions of the U.S. federal income tax laws. Those relief provisions generally will be available if:
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our failure to meet those tests is due to reasonable
cause and not to willful neglect; and |
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following such failure for any taxable year, a schedule
of the sources of our income is filed with the Service in accordance with regulations prescribed by the Secretary of the U.S. Treasury
Department. |
We cannot predict, however, whether any failure
to meet these tests will qualify for the relief provisions. If these relief provisions are inapplicable to a particular set of circumstances
involving us, we will not qualify as a REIT. As discussed above in the section entitled “— Taxation of Our Company,”
even if the relief provisions apply, we would incur a 100% tax on the gross income attributable to the greater of the amount by which
we fail the 75% gross income test or the 95% gross income test, multiplied, in either case, by a fraction intended to reflect our profitability.
Asset Tests
To qualify as a REIT, we also must satisfy the
following asset tests at the end of each quarter of each taxable year.
First, at least 75% of the value of our total
assets must consist of:
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cash or cash items, including certain receivables and
investments in money market funds; |
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government securities; |
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interests in real property, including leaseholds and
options to acquire real property and leaseholds; |
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interests in mortgage loans secured by real property; |
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interests in mortgage loans secured by both real property
and personal property if the fair market value of such personal property does not exceed 15% of the total fair market value of all
such property; |
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stock or shares of beneficial interest in other REITs; |
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investments in stock or debt instruments during the
one-year period following our receipt of new capital that we raise through equity offerings or public offerings of debt with at least
a five-year term; |
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personal property leased in connection with real property
if the rent attributable to such personal property is not greater than 15% of the total rent received under the lease; |
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debt instruments issued by “publicly offered
REITs;” and |
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regular or residual interests in a REMIC. However,
if less than 95% of the assets of a REMIC consist of assets that are qualifying real estate-related assets under the U.S. federal
income tax laws, determined as if we held such assets, we will be treated as holding directly our proportionate share of the assets
of such REMIC. |
Second, of our investments not included in the
75% asset class, the value of our interest in any one issuer’s securities may not exceed 5% of the value of our total assets (the
“5% asset test”).
Third, of our investments not included in the
75% asset class, we may not own more than 10% of the total voting power or 10% of the total value of any one issuer’s outstanding
securities (the “10% vote test” and the “10% value test,” respectively).
Fourth, no more than 20% of the value of our
total assets may consist of the securities of one or more TRSs.
Fifth, no more than 25% of the value of our total
assets may consist of the securities of TRSs and other non-TRS taxable subsidiaries and other assets that are not qualifying assets for
purposes of the 75% asset test (the “25% securities test”).
Sixth, not more than 25% of the value of our
total assets may be represented by debt instruments of “publicly offered REITs” to the extent those debt instruments are
not secured by real property or an interest in real property.
For purposes of these assets tests, we are treated
as holding our proportionate share of our Operating Partnership’s assets. For purposes of the 5% asset test, the 10% vote test
and the 10% value test, the term “securities” does not include stock in another REIT, equity or debt securities of a qualified
REIT subsidiary or TRS, mortgage loans, or equity interests in a partnership. For purposes of the 10% value test, the term “securities”
does not include:
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“straight debt” securities,
which is defined as a written unconditional promise to pay on demand or on a specified date a sum certain in money if (i) the
debt is not convertible, directly or indirectly, into stock, and (ii) the interest rate and interest payment dates are not contingent
on profits, the borrower’s discretion, or similar factors. “Straight debt” securities do not include any securities
issued by a partnership or a corporation in which we or any “controlled TRS” hold non-” straight” debt securities
that have an aggregate value of more than 1% of the issuer’s outstanding securities. However, “straight debt” securities
include debt subject to the following contingencies: |
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a contingency relating to the time of payment of interest
or principal, as long as either (i) there is no change to the effective yield of the debt obligation, other than a change to
the annual yield that does not exceed the greater of 0.25% or 5% of the annual yield, or (ii) neither the aggregate issue price
nor the aggregate face amount of the issuer’s debt obligations held by us exceeds $1 million and no more than 12 months of
unaccrued interest on the debt obligations can be required to be prepaid; and |
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a contingency relating to the time or amount of payment
upon a default or prepayment of a debt obligation, as long as the contingency is consistent with customary commercial practice; |
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any loan to an individual or an
estate; |
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any “section 467 rental agreement,” other
than an agreement with a related party tenant; |
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any obligation to pay “rents from real property;” |
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certain securities issued by governmental entities
that are not dependent in whole or in part on the profits of (or payments made by) a non-governmental entity; |
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any security (including debt securities) issued by
another REIT; |
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any debt instrument of an entity treated as a partnership
for U.S. federal income tax purposes in which we are a partner to the extent of our proportionate interest in the equity and certain
debt securities issued by that partnership; or |
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any debt instrument of an entity treated as a partnership
for U.S. federal income tax purposes not described in the preceding bullet points if at least 75% of the partnership’s gross
income, excluding income from prohibited transactions, is qualifying income for purposes of the 75% gross income test described above
in “— Gross Income Tests.” |
For purposes of the 10% value test, our proportionate
share of the assets of a partnership is our proportionate interest in any securities issued by the partnership, without regard to the
securities described in the last two bullet points above.
We intend that the assets that we will hold will
satisfy the foregoing asset test requirements. We will not obtain, however, nor are we required to obtain under the U.S. federal
income tax laws, independent appraisals to support our conclusions as to the value of our assets and securities or the real estate collateral
for any mortgage loans that we may originate or acquire. Therefore, we cannot assure you that we will be able to satisfy the asset tests
described above. We will monitor the status of our assets for purposes of the various asset tests and seek to manage our portfolio to
comply at all times with such tests. No assurance, however, can be given that we will continue to be successful in this effort. In this
regard, to determine our compliance with these requirements, we will have to value our investment in our assets to ensure compliance
with the asset tests. Although we seek to be prudent in making these estimates, no assurances can be given that the Service might not
disagree with these determinations and assert that a different value is applicable, in which case we might not satisfy the 75% asset
test and the other asset tests and, thus, would fail to qualify as a REIT.
If we fail to satisfy the asset tests at the
end of a calendar quarter, we will not lose our REIT qualification so long as:
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we satisfied the asset tests at
the end of the preceding calendar quarter; and |
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the discrepancy between the value of our assets and
the asset test requirements arose from changes in the market values of our assets and was not wholly or partly caused by the acquisition
of one or more non-qualifying assets. |
If we did not satisfy the condition described
in the second item, above, we still could avoid disqualification by eliminating any discrepancy within 30 days after the close of the
calendar quarter in which it arose.
If we violate the 5% asset test, the 10% vote
test or the 10% value test described above at the end of any calendar quarter, we will not lose our REIT qualification if (i) the
failure is de minimis (up to the lesser of 1% of the total value of our assets or $10 million) and (ii) we dispose of assets or
otherwise comply with the asset tests within six months after the last day of the quarter in which we identified such failure. In the
event of a more than de minimis failure of any of the asset tests, as long as the failure was due to reasonable cause and not to willful
neglect, we will not lose our REIT qualification if we (i) dispose of assets or otherwise comply with the asset tests within six
months after the last day of the quarter in which we identified such failure, (ii) file a schedule with the Service describing the
assets that caused such failure in accordance with regulations promulgated by the Secretary of the U.S. Treasury Department and (iii) pay
a tax equal to the greater of $50,000 or the product of the highest U.S. federal corporate tax rate (currently, 21%) and the
net income from the non-qualifying assets during the period in which we failed to satisfy the asset tests. If these relief provisions
are inapplicable to a particular set of circumstances involving us, we will fail to qualify as a REIT.
We intend that the assets that we may hold will
satisfy the foregoing asset test requirements. We will monitor the status of our assets and our future acquisition of assets to ensure
that we comply with those requirements, but we cannot assure you that we will be successful in this effort. No independent appraisals
will be obtained to support our estimates of and conclusions as to the value of our assets and securities, or in many cases, the real
estate collateral for the mortgage loans that support our assets. Moreover, the values of some assets may not be susceptible to a precise
determination. As a result, no assurance can be given that the Service will not contend that our ownership of securities and other assets
violates one or more of the asset tests applicable to REITs.
Distribution Requirements
Each taxable year, we must distribute dividends,
other than capital gain dividends and deemed distributions of retained capital gain, to our stockholders in an aggregate amount at least
equal to:
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90% of our REIT taxable income computed without regard
to the dividends paid deduction and our net capital gain, and |
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90% of our after-tax net income, if any, from foreclosure
property, minus |
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the sum of certain items of non-cash
income. |
We must make such distributions in the taxable
year to which they relate, or in the following taxable year if either (i) we declare the distribution before we timely file our
U.S. federal income tax return for the year and pay the distribution on or before the first regular dividend payment date after such
declaration or (ii) we declare the distribution in October, November or December of the taxable year, payable to stockholders
of record on a specified day in any such month, and we actually pay the dividend before the end of January of the following year.
The distributions under clause (i) are taxable to the stockholders in the year in which paid, and the distributions in clause (ii) are
treated as paid on December 31 of the prior taxable year. In both instances, these distributions relate to our prior taxable year
for purposes of the 90% distribution requirement.
In order for distributions to be counted as satisfying
the annual distribution requirements for REITs other than “publicly offered” REITs, and to provide a REIT-level tax deduction
for such REITs, the distributions must not be a “preferential dividend.” A distribution is not a preferential dividend if
the distribution is (i) pro-rata among all outstanding shares within a particular class and (ii) in accordance with the preferences
among different classes of shares as set forth in the REIT’s organizational documents. Such preferential dividend rules will
not apply to our distributions if we qualify as a “publicly offered” REIT. We believe that we will be a “publicly offered”
REIT.
We will pay U.S. federal income tax on taxable
income, including net capital gain, that we do not distribute to stockholders. Furthermore, if we fail to distribute during a calendar
year, or by the end of January following the calendar year in the case of distributions with declaration and record dates falling
in the last three months of the calendar year, at least the sum of:
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85% of our REIT ordinary income
for such year, |
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95% of our REIT capital gain income for such year,
and |
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any undistributed taxable income from prior periods,
we will incur a 4% nondeductible excise tax on the excess of such required distribution over the amounts we actually distribute. |
We may elect to retain and pay income tax on
the net long term capital gain we recognize in a taxable year. See the section above entitled “— Taxation of U.S. Holders.”
If we so elect, we will be treated as having distributed any such retained amount for purposes of the REIT distribution requirements
and the 4% nondeductible excise tax described above.
We intend to make timely distributions in the
future sufficient to satisfy the annual distribution requirements and to avoid corporate income tax and the 4% nondeductible excise tax.
It is possible that, from time to time, we may experience timing differences between the actual receipt of cash, including distributions
from our subsidiaries, and actual payment of deductible expenses and the inclusion of that income and deduction of such expenses in arriving
at our REIT taxable income. As a result of the foregoing, we may have less cash than is necessary to make distributions to our stockholders
that are sufficient to avoid corporate income tax and the 4% nondeductible excise tax imposed on certain undistributed income or even
to meet the annual distribution requirements. In such a situation, we may need to borrow funds or issue additional stock, or, if possible,
pay dividends consisting, in whole or in part, of our stock or debt securities.
Under certain circumstances, we may be able to
correct a failure to meet the distribution requirement for a year by paying “deficiency dividends” to our stockholders in
a later year. We may include such deficiency dividends in our deduction for dividends paid for the earlier year. Although we may be able
to avoid income tax on amounts distributed as deficiency dividends, we will be required to pay interest and may be required to pay a
penalty to the Service based upon the amount of any deduction we take for deficiency dividends.
Sale-Leaseback Transactions
Some of our investments have been, and may in
the future be, in the form of sale-leaseback transactions whereby we purchase real estate properties and lease them back to the seller.
We normally intend to treat these transactions as real estate purchases and true leases for federal income tax purposes. However, depending
on the terms of any specific transaction, the Service might take the position that the transaction is not a sale-leaseback but is more
properly treated in some other manner. In the event of a successful recharacterization, we would not be entitled to claim the depreciation
deductions available to an owner of the property. In addition, the recharacterization of one or more of these transactions might cause
us to fail to satisfy the asset tests or the gross income tests described above based upon the asset we would be treated as holding or
the income we would be treated as having earned, and such failure could result in our failing to qualify as a REIT. Alternatively, the
amount or timing of income inclusion or the loss of depreciation deductions resulting from the recharacterization might cause us to fail
to meet the distribution requirement described above for one or more taxable years absent the availability of the deficiency distribution
procedure or might result in a larger portion of our distributions being treated as ordinary distribution income to our stockholders.
Recordkeeping Requirements
We must maintain certain records in order to
qualify as a REIT. In addition, to avoid a monetary penalty, we must request, on an annual basis, information from our stockholders designed
to disclose the actual ownership of our outstanding shares, and we must maintain a list of those persons failing or refusing to comply
with such request as part of our records. A stockholder that fails or refuses to comply with such request is required by the Treasury
Regulations to submit a statement with its tax return disclosing the actual ownership of our stock and other information. We intend to
comply with these requirements.
Failure to Qualify as a REIT
If we fail to satisfy one or more requirements
for REIT qualification, other than the gross income tests and the asset tests, we could avoid disqualification if our failure is due
to reasonable cause and not to willful neglect and we pay a penalty of $50,000 for each such failure. In addition, there are relief
provisions for a failure of the gross income tests and asset tests, as described in “— Gross Income Tests” and “—
Asset Tests.”
If we fail to qualify as a REIT in any taxable
year, and no relief provision applies, we would be subject to U.S. federal income tax and any applicable alternative minimum tax (for
taxable years beginning before January 1, 2018) on our taxable income at regular corporate rates. In calculating our taxable income
in a year in which we fail to qualify as a REIT, we would not be able to deduct amounts paid out to stockholders. In fact, we would not
be required to distribute any amounts to stockholders in that year. In such event, to the extent of our current or accumulated earnings
and profits, all distributions to stockholders would be taxable as ordinary income. Subject to certain limitations of the U.S. federal
income tax laws, corporate stockholders might be eligible for the dividends received deduction and stockholders taxed at individual rates
might be eligible for the reduced U.S. federal income tax rate of 20% on such dividends. Unless we qualified for relief under specific
statutory provisions, we also would be disqualified from taxation as a REIT for the four taxable years following the year during which
we ceased to qualify as a REIT. We cannot predict whether in all circumstances we would qualify for such statutory relief.
Taxation of Our Operating Partnership
Our Operating Partnership currently is treated
as a partnership for U.S. federal income tax purposes.
Under the Code, a partnership generally is not
subject to U.S. federal income tax, but is required to file a partnership tax information return each year. In general, the character
of each partner’s share of each item of income, gain, loss, deduction, credit, and tax preference is determined at the partnership
level. Each partner is then allocated a distributive share of such items in accordance with the partnership agreement and is required
to take such items into account in determining such partner’s income. Each partner includes such amount in income for any taxable
year of the partnership ending within or with the taxable year of the partner, without regard to whether the partner has received or
will receive any cash distributions from the partnership. Cash distributions, if any, from a partnership to a partner generally are not
taxable unless and to the extent they exceed the partner’s basis in its partnership interest immediately before the distribution.
Any amounts in excess of such tax basis will generally be treated as a sale or exchange of such partner’s interest in the partnership.
For purposes of the REIT income and asset tests,
we are treated as receiving or holding our proportionate share of our Operating Partnership’s income and assets, respectively.
We control, and intend to continue to control, our Operating Partnership and intend to operate it consistently with the requirements
for our qualification as a REIT.
The Bipartisan Budget Act of 2015 changed the
rules applicable to U.S. federal income tax audits of partnerships. Under the new rules (which generally are effective for
taxable years beginning after December 31, 2017), among other changes and subject to certain exceptions, 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 the Operating Partnership being required to pay additional taxes, interest and penalties as a result of an audit adjustment, and we
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. Prospective stockholders are urged
to consult their tax advisors with respect to these changes and their potential impact on their investment in our securities.
The discussion above assumes that our Operating
Partnership is treated as a “partnership” for U.S. federal income tax purposes. Generally, a domestic unincorporated entity
with two or more owners is treated as a partnership for U.S. federal income tax purposes unless it affirmatively elects to be treated
as a corporation. However, certain “publicly traded partnerships” are treated as corporations for U.S. federal income tax
purposes. We intend to comply with one or more exceptions to treatment of our Operating Partnership as a corporation under the publicly
traded partnership rules. Failure to qualify for such an exception could prevent us from qualifying as a REIT.
Taxation of U.S. Holders
The term “U.S. holder” means a beneficial
owner of our securities that, for U.S. federal income tax purposes, is:
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a citizen or resident of the United
States; |
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a corporation (including an entity treated as a corporation
for U.S. federal income tax purposes) created or organized under the laws of the United States, any of its States or the District
of Columbia; |
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an estate whose income is subject to U.S. federal income
taxation regardless of its source; or |
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any trust if (i) a U.S. court is able to exercise
primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial
decisions of the trust or (ii) it has a valid election in place to be treated as a U.S. person. |
If a partnership, entity or arrangement treated
as a partnership for U.S. federal income tax purposes holds our securities, the U.S. federal income tax treatment of a partner in the
partnership will generally depend on the status of the partner and the activities of the partnership and certain determinations made
at the partner level. If you are a partner in a partnership holding our securities, you should consult your tax advisor regarding the
consequences of the purchase, ownership and disposition of our securities by the partnership.
Taxation
of Taxable U.S. Holders on Distributions on Shares. As long as we qualify as a REIT, a taxable U.S. holder
must generally take into account as ordinary income distributions made out of our current or accumulated earnings and profits that we
do not designate as capital gain dividends or retained long-term capital gain. Dividends paid to a U.S. holder will not qualify for the
dividends received deduction generally available to corporations. In addition, dividends paid to a U.S. holder generally will not qualify
for the 20% tax rate for “qualified dividend income.”
The maximum tax rate for qualified dividend income
received by taxpayers taxed at individual rates is currently 20%. Qualified dividend income generally includes dividends paid to U.S.
holders taxed at individual rates by domestic C corporations and certain qualified foreign corporations. Because we are not generally
subject to U.S. federal income tax on the portion of our REIT taxable income distributed to our stockholders (see “— Taxation
of Our Company” above), our dividends generally will not be eligible for the 20% rate on qualified dividend income.
As a result, our ordinary REIT dividends will
be taxed at the higher tax rate applicable to ordinary income. Beginning in taxable years on or after January 1, 2018 and before
January 1, 2026, non-corporate U.S. stockholders will be entitled to deduct 20% of ordinary REIT dividends they receive. In combination
with the 37% maximum rate applicable to non-corporate U.S. stockholders in such years, ordinary REIT dividends are subject to a maximum
tax rate of 29.6%, as compared with the 39.6% rate applicable in taxable years beginning before January 1, 2018. Pursuant to Treasury
Regulations finalized in 2020, in order for a dividend paid by a REIT to be eligible to be eligible for this reduced tax rate, a non-corporate
U.S. stockholder must meet two holding period-related requirements. First, the U.S. stockholder must hold the REIT stock for a minimum
of 46 days during the 91-day period that begins 45 days before the date on which the REIT stock becomes ex-dividend with respect to the
dividend. Second, the qualifying portion of the REIT dividend is reduced to the extent that the U.S. stockholder is under an obligation
(whether pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related
property. Prospective investors should consult their tax advisors concerning the applicability of these rules and any limitations
on the ability to deduct all or a portion of dividends received on our securities.
In addition, the 20% tax rate for qualified dividend
income will apply to our ordinary REIT dividends (i) attributable to dividends received by us from certain non-REIT corporations
(e.g., dividends from any domestic TRSs), (ii) to the extent attributable to income upon which we have paid corporate income tax
(e.g., to the extent that we distribute less than 100% of our taxable income) and (iii) attributable to income in the prior taxable
year from the sales of “built-in gain” property acquired by us from C corporations in carryover basis transactions (less
the amount of corporate tax on such income) with respect to such built-in gain. In general, to qualify for the reduced tax rate on qualified
dividend income, a U.S. holder must hold our shares for more than 60 days during the 121-day period beginning on the date that is 60
days before the date on which our shares of capital stock become ex-dividend.
Individuals, trusts and estates whose income
exceeds certain thresholds are also subject to a 3.8% Medicare tax on dividends received from us. The temporary 20% deduction currently
allowed with respect to ordinary REIT dividends received by non-corporate taxpayers, is allowed only for Chapter 1 of the Code and this
is not allowed as a deduction allocable to such dividends for purposes of determining the amount of net investment income subject to
the 3.8% Medicare tax, which is imposed under Chapter 2A of the Code. Dividends paid to a corporate U.S. stockholder will not qualify
for the dividends received deduction generally available to corporations.
A U.S. holder generally will take into account
distributions that we properly designate as capital gain dividends as long-term capital gain, to the extent that they do not exceed our
actual net capital gain for the taxable year, without regard to the period for which the U.S. holder has held our shares of capital stock.
Dividends designated as capital gain dividends may not exceed our dividends paid for the taxable year, including dividends paid the following
year that are treated as paid in the current year. A corporate U.S. holder may, however, be required to treat up to 20% of certain capital
gain dividends as ordinary income. Net capital gain is generally taxable at a maximum U.S. federal income tax rate of 20%, in the case
of U.S. stockholders who are individuals, and 21% for corporations. Capital gain dividends attributable to the sale of depreciable real
property held for more than 12 months are subject to a 25% U.S. federal income tax rate for U.S. stockholders who are individuals, trusts
or estates, to the extent of previously claimed depreciation deductions.
We may elect to retain and pay income tax on
the net long-term capital gain that we recognize in a taxable year. In that case, to the extent we designate such amount on a timely
notice to such stockholder, a U.S. holder would be taxed on its proportionate share of our undistributed long-term capital gain. The
U.S. holder would receive a credit or refund for its proportionate share of the tax we paid. The U.S. holder would increase the basis
in its shares of capital stock by the amount of its proportionate share of our undistributed long-term capital gain, minus its share
of the tax we paid.
A U.S. holder will not incur tax on a distribution
in excess of our current and accumulated earnings and profits if the distribution does not exceed the adjusted basis of the U.S. holder’s
shares of capital stock. Instead, the distribution will reduce the adjusted basis of such shares of capital stock. A U.S. holder will
recognize a distribution in excess of both our current and accumulated earnings and profits and the U.S. holder’s adjusted basis
in his or her shares of capital stock as long-term capital gain, or short-term capital gain if the shares of capital stock have been
held for one year or less, assuming the shares of capital stock are a capital asset in the hands of the U.S. holder. In addition, if
we declare a distribution in October, November or December of any year that is payable to a U.S. holder of record on a specified
date in any such month, such distribution shall be treated as both paid by us and received by the U.S. holder on December 31 of
such year, provided that we actually pay the distribution during January of the following calendar year, as described in “— Distribution
Requirements.”
To the extent that we have available net operating
losses and capital losses carried forward from prior tax years, such losses may reduce the amount of distributions that must be made
in order to comply with the REIT distribution requirements. Any net operating losses generated in years beginning after December 31,
2017 will generally only be able to offset 80% of our net taxable income (determined without regard to the dividends paid deduction).
Such losses are not passed through to U.S. stockholders and do not offset income of U.S. stockholders from other sources, nor do they
affect the character of any distributions that are actually made by us, which are generally subject to tax in the hands of U.S. stockholders
to the extent that we have current or accumulated earnings and profits.
Taxable distributions from us and gain from the
disposition of our shares of capital stock will not be treated as passive activity income and, therefore, a U.S. holder generally will
not be able to apply any “passive activity losses,” such as losses from certain types of limited partnerships in which such
U.S. holder is a limited partner, against such income. In addition, taxable distributions from us and gain from the disposition of our
shares of capital stock generally will be treated as investment income for purposes of the investment interest limitations. Similarly,
for taxable years beginning after December 31, 2017, non-corporate stockholders cannot apply “excess business losses”
against dividends that we distribute and gains arising from the disposition of our common stock. Dividends that we distribute, to the
extent they do not constitute a return of capital, generally will be treated as investment income for purposes of computing the investment
interest limitation. A U.S. stockholder that elects to treat capital gain dividends, capital gains from the disposition of shares or
qualified dividend income as investment income for purposes of the investment interest limitation will be taxed at the ordinary income
tax rate on such amounts. We will notify stockholders after the close of our taxable year as to the portions of the distributions attributable
to that year that constitute ordinary income, return of capital and capital gain.
Taxation
of Taxable U.S. Holders on the Disposition of Shares. In general, a U.S. holder who is not a dealer in securities
must treat any gain or loss realized upon a taxable disposition of our shares of capital stock as long-term capital gain or loss if the
U.S. holder has held such shares of capital stock for more than one year and otherwise as short-term capital gain or loss. In general,
a U.S. holder will realize gain or loss in an amount equal to the difference between the sum of the fair market value of any property
and the amount of cash received in such disposition and the U.S. holder’s adjusted tax basis. A holder’s adjusted tax basis
generally will equal the U.S. holder’s acquisition cost, increased by the excess of net capital gain deemed distributed to the
U.S. holder (discussed above) less tax deemed paid by such U.S. holder on such gains and reduced by any returns of capital. However,
a U.S. holder must treat any loss upon a sale or exchange of shares of capital stock held by such holder for six months or less as a
long-term capital loss to the extent of capital gain dividends and any other actual or deemed distributions from us that such U.S. holder
treats as long term capital gain. All or a portion of any loss that a U.S. holder realizes upon a taxable disposition of our shares of
capital stock may be disallowed if the U.S. holder purchases our shares of capital stock (or substantially similar shares of capital
stock) within 30 days before or after the disposition.
Capital
Gains and Losses. A taxpayer generally must hold a capital asset for more than one year for gain or loss derived
from its sale or exchange to be treated as long-term capital gain or loss. The maximum tax rate on long-term capital gain applicable
to U.S. holders taxed at individual rates is 20% for sales and exchanges of assets held for more than one year. The maximum tax rate
on long-term capital gain from the sale or exchange of “Section 1250 property,” or depreciable real property, is 25%,
which applies to the lesser of the total amount of the gains or the accumulated depreciation on the Section 1250 property. Individuals,
trusts and estates whose income exceeds certain thresholds are also subject to a 3.8% Medicare tax on gain from the sale of our shares
of capital stock.
With respect to distributions that we designate
as capital gain dividends and any retained capital gain that we are deemed to distribute, we will designate whether such a distribution
is taxable to U.S. holders taxed at individual rates at a 20% or 25% rate. The highest marginal individual income tax rate currently
is 37%. Thus, the tax rate differential between capital gain and ordinary income for those taxpayers may be significant. In addition,
the characterization of income as capital gain or ordinary income may affect the deductibility of capital losses, including capital losses
recognized upon the disposition of our shares. A non-corporate taxpayer may deduct capital losses not offset by capital gains against
its ordinary income only up to a maximum annual amount of $3,000. A non-corporate taxpayer may carry forward unused capital losses indefinitely.
A corporate taxpayer must pay tax on its net capital gain at ordinary corporate rates (currently up to 21%). A corporate taxpayer may
deduct capital losses only to the extent of capital gains, with unused losses being carried back three years and forward five years.
The Service and the U.S. Treasury Department have issued final regulations effective for tax years commencing on or after January 19,
2021 that impose special rules in respect of capital gain dividends received through partnership interests constituting “applicable
partnership interests” under Section 1061 of the Code. If we fail to provide the additional reporting set forth in these rules,
capital gain dividends may be recharacterized as short-term capital gains for certain holders of applicable partnership interests and
not eligible for reduced rates of tax. The regulations provide that REITs may, but are not required to, provide this additional reporting.
If a U.S. stockholder recognizes a loss upon
a disposition of our stock in an amount that exceeds a prescribed threshold, it is possible that the provisions of Treasury Regulations
involving “reportable transactions” could apply, resulting in a requirement to separately disclose the loss-generating transaction
to the Service. These Treasury Regulations are written quite broadly and apply to many routine and simple transactions. A reportable
transaction currently includes, among other things, a sale or exchange of stock resulting in a tax loss in excess of (a) $10 million
in any single year or $20 million in any combination of years in the case of stock held by a C corporation or by a partnership with only
C corporation partners or (b) $2 million in any single year or $4 million in any combination of years in the case of stock held
by any other partnership or an S corporation, trust or individual, including losses that flow through pass through entities to individuals.
A taxpayer discloses a reportable transaction by filing IRS Form 8886 with its federal income tax return and, in the first year
of filing, a copy of Form 8886 must be sent to the Service’s Office of Tax Shelter Analysis. The penalty for failing to disclose
a reportable transaction is generally $10,000 in the case of a natural person and $50,000 in any other case.
Information
Reporting Requirements and Withholding. We or the applicable withholding agent will report to U.S. holders
and to the Service the amount and the tax character of distributions we pay during each calendar year, and the amount of tax we withhold,
if any. Under the backup withholding rules, a U.S. holder may be subject to backup withholding (currently at a rate of 24%) with respect
to distributions unless such holder:
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is a corporation or comes within
certain other exempt categories and, when required, demonstrates this fact; or |
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provides a taxpayer identification number, certifies
as to no loss of exemption from backup withholding, and otherwise complies with the applicable requirements of the backup withholding
rules. |
A U.S. holder who does not provide the applicable
withholding agent with its correct taxpayer identification number also may be subject to penalties imposed by the Service. Any amount
paid as backup withholding will be creditable against the U.S. holder’s income tax liability. Backup withholding is not an additional
tax. Any amounts withheld under the backup withholding rules may be refunded or credited against the U.S. holder’s U.S. federal
income tax liability if certain required information is timely furnished to the Service. U.S. holders are urged to consult their own
tax advisors regarding application of backup withholding to them and the availability of, and procedure for obtaining an exemption from,
backup withholding. In addition, the applicable withholding agent may be required to withhold a portion of distributions to any U.S.
holders who fail to certify their U.S. status.
Taxation of Non-U.S. Holders
The term “non-U.S. holder” means
a beneficial owner of our shares of capital stock that is not a U.S. holder or a partnership (or an entity or arrangement treated as
a partnership for U.S. federal income tax purposes). The rules governing U.S. federal income taxation of nonresident alien individuals,
foreign corporations, foreign partnerships and other foreign holders are complex. This section is only a summary of such rules. We
urge non-U.S. holders to consult their tax advisors to determine the impact of U.S. federal, state and local income tax laws on ownership
of our shares of capital stock, including any reporting requirements.
A non-U.S. holder that receives a distribution
from us that is not attributable to gain from our sale or exchange of “United States real property interests,” as defined
below, and that we do not designate as a capital gain dividend or retained capital gain will recognize ordinary income to the extent
that we pay the distribution out of our current or accumulated earnings and profits. A withholding tax equal to 30% of the gross amount
of the distribution ordinarily will apply unless an applicable tax treaty reduces or eliminates the tax. If a distribution is treated
as effectively connected with the non-U.S. holder’s conduct of a U.S. trade or business, the distribution will not incur the 30%
withholding tax, but the non-U.S. holder generally will be subject to U.S. federal income tax on the distribution at graduated rates,
in the same manner as U.S. holders are taxed on distributions and also may be subject to the 30% branch profits tax in the case of a
corporate non-U.S. holder. In general, non-U.S. holders will not be considered to be engaged in a U.S. trade or business solely as a
result of their ownership of our shares of capital stock. It is expected that the applicable withholding agent will withhold U.S. income
tax at the rate of 30% on the gross amount of any distribution that we do not designate as a capital gain distribution or retained capital
gain and is paid to a non-U.S. holder unless either:
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a lower treaty rate applies and
the non-U.S. holder files with the applicable withholding agent an IRS Form W-8BEN or IRS Form W-8BEN-E evidencing eligibility
for that reduced rate, or |
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the non-U.S. holder files with the
applicable withholding agent an IRS Form W-8ECI claiming that the distribution is effectively connected income. |
Capital gain dividends received or deemed received
by a non-U.S. holder from us that are not attributable to gain from our sale or exchange of “United States real property interests,”
as defined below, are generally not subject to U.S. federal income or withholding tax, unless either (1) the non-U.S. holder’s
investment in our shares of capital stock is effectively connected with a U.S. trade or business conducted by such non-U.S. holder (in
which case the non-U.S. holder will be subject to the same treatment as U.S. holders with respect to such gain) or (2) the non-U.S.
holder 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. holder will be subject to a 30% tax on the individual’s
net capital gain for the year).
A non-U.S. holder will not incur tax on a distribution
on the shares of capital stock in excess of our current and accumulated earnings and profits if the excess portion of the distribution
does not exceed the adjusted tax basis of its shares of capital stock. Instead, the excess portion of the distribution will reduce such
non-U.S. holder’s adjusted tax basis of its shares of capital stock. A non-U.S. holder will be subject to tax on a distribution
that exceeds both our current and accumulated earnings and profits and the adjusted basis of its shares of capital stock, if the non-U.S.
holder otherwise would be subject to tax on gain from the sale or disposition of its shares of capital stock, as described below. Because
we generally cannot determine at the time we make a distribution whether the distribution will exceed our current and accumulated earnings
and profits, it is expected that the applicable withholding agent normally will withhold tax on the entire amount of any distribution
at the same rate applicable to withholding on a dividend. To the extent that we do not do so, we nevertheless may withhold at a rate
of 15% on any portion of a distribution not subject to withholding at a rate of 30%. However, a non-U.S. holder may obtain a refund of
amounts that the applicable withholding agent withheld if we later determine that a distribution in fact exceeded our current and accumulated
earnings and profits.
For any year in which we qualify as a REIT, a
non-U.S. holder may incur tax on distributions that are attributable to gain from our sale or exchange of “United States real property
interests” under special provisions of the U.S. federal income tax laws known as “FIRPTA.” The term “United States
real property interests” includes interests in real property and shares in corporations at least 50% of whose assets consist of
interests in real property. Under the FIRPTA rules, a non-U.S. holder is taxed on distributions attributable to gain from sales of United
States real property interests as if the gain were effectively connected with a U.S. business of the non-U.S. holder. A non-U.S. holder
thus would be taxed on such a distribution at the normal capital gain rates applicable to U.S. holders, subject to applicable alternative
minimum tax and a special alternative minimum tax in the case of a nonresident alien individual. A non-U.S. corporate holder not entitled
to treaty relief or exemption also may be subject to the 30% branch profits tax on such a distribution. Unless a non-U.S. holder qualifies
for the exception described in the next paragraph, the applicable withholding agent must withhold 21% of any such distribution that we
could designate as a capital gain dividend. A non-U.S. holder may receive a credit against such holder’s tax liability for the
amount withheld.
Capital gain distributions on our shares of capital
stock that are attributable to our sale of real property will be treated as ordinary dividends, rather than as gain from the sale of
a United States real property interest, if (i) the class of capital stock is “regularly traded” on an established securities
market in the United States and (ii) the non-U.S. holder does not own more than 10% of such class of capital stock during the one-year
period preceding the distribution date. As a result, non-U.S. holders generally would be subject to withholding tax on such capital gain
distributions in the same manner as they are subject to withholding tax on ordinary dividends. If a class of our capital stock is not
regularly traded on an established securities market in the United States or the non-U.S. holder owned more than 10% of such class of
capital stock at any time during the one-year period prior to the distribution, capital gain distributions that are attributable to our
sale of real property would be subject to tax under FIRPTA. Moreover, if a non-U.S. holder disposes of our capital stock during the 30-day
period preceding a dividend payment, and such non-U.S. holder (or a person related to such non-U.S. holder) acquires or enters into a
contract or option to acquire our capital stock within 61 days of the 1st day of the 30 day period described above, and any portion
of such dividend payment would, but for the disposition, be treated as a United States real property interest capital gain to such non-U.S.
holder, then such non-U.S. holder will be treated as having United States real property interest capital gain in an amount that, but
for the disposition, would have been treated as United States real property interest capital gain.
A non-U.S. holder generally will not incur tax
under FIRPTA with respect to gain realized upon a disposition of our shares of capital stock as long as we are not a United States real
property holding corporation during a specified testing period. If at least 50% of a REIT’s assets are United States real property
interests, then the REIT will be a United States real property holding corporation. We anticipate that we will be classified as a United
States real property holding corporation based on our investment strategy and current investments. In that case, gains from the sale
of our shares of capital stock by a non-U.S. holder could be subject to a FIRPTA tax. However, a non-U.S. holder generally would not
incur tax under FIRPTA on gain from the sale of our shares of capital stock if we were a “domestically controlled qualified investment
entity.” A domestically controlled qualified investment entity includes a REIT in which, at all times during a specified testing
period, less than 50% in value of its shares are held directly or indirectly by non-U.S. persons.
If a class of our capital stock is regularly
traded on an established securities market, an additional exception to the tax under FIRPTA will be available with respect to such class
of our capital stock, even if we do not qualify as a domestically controlled qualified investment entity at the time the non-U.S. holder
sells such capital stock. Under that exception, the gain from such a sale by such a non-U.S. holder will not be subject to tax under
FIRPTA if (i) the class of our capital stock is treated as regularly traded under applicable Treasury Regulations on an established
securities market and (ii) the non-U.S. holder owned, actually or constructively, 10% or less of such class of our capital stock
at all times during a specified testing period. If the gain on the sale of our capital stock were taxed under FIRPTA, a non-U.S. holder
would be taxed on that gain in the same manner as U.S. holders, subject to applicable alternative minimum tax and a special alternative
minimum tax in the case of nonresident alien individuals.
In addition, distributions to “qualified
shareholders” (generally, certain non-U.S. publicly traded shareholders that meet certain record-keeping and other requirements)
are exempt from FIRPTA, except to the extent owners of such 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. holders
should consult their tax advisors regarding the application of these rules.
Backup withholding will generally not apply to
payments of dividends made by us or our paying agents, in their capacities as such, to a non-U.S. holder provided that the non-U.S. holder
furnishes to the applicable withholding agent the required certification as to its non-U.S. status, such as providing a valid IRS Form W-8BEN
or W-8BEN-E or W-8ECI, or certain other requirements are met. Notwithstanding the foregoing, backup withholding may apply if the applicable
withholding agent has actual knowledge, or reason to know, that the holder is a U.S. person that is not an exempt recipient. Payments
of the net proceeds from a disposition or a redemption effected outside the United States by a non-U.S. holder made by or through a foreign
office of a broker generally will not be subject to information reporting or backup withholding. However, information reporting (but
not backup withholding) generally will apply to such a payment if the broker has certain connections with the U.S. unless the broker
has documentary evidence in its records that the beneficial owner is a non-U.S. holder and specified conditions are met or an exemption
is otherwise established. Payment of the net proceeds from a disposition by a non-U.S. holder of shares of capital stock made by or through
the U.S. office of a broker is generally subject to information reporting and backup withholding unless the non-U.S. holder certifies
under penalties of perjury that it is not a U.S. person and satisfies certain other requirements, or otherwise establishes an exemption
from information reporting and backup withholding.
Backup withholding is not an additional tax.
Any amounts withheld under the backup withholding rules may be refunded or credited against the non-U.S. holder’s U.S. federal
income tax liability if certain required information is timely furnished to the Service. Non-U.S. holders are urged to consult their
own tax advisors regarding application of backup withholding to them and the availability of, and procedure for obtaining an exemption
from, backup withholding.
Foreign Account Tax Compliance Act
The Foreign Account Tax Compliance Act, or FATCA,
imposes a U.S. federal withholding tax on certain types of payments made to “foreign financial institutions” and certain
other non-U.S. entities unless certain due diligence, reporting, withholding, and certification obligation requirements are satisfied.
FATCA generally imposes a U.S. federal withholding tax at a rate of 30% on dividends on, and gross proceeds from the sale or other disposition
of, our stock if paid to a foreign entity unless either (i) the foreign entity is a “foreign financial institution”
that undertakes certain due diligence, reporting, withholding, and certification obligations, or in the case of a foreign financial institution
that is a resident in a jurisdiction that has entered into an intergovernmental agreement to implement FATCA, the entity complies with
the diligence and reporting requirements of such agreement, (ii) the foreign entity is not a “foreign financial institution”
and identifies certain of its U.S. investors, or (iii) the foreign entity otherwise is excepted under FATCA. If we determine withholding
is appropriate in respect of our capital stock, we may withhold tax at the applicable statutory rate, and we will not pay any additional
amounts in respect of such withholding. Under recently released proposed Treasury Regulations, gross proceeds from a sale or other disposition
of our capital stock are not subject to FATCA withholding. In the preamble to these proposed Treasury Regulations, the Internal
Revenue Service has stated that taxpayers may generally rely on the proposed Treasury Regulations until final Treasury Regulations are
issued.
If withholding is required under FATCA on a payment,
holders of our capital stock that otherwise would not be subject to withholding (or that otherwise would be entitled to a reduced rate
of withholding) generally will be required to seek a refund or credit from the Service to obtain the benefit of such exemption or reduction
(provided that such benefit is available). Stockholders should consult their own tax advisors regarding the effect of FATCA on an investment
in our capital stock.
Redemption and Conversion of Preferred
Stock
Cash
Redemption of Preferred Stock. A redemption of preferred stock will be treated for federal income
tax purposes as a distribution taxable as a dividend (to the extent of our current and accumulated earnings and profits), unless the
redemption satisfies one of the tests set forth in Section 302(b) of the Code and is therefore treated as a sale or exchange
of the redeemed shares. Such a redemption will be treated as a sale or exchange if it (i) is “substantially disproportionate”
with respect to the holder (which will not be the case if only non-voting preferred stock is redeemed), (ii) results in a “complete
termination” of the holder’s equity interest in us, or (iii) is “not essentially equivalent to a dividend”
with respect to the holder, all within the meaning of Section 302(b) of the Code.
In determining whether any of these tests has
been met, shares of our common stock and preferred stock considered to be owned by the holder by reason of certain constructive ownership
rules set forth in the Code, as well as shares of our common stock and preferred stock actually owned by the holder, must generally
be taken into account. If a holder of preferred stock owns (actually and constructively) no shares of our outstanding common stock or
an insubstantial percentage thereof, a redemption of shares of preferred stock of that holder is likely to qualify for sale or exchange
treatment because the redemption would be “not essentially equivalent to a dividend.” However, the determination as to whether
any of the alternative tests of Section 302(b) of the Code will be satisfied with respect to any particular holder of preferred
stock depends upon the facts and circumstances at the time the determination must be made. We urge prospective holders of preferred stock
to consult their own tax advisors to determine such tax treatment.
If a redemption of preferred stock is not treated
as a distribution taxable as a dividend to a particular holder, it will be treated as a taxable sale or exchange by that holder. As a
result, the holder will recognize gain or loss for federal income tax purposes in an amount equal to the difference between (i) the
amount of cash and the fair market value of any property received (less any portion thereof attributable to accumulated and declared
but unpaid dividends, which will be taxable as a dividend to the extent of our current and accumulated earnings and profits) and (ii) the
holder’s adjusted tax basis in the shares of the preferred stock. Such gain or loss will be capital gain or loss if the shares
of preferred stock were held as a capital asset, and will be long-term gain or loss if such shares were held for more than one year.
If a redemption of preferred stock is treated as a distribution taxable as a dividend, the amount of the distribution will be measured
by the amount of cash and the fair market value of any property received by the holder, and the holder’s adjusted tax basis in
the redeemed shares of the preferred stock will be transferred to the holder’s remaining shares of our stock. If the holder owns
no other shares of our stock, such basis may, under certain circumstances, be transferred to a related person or it may be lost entirely.
Conversion
of Preferred Stock into Common Stock. In general, no gain or loss will be recognized for federal
income tax purposes upon conversion of the preferred stock solely into shares of common stock. The basis that a stockholder will have
for tax purposes in the shares of common stock received upon conversion will be equal to the adjusted basis for the stockholder in the
shares of preferred stock so converted, and provided that the shares of preferred stock were held as a capital asset, the holding period
for the shares of common stock received would include the holding period for the shares of preferred stock converted. A stockholder will,
however, generally recognize gain or loss on the receipt of cash in lieu of fractional shares of common stock in an amount equal to the
difference between the amount of cash received and the stockholder’s adjusted basis for tax purposes in the preferred stock for
which cash was received. Furthermore, under certain circumstances, a stockholder of shares of preferred stock may recognize gain or dividend
income to the extent that there are accumulated and unpaid dividends on the shares at the time of conversion into common stock.
Adjustments
to Conversion Price. Adjustments in the conversion price, or the failure to make such adjustments,
pursuant to the anti-dilution provisions of the preferred stock or otherwise, may result in constructive distributions to the stockholders
of preferred stock that could, under certain circumstances, be taxable to them as dividends pursuant to Section 305 of the Code.
If such a constructive distribution were to occur, a stockholder of preferred stock could be required to recognize ordinary income for
tax purposes without receiving a corresponding distribution of cash. Under proposed regulations, such constructive distributions, if
any, would generally be deemed to occur on the date adjustments to the conversion price are made in accordance with the terms of the
relevant series of preferred stock.
Warrants
Upon the exercise of a warrant for common stock,
a holder will not recognize gain or loss and will have a tax basis in the common stock received equal to the tax basis in such stockholder’s
warrant plus the exercise price of the warrant. The holding period for the common stock purchased pursuant to the exercise of a warrant
will begin on the day following the date of exercise and will not include the period that the stockholder held the warrant.
Upon a sale or other disposition of a warrant,
a holder will recognize capital gain or loss in an amount equal to the difference between the amount realized and the holder’s
tax basis in the warrant. Such a gain or loss will be long term if the holding period is more than one year. In the event that a warrant
lapses unexercised, a holder will recognize a capital loss in an amount equal to his tax basis in the warrant. Such loss will be long
term if the warrant has been held for more than one year.
State, Local and Foreign Taxes
We and/or our subsidiaries and holders of securities
may be subject to taxation by various states, localities or foreign jurisdictions, including those in which we, our subsidiaries, or
holders of our securities transact business, own property or reside. We or our subsidiaries may own properties located in numerous jurisdictions
and may be required to file tax returns in some or all of those jurisdictions. The state, local and foreign tax treatment of us and holders
of our securities may differ from the U.S. federal income tax treatment of us and holders of our securities described above. Consequently,
holders of our securities should consult their tax advisors regarding the application and effect of state, local and foreign income and
other tax laws upon an investment in our securities.
Legislative or Other Actions Affecting REITs
The rules dealing with U.S. federal income
taxation are constantly under review by persons involved in the legislative process and by the Service and the U.S. Treasury Department
and may be changed at any time, possibly with retroactive effect. No assurance can be given as to whether, when, or in what form, the
U.S. federal income tax laws applicable to us and our shareholders may be enacted. Changes to the U.S. federal income tax laws and interpretations
of U.S. federal tax laws could adversely affect an investment in our shares.
Prospective investors are urged to consult with
their tax advisors regarding the potential effects of legislative, regulatory, or administrative developments on an investment in our
shares.
ERISA CONSIDERATIONS
The following is a summary of some considerations
associated with the purchase and holding of our securities by (i) an employee benefit plan (as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) that is subject to Title I of ERISA), (ii) a
plan (as defined in Section 4975 of the Code) that is subject to Section 4975 of the Code (including IRAs and Keogh plans) or
(iii) any entity deemed to hold plan assets of any of the foregoing by virtue of the plan’s investment in the entity (each
such plan, account and entity described above is referred to herein as a “Plan”), or any employee benefit plan that is subject
to any federal, state, local or other law that is substantially similar to the foregoing provisions of ERISA and the Code (“Similar
Law”). This summary is based on current provisions of ERISA and the Code, each as amended through the date of this prospectus, and
the relevant regulations, opinions and other authority issued by the Department of Labor and the Service. We cannot assure you that there
will not be adverse tax or labor decisions or legislative, regulatory or administrative changes that would significantly modify the statements
expressed herein. Any such changes may apply to transactions entered into prior to the date of their enactment.
General Fiduciary Obligations
Under ERISA and the Code, a person generally
is a fiduciary with respect to a Plan if, among other things, the person has discretionary authority or control over the administration
of the Plan or the management or disposition of Plan assets or provides investment advice for a fee or other compensation (direct or
indirect) with respect to the Plan. Each fiduciary of a Plan subject to ERISA (such as a profit sharing, Section 401(k) or
pension plan) or any other retirement plan or account subject to Section 4975 of the Code, such as an IRA, seeking to invest plan
assets in our securities must consider, taking into account the facts and circumstances of each such Plan, among other matters:
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whether the investment is consistent
with the applicable provisions of ERISA and the Code; |
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whether, under the facts and circumstances
pertaining to the Plan in question, the fiduciary’s responsibility to the Plan has been satisfied; |
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whether the investment will produce
an unacceptable amount of “unrelated business taxable income” (“UBTI”) to the Plan; and |
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the need to value the assets of
the Plan annually. |
Under ERISA, a Plan fiduciary’s responsibilities
include the following duties:
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to act solely in the interest of
plan participants and beneficiaries and for the exclusive purpose of providing benefits to them, as well as defraying reasonable
expenses of plan administration; |
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to invest plan assets prudently; |
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to diversify the investments of
the plan, unless it is clearly prudent not to do so; |
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to ensure sufficient liquidity for
the plan; |
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to ensure that plan investments
are made in accordance with plan documents; and |
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to consider whether an investment
would constitute or give rise to a non-exempt prohibited transaction under ERISA or the Code. |
ERISA also requires that, with certain exceptions,
the assets of an employee benefit plan be held in trust and that the trustee, or a duly authorized named fiduciary or investment manager,
have exclusive authority and discretion to manage and control the assets of the plan. In considering an investment in our securities,
a Plan fiduciary should consider whether such an investment is appropriate for the Plan, taking into account such fiduciary obligations
described above.
Prohibited Transactions
Generally, both ERISA and the Code prohibit Plans
from engaging in certain transactions involving Plan assets with specified parties, such as sales or exchanges or leasing of property,
loans or other extensions of credit, furnishing goods or services, or transfers to, or use of, plan assets, unless an exemption is available.
The specified parties are referred to as “parties-in-interest” under ERISA and as “disqualified persons” under
the Code. A party in interest or disqualified person who engages in a non-exempt prohibited transaction may be subject to excise taxes
and other penalties and liabilities under ERISA and the Code. In addition, the fiduciary of a Plan that engages in a non-exempt prohibited
transaction may be subject to penalties and liabilities under ERISA and the Code, including an obligation to restore to the Plan any
profits they realized as a result of the transaction or breach and make up for any losses incurred by the Plan as a result of the transaction
or breach. With respect to an IRA that invests in our securities, the occurrence of a non-exempt prohibited transaction involving the
individual who established the IRA, or his or her beneficiary, would cause the IRA to lose its tax-exempt status under Section 408(e)(2) of
the Code. Accordingly, the fiduciary of a Plan or any other person making investment decisions for a Plan should consider the application
of the prohibited transaction rules (and the available exemptions, if any) of ERISA and the Code prior to making any decision to
purchase and hold our securities. There can be no assurance that the conditions of any of the available prohibited transaction exemptions
will be satisfied. In addition, if we are deemed to hold plan assets (as described below), then our management could be characterized
as fiduciaries with respect to such assets, and each would be deemed to be a party-in-interest under ERISA and a disqualified person
under the Code with respect to investing Plans. Whether or not we are deemed to hold plan assets, if we or our affiliates are affiliated
with a Plan investor, we might be a disqualified person or party-in-interest with respect to such Plan investor, resulting in a non-exempt
prohibited transaction merely upon investment by such Plan in our securities.
Plan Asset Considerations
As noted above, if we are deemed to hold
“plan assets” then our management could be characterized as fiduciaries under ERISA which could create the potential for
non-exempt prohibited transactions under regulations promulgated by the Department of Labor (the “Plan Assets
Regulation”), when a Plan makes an equity investment in an entity, the assets of such Plan include not only the equity
interest, but also include an undivided interest in the underlying assets of the entity, unless one of the exceptions to this
general rule applies.
In the event that our underlying assets were treated
as the assets of investing Plans, our management would be treated as fiduciaries with respect to each Plan that invests in our securities
and an investment in our securities might constitute an ineffective delegation by such Plans of fiduciary responsibility to our advisors,
and expose the fiduciary of the Plan to co-fiduciary liability under ERISA for any breach by our advisor of the fiduciary duties mandated
under ERISA. Further, if our assets are deemed to be “plan assets,” an investment by an IRA in our securities might be deemed
to result in an impermissible commingling of IRA assets with other property.
If our advisor or its affiliates were treated
as fiduciaries with respect to Plan holders of our securities, the prohibited transaction restrictions of ERISA and the Code would apply
to any transaction involving our assets. These restrictions could, for example, require that we avoid transactions with persons that
are affiliated with or related to us or our affiliates or require that we restructure our activities in order to obtain an administrative
exemption from the prohibited transaction restrictions. Alternatively, we might have to provide Plan holders of our securities with the
opportunity to sell their securities to us or we might dissolve.
However, as mentioned above, the Plan Assets Regulation
provides exeptions to the general rule that the underlying assets of an entity, such as a REIT, will be treated as assets of a Plan investing
therein. Two such exceptions are the “publicly-offered securities” exception and the “insignificant participation”
exception, each as described below.
Exception
for “Publicly-Offered Securities.” If a Plan acquires “publicly-offered securities,”
the assets of the issuer of the securities will not be deemed to be “plan assets” under the Plan Assets Regulation. A publicly-offered
security must be:
| |
· |
(i) sold as part of a public
offering registered under the Securities Act and be part of a class of securities registered under the Exchange Act within a specified
time period or (ii) sold as part of a class of securities registered under Section 12(b) or 12(g) of the Exchange
Act; |
| |
· |
part of a class of securities that
is owned by 100 or more persons who are independent of the issuer and one another; and |
Whether a security is “freely transferable”
depends upon the particular facts and circumstances. The Plan Assets Regulation provides several examples of restrictions on transferability
that, absent unusual circumstances, will not prevent the rights of ownership in question from being considered “freely transferable”
if the minimum investment is $10,000 or less. Where the minimum investment in a public offering of securities is $10,000 or less, the
presence of the following restrictions on transfer will not ordinarily affect a determination that such securities are “freely
transferable”:
| |
· |
any restriction on, or prohibition
against, any transfer or assignment that would either result in a termination or reclassification of the entity for federal or state
tax purposes or that would violate any state or federal statute, regulation, court order, judicial decree or rule of law; |
| |
· |
any requirement that not less than
a minimum number of shares or units of such security be transferred or assigned by any investor, provided that such requirement does
not prevent transfer of all of the then remaining shares or units held by an investor; |
| |
· |
any prohibition against transfer
or assignment of such security or rights in respect thereof to an ineligible or unsuitable investor; and |
| |
· |
any requirement that reasonable
transfer or administrative fees be paid in connection with a transfer or assignment. |
Our structure has been established with the intent
to satisfy the criteria to be a “publicly-offered security”, however, there is no assurance that our securities will meet
such requirement.
Exception
for Insignificant Participation by Plan Investors. The Plan Assets Regulation provides that the assets of
an entity will not be deemed to be the assets of a Plan investing in such entity if equity participation in the entity by employee benefit
plans, including Plans, is not significant. The Plan Assets Regulation provides that equity participation in an entity by Plan investors
is “significant” if at any time 25% or more of the value of any class of equity interest is held by Plan investors. In calculating
the value of a class of equity interests, the value of any equity interests held by us or any of our affiliates must be excluded. We
cannot provide any assurance that Plan investors will hold less than 25% of the value of our securities.
Other Prohibited Transactions
Regardless of whether our securities qualify
for the “publicly-offered securities” exception of the Plan Assets Regulation, a prohibited transaction could occur if we,
our advisors, any selected broker-dealer or any of their affiliates is a fiduciary (within the meaning of Section 3(21) of ERISA)
with respect to any Plan purchasing our securities. Accordingly, unless an administrative or statutory exemption applies, securities
should not be purchased by a Plan with respect to which any of the above persons is a fiduciary.
Further, certain employee benefit plans, such
as governmental, non-U.S. or church plans, generally are not subject to the requirements of Title I of ERISA of relevant Code provisions;
provided, however, such plans may be subject to Similar Laws that affect their ability to acquire or hold our securities. Such plans
should consult their own advisors regarding the applicability of any such Similar Laws.
Representation
By acceptance of any of our securities, each
purchaser and subsequent transferee of our securities will be deemed to have represented and warranted that either (i) no portion
of the assets used by such purchaser or transferee to acquire or hold such securities constitutes assets of any Plan or a plan subject
to Similar Law or (ii) the purchase and holding of such securities by such purchaser or transferee will not constitute a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or similar violation under any applicable Similar
Laws.
The sale of our securities to a Plan is in no
respect a representation by us or any other person associated with the offering that such an investment meets all relevant legal requirements
with respect to investments by Plans generally or any particular Plan, or that such an investment is appropriate for Plans generally
or any particular Plan.
The preceding discussion is only a summary of
certain ERISA and Code implications of an investment in the securities and does not purport to be complete. Prospective investors should
consult with their own legal, tax, financial and other advisors prior to investing to review these implications in light of such investor’s
particular circumstances.
Each purchaser or transferee that is or is
acting on behalf of a Plan or a plan subject to Similar Law should consult with its legal advisor concerning the potential consequences
to the Plan under ERISA, Section 4975 of the Code or applicable Similar Law of an investment in our securities.
SELLING
SECURITY HOLDERS
Information about selling security holders, where
applicable, will be set forth in a prospectus supplement, in a post-effective amendment, or in filings we make with the SEC under the
Exchange Act which are incorporated by reference.
PLAN OF DISTRIBUTION
We may sell securities in any one or more of
the following ways from time to time: (1) through agents; (2) to or through underwriters; (3) through brokers or dealers;
(4) directly to purchasers, including through a specific bidding, auction or other process; or (5) through a combination of
any of these methods of sale. The applicable prospectus supplement and/or other offering materials will contain the terms of the transaction,
the name or names of any underwriters, dealers, or agents and the respective amounts of securities underwritten or purchased by them,
the initial public offering price of the securities, and the applicable agent’s commission, dealer’s purchase price or underwriter’s
discount. Any dealers and/or 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.
Any initial offering price, dealer purchase price,
discount or commission may be changed from time to time.
The securities may be distributed from time to
time in one or more transactions, at negotiated prices, at a fixed price or fixed prices (that may be subject to change), at market prices
prevailing at the time of sale, at various prices determined at the time of sale or at prices related to prevailing market prices.
Offers to purchase securities may be solicited
directly by us or by agents designated by us from time to time. Any such agent may be deemed to be an underwriter, as that term is defined
in the Securities Act, of the securities so offered and sold.
If underwriters are utilized in the sale of any
securities in respect of which this prospectus is being delivered, such securities will be acquired by the underwriters for their own
account and may be resold from time to time in one or more transactions, including negotiated transactions, at fixed public offering
prices or at varying prices determined by the underwriters at the time of sale. Securities may be offered to the public either through
underwriting syndicates represented by managing underwriters or directly by one or more underwriters. If any underwriter or underwriters
are utilized in the sale of securities, unless otherwise indicated in the applicable prospectus supplement and/or other offering material,
the obligations of the underwriters are subject to certain conditions precedent, and the underwriters will be obligated to purchase all
such securities if they purchase any of them.
If a dealer is utilized in the sale of the securities
in respect of which this prospectus is delivered, we will sell such securities to the dealer, as principal. The dealer may then resell
such securities to the public at varying prices to be determined by such dealer at the time of resale. Transactions through brokers or
dealers may include block trades in which brokers or dealers will attempt to sell shares as agent but may position and resell as principal
to facilitate the transaction or in cross trades, in which the same broker or dealer acts as agent on both sides of the trade. Any such
dealer may be deemed to be an underwriter, as such term is defined in the Securities Act, of the securities so offered and sold.
Offers to purchase securities may be solicited
directly by us and the sale thereof may be made by us directly to institutional investors or others, who may be deemed to be underwriters
within the meaning of the Securities Act with respect to any resale thereof.
Agents, underwriters and dealers may be entitled
under relevant agreements with us to indemnification by us against certain liabilities, including liabilities under the Securities Act,
or to contribution with respect to payments which such agents, underwriters and dealers may be required to make in respect thereof. The
terms and conditions of any indemnification or contribution will be described in the applicable prospectus supplement and/or other offering
material.
We may enter into derivative, sale or forward
sale transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions.
If the applicable prospectus supplement and/or other offering material indicates, in connection with those transactions, the third parties
may sell securities covered by this prospectus and the applicable prospectus supplement and/or other offering material, including in
short sale transactions and by issuing securities not covered by this prospectus but convertible into, exchangeable for or representing
beneficial interests in securities covered by this prospectus, or the return of which is derived in whole or in part from the value of
such securities. The third parties may use securities received under derivative, sale or forward sale transactions or securities pledged
by us or borrowed from us or others to settle those sales or to close out any related open borrowings of stock, and may use securities
received from us in settlement of those transactions to close out any related open borrowings of stock. The third party in such sale
transactions will be an underwriter and will be identified in the applicable prospectus supplement (or a post-effective amendment) and/or
other offering material.
Underwriters, broker-dealers or agents may receive
compensation in the form of commissions, discounts or concessions from us. Underwriters, broker-dealers or agents may also receive compensation
from the purchasers of shares for whom they act as agents or to whom they sell as principals, or both. Compensation as to a particular
underwriter, broker-dealer or agent will be in amounts to be negotiated in connection with transactions involving shares and might be
in excess of customary commissions. In effecting sales, broker-dealers engaged by us may arrange for other broker-dealers to participate
in the resales.
Any securities offered other than common stock
will be a new issue and, other than the common stock, which is listed on the New York Stock Exchange, will have no established trading
market. We may elect to list any series of securities on an exchange, and in the case of the common stock, on any additional exchange,
but, unless otherwise specified in the applicable prospectus supplement and/or other offering material, we shall not be obligated to
do so. No assurance can be given as to the liquidity of the trading market for any of the securities.
Agents, underwriters and dealers may engage in
transactions with, or perform services for, us and/or our subsidiaries in the ordinary course of business.
Any underwriter may engage in overallotment,
stabilizing transactions, short covering transactions and penalty bids in accordance with Regulation M under the Exchange Act. 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. 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 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. An underwriter may carry out these transactions on the New York Stock Exchange, in the over-the-counter market
or otherwise.
The place and time of delivery for securities
will be set forth in the accompanying prospectus supplement and/or other offering material for such securities.
LEGAL MATTERS
The validity of the securities covered by this
prospectus, and certain tax matters will be passed upon for us by Foley & Lardner LLP, Tampa, Florida.
EXPERTS
The consolidated financial statements and schedule
of Innovative Industrial Properties, Inc. as of December 31, 2024 and 2023, and for each of the three years in the period ended
December 31, 2024, and management’s assessment of the effectiveness of internal control over financial reporting as of December 31,
2024, incorporated by reference in this prospectus and in the registration statement, have been so incorporated in reliance on the reports
of BDO USA, P.C., an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND ADDITIONAL
INFORMATION
We file annual, quarterly and current reports,
proxy statements and other information with the SEC under the Exchange Act. Our Operating Partnership do not currently file separate
reports, proxy statements or other information with the SEC.
We will provide to each person, including any
beneficial owner, to whom our prospectus is delivered, upon request, a copy of any or all of the information that we have incorporated
by reference into our prospectus but not delivered with our prospectus. To receive a free copy of any of the documents incorporated by
reference in our prospectus, other than exhibits, unless they are specifically incorporated by reference in those documents, call or
write us at:
Innovative Industrial Properties, Inc.
1389 Center Drive, Suite 200
Park City, UT 84098
Attn: Secretary
(858) 997-3332
We maintain a website at www.innovativeindustrialproperties.com. Information
contained on, or accessible through our website is not incorporated by reference into and does not constitute a part of this prospectus
or any other report or documents we file with or furnish to the SEC.
This prospectus is part of a registration statement
on Form S-3 that we filed with the SEC. This prospectus does not contain all of the information set forth in the registration statement
and exhibits and schedules to the registration statement. For further information with respect to our company and our securities, reference
is made to the registration statement, including the exhibits and schedules thereto. Statements contained in this prospectus as to the
contents of any contract or other document referred to in this prospectus are not necessarily complete and, where that contract or other
document has been filed as an exhibit to the registration statement, each statement in this prospectus is qualified in all respects by
the exhibit to which the reference relates. Copies of the registration statement, including the exhibits and schedules to the registration
statement, may be examined without charge at the public reference room of the SEC, 100 F Street, N.E., Washington, D.C. 20549. Information
about the operation of the public reference room may be obtained by calling the SEC at 1-800-SEC-0300. Copies of all or a portion of
the registration statement can be obtained from the public reference room of the SEC upon payment of prescribed fees. Our SEC filings,
including our registration statement, are also available to you, free of charge, on the SEC’s website, www.sec.gov.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14.
Other Expenses of Issuance and Distribution.
The following table itemizes the expenses incurred
by us in connection with the issuance and registration of the securities being registered hereunder.
| SEC registration fee | |
$ | (1 | ) |
| FINRA filing fees | |
| (2 | ) |
| NYSE listing fees | |
| (2 | ) |
| Printing and mailing expenses | |
| (2 | ) |
| Legal fees and expenses | |
| (2 | ) |
| Accounting fees and expenses | |
| (2 | ) |
| Transfer agent fees | |
| (2 | ) |
| Miscellaneous | |
| (2 | ) |
| Total | |
$ | (2 | ) |
| |
(1) |
Deferred in accordance with Rule 456(b) and
457(r). |
| |
(2) |
These fees are calculated based on the number of issuances
and amount of securities offered and accordingly cannot be estimated at this time. |
Item 15.
Indemnification of Directors and Officers.
Maryland Registrant
For purposes of this section, references to
“we,” “our,” “us,” and “our company” refer to Innovative Industrial Properties, Inc.,
a Maryland corporation.
Maryland law permits a Maryland corporation to
include in its charter a provision eliminating the liability of its directors and officers to the corporation and its stockholders for
money damages except for liability resulting from actual receipt of an improper benefit or profit in money, property or services or active
and deliberate dishonesty that was established by a final judgment and was material to the cause of action. Our charter contains a provision
that eliminates the liability of our directors and officers to the maximum extent permitted by Maryland law.
The MGCL requires us (unless our charter provides
otherwise, which our charter does not) to indemnify a director or officer who has been successful, on the merits or otherwise, in the
defense of any proceeding to which he or she is made a party by reason of his or her service in that capacity. The MGCL permits us to
indemnify our present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable
expenses actually incurred by them in connection with any proceeding to which they may be made or threatened to be made a party by reason
of their service in those or other capacities unless it is established that:
| |
· |
act or omission of the director or officer was material
to the matter giving rise to the proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate
dishonesty; |
| |
· |
the director or officer actually received an improper
personal benefit in money, property or services; or |
| |
· |
in the case of any criminal proceeding, the director
or officer had reasonable cause to believe that the act or omission was unlawful. |
Under the MGCL, we may not indemnify a director
or officer in a suit by us or in our right in which the director or officer was adjudged liable to us or in a suit in which the director
or officer was adjudged liable on the basis that personal benefit was improperly received. Nevertheless, a court may order indemnification
if it determines that the director or officer is fairly and reasonably entitled to indemnification, even though the director or officer
did not meet the prescribed standard of conduct or was adjudged liable on the basis that personal benefit was improperly received. However,
indemnification for an adverse judgment in a suit by us or in our right, or for a judgment of liability on the basis that personal benefit
was improperly received, is limited to expenses.
In addition, the MGCL permits us to advance reasonable
expenses to a director or officer upon our receipt of:
| |
· |
written affirmation by the director or officer of his
or her good faith belief that he or she has met the standard of conduct necessary for indemnification by us; and |
| |
· |
a written undertaking by the director or officer or
on the director’s or officer’s behalf to repay the amount paid or reimbursed by us if it is ultimately determined that
the director or officer did not meet the standard of conduct. |
Our charter authorizes us to obligate ourselves
and our bylaws obligate us, to the fullest extent permitted by Maryland law in effect from time to time, to indemnify and, without requiring
a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of final
disposition of a proceeding to:
| |
· |
any present or former director or officer who is made
or threatened to be made a party to or witness in the proceeding by reason of his or her service in that capacity; or |
| |
· |
any individual who, while a director or officer of
our company and at our request, serves or has served as a director, officer, partner, manager, member or trustee of another corporation,
REIT, partnership, limited liability company, joint venture, trust, employee benefit plan or any other enterprise and who is made
or threatened to be made a party to or witness in the proceeding by reason of his or her service in that capacity. |
Our charter and bylaws, with the approval of
our board of directors, also permit us to indemnify and advance expenses to any individual who served any predecessor of our company,
in any of the capacities described above and any employee or agent of our company or a predecessor of our company.
We have entered into indemnification agreements
with each of our executive officers and directors whereby we agree to indemnify such executive officers and directors to the maximum
extent permitted by Maryland law against all expenses and liabilities, subject to limited exceptions. The indemnification agreements
require us to indemnify the director or officer party thereto, the indemnitee, against all judgments, penalties, fines and amounts paid
in settlement and all expenses actually and reasonably incurred by the indemnitee or on his or her behalf in connection with a proceeding,
unless it is established that one of the exceptions to indemnification under Maryland law set forth above exists. The indemnification
agreements also provide that we agree to hold harmless and indemnify these persons against expenses incurred by reason of the fact that
such person is or was a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign
or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that
such person is or was serving in such capacity at our request, including, without limitation, the Delaware Registrants (as defined below).
The indemnification agreements prohibit indemnification
in connection with a proceeding that is brought by or in the right of our company if the director or officer is adjudged liable to us.
In addition, the indemnification agreements require
us to advance all reasonable expenses incurred by the indemnitee within ten days of the receipt by us of a statement from the indemnitee
requesting the advance, provided the statement evidences the expenses and is accompanied by:
| |
· |
a written affirmation of the indemnitee’s good
faith belief that he or she has met the applicable standards of conduct necessary for indemnification, and |
| |
· |
a written undertaking by or on behalf of the Indemnitee
to repay the amount if it is ultimately determined that the standard of conduct was not met. |
The indemnification agreements provide for procedures
for the determination of entitlement to indemnification, including requiring such determination be made by independent counsel after
a change of control of us.
In addition, we have purchased directors’
and officers’ liability insurance for the benefit of our directors and officers.
Insofar as the foregoing provisions permit indemnification
of directors, officers or persons controlling us for liability arising under the Securities Act, we have been informed that, in the opinion
of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Delaware Registrants
IIP Operating Partnership, LP is a limited partnership
organized under the laws of the State of Delaware (the “Delaware Registrant”).
Section 17-108 of the Delaware Revised Uniform
Limited Partnership Act provides that a limited partnership may, and shall have the power to, indemnify and hold harmless any partner
or other person from and against any and all claims and demands whatsoever, subject to such standards and restrictions set forth in the
partnership agreement.
In addition, our directors and officers are indemnified
for specified liabilities and expenses pursuant to the partnership agreement of IIP Operating Partnership, LP, the partnership in which
IIP serves as sole general partner.
The description of the indemnification agreements
in this Item 15 under the caption “Maryland Registrant” is incorporated herein by reference.
Insofar as the foregoing provisions permit indemnification
of directors, officers or persons controlling us for liability arising under the Securities Act, we have been informed that, in the opinion
of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Item 16.
Exhibits. See
Exhibit Index below.
Item 17.
Undertakings.
| (a) |
The undersigned registrant hereby undertakes: |
| |
(1) |
To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration statement: |
| |
(i) |
To include any prospectus required by Section 10(a)(3) of
the Securities Act; |
| |
(ii) |
To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration
Fee” table in the effective registration statement; and |
| |
(iii) |
To include any material information with respect to
the plan of distribution not previously disclosed in the registration statement or any material change to such information in this
registration statement; |
provided,
however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) do not apply if the information required to
be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the registration
statement or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of 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 the 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, in a primary offering of securities
of the 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 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 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 registrant to the purchaser. |
| (b) |
The undersigned registrant hereby undertakes 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 Section 15(d) of the Securities 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. |
| (c) |
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 Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such
issue. |
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 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 San Diego, state of California, on the 21st day of February, 2025.
| |
INNOVATIVE INDUSTRIAL PROPERTIES, INC. |
| |
|
| |
By: |
/s/
Paul Smithers |
| |
|
Paul Smithers |
| |
|
President and Chief Executive Officer |
| |
IIP OPERATING PARTNERSHIP, LP |
| |
|
| |
By: |
Innovative Industrial Properties, Inc.
Its general partner |
| |
|
| |
By: |
/s/ Paul Smithers |
| |
|
Paul Smithers |
| |
|
President and Chief Executive Officer |
SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person
whose signature appears on the Signature Page to this Registration Statement constitutes and appoints Paul Smithers and David Smith
and each or any of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, including any amendment or registration statement filed pursuant to Rule 462, and to
file the same, with all exhibits hereto, and other documents in connection therewith, with the Securities and Exchange Commission, and
grants unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and
necessary to be done in about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents or his or her substitute or substitutes may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities
Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
| NAME |
|
CAPACITY |
|
DATE |
| |
|
|
|
|
| /s/ Alan Gold |
|
Executive Chairman |
|
February 21, 2025 |
| Alan Gold |
|
|
|
|
| |
|
|
|
|
| /s/ Paul Smithers |
|
President and Chief Executive Officer |
|
February 21, 2025 |
| Paul Smithers |
|
(Principal Executive Officer) |
|
|
| |
|
|
|
|
| /s/ David Smith |
|
Chief Financial Officer and Treasurer |
|
February 21, 2025 |
| David Smith |
|
(Principal Financial Officer) |
|
|
| |
|
|
|
|
| /s/ Andy Bui |
|
Vice President, Chief Accounting Officer |
|
February 21, 2025 |
| Andy Bui |
|
(Principal Accounting Officer) |
|
|
| |
|
|
|
|
| /s/ Gary Kreitzer |
|
Vice Chairman |
|
February 21, 2025 |
| Gary Kreitzer |
|
|
|
|
| |
|
|
|
|
| /s/ Scott Shoemaker |
|
Director |
|
February 21, 2025 |
| Scott Shoemaker |
|
|
|
|
| |
|
|
|
|
| /s/ David Stecher |
|
Director |
|
February 21, 2025 |
| David Stecher |
|
|
|
|
| |
|
|
|
|
| /s/ Mary Curran |
|
Director |
|
February 21, 2025 |
| Mary Curran |
|
|
|
|
EXHIBIT INDEX
The following exhibits are included in this registration
statement on Form S-3 (and are numbered in accordance with Item 601 of Regulation S-K).
| Exhibit |
|
|
| Number |
|
Description
of Exhibit |
| 1.1* |
|
Form of Underwriting Agreement. |
| 4.1 |
|
Form of
Certificate for Common Stock.(1) |
| 4.2** |
|
Form of
Indenture among IIP Operating Partnership, LP, as issuer, Innovative Industrial Properties, Inc., as guarantor, and Argent
Institutional Trust Company, as trustee, and Securities Transfer Corporation, as registrar. |
| 4.3 |
|
Indenture,
dated as of May 25, 2021, among Innovative Industrial Properties, Inc., IIP Operating Partnership, LP, the Subsidiary
Guarantors set forth on the signature page thereto and Argent Institutional Trust Company, as trustee (as successor-in-interest
to GLAS Trust Company LLC), and Securities Transfer Corporation, as registrar (as successor-in-interest to GLAS Trust Company LLC),
including the form of 5.50% Senior Note due 2026.(2) |
| 4.4 |
|
Form of
Note (included in the Indenture filed as Exhibit 4.2). |
| 4.6* |
|
Form of Preferred Stock Certificate. |
| 4.7* |
|
Form of Deposit Agreement and Depositary Receipt
with respect to Depositary Shares. |
| 4.8* |
|
Form of Warrant Certificate. |
| 4.9* |
|
Form of Warrant Agreement. |
| 4.10* |
|
Form of Rights Certificate. |
| 4.11* |
|
Form of Rights Agreement. |
| 4.12* |
|
Form of Unit Certificate. |
| 4.13* |
|
Form of Unit Agreement. |
| 5.1** |
|
Opinion
of Foley & Lardner LLP (including consent of such firm). |
| 8.1** |
|
Tax
Opinion of Foley & Lardner LLP (including consent of such firm). |
| 22.1* |
|
List of Subsidiary Guarantors and Issuers of Guaranteed Securities. |
| 23.1** |
|
Consent
of Foley & Lardner LLP (included in Exhibit 5.1). |
| 23.2** |
|
Consent
of Foley & Lardner LLP (included in Exhibit 8.1). |
| 23.3** |
|
Consent of Independent
Registered Public Accounting Firm. |
| 24.1 |
|
Powers of Attorney (included on signature
page). |
| 25.1** |
|
Form T-1
Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Argent Institutional Trust Company, as trustee with
respect to Exhibit 4.2. |
| 107** |
|
Filing Fee Table |
| * |
To be filed, if necessary,
by amendment or incorporated by reference in connection with the offering of a particular class or series of securities. |
**
|
Filed herewith. |
| (1) |
Incorporated herein by reference to Innovative Industrial
Properties, Inc.’s Registration Statement on Form S-11, as amended (File No. 333-214148), filed with the SEC
on November 17, 2016. |
| |
|
| (2) |
Incorporated herein by reference to Innovative Industrial
Properties, Inc.’s Current Report on Form 8-K filed with the SEC on May 25, 2021. |
Exhibit 4.2
IIP OPERATING PARTNERSHIP, LP
INDENTURE
Dated as of _________________
ARGENT INSTITUTIONAL TRUST COMPANY
as Trustee and Notice Agent
and
SECURITIES TRANSFER CORPORATION,
as Registrar
TABLE
OF CONTENTS
Page
| |
|
|
|
| Article I. |
|
|
| |
DEFINITIONS AND INCORPORATION BY REFERENCE |
1 |
| |
|
|
|
| |
Section 1.1. |
Definitions |
1 |
| |
Section 1.2. |
Other Definitions |
5 |
| |
Section 1.3. |
Incorporation by Reference of Trust Indenture Act |
5 |
| |
Section 1.4. |
Rules of Construction, |
5 |
| |
|
|
|
| Article II. |
|
|
| |
THE SECURITIES |
6 |
| |
|
|
|
| |
Section 2.1. |
Issuable in Series |
6 |
| |
Section 2.2. |
Establishment of Terms of Series of Securities |
6 |
| |
Section 2.3. |
Execution and Authentication |
9 |
| |
Section 2.4. |
Registrar and Paying Agent |
10 |
| |
Section 2.5. |
Paying Agent to Hold Money in Trust |
11 |
| |
Section 2.6. |
Securityholder Lists |
11 |
| |
Section 2.7. |
Transfer and Exchange |
11 |
| |
Section 2.8. |
Mutilated, Destroyed, Lost and Stolen Securities |
12 |
| |
Section 2.9. |
Outstanding Securities |
13 |
| |
Section 2.10. |
Treasury Securities |
13 |
| |
Section 2.11. |
Temporary Securities |
13 |
| |
Section 2.12. |
Cancellation |
14 |
| |
Section 2.13. |
Defaulted Interest |
14 |
| |
Section 2.14. |
Global Securities |
14 |
| |
Section 2.15. |
CUSIP Numbers |
16 |
| |
|
|
|
| Article III. |
|
|
| |
REDEMPTION |
16 |
| |
|
|
|
| |
Section 3.1. |
Notice to Trustee |
16 |
| |
Section 3.2. |
Selection of Securities to be Redeemed |
16 |
| |
Section 3.3. |
Notice of Redemption |
17 |
| |
Section 3.4. |
Effect of Notice of Redemption |
17 |
| |
Section 3.5. |
Deposit of Redemption Price |
18 |
| |
Section 3.6. |
Securities Redeemed in Part |
18 |
| |
|
|
|
| Article IV. |
|
|
| |
COVENANTS |
18 |
| |
|
|
|
| |
Section 4.1. |
Payment of Principal and Interest |
18 |
| |
Section 4.2. |
SEC Reports |
18 |
| |
Section 4.3. |
Compliance Certificate |
19 |
| |
Section 4.4. |
Stay, Extension and Usury Laws |
19 |
| Article V. |
|
|
| |
SUCCESSORS |
20 |
| |
|
|
| |
Section 5.1. |
When Company May Merge, Etc. |
20 |
| |
Section 5.2. |
Successor Entity Substituted |
20 |
| |
Section 5.3. |
General Partner May Consolidate on Certain Terms |
20 |
| |
Section 5.4. |
General Partner Successor to Be Substituted |
21 |
| |
|
|
|
| Article VI. |
|
|
| |
DEFAULTS AND REMEDIES |
21 |
| |
|
|
|
| |
Section 6.1. |
Events of Default |
21 |
| |
Section 6.2. |
Acceleration of Maturity; Rescission and Annulment |
23 |
| |
Section 6.3. |
Collection of Indebtedness and Suits for Enforcement by Trustee |
23 |
| |
Section 6.4. |
Trustee May File Proofs of Claim |
24 |
| |
Section 6.5. |
Trustee May Enforce Claims Without Possession of Securities |
25 |
| |
Section 6.6. |
Application of Money Collected |
25 |
| |
Section 6.7. |
Limitation on Suits |
25 |
| |
Section 6.8. |
Unconditional Right of Holders to Receive Principal and Interest |
26 |
| |
Section 6.9. |
Restoration of Rights and Remedies |
26 |
| |
Section 6.10. |
Rights and Remedies Cumulative |
26 |
| |
Section 6.11. |
Delay or Omission Not Waiver |
26 |
| |
Section 6.12. |
Control by Holders |
27 |
| |
Section 6.13. |
Waiver of Past Defaults |
27 |
| |
Section 6.14. |
Undertaking for Costs |
28 |
| |
|
|
|
| Article VII. |
|
|
| |
TRUSTEE |
28 |
| |
|
|
|
| |
Section 7.1. |
Duties of Trustee |
28 |
| |
Section 7.2. |
Rights of Trustee |
29 |
| |
Section 7.3. |
Individual Rights of Trustee |
31 |
| |
Section 7.4. |
Trustee’s Disclaimer |
31 |
| |
Section 7.5. |
Notice of Defaults |
32 |
| |
Section 7.6. |
Reports by Trustee to Holders |
32 |
| |
Section 7.7. |
Compensation and Indemnity |
32 |
| |
Section 7.8. |
Replacement of Trustee |
33 |
| |
Section 7.9. |
Successor Trustee by Merger, Etc. |
34 |
| |
Section 7.10. |
Eligibility; Disqualification |
34 |
| |
Section 7.11. |
Preferential Collection of Claims Against Company |
34 |
| |
|
|
|
| Article VIII. |
|
|
| |
SATISFACTION AND DISCHARGE; DEFEASANCE |
35 |
| |
|
|
|
| |
Section 8.1. |
Satisfaction and Discharge of Indenture |
35 |
| |
Section 8.2. |
Application of Trust Funds; Indemnification |
36 |
| |
Section 8.3. |
Legal Defeasance of Securities of any Series |
37 |
| |
Section 8.4. |
Covenant Defeasance |
39 |
| |
Section 8.5. |
Repayment to Company |
40 |
| |
Section 8.6. |
Reinstatement |
40 |
| Article IX. |
|
|
| |
AMENDMENTS AND WAIVERS |
40 |
| |
|
|
|
| |
Section 9.1. |
Without Consent of Holders |
40 |
| |
Section 9.2. |
With Consent of Holders |
41 |
| |
Section 9.3. |
Limitations |
41 |
| |
Section 9.4. |
Compliance with Trust Indenture Act |
42 |
| |
Section 9.5. |
Revocation and Effect of Consents |
42 |
| |
Section 9.6. |
Notation on or Exchange of Securities |
43 |
| |
Section 9.7. |
Trustee Protected |
43 |
| |
|
|
|
| Article X. |
|
|
| |
MISCELLANEOUS |
43 |
| |
|
|
|
| |
Section 10.1. |
Trust Indenture Act Controls |
43 |
| |
Section 10.2. |
Notices |
43 |
| |
Section 10.3. |
Communication by Holders with Other Holders |
44 |
| |
Section 10.4. |
Certificate and Opinion as to Conditions Precedent |
45 |
| |
Section 10.5. |
Statements Required in Certificate or Opinion |
45 |
| |
Section 10.6. |
Rules by Trustee and Agents |
45 |
| |
Section 10.7. |
Legal Holidays |
45 |
| |
Section 10.8. |
No Recourse Against Others |
45 |
| |
Section 10.9. |
Counterparts |
46 |
| |
Section 10.10. |
Governing Law; Waiver of Jury Trial; Consent to Jurisdiction |
47 |
| |
Section 10.11. |
No Adverse Interpretation of Other Agreements |
47 |
| |
Section 10.12. |
Successors |
47 |
| |
Section 10.13. |
Severability |
47 |
| |
Section 10.14. |
Table of Contents, Headings, Etc. |
48 |
| |
Section 10.15. |
Securities in a Foreign Currency |
48 |
| |
Section 10.16. |
Judgment Currency |
48 |
| |
Section 10.17. |
USA Patriot Act |
49 |
| |
Section 10.18. |
Force Majeure |
49 |
| |
|
|
|
| Article XI. |
|
|
| |
SINKING FUNDS |
49 |
| |
|
|
|
| |
Section 11.1. |
Applicability of Article |
49 |
| |
Section 11.2. |
Satisfaction of Sinking Fund Payments with Securities |
50 |
| |
Section 11.3. |
Redemption of Securities for Sinking Fund |
50 |
| |
|
|
|
| Article XII. |
|
|
| |
GUARANTEE |
51 |
| |
|
|
|
| |
Section 12.1. |
Unconditional Guarantee |
51 |
| |
Section 12.2. |
Execution and Delivery of Notation of Guarantee |
52 |
| |
Section 12.3. |
Limitation on Guarantors’ Liability |
52 |
| |
Section 12.4. |
Release of Guarantors from Guarantee |
53 |
EXHIBITS
Exhibit A Form of Notation of Guarantee
IIP OPERATING PARTNERSHIP, LP
Reconciliation and tie between Trust Indenture
Act of 1939 and
Indenture, dated as of
| § 310(a)(1) |
7.10 |
| (a)(2) |
7.10 |
| (a)(3) |
Not Applicable |
| (a)(4) |
Not Applicable |
| (a)(5) |
7.10 |
| (b) |
7.10 |
| § 311(a) |
7.11 |
| (b) |
7.11 |
| (c) |
Not Applicable |
| § 312(a) |
2.6 |
| (b) |
10.3 |
| (c) |
10.3 |
| § 313(a) |
7.6 |
| (b)(1) |
7.6 |
| (b)(2) |
7.6 |
| (c)(1) |
7.6 |
| (c)(2) |
7.6 |
| (c)(3) |
7.6 |
| (d) |
7.6 |
| § 314(a) |
4.2, 10.5 |
| (b) |
Not Applicable |
| (c)(1) |
10.4 |
| (c)(2) |
10.4 |
| (c)(3) |
Not Applicable |
| (d) |
Not Applicable |
| (e) |
10.5 |
| (f) |
Not Applicable |
| § 315(a) |
7.1 |
| (b) |
7.5 |
| (c) |
7.1 |
| (d) |
7.1 |
| (e) |
6.14 |
| § 316(a) |
2.10 |
| (a)(1)(A) |
6.12 |
| (a)(1)(B) |
6.13 |
| (b) |
6.8 |
| (c) |
9.5 |
| § 317(a)(1) |
6.3 |
| (a)(2) |
6.4 |
| (b) |
2.5 |
| § 318(a) |
10.1 |
Note: This reconciliation and tie shall not, for any purpose, be deemed
to be part of the Indenture.
Indenture, dated as of _________,_____ , among
IIP OPERATING PARTNERSHIP, LP, a Delaware limited partnership (the “Company”), the Guarantors (as defined herein)
party hereto, ARGENT INSTITUIONAL TRUST COMPANY, a corporation duly organized and existing under the laws of the State of Florida, as
trustee (the “Trustee”) and notice agent, and Securities Transfer Corporation (“STC”), a corporation
duly organized and existing under the laws of the State of Texas, as registrar.
Each party agrees as follows for the benefit of
the other party and for the equal and ratable benefit of the Holders of the Securities issued under this Indenture.
Article I.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.
“Additional Amounts” means any
additional amounts which are required hereby or by any Security, under circumstances specified herein or therein, to be paid by the Company
in respect of certain taxes imposed on Holders specified herein or therein and which are owing to such Holders.
“Affiliate” of any specified
person means any other person directly or indirectly controlling or controlled by or under common control with such specified person.
For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled
by” and “under common control with”), as used with respect to any person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management or policies of such person, whether through the ownership
of voting securities or by agreement or otherwise.
“Agent” means any Registrar,
Paying Agent or Notice Agent.
“Board of Directors” means the
board of directors of the General Partner or any duly authorized committee thereof.
“Board Resolution” means a copy
of a resolution certified by the Secretary or an Assistant Secretary of the General Partner to have been adopted by the Board of Directors
or pursuant to authorization by the Board of Directors and to be in full force and effect on the date of the certificate and delivered
to the Trustee.
“Business Day” means, unless
otherwise provided by Board Resolution, Officer’s Certificate or supplemental indenture hereto for a particular Series, any day
except a Saturday, Sunday, a day on which banking institutions in the state in which the Corporate Trust Office is located or a legal
holiday in The City of New York (or in connection with any payment, the place of payment) on which banking institutions are authorized
or required by law, regulation or executive order to close.
“Capital Stock” means (a) in
the case of a corporation, corporate stock; (b) in the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated and whether or not voting) of corporate stock, including each class of
common stock and preferred stock of such person; and (c) in the case of a partnership or limited liability company, partnership or
membership interests (whether general or limited).
“Company” means the party named
as such above until a successor replaces it and thereafter means the successor.
“Company Order” means a written
order signed in the name of the Company by the General Partner by an Officer.
“Corporate Trust Office” means
the office of the Trustee at which at any particular time its corporate trust business related to this Indenture shall be principally
administered, which office at the date of the Indenture is located at the address set forth in Section 10.2, or such other
address as the Trustee may designate from time to time by notice to the Holders and the Company.
“CUSIP” means the Committee
on Uniform Security Identification Procedures and will be used pursuant to Section 2.15.
“Default” means any event which
is, or after notice or passage of time or both would be, an Event of Default.
“Depositary” means, with respect
to the Securities of any Series issuable or issued in whole or in part in the form of one or more Global Securities, the person designated
as Depositary for such Series by the Company, which Depositary shall be a clearing agency registered under the Exchange Act; and
if at any time there is more than one such person, “Depositary” as used with respect to the Securities of any Series shall
mean the Depositary with respect to the Securities of such Series.
“Discount Security” means any
Security that provides for an amount less than the stated principal amount thereof to be due and payable upon declaration of acceleration
of the maturity thereof pursuant to Section 6.2.
“Dollars” and “$”
means the currency of The United States of America.
“Exchange Act” means the Securities
Exchange Act of 1934, as amended.
“Foreign Currency” means any
currency or currency unit issued by a government other than the government of the United States of America, including the Euro.
“Foreign Government Obligations”
means, with respect to Securities of any Series that are denominated in a Foreign Currency, direct obligations of, or obligations
guaranteed by, the government that issued or caused to be issued such currency for the payment of which obligations its full faith and
credit is pledged and which are not callable or redeemable at the option of the issuer thereof.
“GAAP” means accounting principles
generally accepted in the United States of America set forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or
in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in
effect as of the date of determination.
“General Partner” means Innovative
Industrial Properties, Inc., in its capacity as general partner of the Company, and, subject to the provision in Article V,
its successors and assigns.
“Global Security” or “Global
Securities” means a Security or Securities, as the case may be, in the form established pursuant to Section 2.2
evidencing all or part of a Series of Securities, issued to the Depositary for such Series or its nominee, and registered in
the name of such Depositary or nominee.
“Guarantor” means each person
that executes this Indenture as a guarantor and its respective successors and assigns, in each case until the Guarantee of such person
has been released in accordance with the provisions of this Indenture; provided, however, that such person shall be a Guarantor
only with respect to a Series of Securities for which such person has executed a Notation of Guarantee with respect to such Series.
“Holder” or “Securityholder”
means a person in whose name a Security is registered.
“Indenture” means this Indenture
as amended or supplemented from time to time and shall include the form and terms of particular Series of Securities established
as contemplated hereunder.
“interest” with respect to any
Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity.
“Maturity,” when used with respect
to any Security, means the date on which the principal of such Security becomes due and payable as therein or herein provided, whether
at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.
“Notation of Guarantee” means
a notation, substantially in the form of Exhibit A, executed by a Guarantor and affixed to each Security of any Series to
which the Guarantee of such Guarantor under Article XII of this Indenture applies.
“Officer” means the Chief Executive
Officer, the President, the Chief Financial Officer, the General Counsel or any Assistant General Counsel, the Treasurer or any Assistant
Treasurer, the Secretary or any Assistant Secretary, and any Vice President of the General Partner or any Guarantor, as the case may be.
“Officer’s Certificate”
means a certificate signed by any Officer which complies with Section 10.4.
“Opinion of Counsel” means a
written opinion of legal counsel which complies with Section 10.4. The counsel may be an employee of or counsel to the Company
or the General Partner. The opinion may contain customary limitations, conditions and exceptions.
“person” means any individual,
corporation, partnership, joint venture, association, limited liability company, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
“principal” of a Security means
the principal of the Security plus, when appropriate, the premium, if any, on, and any Additional Amounts in respect of, the Security.
“Responsible Officer” means
any officer of the Trustee in its Corporate Trust Office having responsibility for administration of this Indenture and also means, with
respect to a particular corporate trust matter, any other officer to whom any corporate trust matter relating to this Indenture is referred
because of his or her knowledge of and familiarity with a particular subject.
“SEC” means the Securities and
Exchange Commission.
“Securities” means the debentures,
notes or other debt instruments of the Company of any Series authenticated and delivered under this Indenture, provided, however
that, if at any time there is more than one person acting as Trustee under this Indenture, “Securities,” with respect
to any such person, shall mean Securities authenticated and delivered under this Indenture, exclusive, however, of Securities of any Series as
to which such person is not Trustee.
“Series” or “Series of
Securities” means each series of debentures, notes or other debt instruments of the Company created pursuant to Sections
2.1 and 2.2 hereof.
“Stated Maturity” when used
with respect to any Security, means the date specified in such Security as the fixed date on which the principal of such Security or interest
is due and payable.
“Subsidiary” of any specified
person means any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by such person or one or more of the other Subsidiaries of that person or
a combination thereof
“TIA” means the Trust Indenture
Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) as in effect on the date of this Indenture; provided, however, that in the event
the Trust Indenture Act of 1939 is amended after such date, “TIA” means, to the extent required by any such amendment,
the Trust Indenture Act as so amended.
“Trustee” means the person named
as the “Trustee” in the first paragraph of this instrument until a successor Trustee shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean or include each person who is then
a Trustee hereunder, and if at any time there is more than one such person, “Trustee” as used with respect to the Securities
of any Series shall mean the Trustee with respect to Securities of that Series.
“U.S. Government Obligations”
means securities which are direct obligations of, or guaranteed by, The United States of America for the payment of which its full faith
and credit is pledged and which are not callable or redeemable at the option of the issuer thereof, and shall also include a depositary
receipt issued by a bank or trust company as custodian with respect to any such U.S. Government Obligation or a specific payment of interest
on or principal of any such U.S. Government Obligation held by such custodian for the account of the holder of a depositary receipt, provided
that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such
depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligation evidenced by such depositary
receipt.
Section 1.2. Other Definitions.
| TERM | |
DEFINED IN SECTION | |
| “Bankruptcy Law” | |
| 6.1 | |
| “Custodian” | |
| 6.1 | |
| “Guarantee” | |
| 12.1 | (b) |
| “Event of Default” | |
| 6.1 | |
| “Judgment Currency” | |
| 10.16 | |
| “Legal Holiday” | |
| 10.7 | |
| “mandatory sinking fund payment” | |
| 11.1 | |
| “New York Banking Day” | |
| 10.16 | |
| “Notice Agent” | |
| 2.4 | |
| “optional sinking fund payment” | |
| 11.1 | |
| “Paying Agent” | |
| 2.4 | |
| “Registrar” | |
| 2.4 | |
| “Required Currency” | |
| 10.16 | |
| “successor person” | |
| 5.1 | |
| “USA Patriot Act” | |
| 10.17 | |
Section 1.3. Incorporation by Reference
of Trust Indenture Act.
Whenever this Indenture refers to a provision of
the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture
have the following meanings:
| · | “Commission” means the SEC. |
| · | “indenture securities” means the Securities. |
| · | “indenture security holder” means a Securityholder. |
| · | “indenture to be qualified” means this Indenture. |
| · | “indenture trustee” or “institutional trustee”
means the Trustee. |
| · | “obligor” on the indenture securities means the Company
and any successor obligor upon the Securities. |
All other terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA and not otherwise defined herein
are used herein as so defined.
Section 1.4. Rules of Construction,
Unless the context otherwise requires:
| a. | a term has the meaning assigned to it; |
| b. | an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; |
| d. | words in the singular include the plural, and in the plural include the singular; and |
| e. | provisions apply to successive events and transactions. |
Article II.
THE SECURITIES
Section 2.1. Issuable in Series
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. All Securities
of a Series shall be identical except as may be set forth or determined in the manner provided in a Board Resolution, a supplemental
indenture or an Officer’s Certificate detailing the adoption of the terms thereof pursuant to authority granted under a Board Resolution.
In the case of Securities of a Series to be issued from time to time, the Board Resolution, Officer’s Certificate or supplemental
indenture detailing the adoption of the terms thereof pursuant to authority granted under a Board Resolution may provide for the method
by which specified terms (such as interest rate, maturity date, record date or date from which interest shall accrue) are to be determined.
Securities may differ between Series in respect of any matters, provided that all Series of Securities shall be equally
and ratably entitled to the benefits of the Indenture.
Section 2.2. Establishment of Terms of
Series of Securities.
At or prior to the issuance of any Securities within
a Series, the following shall be established (as to the Series generally, in the case of Subsection 2.2.1 and either as to
such Securities within the Series or as to the Series generally in the case of Subsections 2.2.2 through 2.2.30)
by or pursuant to a Board Resolution, and set forth or determined in the manner provided in a Board Resolution, supplemental indenture
hereto or Officer’s Certificate:
Section 2.2.1. the
title (which shall distinguish the Securities of that particular Series from the Securities of any other Series) and ranking (including
the terms of any subordination provisions) of the Series;
Section 2.2.2. the
price or prices (expressed as a percentage of the principal amount thereof) at which the Securities of the Series will be issued;
Section 2.2.3. any
limit upon the aggregate principal amount of the Securities of the Series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities
of the Series pursuant to Section 2.7, 2.8, 2.11, 3.6 or 9.6) and whether additional Securities
of that Series may be issued without the consent of Holders of outstanding Securities of that Series or any other Series; provided,
that in the event that additional Securities of such Series may be so issued, the terms thereof shall indicate whether any such
additional Securities shall have the same terms as the prior Securities of such Series or whether the Issuer may establish additional
or different terms with respect to such additional Securities;
Section 2.2.4. the
date or dates on which the principal of the Securities of the Series is payable;
Section 2.2.5. the
rate or rates (which may be fixed or variable) per annum or, if applicable, the method used to determine such rate or rates (including,
but not limited to, any commodity, commodity index, stock exchange index or financial index) at which the Securities of the Series shall
bear interest, if any, the date or dates from which such interest, if any, shall accrue, the date or dates on which such interest, if
any, shall commence and be payable, any regular record date for the interest payable on any interest payment date and the basis upon which
interest shall be calculated if other than that of a 360-day year of twelve 30-day months;
Section 2.2.6. the
place or places where the principal of and interest, if any, on the Securities of the Series shall be payable, where the Securities
of such Series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of such Series and this Indenture may be delivered, and the method of such payment, if by wire transfer,
mail or other means;
Section 2.2.7. if
applicable, the period or periods within which the price or prices at which and the terms and conditions upon which the Securities of
the Series may be redeemed, in whole or in part, at the option of the Company;
Section 2.2.8. the
obligation, if any, of the Company to redeem or purchase the Securities of the Series pursuant to any sinking fund or analogous provisions
or at the option of a Holder thereof and the period or periods within which, the price or prices at which and the terms and conditions
upon which Securities of the Series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;
Section 2.2.9. the
dates, if any, on which and the price or prices at which the Securities of the Series will be repurchased by the Company at the option
of the Holders thereof and other detailed terms and provisions of such repurchase obligations;
Section 2.2.10. if
other than denominations of $1,000 and any integral multiple thereof, the denominations in which the Securities of the Series shall
be issuable;
Section 2.2.11. the
forms of the Securities of the Series and whether the Securities will be issuable as Global Securities;
Section 2.2.12. if
other than the principal amount thereof, the portion of the principal amount of the Securities of the Series that shall be payable
upon declaration of acceleration of the maturity thereof pursuant to Section 6.2;
Section 2.2.13. the
currency of denomination of the Securities of the Series, which may be Dollars or any Foreign Currency, and if such currency of denomination
is a composite currency, the agency or organization, if any, responsible for overseeing such composite currency;
Section 2.2.14. the
designation of the currency, currencies or currency units in which payment of the principal of and interest, if any, on the Securities
of the Series will be made;
Section 2.2.15.
if payments of principal of or interest, if any, on the Securities of the Series are to be made in one or more
currencies or currency units other than that or those in which such Securities are denominated, the manner in which the exchange
rate with respect to such payments will be determined;
Section 2.2.16. the
manner in which the amounts of payment of principal of or interest, if any, on the Securities of the Series will be determined, if
such amounts may be determined by reference to an index based on a currency or currencies or by reference to a commodity, commodity index,
stock exchange index or financial index;
Section 2.2.17. the
provisions, if any, relating to any security provided for the Securities of the Series or the Guarantees;
Section 2.2.18. any
addition to, deletion of or change in the Events of Default which applies to any Securities of the Series and any change in the right
of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant to Section 6.2;
Section 2.2.19. any
addition to, deletion of or change in the covenants and terms set forth in Articles IV, V or IX which applies to
Securities of the Series;
Section 2.2.20. any
Depositaries, interest rate calculation agents, exchange rate calculation agents or other agents with respect to Securities of such Series if
other than those appointed herein;
Section 2.2.21. the
provisions, if any, relating to conversion or exchange of any Securities of such Series, including, if applicable, the conversion or exchange
price, the conversion or exchange period, provisions as to whether conversion or exchange will be mandatory, at the option of the Holders
thereof or at the option of the Company, the events requiring an adjustment of the conversion price or exchange price and provisions affecting
conversion or exchange if such Series of Securities are redeemed;
Section 2.2.22. any
other terms of the Series (which may supplement, modify or delete any provision of this Indenture insofar as it applies to such Series),
including any terms that may be required under applicable law or regulations or advisable in connection with the marketing of Securities
of that Series;
Section 2.2.23. whether
the Securities of such Series are entitled to the benefits of the Guarantee of any Guarantor pursuant to this Indenture, whether
any such Guarantee shall be made on a senior or subordinated basis and, if applicable, a description of the subordination terms of any
such Guarantee;
Section 2.2.24. if
a person other than Argent Instituional Trust Company is to act as Trustee for the Securities of that Series, the name and location of
the designated corporate trust office of such Trustee;
Section 2.2.25. the
securities exchanges, if any, on which the Securities of the Series may be listed;
Section 2.2.26. if
the Securities of that Series do not bear interest, the applicable dates for purposes of Section 2.6;
Section 2.2.27. if
Securities of the Series are to be issuable initially in the form of a temporary Global Security, the circumstances under which the
temporary Global Security can be exchanged for definitive Securities;
Section 2.2.28. whether
Securities of that Series are to be issuable in bearer form and any additions or changes to any of the provisions of this Indenture
as shall be necessary to permit or facilitate the issuance of Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons;
Section 2.2.29. the
applicability, if any, of Sections 8.3 and/or 8.4 to the Securities of the Series and any provisions in modification
of, in addition to or in lieu of any of the provisions of Article VIII; and
Section 2.2.30. any
change in the right of the Trustee or the right of the requisite Holders of Securities to declare the principal amount thereof due and
payable.
All Securities of any particular Series shall
be substantially identical except as to denomination and the date from which interest, if any, shall accrue, and except as may otherwise
be provided in or pursuant to such Board Resolutions and set forth in such Officer’s Certificate relating thereto or provided in
or pursuant to any supplemental indenture hereto. All Securities of any one Series need not be issued at the same time and may be
issued from time to time, consistent with the terms of this Indenture, if so provided by or pursuant to the Board Resolution, supplemental
indenture hereto or Officer’s Certificate referred to above.
Section 2.3. Execution and Authentication.
Any Officer shall sign the Securities for the Company
by manual, facsimile or other electronic (including .pdf) signature (including any electronic signature covered by the U.S. federal ESIGN
Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com).
If an Officer whose signature is on a Security
no longer holds that office at the time the Security is authenticated, the Security shall nevertheless be valid.
A Security shall not be valid until authenticated
by the manual signature of an authorized signatory of the Trustee or an authenticating agent. The signature shall be conclusive evidence
that the Security has been authenticated under this Indenture.
The Trustee shall at any time, and from time to
time, authenticate Securities for original issue in the principal amount provided in the Board Resolution, supplemental indenture hereto
or Officer’s Certificate, upon receipt by the Trustee of a Company Order. Each Security shall be dated the date of its authentication.
The aggregate principal amount of Securities of
any Series outstanding at any time may not exceed any limit upon the maximum principal amount for such Series set forth in the
Board Resolution, supplemental indenture hereto or Officer’s Certificate delivered pursuant to Section 2.2, except as
provided in Section 2.8.
Prior to the issuance of Securities of any Series,
the Trustee shall have received and (subject to Section 7.2) shall be fully protected in relying on: (a) the Board Resolution,
supplemental indenture hereto or Officer’s Certificate establishing the form of the Securities of that Series or of Securities
within that Series and the terms of the Securities of that Series or of Securities within that Series, (b) an Officer’s
Certificate complying with Section 10.4, and (c) an Opinion of Counsel complying with Section 10.4.
The Trustee shall have the right to decline to
authenticate and deliver any Securities of such Series: (a) if the Trustee, being advised by counsel, determines that such action
may not be taken lawfully; or (b) if the Trustee in good faith shall determine that such action would expose the Trustee to personal
liability to Holders of any then outstanding Series of Securities.
The Trustee may appoint an authenticating agent
acceptable to the Company to authenticate Securities. An authenticating agent may authenticate Securities whenever the Trustee may do
so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has
the same rights as an Agent to deal with the Company or an Affiliate of the Company.
Section 2.4. Registrar and Paying Agent.
The Company shall maintain, with respect to each
Series of Securities, at the place or places specified with respect to such Series pursuant to Section 2.2, an office
or agency where Securities of such Series may be presented or surrendered for payment (“Paying Agent”), where
Securities of such Series may be surrendered for registration of transfer or exchange (“Registrar”) and where
notices and demands to or upon the Company in respect of the Securities of such Series and this Indenture may be delivered (“Notice
Agent”). The Registrar shall keep a register with respect to each Series of Securities and to their transfer and exchange.
The Company will give prompt written notice to the Trustee of the name and address, and any change in the name or address, of each Registrar,
Paying Agent or Notice Agent. If at any time the Company shall fail to maintain any such required Registrar, Paying Agent or Notice Agent
or shall fail to furnish the Trustee with the name and address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands; provided, that the Corporate Trust Office of the Trustee shall not be a place of service of legal
process on the Company.
The Company may also from time to time designate
one or more co-registrars, additional paying agents or additional notice agents and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the Company of its obligations to maintain a Registrar,
Paying Agent and Notice Agent in each place so specified pursuant to Section 2.2 for Securities of any Series for such
purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the name
or address of any such co-registrar, additional paying agent or additional notice agent. The term “Registrar” includes
any co-registrar; the term “Paying Agent” includes any additional paying agent; and the term “Notice Agent”
includes any additional notice agent. The Company or any of its Affiliates may serve as Registrar or Paying Agent.
The Company hereby appoints the Trustee as the
initial Paying Agent and Notice Agent for each Series unless another Paying Agent or Notice Agent, as the case may be, is appointed.1
The Company hereby appoints STC as the initial Registrar for each Series unless another Registrar is appointed.
Section 2.5. Paying Agent to Hold Money
in Trust.
The Company shall require each Paying Agent other
than the Trustee to agree in writing that the Paying Agent will hold in trust, for the benefit of Securityholders of any Series of
Securities, or the Trustee, all money held by the Paying Agent for the payment of principal of or interest on the Series of Securities,
and will notify the Trustee in writing of any default by the Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary of
the Company) shall have no further liability for the money. If the Company or a Subsidiary of the Company acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of Securityholders of any Series of Securities all money held by it as
Paying Agent. Upon any bankruptcy, reorganization or similar proceeding with respect to the Company, the Trustee shall serve as Paying
Agent for the Securities.
Section 2.6. Securityholder Lists.
The Registrar shall preserve in as current a form
as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders of each Series of
Securities and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar, the Company shall furnish to
the Trustee at least ten days before each interest payment date and at such other times as the Trustee may request in writing a list,
in such form and as of such date as the Trustee may reasonably require, of the names and addresses of Securityholders of each Series of
Securities.
Section 2.7. Transfer and Exchange.
Where Securities of a Series are presented
to the Registrar or a co-registrar with a request to register a transfer or to exchange them for an equal principal amount of Securities
of the same Series, the Registrar shall register the transfer or make the exchange if its requirements for such transactions are met.
To permit registrations of transfers and exchanges, the Trustee shall authenticate Securities at the Registrar’s request. No service
charge shall be made for any registration of transfer or exchange (except as otherwise expressly permitted herein), but the Company may
require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than
any such transfer tax or similar governmental charge payable upon exchanges pursuant to Section 2.11, 3.6 or 9.6).
1 This may happen in the case of resignation or removal
of the Trustee/agent.
Neither the Company nor the Registrar shall be
required (a) to issue, register the transfer of, or exchange Securities of any Series for the period beginning at the opening
of business 15 days immediately preceding the sending of a notice of redemption of Securities of that Series selected for redemption
and ending at the close of business on the day such notice is sent, or (b) to register the transfer of or exchange Securities of
any Series selected, called or being called for redemption as a whole or the portion being redeemed of any such Securities selected,
called or being called for redemption in part.
Neither the Trustee nor any Agent shall have any
obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer or exchange imposed under this
Indenture or under applicable law with respect to any transfer or exchange of any interest in any note (including any transfers between
or among participants or other 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, the Indenture,
and to examine the same to determine substantial compliance as to form with the express requirements hereof.
Section 2.8. Mutilated, Destroyed, Lost
and Stolen Securities.
If any mutilated Security is surrendered to the
Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same Series and
of like tenor and principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and
the Trustee (a) evidence to their satisfaction of the destruction, loss or theft of any Security and (b) such security or indemnity
bond as may be required by each of them to hold itself and any of its agents harmless, then, in the absence of notice to the Company or
the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and upon receipt of a Company Order
the Trustee shall authenticate and make available for delivery, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same Series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or
stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security,
pay such Security following delivery of the documents and security or indemnity required in the preceding paragraph.
Upon the issuance of any new Security under this
Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any Series issued pursuant
to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation
of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled
to all the benefits of this Indenture equally and proportionately with any and all other Securities of that Series duly issued hereunder.
The provisions of this Section are exclusive
and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities.
Section 2.9. Outstanding Securities.
The Securities outstanding at any time are all
the Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions
in the interest on a Global Security effected by the Trustee in accordance with the provisions hereof and those described in this Section as
not outstanding, including those paid in accordance with the third-to-last paragraph of Section 2.8.
If a Security is replaced pursuant to Section 2.8,
it ceases to be outstanding until the Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide purchaser.
If the Paying Agent (other than the Company, a
Subsidiary of the Company or an Affiliate of the Company) holds on the Maturity of Securities of a Series money sufficient to pay
such Securities payable on that date as provided in this Indenture, then on and after that date such Securities of the Series cease
to be outstanding and interest on them ceases to accrue.
The Company may purchase or otherwise acquire the
Securities, whether by open market purchases, negotiated transactions or otherwise. A Security does not cease to be outstanding because
the Company or an Affiliate of the Company holds the Security (but see Section 2.10 below).
In determining whether the Holders of the requisite
principal amount of outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder,
the principal amount of a Discount Security that shall be deemed to be outstanding for such purposes shall be the amount of the principal
thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the Maturity thereof
pursuant to Section 6.2.
Section 2.10. Treasury Securities.
In determining whether the Holders of the requisite
principal amount of outstanding Securities of a Series have given any request, demand, authorization, direction, notice, consent
or waiver hereunder, Securities of a Series owned by the Company, any Guarantor, or any other obligor upon the Securities of such
Series or any Affiliate of the Company or any Guarantor or any of the other obligors shall be disregarded, except that for the purposes
of determining whether the Trustee shall be protected in relying on any such request, demand, authorization, direction, notice, consent
or waiver, only Securities of a Series that a Responsible Officer of the Trustee knows are so owned shall be so disregarded.
Section 2.11. Temporary Securities.
Until definitive Securities are ready for delivery,
the Company may prepare and the Trustee shall authenticate temporary Securities upon a Company Order. Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Company considers appropriate for temporary Securities. Without
unreasonable delay, the Company shall prepare and the Trustee upon receipt of a Company Order shall authenticate definitive Securities
of the same Series and date of maturity in exchange for temporary Securities. Until so exchanged, temporary securities shall have
the same rights under this Indenture as the definitive Securities.
Any temporary Global Security and any permanent
Global Security shall, unless otherwise provided therein, be delivered to the Depositary designated pursuant to Section 2.2
or shall be held by the Custodian on behalf of such Depositary.
Section 2.12. Cancellation.
The Company at any time may deliver Securities
to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for
registration of transfer, exchange or payment. The Trustee shall cancel all Securities surrendered for transfer, exchange, payment, replacement
or cancellation and shall dispose of such canceled Securities in accordance with its then customary procedures (subject to the record
retention requirement of the Exchange Act and the Trustee) and deliver a certificate of such cancellation to the Company upon written
request of the Company. The Company may not issue new Securities to replace Securities that it has paid or delivered to the Trustee for
cancellation.
Section 2.13. Defaulted Interest.
If the Company defaults in a payment of interest
on a Series of Securities, it shall pay the defaulted interest, plus, to the extent permitted by law, any interest payable on the
defaulted interest, to the persons who are Securityholders of the Series on a subsequent special record date. The Company shall fix
the record date and payment date. At least ten days before the special record date, the Company shall send to the Trustee and to each
Securityholder of the Series a notice that states the special record date, the payment date and the amount of interest to be paid.
The Company may pay defaulted interest in any other lawful manner.
Section 2.14. Global Securities.
Section 2.14.1. Terms
of Securities. A Board Resolution, a supplemental indenture hereto or an Officer’s Certificate shall establish whether the Securities
of a Series shall be issued in whole or in part in the form of one or more Global Securities and the Depositary for such Global Security
or Securities.
Section 2.14.2. Transfer
and Exchange. Notwithstanding any provisions to the contrary contained in Section 2.7 of the Indenture and in addition
thereto, any Global Security shall be exchangeable pursuant to Section 2.7 of the Indenture for Securities registered in the
names of Holders other than the Depositary for such Security or its nominee only if (a) such Depositary notifies the Company that
it is unwilling or unable to continue as Depositary for such Global Security or if at any time such Depositary ceases to be a clearing
agency registered under the Exchange Act, and, in either case, the Company fails to appoint a successor Depositary registered as a clearing
agency under the Exchange Act within 90 days of such event or (b) the Company executes and delivers to the Trustee an Officer’s
Certificate stating that such Global Security shall be so exchangeable. Any Global Security that is exchangeable pursuant to the preceding
sentence shall be exchangeable for Securities registered in such names as the Depositary shall direct in writing in an aggregate principal
amount equal to the principal amount of the Global Security with like tenor and terms.
Except as provided in this Section 2.14.2,
a Global Security may not be transferred except as a whole by the Depositary with respect to such Global Security to a nominee of such
Depositary, by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by the Depositary or any such
nominee to a successor Depositary or a nominee of such a successor Depositary.
Section 2.14.3. Legend.
Any Global Security issued hereunder shall bear a legend in substantially the following form:
“THIS SECURITY IS A GLOBAL SECURITY
WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE DEPOSITARY.
THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY,
BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITARY OR A NOMINEE OF SUCH A SUCCESSOR DEPOSITARY.”
In addition, so long as The Depository
Trust Company (“DTC”) is the Depositary, each Global Security registered in the name of DTC or its nominee shall bear
a legend in substantially the following form:
“UNLESS THIS GLOBAL SECURITY IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY GLOBAL SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”
Section 2.14.4. Acts
of Holders. The Depositary, as a Holder, may appoint agents and otherwise authorize participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action which a Holder is entitled to give or take under the Indenture.
Section 2.14.5. Payments.
Notwithstanding the other provisions of this Indenture, unless otherwise specified as contemplated by Section 2.2, payment
of the principal of and interest, if any, on any Global Security shall be made to the Holder thereof.
Section 2.14.6. Consents,
Declaration and Directions. The Company, the Trustee and any Agent shall be entitled to conclusively treat a person as the absolute
owner of such principal amount of outstanding Securities of such Series represented by a Global Security as shall be specified in
a written statement of the Depositary or by the applicable procedures of the Depositary with respect to such Global Security, for purposes
of obtaining any consents, declarations, waivers or directions required to be given by the Holders pursuant to this Indenture.
Section 2.15. 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 shall promptly notify the Trustee in writing of any change in CUSIP numbers.
Article III.
REDEMPTION
Section 3.1. Notice to Trustee.
The Company may, with respect to any Series of
Securities, reserve the right to redeem and pay the Series of Securities or may covenant to redeem and pay the Series of Securities
or any part thereof prior to the Stated Maturity thereof at such time and on such terms as provided for in such Securities. If a Series of
Securities is redeemable and the Company wants or is obligated to redeem prior to the Stated Maturity thereof all or part of the Series of
Securities pursuant to the terms of such Securities, it shall notify the Trustee in writing of the redemption date and the principal amount
of the Series of Securities to be redeemed. The Company shall give the written notice at least 15 days before the redemption date
(or such shorter period as may be acceptable to the Trustee).
Section 3.2. Selection of Securities to
be Redeemed.
Unless otherwise indicated for a particular Series by
a Board Resolution, supplemental indenture hereto or Officer’s Certificate, if less than all the Securities of a Series are
to be redeemed, in the case of certificated Securities, the Trustee shall select the Securities of the Series to be redeemed in any
manner that the Trustee deems fair and appropriate, including by lot or other method, unless otherwise required by law or applicable stock
exchange requirements (as certified by the Company to the Trustee), or, in the case of Global Securities, to the applicable rules and
procedures of the Depositary. In the case of certificated Securities, the Trustee shall make the selection from Securities of the Series outstanding
not previously called for redemption. The Trustee (in the case of certificated Securities) or the Depositary (in the case of Global Securities)
may select for redemption portions of the principal of Securities of the Series that have denominations larger than $1,000. Securities
of the Series and portions of them it selects shall be in minimum amounts of $1,000 or whole multiples of $1,000 thereof or, with
respect to Securities of any Series issuable in other denominations pursuant to Section 2.2.10, the minimum principal
denomination for each Series and the authorized integral multiples thereof. Provisions of this Indenture that apply to Securities
of a Series called for redemption also apply to portions of Securities of that Series called for redemption.
Section 3.3. Notice of Redemption.
Unless otherwise indicated for a particular Series by
Board Resolution, a supplemental indenture hereto or an Officer’s Certificate, at least 15 days but not more than 60 days before
a redemption date, the Company shall send or cause to be sent by first class mail or electronically, in accordance with the procedures
of the Depositary, a notice of redemption to each Holder whose Securities are to be redeemed, with a copy to the Trustee.
The notice shall identify the Securities of the
Series to be redeemed and shall state:
| c. | the name and address of the Paying Agent; |
| d. | if any Securities are being redeemed in part, the portion of the principal amount of such Securities to be redeemed and that, after
the redemption date and upon surrender of such Security, a new Security or Securities in principal amount equal to the unredeemed portion
of the original Security shall be issued in the name of the Holder thereof upon cancellation of the original Security; |
| e. | that Securities of the Series called for redemption must be surrendered to the Paying Agent to collect the redemption price; |
| f. | that interest on Securities of the Series called for redemption ceases to accrue on and after the redemption date; |
| g. | the CUSIP number, if any; and |
| h. | any other information as may be required by the terms of the particular Series or the Securities of a Series being redeemed. |
At the Company’s written request, the Trustee
shall give the notice of redemption in the Company’s name and at its expense, provided, however, that the Company has delivered
to the Trustee, at least five days (unless a shorter time shall be acceptable to the Trustee) prior to the notice date, such notice and
an Officer’s Certificate authorizing and directing the Trustee to give such notice and setting forth the information to be stated
in such notice in the form of such notice.
Section 3.4. Effect of Notice of Redemption.
Once notice of redemption is sent as provided in
Section 3.3, Securities of a Series called for redemption become due and payable on the redemption date and at the redemption
price. Except as otherwise provided in the supplemental indenture, Board Resolution or Officer’s Certificate for a Series, a notice
of redemption may not be conditional. Upon surrender to the Paying Agent, such Securities shall be paid at the redemption price plus accrued
interest, if any, to the redemption date.
Section 3.5. Deposit of Redemption Price.
On or before 11:00 a.m., New York City time, one
Business Day prior to the redemption date, the Company shall deposit with the Paying Agent money sufficient to pay the redemption price
of and accrued interest, if any, on all Securities to be redeemed on that date.
Section 3.6. Securities Redeemed in Part.
In connection with any Security held in physical
form, upon surrender of a Security that is redeemed in part, the Company shall execute and, upon receipt of a Company Order in accordance
with Section 2.3 and the other deliverables required hereunder from the Company, the Trustee shall authenticate for the Holder
at the expense of the Company a new Security of the same Series and the same Maturity equal in principal amount to the unredeemed
portion of the Security surrendered; provided that each new Security will be issued in a minimum principal amount of $1,000 or
an integral multiple of $1,000 in excess thereof. In the case of any Security held in global form, the records of the Trustee and/or Registrar
shall reflect that the Security has been redeemed in part.
Article IV.
COVENANTS
Section 4.1. Payment of Principal and Interest.
The Company covenants and agrees for the benefit
of the Holders of each Series of Securities that it shall duly and punctually pay or cause to be paid when due the principal of and
interest, if any, on the Securities of that Series in accordance with the terms of such Securities and this Indenture. On or before
11:00 a.m., New York City time, on the applicable payment date, the Company shall deposit with the Paying Agent money sufficient to pay
the principal of and interest, if any, on the Securities of each Series in accordance with the terms of such Securities and this
Indenture.
Section 4.2. SEC Reports.
The General Partner shall, so long as any Securities
are outstanding, deliver to the Trustee within 15 days after it files them with the SEC 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 SEC may by rules and regulations prescribe)
which the General Partner is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The General
Partner shall also comply with the other provisions of TIA Section 314(a). Reports, information and documents filed with the SEC
via the EDGAR system (or its successor) will be deemed to be delivered to the Trustee as of the time of such filing for purposes of this
Section 4.2; provided, however, that the Trustee shall have no obligation whatsoever to determine whether or not such
information, documents or reports have been filed via EDGAR.
Delivery of reports, information and documents
to the Trustee under this Section 4.2 is for informational purposes only and the Trustee’s receipt of the foregoing
shall not constitute constructive or actual notice of any information contained therein or determinable from information contained therein,
including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively
on Officer’s Certificates). The Trustee shall have no responsibility for the filing, timeliness or content of any reports, information
or documents. The Trustee shall have no obligation to determine whether or not such reports, information or documents have been filed
pursuant to the SEC’s EDGAR filing system (or its successor) or postings to any website have occurred, and the Trustee shall have
no duty to participate in or monitor any conference calls.
Section 4.3. Compliance Certificate.
The Company and each Guarantor (to the extent that
such Guarantor is so required under the TIA) shall, so long as any Securities are outstanding, deliver to the Trustee, within 120 days
after the end of each fiscal year of the Company, an Officer’s Certificate stating that a review of the activities of the General
Partner, the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officer
with a view to determining whether the Company and any Guarantor has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to such Officer signing such certificate, that to the best of such Officer’s knowledge the Company
and any Guarantor has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default
in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of which such Officer may have knowledge and the nature and status thereof).
The Company will, so long as any of the Securities
are outstanding, deliver to the Trustee, promptly upon becoming aware of any Default or Event of Default, an Officer’s Certificate
specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto.
Section 4.4. Stay, Extension and Usury
Laws.
The Company and the Guarantors covenant (to the
extent that they may lawfully do so) that they will not at any time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture or the Securities and the Company and the Guarantors (to the extent they may lawfully do
so) hereby expressly waive all benefit or advantage of any such law and covenants that they will not, by resort to any such law, hinder,
delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power
as though no such law has been enacted.
Article V.
SUCCESSORS
Section 5.1. When Company May Merge,
Etc.
The Company shall not consolidate with or merge
with or into, or convey, transfer or lease all or substantially all of its properties and assets to, any person (a “successor
person”) unless:
| a. | the Company is the surviving entity or the successor person (if other than the Company) is a corporation, partnership, trust or other
entity organized and validly existing under the laws of any U.S. domestic jurisdiction and expressly assumes the Company’s obligations
on the Securities and under this Indenture; and |
| b. | immediately after giving effect to the transaction, no Default or Event of Default, shall have occurred and be continuing. |
The Company shall deliver to the Trustee prior
to the consummation of the proposed transaction an Officer’s Certificate to the foregoing effect and an Opinion of Counsel stating
that the proposed transaction and any supplemental indenture comply with this Indenture.
Notwithstanding the above, any Subsidiary of the
Company may consolidate with, merge into or transfer all or part of its properties to the Company. Neither an Officer’s Certificate
nor an Opinion of Counsel shall be required to be delivered in connection therewith.
Section 5.2. Successor Entity Substituted.
Upon any consolidation or merger, or any sale,
lease, conveyance or other disposition of all or substantially all of the assets of the Company in accordance with Section 5.1,
the successor entity formed by such consolidation or into or with which the Company is merged or to which such sale, lease, conveyance
or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this
Indenture with the same effect as if such successor entity had has been named as the Company herein; provided, however, that the
predecessor Company in the case of a sale, conveyance or other disposition (other than a lease) shall be released from all obligations
and covenants under this Indenture and the Securities.
Section 5.3. General Partner May Consolidate
on Certain Terms.
Nothing contained in this Indenture or in the Securities
shall prevent any consolidation or merger of the General Partner with or into any other person or persons (whether or not affiliated with
the General Partner), or successive consolidations or mergers in which either the General Partner will be the continuing entity or the
General Partner or its successor or successors shall be a party or parties, or shall prevent any sale, conveyance, transfer or lease of
all or substantially all of the property of the General Partner, to any other person (whether or not affiliated with the General Partner);
provided, however, that the following conditions are met:
| a. | the General Partner shall be the continuing entity, or the successor entity (if other than the General Partner) formed by or resulting
from any consolidation or merger or which shall have received the transfer of assets shall expressly assume the obligations of the General
Partner under the Guarantee and the due and punctual performance and observance of all of the covenants and conditions in this Indenture;
and |
| b. | immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing. |
The General Partner shall deliver to the Trustee
prior to the consummation of the proposed transaction an Officer’s Certificate to the foregoing effect and an Opinion of Counsel
stating that the proposed transaction and any supplemental indenture comply with this Indenture.
Notwithstanding the above, any Subsidiary of the
General Partner may consolidate with, merge into or transfer all or part of its properties to the General Partner. Neither an Officer’s
Certificate nor an Opinion of Counsel shall be required to be delivered in connection therewith.
Section 5.4. General Partner Successor
to Be Substituted.
Upon any consolidation or merger or any sale, conveyance,
transfer or lease of all or substantially all of the properties and assets of the General Partner to any person in accordance with Section 5.3,
the successor person formed by such consolidation or into which the General Partner is merged or to which such sale, conveyance, transfer
or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the General Partner under this Indenture
with the same effect as if such successor person had been named as the General Partner herein, and thereafter, the predecessor person
shall be released from all obligations and covenants under this Indenture; provided, however, that the predecessor Guarantor shall
not be relieved from the obligation, if any, to guarantee the payment of the principal of and interest on the Securities except in the
case of a sale of all or substantially all of the General Partner’s assets in a transaction that is subject to, and that complies
with the provisions of, Section 5.3 hereof.
Article VI.
DEFAULTS AND REMEDIES
Section 6.1. Events of Default.
“Event of Default,” wherever
used herein with respect to Securities of any Series, means any one of the following events, unless in the establishing Board Resolution,
supplemental indenture or Officer’s Certificate, it is provided that such Series shall not have the benefit of said Event of
Default:
| a. | default in the payment of any interest upon any Security of that Series when it becomes due and payable, and continuance of such
default for a period of 90 days (unless the entire amount of such payment is deposited by the Company with the Trustee or with a Paying
Agent prior to the expiration of the 90-day period); or |
| b. | default in the payment of principal of any Security of that Series at its Maturity; or |
| c. | default in the performance or breach of any covenant or warranty of the Company in the Securities of that Series or this Indenture
(other than defaults pursuant to paragraph (a) or (b) above or pursuant to a covenant or warranty that has been included in
this Indenture solely for the benefit of a Series of Securities other than that Series), which default continues uncured for a period
of 90 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee
by the Holders of not less than 25% in principal amount of the outstanding Securities of that Series a written notice specifying
such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or |
| d. | the Company or any Guarantor 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, |
| iv. | makes a general assignment for the benefit of its creditors, or |
| v. | generally is unable to pay its debts as the same become due; or |
| e. | a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: |
| i. | is for relief against the Company or any Guarantor in an involuntary case, |
| ii. | appoints a Custodian of the Company, any Guarantor or for all or substantially all of its property, or |
| iii. | orders the liquidation of the Company or any Guarantor, and the order or decree remains unstayed and in effect for 60 days; or |
| f. | any other Event of Default provided with respect to Securities of that Series, which is specified in a Board Resolution, a supplemental
indenture hereto or an Officer’s Certificate, in accordance with Section 2.2.18. |
The term “Bankruptcy Law” means
title 11, U.S. Code or any similar federal or state law for the relief of debtors. The term “Custodian” means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.
Section 6.2. Acceleration of Maturity;
Rescission and Annulment.
If an Event of Default with respect to Securities
of any Series at the time outstanding occurs and is continuing (other than an Event of Default referred to in Section 6.1(d) or
(e)), then in every such case the Trustee or the Holders of not less than 25% in principal amount of the outstanding Securities
of that Series may declare the principal amount (or, if any Securities of that Series are Discount Securities, such portion
of the principal amount as may be specified in the terms of such Securities) of and accrued and unpaid interest, if any, on all of the
Securities of that Series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by
Holders), and upon any such declaration such principal amount (or such specified amount) and accrued and unpaid interest, if any, shall
become immediately due and payable. If an Event of Default specified in Section 6.1(d) or (e), shall occur, the
principal amount (or specified amount) of and accrued and unpaid interest, if any, on all outstanding Securities shall ipso facto become
and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.
At any time after such a declaration of acceleration
with respect to any Series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee
as hereinafter in this Article provided, the Holders of a majority in principal amount of the outstanding Securities of that Series,
by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences, including any related payment
default that resulted from such acceleration, if all Events of Default with respect to Securities of that Series, other than the non-payment
of the principal and interest, if any, of Securities of that Series which have become due solely by such declaration of acceleration,
have been cured or waived as provided in Section 6.13.
No such rescission shall affect any subsequent
Default or impair any right consequent thereon.
Section 6.3. Collection of Indebtedness
and Suits for Enforcement by Trustee.
The Company covenants that if:
| a. | default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues
for a period of 30 days, or |
| b. | default is made in the payment of principal of any Security at the Maturity thereof, or |
| c. | default is made in the deposit of any sinking fund payment when and as due by the terms of a Security, |
then, the Company and the Guarantors shall, upon
demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities
for principal and interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal
and any overdue interest at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company or the Guarantors fail to pay such
amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding
for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against
the Company, any Guarantor or any other obligor upon such Securities and collect the moneys adjudged or deemed to be payable in the manner
provided by law out of the property of the Company, any Guarantor or any other obligor upon such Securities, wherever situated.
If an Event of Default with respect to any Securities
of any Series occurs and is continuing, the Trustee may proceed to protect and enforce its rights and the rights of the Holders of
Securities of such Series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce
any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
Section 6.4. Trustee May File Proofs
of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or
any other obligor upon the Securities or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand on the Company for the payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
| a. | to file and prove a claim for the whole amount of principal or, if the Securities of such Series are Discount Securities, such
amounts as may be due and payable with respect to such Securities pursuant to an acceleration in accordance with Section 6.2,
and interest owing and unpaid in respect of the Securities and to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and of the Holders allowed in such judicial proceeding, and |
| b. | to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same, and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that such payments shall be made directly to the Holders, to pay
to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel, and any other amounts due the Trustee under Section 7.7. |
Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment
or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim
of any Holder in any such proceeding.
Section 6.5. Trustee May Enforce Claims Without Possession
of Securities.
All rights of action and claims under this Indenture
or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof
in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
Section 6.6. Application of Money Collected.
Any money or property collected by the Trustee
pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution
of such money or property on account of principal or interest, upon presentation of the Securities and the notation thereon of the payment
if only partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee
(acting in any capacity hereunder) and Agents under Section 7.7; and
Second: To the payment of the amounts then due
and unpaid for principal of and interest on the Securities in respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and interest,
respectively; and
Third: To the Company or the Guarantors, as applicable.
Section 6.7. Limitation on Suits.
No Holder of any Security of any Series shall
have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver
or trustee, or for any remedy hereunder, unless
| a. | such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of
that Series; |
| b. | the Holders of not less than 25% in principal amount of the outstanding Securities of that Series shall have made written request
to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; |
| c. | such Holder or Holders have offered to the Trustee indemnity or security reasonably satisfactory to the Trustee against the costs,
claims, expenses and liabilities which might be incurred by the Trustee in compliance with such request; |
| d. | the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding;
and |
| e. | no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the outstanding Securities of that Series; |
it being understood, intended and expressly
covenanted by the Holder of every Security with every other Holder and the Trustee that no one or more of such Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights
of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any
right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all such Holders of the applicable
Series (it being expressly understood that the Trustee shall not have an affirmative duty to ascertain whether such action is prejudicial).
Section 6.8. Unconditional Right of Holders
to Receive Principal and Interest.
Notwithstanding any other provision in this Indenture,
the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest,
if any, on such Security on the Maturity of such Security, including the Stated Maturity expressed in such Security (or, in the case of
redemption, on the redemption date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder.
Section 6.9. Restoration of Rights and
Remedies.
If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding,
the Company, the Guarantors, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder
and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.
Section 6.10. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities in Section 2.8, no right or remedy herein conferred
upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy
shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not, to the
extent permitted by law, prevent the concurrent assertion or employment of any other appropriate right or remedy.
Section 6.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder
of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute
a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the
case may be.
Section 6.12. Control by Holders.
The Holders of a majority in principal amount of
the outstanding Securities of any Series shall have the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such
Series, provided that
| a. | such direction shall not be in conflict with any rule of law or with this Indenture, |
| b. | the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction, |
| c. | the Trustee shall have the right to decline to follow any such direction if the Trustee in good faith shall, by a Responsible Officer
of the Trustee, determine that the proceeding so directed would involve the Trustee in personal liability, the direction is in conflict
with any law or this Indenture, or the direction would be unduly prejudicial to the Holders of such Series not joining therein provided,
however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction (it being
expressly understood that the Trustee shall not have an affirmative duty to ascertain whether such action is prejudicial), and |
| d. | prior to taking any action as directed under this Section 6.12, the Trustee shall receive indemnity or security satisfactory
to it against the costs, claims, expenses and liabilities which might be incurred by it in compliance with such request or direction. |
Section 6.13. Waiver of Past Defaults.
The Holders of not less than a majority in principal
amount of the outstanding Securities of any Series may on behalf of the Holders of all the Securities of such Series, by written
notice to the Trustee and the Company, waive any past Default hereunder with respect to such Series and its consequences, except
a Default in the payment of the principal of or interest on any Security of such Series (provided, however, that the Holders
of a majority in principal amount of the outstanding Securities of any Series may rescind an acceleration and its consequences, including
any related payment default that resulted from such acceleration). Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.
Section 6.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder
of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted
by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys’ fees 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 Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the outstanding Securities of any Series, or
to any suit instituted by any Holder for the enforcement of the payment of the principal of or interest on any Security on or after the
Maturity of such Security, including the Stated Maturity expressed in such Security (or, in the case of redemption, on the redemption
date).
Article VII.
TRUSTEE
Section 7.1. Duties of Trustee.
| a. | If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this the same
degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s
own affairs. |
| b. | Except during the continuance of an Event of Default: |
| i. | The Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants
or obligations shall be read into this Indenture against the Trustee. |
| ii. | In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon Officer’s Certificates or Opinions of Counsel furnished to the Trustee and conforming to
the requirements of this Indenture; however, in the case of any such Officer’s Certificates or Opinions of Counsel which by any
provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall examine such Officer’s Certificates
and Opinions of Counsel to determine whether or not they conform to the form requirements of this Indenture (but need not confirm or investigate
the accuracy of calculations or other facts stated therein). Whenever in the administration of this Indenture the Trustee shall deem it
desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee may require
and conclusively rely upon an Officer’s Certificate and/or an Opinion of Counsel. |
| c. | The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct,
except that: |
| i. | This paragraph does not limit the effect of paragraph (b) of this Section. |
| ii. | The Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts. |
| iii. | The Trustee shall not be liable with respect to any action taken, suffered or omitted to be taken by it with respect to Securities
of any Series in good faith in accordance with the direction of the Company or the Holders of a majority in principal amount of the
outstanding Securities of such Series 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 such
Series in accordance with Section 6.12. |
| d. | Every provision of this Indenture that in any way relates to the Trustee is subject to paragraph (a), (b) and (c) of this
Section. |
| e. | The Trustee may refuse to perform any duty or exercise any right or power unless it receives security or indemnity satisfactory to
it against the losses, costs, claims, expenses and liabilities which might be incurred by it in performing such duty or exercising such
right or power (including, but in no way limited to, the fees and disbursements of agents and attorneys). |
| f. | The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. |
| g. | No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties, or in the exercise of any of its rights or powers. The Trustee shall not be required to give
any bond or surety in respect of the performance of its powers or duties hereunder. |
| h. | The Paying Agent, the Registrar and any authenticating agent shall be entitled to the protections and immunities as are set forth
in paragraphs (e), (f) and (g) of this Section, each with respect to the Trustee. |
Section 7.2. Rights of Trustee.
| a. | The Trustee shall be entitled to conclusively rely on and shall be protected in acting or refraining from acting upon any document
(whether in its original, facsimile or electronic (including .pdf) form) reasonably believed by it to be genuine and to have been signed
or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document. |
| b. | Before the Trustee acts or refrains from acting, it may require and shall be entitled to receive an Officer’s Certificate and
an Opinion of Counsel, or both, which shall conform to the provisions of Section 10.4 and 10.5. The Trustee shall be
protected and shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate
and Opinion of Counsel. |
| c. | The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.
No Depositary shall be deemed an agent of the Trustee and the Trustee shall not be responsible for any act or omission by any Depositary. |
| d. | The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within
its rights or powers, provided that the Trustee’s conduct does not constitute willful misconduct or negligence. |
| e. | The Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder without willful misconduct
or negligence, and in reliance on the advice or opinion of such counsel. |
| f. | The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be
compensated, reimbursed and indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder
(including, but not limited to, as Registrar and Paying Agent), each Agent, and each agent, custodian and other person employed to act
hereunder; provided however, that (i) an Agent shall only be liable to extent of its gross negligence or willful misconduct; and
(ii) in and during an Event of Default, only the Trustee, and not any Agent, shall be subject to the prudent person standard. |
| g. | The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders of Securities unless such Holders shall have offered, and, if requested, provided to the Trustee security
or indemnity satisfactory to it against the losses, costs, claims, expenses and liabilities which might be incurred by it in compliance
with such request or direction. |
| h. | The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document, but the Trustee may make such further inquiry or investigation into such facts or matters as it may see fit. |
| i. | The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has
written notice from the Company or a Holder of any event which is in fact such a default is actually received by the Trustee at the Corporate
Trust Office of the Trustee, and such notice references the Securities generally or the Securities of a particular Series and this
Indenture and states that such Notice is a Notice of Default or Event of Default. |
| j. | Any permissive right or authority granted to the Trustee shall not be construed as a mandatory duty. |
| k. | 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 take specified actions pursuant to this Indenture, which Officer’s Certificate may be signed
by any person authorized to sign an Officer’s Certificate, including any person specified as so authorized in any such certificate
previously delivered and not superseded. |
| l. | 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 arising in connection with the Indenture. |
| m. | The Trustee shall not be required to give any bond or surety in respect of the execution of the trusts and powers or otherwise in
respect of the Indenture. |
| n. | Under no circumstances shall the Trustee be liable in its individual capacity for the obligations evidenced by the Securities. |
| o. | The Trustee is not responsible for monitoring the performance by any third party of their duties or for their failure to perform. |
| p. | Nothing herein shall be construed to impose an obligation on the part of the Trustee to monitor, calculate or recalculate, evaluate
or verify any report, certificate or information received from the Company or any other person (unless and except to the extent expressly
set forth herein), or to monitor, verify or independently determine compliance by the Company with the terms hereof. |
Section 7.3. Individual Rights of Trustee.
The Trustee in its individual or any other capacity
may become the owner or pledgee of Securities and may otherwise deal with the Company or an Affiliate of the Company with the same rights
it would have if it were not Trustee. Any Agent may do the same with like rights. The Trustee is also subject to Sections 7.10
and 7.11.
Section 7.4. Trustee’s Disclaimer.
The Trustee makes no representation as to the validity
or adequacy of this Indenture or the Securities, it shall not be accountable for the Company’s use of the proceeds from the Securities,
and it shall not be responsible for any statement in the Securities other than its authentication.
Section 7.5. Notice of Defaults.
If a Default or Event of Default occurs and is
continuing with respect to the Securities of any Series and a Responsible Officer of the Trustee has written notice from the Company
or a Holder stating that such notice is a Notice of Default or Event of Default, the Trustee shall deliver to each Securityholder of the
Securities of that Series, in the manner set forth in Section 10.2, notice of a Default or Event of Default within 90 days
after it occurs or, if later, after a Responsible Officer of the Trustee has written notice of such Default or Event of Default. Except
in the case of a Default or Event of Default in payment of principal of or interest on any Security of any Series, the Trustee may withhold
the notice if and so long as the Trustee in good faith determines that withholding the notice is in the interests of Securityholders of
that Series.
Section 7.6. Reports by Trustee to Holders.
Within 60 days after May 15 of each year,
the Trustee shall transmit to all Securityholders, as their names and addresses appear on the register kept by the Registrar, a brief
report dated as of such anniversary date, in accordance with, and to the extent required under, TIA Section 313.
A copy of each report at the time of its delivery
to Securityholders of any Series shall be filed with the SEC and each national securities exchange on which the Securities of that
Series are listed. The Company shall promptly notify the Trustee in writing when Securities of any Series are listed or de-listed
on any national securities exchange and of any delisting thereof.
Section 7.7. Compensation and Indemnity.
The Company shall pay to the Trustee (acting in
any capacity 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 and Agents upon request for all reasonable disbursements, out-of-pocket expenses and advances incurred or
made by it. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.
The Company shall indemnify, defend and hold harmless
each of the Trustee (acting in any capacity hereunder) the Agents, and any predecessor Trustee (including the cost of defending itself)
(an “Indemnified Party”) from and against any cost, claim, obligation, expense, losses, damages, injuries, penalties, or liability,
including taxes demanded, asserted, claimed or incurred by it, whether asserted by any Holder, the Company, or otherwise, and including
without limitation all reasonable costs required to be associated with claims for damages to persons or property, and reasonable attorneys’
and consultants’ fees and expenses and court costs, the costs and expenses of enforcing this Indenture (including this the indemnification
provided herein), and of defending itself against any claims, except as set forth in the next paragraph in the performance of its duties
under this Indenture as Trustee or Agent. An Indemnified Party shall notify the Company promptly of any claim for which it may seek indemnity.
Failure by the such Indemnified Party to so notify the Company shall not relieve the Company of its obligations under this Section 7.7.
The Company may defend the claim and such Indemnified Party shall cooperate in the defense; provided that: (i) counsel appointed
by the Company is reasonably acceptable to such Indemnified Party, (ii) there is no conflict of interest between one or more of the
Indemnified Parties, on the one hand, and the Company, on the other hand, in the conduct of the response to a threatened claim or in the
conduct of the defense of an actual claim that would make it inappropriate for the Company to assume such defense, in which event the
Company shall be liable for the reasonable legal expenses of each counsel whose appointment is necessary to resolve such conflict and
(iii) the Company shall not enter into any settlement with respect to such claim or action without the Indemnified Parties’
prior written consent (which such consent shall not be unreasonably withheld or delayed). An Indemnified Party may have separate counsel
of its selection 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 (acting in any capacity hereunder) or Agent.
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 (i) of the Trustee
through willful misconduct or negligence, as determined by a final non-appealable order of a court of competent jurisdiction; (ii) of
an Agent through willful misconduct or gross negligence, as determined by a final non-appealable order of a court of competent jurisdiction.
To secure the Company’s payment obligations
in this Section, the Trustee shall have a lien prior to the Securities of any Series on all money or property held or collected by
the Trustee, except that held in trust to pay principal of and interest on particular Securities of that Series.
When the Trustee incurs expenses or renders services
after an Event of Default specified in Section 6.1(d) or (e) occurs, the expenses and the compensation for the services
are intended to constitute expenses of administration under any Bankruptcy Law.
The provisions of this Section shall survive
the termination of this Indenture and the earlier resignation or removal of the Trustee.
Section 7.8. Replacement of Trustee.
A resignation or removal of the Trustee and appointment
of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section.
The Trustee may resign with respect to the Securities
of one or more Series by so notifying the Company at least 30 days prior to the date of the proposed resignation and the retiring
or resigning Trustee shall have no liability or responsibility for the action or inaction of any successor Trustee. The Holders of a majority
in principal amount of the Securities of any Series may remove the Trustee with respect to that Series by so notifying the Trustee
and the Company. The Company may remove the Trustee with respect to Securities of one or more Series if:
| a. | the Trustee fails to comply with Section 7.10; |
| b. | the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy
Law; |
| c. | a Custodian or public officer takes charge of the Trustee or its property; or |
| d. | the Trustee becomes incapable of acting. |
If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor
Trustee takes office, the Holders of a majority in principal amount of the then outstanding Securities may appoint a successor Trustee
to replace the successor Trustee appointed by the Company.
If a successor Trustee with respect to the Securities
of any one or more Series does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee,
the Company or the Holders of at least a majority in principal amount of the Securities of the applicable Series may, at the Company’s
sole cost and expense, petition any court of competent jurisdiction for the appointment of a successor Trustee. A successor Trustee shall
deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Immediately after that, the retiring Trustee
shall transfer all property held by it as Trustee to the successor Trustee subject to the lien provided for in Section 7.7,
the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers
and duties of the Trustee with respect to each Series of Securities for which it is acting as Trustee under this Indenture. A successor
Trustee shall deliver a notice of its succession to each Securityholder of each such Series. Notwithstanding replacement of the Trustee
pursuant to this Section 7.8, the Company’s obligations under Section 7.7 hereof shall continue for the
benefit of the retiring Trustee with respect to expenses and liabilities incurred by it for actions taken or omitted to be taken in accordance
with its rights, powers and duties under this Indenture prior to such replacement.
Section 7.9. Successor Trustee by Merger,
Etc.
If the Trustee consolidates with, merges or converts
into, or transfers all or substantially all of its corporate trust business to, another corporation or banking association, the successor
corporation or banking association without any further act shall be the successor Trustee, subject to Section 7.10.
Section 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who
satisfies the requirements of TIA Section 310(a)(1), (2) and (5). The Trustee shall always have a combined capital and surplus
as required under Section 310(a)(2) of the TIA and as set forth in the Trustee’s most recent published annual report of
condition. The Trustee shall comply with TIA Section 310(b). In determining whether the Trustee has a conflicting interest as defined
in Section 310(b) of the TIA with respect to the Securities of any Series, there shall be excluded Securities of any particular
Series of Securities other than that Series.
Section 7.11. Preferential Collection of
Claims Against Company.
The Trustee is subject to TIA Section 311(a),
excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to
TIA Section 311(a) to the extent indicated.
Article VIII.
SATISFACTION AND DISCHARGE; DEFEASANCE
Section 8.1. Satisfaction and Discharge
of Indenture.
This Indenture shall upon Company Order be discharged
with respect to the Securities of any Series and cease to be of further effect as to all Securities of such Series (except as
hereinafter provided in this Section 8.1), and the Trustee, at the expense of the Company, shall execute instruments reasonably
requested by the Company acknowledging satisfaction and discharge of this Indenture, when
| i. | all Securities of such Series theretofore authenticated and delivered (other than Securities that have been destroyed, lost or
stolen and that have been replaced or paid) have been delivered to the Trustee for cancellation; or |
| ii. | all such Securities of such Series not theretofore delivered to the Trustee for cancellation: |
| 1. | have become due and payable by reason of sending a notice of redemption or otherwise, or |
| 2. | will become due and payable at their Stated Maturity within one year, or |
| 3. | have been called for redemption or are to be called for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, or |
| 4. | are deemed paid and discharged pursuant to Section 8.3, as applicable |
and the Company, in the case of (1), (2) or
(3) above, has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust an amount of money or U.S.
Government Obligations sufficient for the purpose of paying and discharging the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal and interest to the date of such deposit (in the case of Securities which have
become due and payable on or prior to the date of such deposit) or to the Stated Maturity or redemption date, as the case may be;
| b. | the Company has paid or caused to be paid all other sums payable hereunder by the Company; and |
| c. | the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. |
Notwithstanding the satisfaction and discharge
of this Indenture, the obligations of the Company to the Trustee under Section 7.7, and, if money shall have been deposited
with the Trustee pursuant to clause (a) of this Section, the provisions of Sections 2.4, 2.7, 2.8, 8.2
and 8.5 shall survive.
If the Company exercises the satisfaction and discharge
provisions in compliance with this Indenture with respect to Securities of a particular Series that are entitled to the benefit of
the Guarantee of any Guarantor, the Guarantee will terminate with respect to that Series of Securities.
Section 8.2. Application of Trust Funds;
Indemnification.
| a. | Subject to the provisions of Section 8.5, all money or U.S. Government Obligations deposited with the Trustee pursuant
to Section 8.1 all money and U.S. Government Obligations or Foreign Government Obligations deposited with the Trustee pursuant
to Sections 8.3 or 8.4 and all money received by the Trustee in respect of U.S. Government Obligations or Foreign Government
Obligations deposited with the Trustee pursuant to Sections 8.3 or 8.4, shall be held in trust and applied by it, in accordance
with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the persons entitled thereto, of the principal and interest for whose
payment such money has been deposited with or received by the Trustee or to make mandatory sinking fund payments or analogous payments
as contemplated by Sections 8.3 or 8.4. |
| b. | The Company shall pay and shall indemnify the Trustee (and any Agent as applicable) against any tax, fee or other charge imposed on
or assessed against U.S. Government Obligations or Foreign Government Obligations deposited pursuant to Sections 8.3 or 8.4
or the interest and principal received in respect of such obligations other than any payable by or on behalf of Holders. |
| c. | The Trustee shall deliver or pay to the Company from time to time upon Company Order any U.S. Government Obligations or Foreign Government
Obligations or money held by it as provided in Sections 8.3 or 8.4 which, in the opinion of a nationally recognized firm
of independent certified public accountants or investment bank expressed in a written certification thereof delivered to the Trustee,
are then in excess of the amount thereof which then would have been required to be deposited for the purpose for which such U.S. Government
Obligations or Foreign Government Obligations or money were deposited or received. This provision shall not authorize the sale by the
Trustee of any U.S. Government Obligations or Foreign Government Obligations held under this Indenture. |
Section 8.3. Legal Defeasance of Securities
of any Series.
Unless this Section 8.3 is otherwise
specified, pursuant to Section 2.2, to be inapplicable to Securities of any Series, the Company shall be deemed to have paid
and discharged the entire indebtedness on all the outstanding Securities of any Series on the 91st day after the date of the deposit
referred to in subparagraph (d) hereof, and the provisions of this Indenture, as it relates to such outstanding Securities
of such Series, shall no longer be in effect and any Guarantee will terminate with respect to that Series of Securities (and the
Trustee, at the expense of the Company, shall, upon receipt of a Company Order, execute instruments reasonably requested by the Company
acknowledging the same), except as to:
| a. | the rights of Holders of Securities of such Series to receive, from the trust funds described in subparagraph (d) hereof,
(i) payment of the principal of and each installment of principal of and interest on the outstanding Securities of such Series on
the Maturity of such principal or installment of principal or interest and (ii) the benefit of any mandatory sinking fund payments
applicable to the Securities of such Series on the day on which such payments are due and payable in accordance with the terms of
this Indenture and the Securities of such Series; |
| b. | the provisions of Sections 2.4, 2.7, 2.8, 8.2, 8.3 and 8.5; and |
| c. | the rights, powers, trust and immunities of the Trustee hereunder and the Company’s obligations in connection therewith; provided
that, the following conditions shall have been satisfied: |
| i. | the Company shall have deposited or caused to be irrevocably deposited (except as provided in Section 8.2(g)) with the Trustee
as trust funds in trust for the purpose of making the following payments, specifically pledged as security for and dedicated solely to
the benefit of the Holders of such Securities (i) in the case of Securities of such Series denominated in Dollars, cash in Dollars
and/or U.S. Government Obligations, or (ii) in the case of Securities of such Series denominated in a Foreign Currency (other
than a composite currency), money and/or Foreign Government Obligations, which through the payment of interest and principal in respect
thereof in accordance with their terms, will provide (and without reinvestment and assuming no tax liability will be imposed on such Trustee),
not later than one day before the due date of any payment of money, an amount in cash, sufficient, in the opinion of a nationally recognized
firm of independent public accountants or investment bank expressed in a written certification thereof delivered to the Trustee, to pay
and discharge each installment of principal of and interest, if any, on and any mandatory sinking fund payments in respect of all the
Securities of such Series on the dates such installments of interest or principal and such sinking fund payments are due; |
| ii. | such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound (other than a Default or Event of Default resulting from the borrowing
of funds to be applied to such deposit (and any similar concurrent deposit related to other indebtedness of the Company or any Subsidiary)
and the granting of liens to secure such borrowings); |
| iii. | no Default or Event of Default with respect to the Securities of such Series shall have occurred and be continuing on the date
of such deposit or during the period ending on the 91st day after such date; |
| iv. | the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the Internal Revenue Service a ruling, or (ii) since the date of execution
of this Indenture, there has been a change in the applicable Federal income tax law, in either case stating that, and based thereon such
Opinion of Counsel shall confirm that, the Holders of the Securities of such Series will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit, defeasance and discharge and will be subject to federal income tax on the same amount
and in the same manner and at the same times as would have been the case if such deposit, defeasance and discharge had not occurred; |
| v. | the Company shall have delivered to the Trustee an Officer’s Certificate stating that the deposit was not made by the Company
with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company; and |
| vi. | the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the defeasance contemplated by this Section have been complied with. |
Section 8.4. Covenant Defeasance.
Unless this Section 8.4 is otherwise
specified pursuant to Section 2.2 to be inapplicable to Securities of any Series, the Company may omit to comply with respect
to the Securities of any Series with any term, provision or condition set forth under Sections 4.2, 4.3, 4.4,
and 5.1 as well as any additional covenants specified in a supplemental indenture for such Series of Securities or a Board
Resolution or an Officer’s Certificate delivered pursuant to Section 2.2 (and the failure to comply with any such covenants
shall not constitute a Default or Event of Default with respect to such Series under Section 6.1) and the occurrence
of any event specified in a supplemental indenture for such Series of Securities or a Board Resolution or an Officer’s Certificate
delivered pursuant to Section 2.2.18 and designated as an Event of Default shall not constitute a Default or Event of Default
hereunder, with respect to the Securities of such Series, provided that the following conditions shall have been satisfied:
| a. | With reference to this Section 8.4, the Company has deposited or caused to be irrevocably deposited (except as provided
in Section 8.2(c)) with the Trustee as trust funds in trust for the purpose of making the following payments specifically
pledged as security for, and dedicated solely to, the benefit of the Holders of such Securities (i) in the case of Securities of
such Series denominated in Dollars, cash in Dollars and/or U.S. Government Obligations, or (ii) in the case of Securities of
such Series denominated in a Foreign Currency (other than a composite currency), money and/or Foreign Government Obligations, which
through the payment of interest and principal in respect thereof in accordance with their terms, will provide (and without reinvestment
and assuming no tax liability will be imposed on such Trustee), not later than one day before the due date of any payment of money, an
amount in cash, sufficient, in the opinion of a nationally recognized firm of independent certified public accountants or investment bank
expressed in a written certification thereof delivered to the Trustee, to pay and discharge each installment of principal of and interest,
if any, on and any mandatory sinking fund payments in respect of the Securities of such Series on the dates such installments of
interest or principal and such sinking fund payments are due; |
| b. | Such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound (other than a Default or Event of Default resulting from the borrowing
of funds to be applied to such deposit (and any similar concurrent deposit related to other indebtedness of the Company or any Subsidiary)
and the granting of liens to secure such borrowings); |
| c. | No Default or Event of Default with respect to the Securities of such Series shall have occurred and be continuing on the date
of such deposit; |
| d. | The Company shall have delivered to the Trustee an Opinion of Counsel stating that the Holders of the Securities of such Series will
not recognize income, gain or loss for federal income tax purposes as a result of such deposit and covenant defeasance and will be subject
to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such deposit and covenant
defeasance had not occurred; |
| e. | The Company shall have delivered to the Trustee an Officer’s Certificate stating that the deposit was not made by the Company
with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company; and |
| f. | The Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the covenant defeasance contemplated by this Section have been complied with. |
Section 8.5. Repayment to Company.
Subject to applicable abandoned property law, the
Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of principal and interest that
remains unclaimed for two years. After that, Securityholders entitled to the money must look to the Company for payment as general creditors
unless an applicable abandoned property law designates another person.
Section 8.6. Reinstatement.
If the Trustee or the Paying Agent is unable to
apply any money deposited with respect to Securities of any Series in accordance with Section 8.1 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the obligations of the Company under this Indenture with respect to the Securities of such Series and under the
Securities of such Series shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.1 until
such time as the Trustee or the Paying Agent is permitted to apply all such money in accordance with Section 8.1; provided,
however, that if the Company has made any payment of principal of or interest on or any Additional Amounts with respect to any Securities
because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive
such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent after payment in full to the Holders.
Article IX.
AMENDMENTS AND WAIVERS
Section 9.1. Without Consent of Holders.
The Company, any Guarantors and the Trustee may
amend or supplement this Indenture or the Securities of one or more Series without the consent of any Securityholder:
| a. | to cure any ambiguity, defect or inconsistency; |
| b. | to comply with Article V; |
| c. | to provide for uncertificated Securities in addition to or in place of certificated Securities; |
| d. | to surrender any of the Company’s rights or powers under this Indenture; |
| e. | to add covenants or events of default for the benefit of the holders of Securities of any Series; |
| f. | to comply with the applicable procedures of the applicable Depositary; |
| g. | to make any change that does not adversely affect the rights of any Securityholder; |
| h. | to provide for the issuance of and establish the form and terms and conditions of Securities of any Series as permitted by this
Indenture; |
| i. | to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or
more Series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee; |
| j. | to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA; |
| k. | to reflect the release of any Guarantor in accordance with Article XII; or |
| l. | to add Guarantors with respect to any or all of the Securities or to secure any or all of the Securities or the Guarantees. |
Section 9.2. With Consent of Holders.
The Company, any Guarantors and the Trustee may
enter into a supplemental indenture with the written consent of the Holders of at least a majority in principal amount of the outstanding
Securities of each Series affected by such supplemental indenture (including consents obtained in connection with a tender offer
or exchange offer for the Securities of such Series), for the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner the rights of the Securityholders
of each such Series. Except as provided in Section 6.13, the Holders of at least a majority in principal amount of the outstanding
Securities of any Series by notice to the Trustee (including consents obtained in connection with a tender offer or exchange offer
for the Securities of such Series) may waive compliance by the Company with any provision of this Indenture or the Securities with respect
to such Series.
It shall not be necessary for the consent of the
Holders of Securities under this Section 9.2 to approve the particular form of any proposed supplemental indenture or waiver,
but it shall be sufficient if such consent approves the substance thereof. After a supplemental indenture or waiver under this section
becomes effective, the Company shall mail to the Holders of Securities affected thereby (with a copy to the Trustee), a notice briefly
describing the supplemental indenture or waiver.
Any failure by the Company to send such notice,
or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture or waiver.
Section 9.3. Limitations.
Without the consent of each Securityholder affected,
an amendment or waiver may not:
| a. | reduce the principal amount of Securities whose Holders must consent to an amendment, supplement or waiver; |
| b. | reduce the rate of or extend the time for payment of interest (including default interest) on any Security; |
| c. | reduce the principal or change the Stated Maturity of any Security or reduce the amount of, or postpone the date fixed for, the payment
of any sinking fund or analogous obligation; |
| d. | reduce the principal amount of Discount Securities payable upon acceleration of the maturity thereof; |
| e. | waive a Default or Event of Default in the payment of the principal of or interest, if any, on any Security (except a rescission of
acceleration of the Securities of any Series by the Holders of at least a majority in principal amount of the outstanding Securities
of such Series and a waiver of the payment default that resulted from such acceleration); |
| f. | make the principal of or interest, if any, on any Security payable in any currency other than that stated in the Security; |
| g. | make any change in Section 6.8, 6.13 or 9.3 (this sentence); |
| h. | waive a redemption payment with respect to any Security, provided that such redemption is made at the Company’s option; or |
| i. | if the Securities of that Series are entitled to the benefit of the Guarantee, release any Guarantor of such Series other
than as provided in this Indenture or modify the Guarantee in any manner adverse to the Holders. |
Section 9.4. Compliance with Trust Indenture
Act.
Every amendment to this Indenture or the Securities
of one or more Series shall be set forth in a supplemental indenture hereto that complies with the TIA as then in effect.
Section 9.5. Revocation and Effect of Consents.
Until an amendment is set forth in a supplemental
indenture or a waiver becomes effective, a consent to it by a Holder of a Security is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder’s Security, even if notation
of the consent is not made on any Security. However, any such Holder or subsequent Holder may revoke the consent as to his Security or
portion of a Security if the Trustee receives the notice of revocation before the date of the supplemental indenture or the date the waiver
becomes effective.
Any amendment or waiver once effective shall bind
every Securityholder of each Series affected by such amendment or waiver unless it is of the type described in any of clauses
(a) through (h) of Section 9.3 or requires the consent of each Security Holder affected, as set forth
in a supplemental indenture or Officer’s Certificate in respect to a particular Series of Securities. In that case, the amendment
or waiver shall bind each Holder of a Security who has consented to it and every subsequent Holder of a Security or portion of a Security
that evidences the same debt as the consenting Holder’s Security.
The Company may, but shall not be obligated to,
fix a record date for the purpose of determining the Holders entitled to give their consent or take any other action described above or
required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding
paragraph, those persons who were Holders at such record date (or their duly designated proxies), and only those persons, shall be entitled
to give such consent or to revoke any consent previously given or take any such action, whether or not such persons continue to be Holders
after such record date. No such consent shall be valid or effective for more than 120 days after such record date.
Section 9.6. Notation on or Exchange of
Securities.
The Company or the Trustee may place an appropriate
notation about an amendment or waiver on any Security of any Series thereafter authenticated. The Company in exchange for Securities
of that Series may issue and the Trustee shall authenticate upon request new Securities of that Series that reflect the amendment
or waiver.
Section 9.7. Trustee Protected.
The Trustee will execute and deliver any amendment
or supplemental indenture authorized pursuant to this Article IX; provided, however, that the Trustee need not (but
may, in its sole and absolute discretion) execute or deliver any such amendment or supplemental indenture that the Trustee reasonably
concludes adversely affects the Trustee’s rights, duties, liabilities, indemnities, or immunities. In executing, or accepting the
additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created
by this Indenture, the Trustee shall receive, and (subject to Section 7.1) shall be fully protected in relying upon, an Officer’s
Certificate or an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture.
The Trustee shall sign all supplemental indentures upon delivery of such an Officer’s Certificate or Opinion of Counsel, except
that the Trustee need not sign any supplemental indenture that adversely affects its rights.
Article X.
MISCELLANEOUS
Section 10.1. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies,
or conflicts with another provision which is required or deemed to be included in this Indenture by the TIA, such required or deemed provision
shall control.
Section 10.2. Notices.
Any notice or communication by the Company, any
Guarantor or the Trustee to the other, or by a Holder to the Company, any Guarantor or the Trustee, is duly given if in writing and delivered
in person or mailed by first-class mail or overnight nationally recognized courier:
if to the Company or any Guarantor:
IIP Operating Partnership, LP
West Bernardo Court, Suite 100
San Diego, CA 92127
Attention: General Counsel
with a copy to:
Foley & Lardner LLP
100 North Tampa Street, Suite 2700
Tampa, Florida 33602
Attention: Carolyn T. Long
if to the Trustee:
Argent Institutional Trust Company
Abernathy Road, Suite 480
Atlanta, Georgia 30328
Attention: Debbie Schachel
If to the Registrar:
Securities Transfer Corporation
2901 North Dallas Parkway, Suite 380
Plano, Texas 75093
Attention: David Lopez
The Company, any Guarantor or the Trustee by notice
to the other may designate additional or different addresses for subsequent notices or communications.
Any notice or communication to a Securityholder
shall be sent electronically or by first-class mail to his, her or its address shown on the register kept by the Registrar, in accordance
with the procedures of the Depositary. Any notice or communication to the Trustee or Agent shall be deemed received upon actual receipt
by the Trustee or Agent, as applicable.
Failure to send a notice or communication to a
Securityholder of any Series or any defect in it shall not affect its sufficiency with respect to other Securityholders of that or
any other Series.
If a notice or communication is sent or published
in the manner provided above, within the time prescribed, it is duly given, whether or not the Securityholder receives it.
If the Company or any Guarantor mails a notice
or communication to Securityholders, it shall mail a copy to the Trustee and each Agent at the same time.
Notwithstanding any other provision of this Indenture
or any Security, where this Indenture or any Security provides for notice of any event (including any notice of redemption) to a Holder
of a Global Security (whether by mail or otherwise), such notice shall be sufficiently given to the Depositary for such Security (or its
designee) pursuant to the customary procedures of such Depositary.
Section 10.3. Communication by Holders
with Other Holders.
Securityholders of any Series may communicate
pursuant to TIA Section 312(b) with other Securityholders of that Series or any other Series with respect to their
rights under this Indenture or the Securities of that Series or all Series. The Company, the Trustee, the Registrar and anyone else
shall have the protection of TIA Section 312(c).
Section 10.4. Certificate and Opinion as
to Conditions Precedent.
Upon any request or application by the Company
to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee:
| a. | an Officer’s Certificate stating that, in the opinion of the signers, all covenants and conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with; and |
| b. | an Opinion of Counsel stating that, in the opinion of such counsel, all such covenants and conditions precedent have been complied
with. |
Section 10.5. Statements Required in Certificate
or Opinion.
Each certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA Section 314(a)(4))
shall comply with the provisions of TIA Section 314(e) and shall include:
| a. | a statement that the person making such certificate or opinion has read such covenant or condition; |
| b. | a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based; |
| c. | a statement that, in the opinion of such person, such person has made such examination or investigation as is necessary to enable
such person to express an informed opinion as to whether or not such covenant or condition has been complied with; and |
| d. | a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with. |
Section 10.6. Rules by Trustee and
Agents.
The Trustee may make reasonable rules for
action by or a meeting of Securityholders of one or more Series. Any Agent may make reasonable rules and set reasonable requirements
for its functions.
Section 10.7. Legal Holidays.
Unless otherwise provided by Board Resolution,
Officer’s Certificate or supplemental indenture hereto for a particular Series, a “Legal Holiday” is any day
that is not a Business Day. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.
Section 10.8. No Recourse Against Others.
A director, officer, employee or stockholder (past
or present), as such, of the Company or any Guarantor shall not have any liability for any obligations of the Company under the Securities,
the Guarantee or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Securityholder
by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the issue of
the Securities.
Section 10.9. Counterparts.
This Indenture may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and
all of which taken together shall constitute one and the same agreement. 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. The words “execution,” “signed,” “signature,”
and words of like import in this Indenture shall include images of manually executed signatures transmitted by facsimile, email or other
electronic format (including, without limitation, “pdf,” “tif” or “jpg”) and other electronic signatures
(including without limitation, DocuSign and AdobeSign). The use of electronic signatures and electronic records (including, without limitation,
any contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same legal
effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent
permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic
Signatures and Records Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic
Transactions Act or the Uniform Commercial Code. Without limitation to the foregoing, and anything in this Indenture to the contrary notwithstanding,
(a) any Officer’s Certificate, Company Order, Opinion of Counsel, Security, Guarantee endorsed on any Security, opinion of
counsel, instrument, agreement or other document delivered pursuant to this Indenture may be executed, attested and transmitted by any
of the foregoing electronic means and formats, (b) all references in Section 2.3 or elsewhere in this Indenture to the
execution, attestation or authentication of any Security, any Guarantee endorsed on any Security, or any certificate of authentication
appearing on or attached to any Security by means of a manual or facsimile signature shall be deemed to include signatures that are made
or transmitted by any of the foregoing electronic means or formats, and (c) any requirement in this Indenture that any signature
be made under a corporate seal (or facsimile thereof) shall not be applicable to the Securities or any Guarantees endorsed on any Securities.
The Company agrees to assume all risks arising out of the use of using digital signatures, including without limitation the risk of the
Trustee acting on unauthorized instructions. The Trustee shall not have any duty to confirm that the person sending any notice, instruction
or other communication (a “Notice”) by electronic transmission (including by e-mail, facsimile transmission, web portal
or other electronic methods) is, in fact, a person authorized to do so. Electronic signatures believed by the Trustee to comply with the
ESIGN Act of 2000 or other applicable law (including electronic images of handwritten signatures and digital signatures provided by DocuSign,
Orbit, Adobe Sign or any other digital signature provider acceptable to the Trustee) shall be deemed original signatures for all purposes.
Each other party assumes all risks arising out of the use of electronic signatures and electronic methods to send Notices to the Trustee,
including without limitation the risk of the Trustee acting on an unauthorized Notice, and the risk of interception or misuse by third
parties.
Section 10.10. Governing Law; Waiver of
Jury Trial; Consent to Jurisdiction.
THIS INDENTURE AND THE SECURITIES, INCLUDING
ANY CLAIM OR CONTROVERSY ARISING OUT OF OR RELATING TO THE INDENTURE OR THE SECURITIES, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK (WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS THEREOF OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW).
THE COMPANY, THE GUARANTORS, THE TRUSTEE AND THE
HOLDERS (BY THEIR ACCEPTANCE OF THE SECURITIES) EACH HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
Any legal suit, action or proceeding arising out
of or based upon this Indenture or the transactions contemplated hereby may be instituted in the federal courts of the United States of
America located in the Borough of Manhattan, the City of New York or the courts of the State of New York in each case located in the Borough
of Manhattan, the City of New York (collectively, the “Specified Courts”), and each party irrevocably submits to the
non-exclusive jurisdiction of such courts in any such suit, action or proceeding. Solely as to the Company, service of any process, summons,
notice or document by mail (to the extent allowed under any applicable statute or rule of court) to the Company’s address set
forth above shall be effective service of process for any suit, action or other proceeding brought in any such court. The Company, the
Guarantors, the Trustee and the Holders (by their acceptance of the Securities) each hereby irrevocably and unconditionally waive any
objection to the laying of venue of any suit, action or other proceeding in the Specified Courts and irrevocably and unconditionally waive
and agree not to plead or claim any such suit, action or other proceeding has been brought in an inconvenient forum.
Section 10.11. No Adverse Interpretation
of Other Agreements.
This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company or a Subsidiary of the Company. Any such indenture, loan or debt agreement may not be
used to interpret this Indenture.
Section 10.12. Successors.
All agreements of the Company and the Guarantors
in this Indenture and the Securities shall bind their respective successors. All agreements of the Trustee in this Indenture shall bind
its successor.
Section 10.13. Severability.
In case any provision in this Indenture or in the
Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
Section 10.14. Table of Contents, Headings,
Etc.
The Table of Contents, Cross Reference Table, and
headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered
a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.
Section 10.15. Securities in a Foreign
Currency.
Unless otherwise specified in a Board Resolution,
a supplemental indenture hereto or an Officer’s Certificate delivered pursuant to Section 2.2 of this Indenture with
respect to a particular Series of Securities, whenever for purposes of this Indenture any action may be taken by the Holders of a
specified percentage in aggregate principal amount of Securities of all Series or all Series affected by a particular action
at the time outstanding and, at such time, there are outstanding Securities of any Series which are denominated in more than one
currency, then the principal amount of Securities of such Series which shall be deemed to be outstanding for the purpose of taking
such action shall be determined by converting any such other currency into a currency that is designated upon issuance of any particular
Series of Securities. Unless otherwise specified in a Board Resolution, a supplemental indenture hereto or an Officer’s Certificate
delivered pursuant to Section 2.2 of this Indenture with respect to a particular Series of Securities, such conversion
shall be made by the Company at the spot rate for the purchase of the designated currency as published in The Financial Times in the “Currency
Rates” section (or, if The Financial Times is no longer published, or if such information is no longer available in The Financial
Times, such source as may be selected in good faith by the Company) on any date of determination. The provisions of this paragraph shall
apply in determining the equivalent principal amount in respect of Securities of a Series denominated in currency other than Dollars
in connection with any action taken by Holders of Securities pursuant to the terms of this Indenture.
All decisions and determinations provided for in
the preceding paragraph shall, in the absence of manifest error, to the extent permitted by law, be conclusive for all purposes and irrevocably
binding upon the Trustee and all Holders.
Section 10.16. Judgment Currency.
The Company and each Guarantor agrees, to the fullest
extent that it may effectively do so under applicable law, that (a) if for the purpose of obtaining judgment in any court it is necessary
to convert the sum due in respect of the principal of or interest or other amount on the Securities of any Series (the “Required
Currency”) into a currency in which a judgment will be rendered (the “Judgment Currency”), the rate of exchange
used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required
Currency with the Judgment Currency on the day on which final unappealable judgment is entered, unless such day is not a New York Banking
Day, then the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase
in The City of New York the Required Currency with the Judgment Currency on the New York Banking Day preceding the day on which final
unappealable judgment is entered and (b) its obligations under this Indenture to make payments in the Required Currency (i) shall
not be discharged or satisfied by any tender, any recovery pursuant to any judgment (whether or not entered in accordance with subsection
(a)), in any currency other than the Required Currency, except to the extent that such tender or recovery shall result in the actual
receipt, by the payee, of the full amount of the Required Currency expressed to be payable in respect of such payments, (ii) shall
be enforceable as an alternative or additional cause of action for the purpose of recovering in the Required Currency the amount, if any,
by which such actual receipt shall fall short of the full amount of the Required Currency so expressed to be payable, and (iii) shall
not be affected by judgment being obtained for any other sum due under this Indenture. For purposes of the foregoing, “New York
Banking Day” means any day except a Saturday, Sunday or a legal holiday in The City of New York on which banking institutions
are authorized or required by law, regulation or executive order to close.
Section 10.17. USA Patriot Act.
The parties hereto acknowledge that, in accordance
with Section 326 of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (as amended, modified
or supplemented from time to time, the “USA Patriot Act”), the Trustee, like all financial institutions, is required
to obtain, verify, and record information that identifies each person or legal entity that opens an account. The parties to this Indenture
agree that they will provide the Trustee with such information as the Trustee may reasonably request in order for the Trustee to satisfy
the requirements of the USA Patriot Act.
Section 10.18. Force Majeure.
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 strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, pandemics,
epidemics, recognized public emergencies, quarantine restrictions, nuclear or natural catastrophes or acts of God, and interruptions,
loss or malfunctions of utilities, communications or computer (software and hardware) services hacking, cyber-attacks, or other use or
infiltration of the Trustee’s technological infrastructure exceeding authorized access; 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.
Article XI.
SINKING FUNDS
Section 11.1. Applicability of Article.
The provisions of this Article shall be applicable
to any sinking fund for the retirement of the Securities of a Series if so provided by the terms of such Securities pursuant to Section 2.2,
except as otherwise permitted or required by any form of Security of such Series issued pursuant to this Indenture.
The minimum amount of any sinking fund payment
provided for by the terms of the Securities of any Series is herein referred to as a “mandatory sinking fund payment”
and any other amount provided for by the terms of Securities of such 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 11.2. Each sinking fund payment shall be applied to the redemption of Securities of any Series as
provided for by the terms of the Securities of such Series.
Section 11.2. Satisfaction of Sinking Fund
Payments with Securities.
The Company may, in satisfaction of all or any
part of any sinking fund payment with respect to the Securities of any Series to be made pursuant to the terms of such Securities
(1) deliver outstanding Securities of such Series to which such sinking fund payment is applicable (other than any of such Securities
previously called for mandatory sinking fund redemption) and (2) apply as credit Securities of such Series to which such sinking
fund payment is applicable and which have been repurchased by the Company or redeemed either at the election of the Company pursuant to
the terms of such Series of Securities (except pursuant to any mandatory sinking fund) or through the application of permitted optional
sinking fund payments or other optional redemptions pursuant to the terms of such Securities, provided that such Securities have
not been previously so credited. Such Securities shall be received by the Trustee, together with an Officer’s Certificate with respect
thereto, not later than 15 days prior to the date on which the Trustee begins the process of selecting Securities for redemption, and
shall be credited for such purpose by the Trustee at the 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. If as a result of the delivery or credit of Securities
in lieu of cash payments pursuant to this Section 11.2, the principal amount of Securities of such Series to be redeemed
in order to exhaust the aforesaid cash payment shall be less than $100,000, the Trustee need not call Securities of such Series for
redemption, except upon receipt of a Company Order that such action be taken, and such cash payment shall be held by the Trustee or a
Paying Agent and applied to the next succeeding sinking fund payment, provided, however, that the Trustee or such Paying Agent
shall from time to time upon receipt of a Company Order pay over and deliver to the Company any cash payment so being held by the Trustee
or such Paying Agent upon delivery by the Company to the Trustee of Securities of that Series purchased by the Company having an
unpaid principal amount equal to the cash payment required to be released to the Company.
Section 11.3. Redemption of Securities
for Sinking Fund.
Not less than 45 days (unless otherwise indicated
in the Board Resolution, supplemental indenture hereto or Officer’s Certificate in respect of a particular Series of Securities)
prior to each sinking fund payment date for any Series of Securities, the Company will deliver to the Trustee an Officer’s
Certificate specifying the amount of the next ensuing mandatory sinking fund payment for that Series pursuant to the terms of that
Series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied
by delivering and crediting of Securities of that Series pursuant to Section 11.2, and the optional amount, if any, to
be added in cash to the next ensuing mandatory sinking fund payment, and the Company shall thereupon be obligated to pay the amount therein
specified. Not less than 30 days (unless otherwise indicated in the Board Resolution, Officer’s Certificate or supplemental indenture
in respect of a particular Series of Securities) before each such sinking fund payment date the Trustee shall select the Securities
to be redeemed upon such sinking fund payment date in the manner specified in Section 3.2 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the manner provided in Section 3.3. Such notice having
been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 3.4, 3.5
and 3.6.
Article XII.
GUARANTEE
Section 12.1. Unconditional Guarantee.
| a. | Notwithstanding any provision of this Article XII to the contrary, the provisions of this Article XII shall be applicable
only to, and inure solely to the benefit of, the Securities of any Series designated, pursuant to Section 2.2.23, as
entitled to the benefits of the Guarantee of each Guarantor identified in such designation and that has executed a Notation of Guarantee
with respect to such Series. |
| b. | For value received, each Guarantor hereby jointly and severally, fully, unconditionally and absolutely guarantees (the “Guarantee”)
to the Holders and to the Trustee the due and punctual payment of the principal of, premium, if any, and interest on each Series of
Securities for which such Guarantor has executed a Notation of Guarantee with respect to such Series and all other amounts due and
payable under this Indenture and the Securities of such Series by the Company, when and as such principal, premium, if any, interest,
and such other amounts as shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption
or otherwise, according to the terms of such Securities and this Indenture, subject to the limitations set forth in Section 12.3. |
| c. | Failing payment when due of any amount guaranteed pursuant to the Guarantee, for whatever reason, each of the Guarantors will be jointly
and severally obligated to pay the same immediately. Each of the Guarantors hereby agrees that its obligations hereunder shall be full,
unconditional and absolute, irrespective of the validity, regularity or enforceability of the Securities, the Guarantee (including the
Guarantee of any other Guarantor) or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder
of the Securities with respect to any provisions hereof or thereof, the recovery of any judgment against the Company or any other Guarantor,
or any action to enforce the same or any other circumstances which might otherwise constitute a legal or equitable discharge or defense
of any of the Guarantors. Each Guarantor hereby agrees that in the event of a default in payment of the principal of or interest on the
Securities entitled to the Guarantee of such Guarantor, whether at the Stated Maturity or by declaration of acceleration, call for redemption
or otherwise, legal proceedings may be instituted by the Trustee on behalf of the Holders or, subject to Section 6.7 by the
Holders, on the terms and conditions set forth in this Indenture, directly against such Guarantor to enforce the Guarantee without first
proceeding against the Company or any other Guarantor. |
| d. | Each Guarantor hereby (i) waives diligence, presentment, demand of payment, filing of claims with a court in the event of the
merger, insolvency or bankruptcy of the Company or any of the Guarantors, and all demands whatsoever and (ii) acknowledges that any
agreement, instrument or document evidencing the Guarantee may be transferred and that the benefit of its obligations hereunder shall
extend to each holder of any agreement, instrument or document evidencing the Guarantee without notice to it. Each Guarantor further agrees
that if at any time all or any part of any payment theretofore applied by any person to the Guarantee is, or must be, rescinded or returned
for any reason whatsoever, including without limitation, the insolvency, bankruptcy or reorganization of the Company or any of the Guarantors,
the Guarantee shall, to the extent that such payment is or must be rescinded or returned, be deemed to have continued in existence notwithstanding
such application, and the Guarantee shall continue to be effective or be reinstated, as the case may be, as though such application had
not been made. |
| e. | Each Guarantor shall be subrogated to all rights of the Holders and the Trustee against the Company in respect of any amounts paid
by such Guarantor pursuant to the provisions of this Indenture; provided, however, that such Guarantor shall not be entitled
to enforce or to receive any payments arising out of, or based upon, such right of subrogation until all of the Securities entitled to
the Guarantee of such Guarantor and the Guarantee shall have been paid in full or discharged. |
Section 12.2. Execution and Delivery of
Notation of Guarantee.
To evidence the Guarantee of a Guarantor of a Series of
Securities, a Notation of Guarantee, executed by either manual or facsimile signature of an Officer of such Guarantor, shall be affixed
on each Security entitled to the benefits of the Guarantee of such Guarantor. If any Officer of any Guarantor whose signature is on a
Notation of Guarantee no longer holds that office at the time the Trustee authenticates a Security to which such Notation of Guarantee
is affixed or at any time thereafter, the Guarantee of such Security shall be valid nevertheless. The delivery of any Security by the
Trustee, after the authentication thereof hereunder, shall constitute due delivery of any Guarantee relating to such Security set forth
in the Indenture on behalf of the Guarantor. Notwithstanding the foregoing, each Guarantor hereby agrees that its Guarantee shall remain
in full force and effect notwithstanding the absence of a Notation of Guarantee being affixed to such Security.
Section 12.3. Limitation on Guarantors’
Liability.
Each Guarantor by its acceptance hereof and each
Holder of Security and the Trustee entitled to the benefits of the Guarantee hereby confirms that it is the intention of all such parties
that the guarantee by such Guarantor pursuant to the Guarantee not constitute a fraudulent transfer or conveyance for purposes of any
federal or state law. To effectuate the foregoing intention, each Holder of a Security and the Trustee entitled to the benefits of the
Guarantee and each Guarantor hereby irrevocably agrees that the obligations of each Guarantor under the Guarantee shall be limited to
the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Guarantor and to any collections
from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under the Guarantee,
not result in the obligations of such Guarantor under the Guarantee constituting a fraudulent conveyance or fraudulent transfer under
federal or state law.
Section 12.4. Release of Guarantors from
Guarantee.
| a. | Notwithstanding any other provisions of this Indenture, the Guarantee of any Guarantor may be released upon the terms and subject
to the conditions set forth in Section 8.1, Section 8.3 and this Section 12.4. Provided that no Default
shall have occurred and shall be continuing under this Indenture, the Guarantee incurred by a Guarantor pursuant to this Article XII
shall be unconditionally released and discharged (i) automatically upon (A) any sale, exchange or transfer, whether by way of
merger or otherwise, to any person that is not an Affiliate of the Company, of all of the Company’s direct or indirect equity interests
in such Guarantor (provided such sale, exchange or transfer is not prohibited by this Indenture) or (B) the merger of such Guarantor
into the Company or any other Guarantor or the liquidation and dissolution of such Guarantor (in each case to the extent not prohibited
by this Indenture) or (ii) with respect to any Series of Securities, upon the occurrence of any other condition set forth in
the Board Resolution, supplemental indenture or Officer’s Certificate establishing the terms of such Series. |
| b. | Upon receipt of a written request of the Company accompanied by an Officer’s Certificate and Opinion of Counsel stating that
(i) any Guarantor is entitled to be released from the Guarantee in accordance with the provisions of this Indenture and (ii) such
release of the Guarantor is authorized or permitted by the terms of this Indenture, the Trustee shall deliver instruments reasonably requested
by the Company or such Guarantor evidencing the release of such Guarantor from the Guarantee, such instruments to be prepared by the Company
or such Guarantor and delivered to the Trustee. Any Guarantor not so released shall remain liable for the full amount of principal of
and interest on the Securities entitled to the benefits of the Guarantee as provided in this Indenture, subject to the limitations of
Section 12.3. |
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed as of the day and year first above written.
| |
IIP OPERATING PARTNERSHIP, LP, as the Company |
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|
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By: |
Innovative Industrial Properties, Inc., as its sole general partner |
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By: |
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Name: |
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Title: |
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INNOVATIVE INDUSTRIAL PROPERTIES, INC., as Guarantor |
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By: |
|
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Name: |
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Title: |
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|
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ARGENT INSTITUTIONAL TRUST COMPANY, as Trustee |
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By: |
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Name: |
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Title: |
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SECURITIES TRANSFER CORPORATION, as Registrar |
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By: |
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Name: |
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Title: |
[Signature Page for Indenture]
EXHIBIT A
[FORM OF]
NOTATION
OF GUARANTEE
Each Guarantor signing below has fully, unconditionally
and absolutely guaranteed, to the extent set forth in the Indenture and subject to the provisions in the Indenture, the due and punctual
payment of the principal of, premium, if any, and interest on the Securities to which this notation is affixed and all other amounts due
and payable under the Indenture and the Securities to which this notation is affixed by the Company.
The obligations of such Guarantor to the Holders
of Securities to which this notation is affixed and to the Trustee pursuant to the Guarantee and the Indenture are expressly set forth
in Article XII of the Indenture and reference is hereby made to the Indenture for the precise terms of the Guarantee.
| |
[NAME OF GUARANTOR(S)] |
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|
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By: |
|
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Name: |
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Title: |
Exhibit 5.1
|
|
ATTORNEYS AT LAW
3579 Valley Centre Drive,
Suite 300
San Diego, CA 92130
858.847.6700 TEL
858.792.6773 FAX
www.foley.com |
February 21, 2025
Innovative Industrial Properties, Inc.
1389 Center Drive, Suite 200
Park City, Utah 84098 |
|
| Re: | Registration Statement on Form S-3 |
Ladies and Gentlemen:
In connection with the Registration
Statement on Form S-3 (the “Registration Statement”) under the Securities Act of 1933, as amended (the “Securities
Act”), of Innovative Industrial Properties, Inc., a Maryland corporation (the “Company”), proposed
to be filed by the Company with the Securities and Exchange Commission (the “Commission”) on or about the date hereof,
you have requested our opinions set forth below.
You
have provided us with a copy of the Registration Statement, which relates to the issuance and sale from time to time, pursuant to Rule 415
of the General Rules and Regulations of the Commission promulgated under the Securities Act (the “Rules and Regulations”),
of an indeterminate amount of (i) common stock of the Company, par value $0.001 per share (the “Common Stock”),
(ii) preferred stock of the Company, par value $0.001 per share (the “Preferred Stock”), (iii) depositary
shares of the Company evidenced by receipts (“Receipts”) representing fractional interests in Preferred Stock (the
“Depositary Shares”), (iv) warrants to purchase shares of Common Stock or Preferred Stock (the “Warrants”),
(v) rights to purchase shares of Common Stock or Preferred Stock (the “Rights”), (vi) units of the Company
consisting of an interest in two or more securities of the types described in the Registration Statement, or a combination thereof
(the “Units”), which may or may not be separable from one another, and (vii) debt securities (the
“Debt Securities”) of IIP Operating Partnership, LP, a Delaware limited liability corporation (the “Operating
Partnership”), which may be guaranteed by the Company (the “Guarantees” and together with the Common
Stock, the Preferred Stock, the Depositary Shares, the Warrants, the Rights, the Units, and the Debt Securities, the “Securities”).
We understand that (i) Depositary
Shares will be issued under one or more deposit agreements (each, a “Deposit Agreement”) between the Company and the
depositary party thereto (the “Depositary”), substantially in the form to be filed as an exhibit to a post-effective
amendment to the Registration Statement or as an exhibit to a document filed under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and incorporated into the Registration Statement by reference; (ii) any Warrants will be issued
pursuant to one or more warrant agreements (each, a “Warrant Agreement”) between the Company and the warrant agent
named therein (“Warrant Agent”) substantially in the form to be filed as an exhibit to a post-effective amendment
to the Registration Statement or as an exhibit to a document filed under the Exchange Act and incorporated into the Registration Statement
by reference; (iii) any Rights will be issued pursuant to one or more rights agreements (each, a “Rights Agreement”)
and/or rights certificate (“Rights Certificate”) between the Company and the rights agent named therein (“Rights
Agent”) substantially in the form to be filed as an exhibit to a post-effective amendment to the Registration Statement or
as an exhibit to a document filed under the Exchange Act and incorporated into the Registration Statement by reference; (iv) any
Units will be issued pursuant to one or more unit agreements (each, a “Unit Agreement”) between the Company and the
unit agent named therein (“Unit Agent”) substantially in the form to be filed as an exhibit to a post-effective amendment
to the Registration Statement or as an exhibit to a document filed under the Exchange Act and incorporated into the Registration Statement
by reference, and (v) any Debt Securities and, if applicable, any Guarantees will be issued in one or more series pursuant to an
indenture substantially in the form of Exhibit 4.2 to the Registration Statement (the “Indenture”), between the
Operating Partnership, the Company, the registrar named therein (the “Registrar”) and the trustee named therein (the
“Trustee”). As used herein, “Transaction Agreements” means the Deposit Agreements, the Warrant
Agreements, the Rights Agreements, the Rights Certificates, the Unit Agreements, the Guarantees, and the Indenture.
AUSTIN
Boston
CHICAGO
dallas
DENVER |
DETROIT
houston
JACKSONVILLE
LOS ANGELES
MADISON |
MEXICO
CITY
MIAMI
MILWAUKEE
NEW YORK
ORLANDO
|
SACRAMENTO
SAN DIEGO
SAN FRANCISCO
SILICON
VALLEY
TALLAHASSEE |
TAMPA
WASHINGTON,
D.C.
BRUSSELS
TOKYO |
February 21, 2025
Page 2
In connection with this opinion,
we have examined the Registration Statement, the Indenture and originals or copies, certified or otherwise identified to our satisfaction
of such records, agreements and instruments of the Company and the Operating Partnership, certificates and receipts of public officials
and of officers or other representatives of the Company and the Operating Partnership and such other documents and records, and such
matters of law, as we have deemed necessary or appropriate as a basis for the opinions stated below. In our examination, we have assumed
the genuineness of all signatures, including endorsements, the legal capacity and competency of all natural persons, the authenticity
of all documents submitted to us as originals and the conformity to the original documents of all documents submitted to us as facsimile,
electronic, certified or photostatic copies, and the authenticity of the originals of such copies. As to various questions of fact material
to this opinion, we have relied upon, without independent verification of their accuracy, certificates of public officials, statements
and representations of officers and other representatives of the Company and the Operating Partnership, and statements of fact contained
in documents we have examined.
The opinions expressed herein
presume that all of the following (collectively, the “general conditions”) shall have occurred prior to the issuance
of the Securities referred to therein: (i) the Registration Statement, as finally amended (including all necessary post-effective
amendments), has become effective under the Securities Act; (ii) an appropriate prospectus supplement with respect to such Securities
has been prepared, delivered and filed in compliance with the Securities Act and the applicable Rules and Regulations; (iii) the
applicable Transaction Agreements shall have been duly authorized, executed and delivered by the Company and the other parties thereto,
including, if such Securities are to be sold or otherwise distributed pursuant to an underwritten offering, the underwriting agreement
or purchase agreement with respect thereto; (iv) the issuance and sale of such Securities (and the terms and conditions thereof)
have been duly authorized and approved on behalf of the Company and, if applicable, the Operating Partnership; and (v) the terms
of the applicable Transaction Agreements and the issuance and sale of such Securities have been duly established in conformity with the
requisite organizational documents of the Company and, if applicable, the Operating Partnership, so as not to violate any applicable law,
or any such organizational documents, or result in a default under or breach of any agreement or instrument binding upon the Company,
and, if applicable, the Operating Partnership, so as to comply with any requirement or restriction imposed by any court or governmental
body having jurisdiction over the Company and the Operating Partnership, the Depositary, the Warrant Agent, the Rights Agent, the Unit
Agent, the Trustee, and the Registrar, as applicable
February 21, 2025
Page 3
Based upon the foregoing and
subject to the qualifications and assumptions stated herein, we are of the opinion that:
1. With
respect to any shares of the Common Stock offered by the Company pursuant to the Registration Statement (the “Offered Common
Stock”), when (a) the general conditions shall have been satisfied, (b) if the Offered Common Stock is to be certificated,
certificates in the form required under the Maryland General Corporation Law (“MGCL”) representing the shares of Offered
Common Stock are duly executed and countersigned, and (c) the shares of Offered Common Stock are registered in the Company’s
share registry and delivered upon payment of the agreed-upon consideration therefor, the shares of Offered Common Stock, when issued and
sold or otherwise distributed in accordance with the provisions of the applicable Transaction Agreements and, if distributed pursuant
to an underwritten offering, in accordance with the provisions of the underwriting agreement or purchase agreement with respect thereto,
will be duly authorized by all requisite corporate action on the part of the Company under the MGCL and validly issued, fully paid and
nonassessable, provided that the consideration therefor is not less than the par value per share of the Common Stock.
2. With
respect to any shares of the Preferred Stock offered by the Company pursuant to the Registration Statement (the “Offered Preferred
Stock”), when (a) the general conditions shall have been satisfied, (b) the Board of Directors of the Company, or
a duly authorized committee thereof, has duly adopted articles supplementary for the Offered Preferred Stock in accordance with the MGCL,
(c) such articles supplementary have been duly filed with and accepted for record by the State Department of Assessments and Taxation
of Maryland establishing the relative powers, designations, preferences, rights, qualifications, limitations or restrictions of such Offered
Preferred Stock, (d) if the Offered Preferred Stock is to be certificated, certificates in the form required under the MGCL representing
the shares of Offered Preferred Stock are duly executed and countersigned, and (e) the shares of Offered Preferred Stock are registered
in the Company’s share registry and delivered upon payment of the agreed-upon consideration therefor, the shares of Offered Preferred
Stock, when issued and sold or otherwise distributed in accordance with the provisions of the applicable Transaction Agreements and, if
distributed pursuant to an underwritten offering, in accordance with the provisions of the underwriting agreement or purchase agreement
with respect thereto, will be duly authorized by all requisite corporate action on the part of the Company under the MGCL and validly
issued, fully paid and nonassessable, provided that the consideration therefor is not less than the par value per share of the Preferred
Stock.
February 21, 2025
Page 4
3. With
respect to the Depositary Shares offered by the Company pursuant to the Registration Statement (the “Offered Depositary Shares”),
when (a) the general conditions shall have been satisfied, (b) the shares of Preferred Stock relating to such Offered Depositary
Shares have been duly authorized for issuance, (c) the terms of the Offered Depositary Shares have been established in accordance
with the Depositary Agreement, (d) the Receipts evidencing the Offered Depositary Shares have been duly executed and countersigned
(in the case of certificated Depositary Shares), registered and delivered in accordance with the provisions of the applicable Deposit
Agreement and the Offered Depositary Shares have been delivered to the Depositary for deposit in accordance with provisions of the applicable
Deposit Agreement, and (e) the Receipts evidencing the Offered Depositary Shares have been duly issued against deposit of the related
shares of Preferred Stock with the Depositary in accordance with the applicable Deposit Agreement and duly delivered to purchasers thereof
upon payment of the agreed-upon consideration therefor, and if distributed pursuant to an underwritten offering, when issued and sold
or otherwise distributed in accordance with the provisions of the underwriting agreement or purchase agreement with respect thereto, the
Receipts evidencing the Offered Depositary Shares will constitute a legally valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms under the laws of the State of Maryland.
4. With
respect to any Warrants offered by the Company pursuant to the Registration Statement (the “Offered Warrants”), when
(a) the general conditions shall have been satisfied, (b) the shares of Common Stock, shares of Preferred Stock or other securities
described in the Registration Statement for which the Offered Warrants are exercisable have been duly authorized for issuance by the Company,
(c) the terms of the Offered Warrants have been established in accordance with the Warrant Agreement, and (d) the Offered Warrants
have been duly executed (if certificated) and delivered in accordance with the provisions of the applicable Warrant Agreement, the Offered
Warrants, when issued and sold or otherwise distributed in accordance with the provisions of the applicable Warrant Agreement and, if
distributed pursuant to an underwritten offering, in accordance with the provisions of the underwriting agreement or purchase agreement
with respect thereto, and upon payment of the agreed-upon consideration therefor, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their respective terms under the laws of the State of Maryland.
5. With
respect to any Rights offered by the Company pursuant to the Registration Statement (the “Offered Rights”), when (a) the
general conditions shall have been satisfied, (b) the Common Stock and/or Preferred Stock for which the Offered Rights are exercisable
have been duly authorized for issuance by the Company, and (c) the Offered Rights have been duly executed (in the case of certificated
Rights) and delivered in accordance with the provisions of the applicable Rights Agreement, the Offered Rights, when issued and sold or
otherwise distributed in accordance with the provisions of the applicable Rights Agreement and, if distributed pursuant to an underwritten
offering, in accordance with the provisions of the underwriting agreement or purchase agreement with respect thereto, and upon payment
of the agreed-upon consideration therefor, will constitute valid and binding obligations of the Company, enforceable against the Company
in accordance with their respective terms under the laws of the State of Maryland.
February 21, 2025
Page 5
6. With
respect to any Units offered by the Company pursuant to the Registration Statement (the “Offered Units”), when (a) the
general conditions shall have been satisfied, (b) the shares of Common Stock, shares of Preferred Stock, Depositary Shares, Warrants,
Rights or other securities or a combination thereof included in such Offered Units have been duly authorized for issuance by the Company,
(c) the terms of the Offered Units have been established in accordance with the applicable Unit Agreement, and (d) the Offered
Units have been duly executed (if certificated) and delivered in accordance with the provisions of the applicable Unit Agreement, the
Offered Units, when issued and sold or otherwise distributed in accordance with the provisions of the applicable Unit Agreement and, if
distributed pursuant to an underwritten offering, in accordance with the provisions of the underwriting agreement or purchase agreement
with respect thereto, and upon payment of the agreed-upon consideration therefor, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their respective terms under the laws of the State of Maryland.
7. Each
series of Debt Securities and the Guarantees, if any, will be valid and binding obligations of the Operating Partnership and the Company,
as applicable, enforceable in accordance with their terms, when (a) the general conditions shall have been satisfied, (b) the
Indenture shall have been qualified under the Trust Indenture Act of 1939, as amended (the “TIA”), and a Form T-1
shall have been filed with the Commission and become effective under the TIA with respect to the trustee executing the Indenture or any
related supplemental indenture, (c) the Indenture (and any related supplemental indenture) shall have been duly executed and delivered
by the Operating Partnership, the Company, the Trustee, and the Registrar, as applicable, and (d) such series of Debt Securities
and such Guarantees, if any, shall have been (i) duly executed by the Operating Partnership and the Company, if any, authenticated
by the Trustee as provided in the Indenture and issued by the Operating Partnership and the Company, if any, and (ii) issued and
sold or otherwise distributed in accordance with the provisions of the applicable Indenture (and any related supplemental indenture) and,
if distributed pursuant to an underwritten offering, in accordance with the provisions of the underwriting agreement or purchase agreement
with respect thereto, and upon payment of the agreed-upon consideration therefor.
The foregoing opinions are limited
to the laws of the State of Maryland, the Delaware Revised Uniform Limited Partnership Act, the Delaware Limited Liability Company Act
and the Federal laws of the United States of America, and we do not express any opinion herein concerning any other law. Notwithstanding
the foregoing, we express no opinion as to the applicability or effect of any state securities laws, including the securities laws of
the States of Maryland and Delaware, or as to state laws regarding fraudulent transfers. To the extent that any matter as to which our
opinion is expressed herein would be governed by the laws of any jurisdiction other than those set forth above in this paragraph, we do
not express any opinion on such matter.
February 21, 2025
Page 6
The opinions stated herein are
subject to the following qualifications:
(a) the
opinions stated herein are limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, preference and
other similar laws affecting creditors’ rights generally, and by general principles of equity (regardless of whether enforcement
is sought in equity or at law);
(b) we
do not express any opinion with respect to any law, rule or regulation that is applicable to any party to any of the Transaction
Agreements or the transactions contemplated thereby solely because such law, rule or regulation is part of a regulatory regime applicable
to any such party or any of its affiliates as a result of the specific assets or business operations of such party or such affiliates;
(c) except
to the extent expressly stated in the opinions contained herein, we have assumed that each of the Transaction Agreements constitutes the
valid and binding obligation of each party to such Transaction Agreement, enforceable against such party in accordance with its terms;
(d) we
have assumed that any Securities will not be issued or transferred in violation of any restriction or limitation on transfer or ownership
of shares of stock of the Company contained in Section 5.7 of the Second Articles of Amendment and Restatement of the Company or
any similar provision of Articles Supplementary relating to Preferred Stock;
(e) to
the extent relevant to our opinions in paragraphs 3, 4, 5, 6, and 7, and not covered by our opinions in paragraphs 1 or 2, we have assumed
that any securities, currencies or commodities underlying, comprising or issuable upon exchange, conversion or exercise of any Depositary
Shares, Warrants, Rights, Units, Debt Securities or Guarantees are validly issued, fully paid and non-assessable (in the case of an equity
security) or a legal, valid and binding obligation of the issuer thereof, enforceable against such issuer in accordance with its terms;
and
(f) we
have assumed that any Depositary Shares, Warrants, Rights, Units, Debt Securities and Guarantees and that may be issued will be manually
authenticated, signed or countersigned, as the case may be, by duly authorized officers of any Depositary, Warrant Agent, Rights Agent,
Unit Agent. Registrar and Trustee, as the case may be.
February 21, 2025
Page 7
In addition, in rendering the
foregoing opinions we have assumed that:
(y) neither
the execution and delivery by the Company and the Operating Partnership of the Transaction Agreements nor the performance by the Company
and the Operating Partnership of their respective obligations thereunder, including the issuance and sale of the applicable Securities:
(i) constitutes or will constitute a violation of, or a default under, any lease, indenture, instrument or other agreement to which
the Company or the Operating Partnership or their respective property is subject, (ii) contravened or will contravene any order or
decree of any governmental authority to which the Company or the Operating Partnership or their respective property is subject, or (iii) except
to the extent expressly stated in the opinions contained herein, violates or will violate any law, rule or regulation to which the
Company or the Operating Partnership or their respective property is subject; and
(z) neither
the execution and delivery by the Company and the Operating Partnership of the Transaction Agreements nor the performance by the Company
and the Operating Partnership of their respective obligations thereunder, including the issuance and sale of the applicable Securities,
requires or will require the consent, approval, licensing or authorization of, or any filing, recording or registration with, any governmental
authority under any law, rule or regulation of any jurisdiction.
This opinion is being furnished
to you for submission to the Commission as an exhibit to the Registration Statement in accordance with the requirements of Item 16
of Form S-3 and Item 601(b)(5) of Regulation S-K promulgated under the Securities Act. We hereby consent to the filing
of this opinion as Exhibit 5.1 to the Registration Statement with the Commission on the date hereof and to the use of the name of
our firm in the section entitled “Legal Matters” in the Registration Statement. In giving this consent, we do not admit that
we are within the category of persons whose consent is required by Section 7 of the Securities Act or the rules and regulations
promulgated thereunder by the Commission.
This
opinion is limited to the matters stated in this letter, and no opinion may be implied or inferred beyond the matters expressly stated
in this letter. This opinion is given as of the date hereof, and we assume no obligation to advise you after the date hereof of facts
or circumstances that come to our attention or changes in the law, including judicial or administrative interpretations thereof, that
occur which could affect the opinions contained herein. This opinion may not be used for any other purpose without our records
written consent, which we may grant or withhold in our sole discretion.
| Very truly yours, |
| | |
| | /s/ Foley & Lardner LLP |
| | |
| | Foley & Lardner LLP |
Exhibit 8.1
|
|
ATTORNEYS AT LAW
11988 el camino real,
Suite 400
San Diego, CA 92130
858.847.6700 TEL
858.792.6773 FAX
www.foley.com
CLIENT/MATTER NUMBER
112808-0151 |
February 21, 2025
Via E-Mail and U.S. Mail
Innovative Industrial Properties, Inc.
1389 Center Drive, Suite 200
Park City, Utah 84098 |
|
| Re: | Opinion of Foley & Lardner LLP as to Tax Matters |
Ladies and Gentlemen:
We have acted as counsel to Innovative Industrial
Properties, Inc., a Maryland corporation (the “Company”), with respect to certain United States federal income
tax matters in connection with the filing of its registration statement on Form S-3 (the “Registration Statement”)
with the Securities and Exchange Commission (the “Commission”) on the date hereof relating to the issuance of (i) shares
of common stock, $0.001 par value per share (“Common Stock”), (ii) one or more series of preferred stock, $0.001
par value per share (“Preferred Stock”), (iii) depositary shares (“Depositary Shares”), (iv) warrants
(“Warrants”), (v) rights (“Rights”), (vi) units (“Units”), (vii) IIP
Operating Partnership LP’s (the “Operating Partnership”) debt securities (“Debt Securities”)
and (viii) the guarantee of the Company with respect to Debt Securities, to be issued against payment thereof (“Guarantees”
and together with the Common Stock, Preferred Stock, Depositary Shares, Warrants, Rights, Units, Debt Securities and Guarantees, the “Securities”).
In connection with the Registration Statement, we have been asked to provide an opinion 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 Registration Statement under the caption “Material U.S. Federal
Income Tax Considerations”. Capitalized terms not defined herein shall have the meanings ascribed to them in the Registration Statement.
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); (2) the Second Articles of Amendment and Restatement of the Company, as amended through the date hereof; and (3) the
Agreement of Limited Partnership of IIP Operating Partnership, LP (the “Operating Partnership”), dated October 4,
2016, and any amendments thereto through the date hereof. 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 the Company’s own capacity and in its capacity as the general
partner of the Operating Partnership, in a letter to us of even date herewith (the “Officer’s Certificate”)
(collectively, the Officer’s Certificate, and the documents described in the immediately preceding sentence are referred to herein
as the “Transaction Documents”).
1
Unless otherwise stated, all section references herein are to the Code.
AUSTIN
Boston
CHICAGO
dallas
DENVER |
DETROIT
houston
JACKSONVILLE
LOS ANGELES
MADISON |
MEXICO
CITY
MIAMI
MILWAUKEE
NEW YORK
ORLANDO
|
SACRAMENTO
SAN DIEGO
SAN FRANCISCO
SILICON
VALLEY
TALLAHASSEE |
TAMPA
WASHINGTON,
D.C.
BRUSSELS
TOKYO |
February 21, 2025
Page 2
In addition to the foregoing, in rendering the
opinions set forth below, we note that the Company and the Operating Partnership will be engaged in the business of acquiring, owning,
and managing specialized industrial properties that will be leased to state-licensed businesses that grow and cultivate cannabis on such
properties. We further note that, as described in more detail in the Company’s most recently filed SEC Form 10-K for
the fiscal year ended December 31, 2024, cannabis continues to be a Schedule I controlled substance under the U.S. Controlled Substances
Act, and therefore, the possession, cultivation, and production of cannabis products continues to be illegal under federal law notwithstanding
state laws that may permit such activities. As described in more detail in the SEC Form 10-K, the cannabis industry occupies
a unique and uncertain legal status in the United States. The basic federal prohibition under the U.S. Controlled Substances Act remains
in place, and former U.S. Attorney General Jeff Sessions rescinded the U.S. Department of Justice’s previously issued memoranda
(the so-called “Cole Memo”) instructing federal prosecutors not to take actions against individuals complying with state medical
cannabis laws. The impact of this rescission remains unclear. We are not aware of any specific provisions of the Code or the rules or
regulations thereunder, any U.S. tax court decisions, or any private letter rulings that cause us to believe that the nature of the Company’s
business will negatively impact how the IRS or the courts would apply to the Company the provisions of the Code and the rules and
regulations thereunder relative to the Company’s REIT status, but we cannot be certain that the IRS or the courts will not take
a position that negatively affects REIT status by reason of the Company’s business. Accordingly, with your permission, we
have assumed for purposes of our opinions herein that the IRS and the courts will not apply or interpret the provisions of the Code and
the rules and regulations thereunder relative to an entity’s status as a REIT any differently to the Company and its business
than they would be applied to any lawful business.
We have also assumed for purposes of this opinion
that neither the IRS nor the courts will consider the Company’s current or contemplated business activities, as described in the
Registration Statement, to include a trade or business that consists of “trafficking in controlled substances” within the
meaning of Section 280E of the Code.
Based upon, and subject to, the foregoing assumptions
and qualifications and the discussion below, we are of the opinion that:
1. Commencing
with the Company’s taxable year ended on December 31, 2017, the Company has been organized and operated in conformity with
requirements for qualification and taxation as a REIT under the Code, and the Company’s current and proposed method of operation
will enable it to continue to meet the requirements for qualification and taxation as a REIT under the Code, assuming the Company’s
election to be treated as a REIT is not either revoked or intentionally terminated under the Code; and
February 21, 2025
Page 3
2. The
discussion in the Registration Statement under the caption “Material U.S. Federal Income Tax Considerations,” to the extent
it constitutes matters of law, summaries of legal matters or legal conclusions, is correct in all material respects.
We express no opinion on any issue relating to
the Company, the Operating Partnership or the discussion in the Registration Statement under the caption “Material U.S. Federal
Income Tax Considerations” other than as expressly stated above.
We undertake no obligation to update this opinion,
or to ascertain after the date hereof whether circumstances occurring after such date may affect the conclusions set forth herein. We
express no opinion as to matters governed by any laws other than the Code, the Treasury Regulations, published administrative announcements
and rulings of the Internal Revenue Service (“IRS”), and court decisions.
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, the diversity of its stock ownership,
and the Company’s utilization of any and all appropriate “savings provisions” (including, without limitation, the provisions
of Sections 856(c)(6), 856(c)(7), and 856(g) and the provision included in Section 856(c)(4) (flush language) allowing
for the disposal of assets within 30 days after the close of a calendar quarter, and all available deficiency dividend procedures) available
to the Company under the Code to correct violations of specified REIT qualification requirements of Sections 856 and 857. Our opinions
set forth above do not foreclose the possibility that the Company may have to utilize one or more of these “savings provisions”
in the future, which could require amending prior year tax returns and/or the payment of an excise tax and/or penalty tax (either of which
could be significant in amount) in order to maintain its REIT qualification. Foley & Lardner LLP 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 and the Operating Partnership, 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. To the extent that the facts differ from those represented to or
assumed by us herein, our opinion should not be relied upon.
February 21, 2025
Page 4
The foregoing opinions 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 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. The IRS has not issued Regulations or administrative interpretations with respect to various provisions of the Code relating
to REIT qualification. No assurance can be given that the law will not change in a way that will prevent the Company from qualifying as
a REIT or that may change the other legal conclusions stated herein. As described in the Registration Statement, the Company’s qualification
and taxation as a REIT depend upon the Company’s ability to meet the various qualification tests imposed under the Code, including
through actual annual operating results, asset composition, distribution levels and diversity of stock ownership, the results of which
have not been and will not be reviewed by Foley & Lardner LLP. Accordingly, no assurance can be given that the actual results
of the Company’s operation for any particular taxable year will satisfy such requirements.
The foregoing opinions are limited to the United
States federal income tax matters addressed herein, and no other opinions are rendered with respect to other United States federal tax
matters or to any issues arising under the tax laws of any other country, or any state or locality. This opinion letter is rendered to
you for your use in connection with the Registration Statement and may be relied upon solely by you and the purchasers of Securities pursuant
to the Registration Statement, and it speaks only as of the date hereof. Except as provided in the next paragraph, this opinion letter
may not be distributed, quoted in whole or in part or otherwise reproduced in any document, 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.
We consent to the use of our name under the captions
“Material U.S. Federal Income Tax Considerations” and “Legal Matters” in the Registration Statement 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 thereunder.
| Very truly yours, |
| | |
| | /s/ Foley & Lardner LLP
|
| | |
| | FOLEY & LARDNER LLP |
Exhibit 23.3
Consent of Independent Registered Public Accounting
Firm
We hereby consent to the incorporation by reference
in the Prospectus constituting a part of this Registration Statement of our reports dated February 21, 2025, relating to the consolidated
financial statements and schedule and the effectiveness of internal control over financial reporting, of Innovative Industrial Properties, Inc.
(the “Company”) appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
We also consent to the reference to us under the
caption “Experts” in the Prospectus.
/s/ BDO USA, P.C.
San Diego, California
February 21, 2025
Exhibit 25.1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2)
[___]
ARGENT
INSTITUTIONAL TRUST COMPANY
(Exact name of trustee as specified in its charter)
Corporation duly organized and exisiting
under the laws of the State of Florida
(Jurisdiction of incorporation of organization
if not a U.S. national bank) |
56-2075834
(I.R.S. Employer
Identification Number) |
| |
|
1715 North Westshore Blvd., Suite 750, Tampa, FL 33607
(Address of principal executive offices) |
33607
(Zip Code) |
INNOVATIVE INDUSTRIAL PROPERTIES, INC.
IIP OPERATING PARTNERSHIP, LP
(Exact Name of Registrant as Specified in its
Governing Instruments)
|
Maryland (Innovative Industrial Properties, Inc.)
Delaware
(IIP Operating Partnership, LP) |
81-2963381
61-1800557 |
(State or other jurisdiction of
incorporation or organization) |
(I.R.S. Employer
Identification Number) |
For co-registrants, see “Subsidiary
Guarantor Registrants” table on the following page.
1389 Center Drive, Suite 200
Park City, UT 84098
(858) 997-3332
(Address, Including Zip Code, and Telephone
Number,
Including Area Code, of Registrant’s Principal Executive Offices)
Paul E. Smithers
President and Chief Executive Officer
INNOVATIVE INDUSTRIAL PROPERTIES, INC.
1389 Center Drive, Suite 200
Park City, UT 84098
(858) 997-3332
(Name, Address, Including Zip Code, and
Telephone Number,
Including Area Code, of Agent for Service)
With copies to:
Carolyn
Long, Esq.
Curt Creely, Esq.
FOLEY & LARDNER LLP
11988 El Camino Real,
Suite 400
San Diego, California 92130
Tel: (858) 847-6700
Fax: (858) 792-6773
Approximate date of commencement of proposed
sale to the public:
From time to time after the effective date of this registration statement.
Innovative Industrial Properties, Inc.
COMMON STOCK
PREFERRED STOCK
DEPOSITARY SHARES
WARRANTS
RIGHTS
UNITS
GUARANTEES OF DEBT
SECURITIES
IIP Operating Partnership,
LP
DEBT SECURITIES
DEBT SECURITIES
(Title of the indenture securities)
| Item 1. | General Information. Furnish the following
information as to the trustee: |
| (a) | Name and address of each examining or supervising authority to which it is subject. |
Florida Office of Financial Regulation
200 E. Gaines Street
Tallahassee, FL 32399
| (b) | Whether it is authorized to exercise corporate trust powers. |
The trustee is authorized to exercise corporate
trust powers.
| Item 2. | Affiliations with the obligor. If the obligor
is an affiliate of the trustee, describe such affiliation. |
None.
| Item 16. | List of exhibits. List below all exhibits
filed as a part of this statement of eligibility. |
1. A
copy of the articles of association of the trustee.
2. A
copy of the certificate of authority of the trustee to commence business.
3. A
copy of the authorization of the trustee to exercise corporate trust powers. (See exhibits 1, 2 and 3).
4. A
copy of the existing bylaws of the trustee, as now in effect.
5. Not
Applicable.
6. The
consent of the Trustee required by Section 321(b) of the Act.
7. A
copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority.
8. Not
Applicable.
9. Not
Applicable.
[Remainder of this Page Intentionally Left
Blank;
Signature Pages and Exhibits Follow]
SIGNATURE
Pursuant to the requirements of the Trust Indenture
Act of 1939, the trustee, ARGENT INSTITUTIONAL TRUST COMPANY, a corporation duly organized and existing under the laws of the State of
Florida, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Atlanta, and State of Georgia, on the 19th day of February, 2025.
| |
ARGENT INSTITUTIONAL TRUST COMPANY |
| |
|
| |
|
| |
By: |
/s/ Debra Schachel |
| |
|
Name: Debra Schachel |
| |
|
Title: Vice President |
EXHIBIT 1
ARTICLES OF INCORPORATION
FLORIDA DEPARTMENT OF STATE
Division of Corporations
September 11, 2023
JACKIE PRESTER
BAKER, DONELSON, BEARMAN, CALDWELL
165 MADISON AVENUE, SUITE 2000
MEMPHIS, TN 38103
Re: Document Number P98000053890
The Articles of Amendment to the Articles of Incorporation for TMI
TRUST COMPANY which changed its name to ARGENT INSTITUTIONAL TRUST COMPANY, a Florida corporation, were filed on September 8, 2023.
The certification requested is enclosed.
Should you have any question regarding this matter, please telephone
(850) 245-6050, the Amendment Filing Section.
Annette Ramsey
OPS |
|
| Division of Corporations |
Letter Number: 623A00020761 |
www.sunbiz.org
Division of
Corporations - P.O. BOX 6327 - Tallahassee, Florida 32314
I certify the attached is a true and correct copy
of the Articles of Amendment, filed on September 8, 2023, to Articles of Incorporation for TMI TRUST COMPANY which changed its name to
ARGENT INSTITUTIONAL TRUST COMPANY, a Florida corporation, as shown by the records of this office.
The document number of this corporation is P98000053890.
CR2E022 (01-11) |
|
Given
under my hand and the
Great Seal of the State of Florida
at Tallahassee, the Capital, this the
Eleventh day of September, 2023
Cord Byrd
Secretary of State |
Articles of Amendment
to
Articles of Incorporation
of
TMI Trust Company
(Name of Corporation as currently
filed with the Florida Dept. of State)
P98000053890
(Document Number of Corporation (if known)
Pursuant to the provisions of section 607.1006,
Florida Statutes, this Florida Profit Corporation adopts the following amendment(s) to its Articles of Incorporation:
A. If amending name, enter the new name
of the corporation:
Argent Institutional Trust Company
_________________________________________________________________________The
new name must be distinguishable and contain the word "corporation," "company," or "incorporated" or the abbreviation "Corp.," "Inc.," or Co.," or the designation "Corp." "Inc." or "Co". A professional corporation name must contain the word "chartered," "professional
association." or the abbreviation "P. A."
| B. Enter new principal office address, if applicable: | | N/A |
| (Principal office address MUST BE A STREET ADDRESS ) | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| C. Enter new mailing address, if applicable: | | N/A |
| (Mailing address MAY BE A POST OFFICE BOX) | | |
| | | |
| | | |
| | | |
D. If amending the registered agent and/or registered office address in Florida,
enter the name of the new registered agent and/or the new registered office address:
| |
Name of New Registered Agent | | N/A |
| |
| | |
| |
| | |
| |
| | (Florida
street address) |
| |
| | |
| |
New Registered Office Address: | | N/A |
Florida |
|
| |
| | (City) |
(Zip
Code) |
New Registered Agent's Signature, if
changing Registered Agent:
I hereby accept the appointment as registered
agent. I am familiar with and accept the obligations of the position.
| | |
| | Signature of New
Registered Agent, if changing | |
Check if applicable
¨ The
amendment(s) is/are being filed pursuant to s. 607.0120 (11) (e), F.S.
If amending the Officers and/or Directors, enter the title and
name of each officer/director being removed and title, name, and address of each Officer and/or Director being added:
(Attach additional
sheets, if necessary)
Please note the officer director title by the first letter of the office title:
P President; V Vice President; T Treasurer; S Secretary; D Director;
TR Trustee; C Chairman or Clerk; CEO Chief Executive Officer; CFO Chief Financial
Officer. If an officer director holds more than one title, list the first letter of each office held. President, Treasurer, Director
would be PTD.
Changes should be noted in the following manner. Currently John Doe is listed as the PST and Mike Jones is listed
as the V. There is a change, Mike Jones leaves the corporation, Sally Smith is named the V and S. These should be noted as John Doe,
PT as a Change. Mike Jones, V as Remove, and Sally Smith, SV as an Add.
Example:
| x Change | PT | John
Doe |
|
| | | |
|
| x Remove | V | Mike
Jones |
|
| | | |
|
| x Add | SV | Sally
Smith |
|
| Type of Action |
Title |
|
Name |
|
Address |
| (Check One) |
|
|
|
|
|
| |
|
|
|
|
|
| 1) ¨ Change |
D |
|
Danny L. Buck |
|
156 Balcones
Bend |
| |
|
|
|
|
|
| ¨ Add |
|
|
|
|
Boerne, TX 78006 |
| |
|
|
|
|
|
| x Remove |
|
|
|
|
|
| |
|
|
|
|
|
| 2) ¨ Change |
D |
|
Brian P. Bouda |
|
13209 Treviso
Drive |
| |
|
|
|
|
|
| x Add |
|
|
|
|
Bradenton, FL
34211 |
| |
|
|
|
|
|
| ¨ Remove |
|
|
|
|
|
| |
|
|
|
|
|
| 3) ¨ Change |
D |
|
Steven B. Eason |
|
2104 W. First
Street |
| |
|
|
|
|
|
| x Add |
|
|
|
|
Unit
1804 |
| |
|
|
|
|
|
| ¨ Remove |
|
|
|
|
Fort Myers,
FL 33901 |
| |
|
|
|
|
|
| 4) ¨ Change |
D |
|
Troy L. Kilpatrick |
|
171 Knoxview
Lane |
| |
|
|
|
|
|
| x Add |
|
|
|
|
Mooresville,
NC 28117 |
| |
|
|
|
|
|
| ¨ Remove |
|
|
|
|
|
| |
|
|
|
|
|
| 5) ¨ Change |
D |
|
D. Kyle McDonald |
|
500 E Reynolds
Drive |
| |
|
|
|
|
|
| xAdd |
|
|
|
|
Ruston, LA 71270 |
| |
|
|
|
|
|
| ¨ Remove |
|
|
|
|
|
| |
|
|
|
|
|
| 6) ¨ Change |
D |
|
Kaivan Rahbari |
|
7730 Flemingwood
Court |
| |
|
|
|
|
|
| x Add |
|
|
|
|
Sanford, FL 32771 |
| |
|
|
|
|
|
| ¨ Remove |
|
|
|
|
|
If amending the Officers and/or Directors,
enter the title and name of each officer/director being removed and title, name, and address of each Officer and/or Director being added:
(Attach additional sheets, if necessary)
Please note the officer director title by the first letter of the
office title:
P President; V Vice
President; T Treasurer; S Secretary; D Director; TR Trustee; C Chairman
or Clerk; CEO Chief Executive Officer; CFO Chief Financial Officer. If an officer director holds more than one title,
list the first letter of each office held. President, Treasurer, Director would be PTD.
Changes should be noted in the
following manner. Currently John Doe is listed as the PST and Mike Jones is listed as the V. There is a change, Mike Jones leaves
the corporation, Sally Smith is named the V and S. These should be noted as John Doe, PT as a Change. Mike Jones, V as Remove, and
Sally Smith, SV as an Add.
Example:
| x Change | PT | John
Doe |
|
| | | |
|
| x Remove | V | Mike
Jones |
|
| | | |
|
| x Add | SV | Sally
Smith |
|
| Type of Action |
Title |
|
Name |
|
Address |
| (Check One) |
|
|
|
|
|
| |
|
|
|
|
|
| 1) ¨ Change |
D |
|
Terry L. McRoberts |
|
4 Calle de Princesa |
| |
|
|
|
|
|
| x Add |
|
|
|
|
Coto de
Caza, CA 92679 |
| |
|
|
|
|
|
| ¨ Remove |
|
|
|
|
|
| |
|
|
|
|
|
| 2) ¨ Change |
|
|
|
|
|
| |
|
|
|
|
|
| ¨ Add |
|
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|
|
| |
|
|
|
|
|
| ¨ Remove |
|
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|
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| |
|
|
|
|
|
| 3) ¨ Change |
|
|
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|
| |
|
|
|
|
|
| ¨ Add |
|
|
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|
|
| |
|
|
|
|
|
| ¨ Remove |
|
|
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|
|
| |
|
|
|
|
|
| 4) ¨ Change |
|
|
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|
|
| |
|
|
|
|
|
| ¨ Add |
|
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|
|
| |
|
|
|
|
|
| ¨ Remove |
|
|
|
|
|
| |
|
|
|
|
|
| 5) ¨ Change |
|
|
|
|
|
| |
|
|
|
|
|
| ¨ Add |
|
|
|
|
|
| |
|
|
|
|
|
| ¨ Remove |
|
|
|
|
|
| |
|
|
|
|
|
| 6) ¨ Change |
|
|
|
|
|
| |
|
|
|
|
|
| ¨ Add |
|
|
|
|
|
| |
|
|
|
|
|
| ¨ Remove |
|
|
|
|
|
The date of each amendment(s) adoption:
_______________________________________________________________, if other than the date this document was signed.
| Effective date if applicable: | N/A | |
| | (no more than 90 days after amendment file date) | |
Note: If the date inserted in this block does not meet the
applicable statutory filing requirements, this date will not be listed as the document’s effective date on the Department of State’s
records.
| Adoption of Amendment(s) |
(CHECK ONE) |
| ¨ | The
amendment(s) was/were adopted by the incorporators, or board of directors without shareholder
action and shareholder action was not required. |
| | |
| x | The
amendment(s) was/were adopted by the shareholders. The number of votes cast for the amendment(s)
by the shareholders was/were sufficient for approval. |
| | |
| ¨ | The
amendment(s) was/were approved by the shareholders through voting groups. The following
statement must be separately provided for each voting group entitled to vote separately on
the amendment(s): |
| “The number of votes cast for the amendment(s) was/were sufficient
for approval | |
| | | |
| | by |
| .” |
| | |
(voting group) | |
| | | |
|
| | Signature | /s/ Deborah D. George |
|
| | | (By a director, president or other officer -- if directors or
officers have not been selected, by an incorporator -- if in the hands of a receiver, trustee, or other court appointed fiduciary by
that fiduciary) |
|
| | | Deborah D. George |
|
| | | (Typed or printed name of person signing) |
|
| | | Chief Financial Officer |
|
| | | (Title of person signing) |
|
APPROVED by the Office of Financial Regulation this 8th
day of September, 2023.
| Tallahassee,
Leon County, Florida |
| | |
| | /s/ Russell C. Weigel, III |
| | Russell C. Weigel, III |
| | Commissioner |
| | Office of Financial Regulation |
COVER LETTER
TO: Amendment Section
Division of
Corporations
| NAME OF CORPORATION: |
TMI Trust Company |
| DOCUMENT NUMBER: |
P98000053890 |
The enclosed Articles of Amendment and fee are submitted
for filing.
Please return all correspondence concerning this matter to the following:
| Jackie Prester |
| Name of Contact Person |
| |
| Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C. |
| Firm/ Company |
| |
| 165 Madison Avenue, Suite 2000 |
| Address |
| |
| Memphis, TN 38103 |
| City/ State and Zip Code |
| |
| jprester@bakerdonelson.com |
| E-mail address: (to be used for future annual report notification) |
For further information concerning this matter. please call:
| Jackie Prester |
at ( |
901 |
) |
577-8114 |
| |
|
|
|
|
| Name of Contact Person |
|
Area Code & Daytime Telephone Number |
Enclosed is a check for the following amount made payable to the Florida
Department of State:
| ¨ $35 Filing Fee |
¨ $43.75 Filing Fee & |
x $43.75 Filing Fee & |
¨ $52.50 Filing Fee |
| |
Certificate of Status |
Certified Copy |
Certificate of Status |
| |
|
(Additional copy is |
Certified Copy |
| |
|
enclosed) |
(Additional Copy |
| |
|
|
is enclosed) |
| Mailing Address |
Street Address |
| Amendment Section |
Amendment Section |
| Division of Corporations |
Division of Corporations |
| P.O. Box 6327 |
The Centre of Tallahassee |
| Tallahassee, FL 32314 |
2415 N. Monroe Street, Suite 810 |
| |
Tallahassee, FL 32303 |
ARTICLES OF INCORPORATION OF
TMI TRUST COMPANY
The undersigned, acting as director(s) for
the purpose of forming a financial institution corporation in accordance with the Laws of the State of Florida, adopt(s) the following
Articles of Incorporation.
ARTICLE I
The name of the corporation shall be TMI Trust
Company and its initial place of business shall be at 1715 North Westshore Boulevard, Suite 750, in the City of Tampa, in the County
of Hillsborough and State of Florida. These Articles shall be effective upon filing with the Florida Division of Corporations.
ARTICLE II
The general nature of the business to be transacted
by this corporation shall be: That of a general trust business with all the rights, powers, and privileges granted and conferred by the
Florida Financial Institutions Codes, regulating the organization, powers, and management of trust corporations.
ARTICLE III
The total number of shares authorized to be issued
by the corporation shall be 1,000,000. Such shares shall be of a single class and shall have a par value of $12.50 per share. The corporation
shall have at least $1,250,000 in paid-in common capital stock to be divided into 100,000 shares. The amount of surplus with which the
corporation will operate will be not less than $3,000,000 all of which (capital stock and surplus) shall be paid in cash.
ARTICLE IV
The term for which said corporation shall exist shall be
perpetual unless terminated pursuant to the Florida Financial Institutions Codes.
ARTICLE V
The number of directors shall not be fewer than
seven (7). The names and street addresses of the first directors of the corporation are:
| NAME |
STREET ADDRESS |
| |
|
| Anthony A. Guthrie |
4342 16th
Street |
| |
St. Simons Island, Georgia 31522 |
| |
|
| Danny L. Buck |
156 Balcones Bend |
| |
Boerne, Texas 78006 |
| |
|
| Richard F. Curcio |
409 Nokomis Avenue S |
| |
Venice, Florida 34285 |
| |
|
| Ward J. Curtis |
1904 Kansas Avenue NE |
| |
St. Petersburg, Florida 33703 |
| |
|
| Bryant N. Jones |
2211 7th Street North |
| |
St. Petersburg, Florida 33704 |
| |
|
| James T. Maxwell |
14270 Royal Harbour Court, #421 |
| |
Fort Myers, Florida 33908 |
| |
|
| Benjamin F. Youngblood III |
3011 Orchard Hill |
| |
San Antonio, Texas 78230 |
In witness of the foregoing, the undersigned director(s) have executed
these Articles of Incorporation this 1st day of April, 2019.
| NAME |
|
STREET ADDRESS |
| |
|
|
| /s/ Anthony A. Guthrie |
|
4342 16thStreet |
| Anthony A. Guthrie |
|
St. Simons Island, Georgia 31522 |
| |
|
|
| |
|
|
| /s/ Danny L. Buck |
|
156 Balcones Bend |
| Danny L. Buck |
|
Boerne, Texas 78006 |
| |
|
|
| |
|
|
| /s/ Richard F. Curcio |
|
409 Nokomis Avenue S |
| Richard F. Curcio |
|
Venice, Florida 34285 |
| |
|
|
| |
|
|
| /s/ Ward J. Curtis |
|
1904 Kansas Avenue NE |
| Ward J. Curtis |
|
St. Petersburg, Florida 33703 |
| |
|
|
| |
|
|
| /s/ Bryant N. Jones |
|
2211 7th Street North |
| Bryant N. Jones |
|
St. Petersburg, Florida 33704 |
| |
|
|
| |
|
|
| /s/ James T. Maxwell |
|
14270 Royal Harbour Court, #421 |
| James T. Maxwell |
|
Fort Myers, Florida 33908 |
| |
|
|
| |
|
|
| /s/ Benjamin F. Youngblood III |
|
3011 Orchard Hill |
| Benjamin F. Youngblood III |
|
San Antonio, Texas 78230 |
APPROVED by the Office of Financial Regulation this 2nd
day of April, 2019.
| |
Tallahassee, Leon County, Florida |
| |
|
| |
/s/ Ronald L. Rubin |
| |
Ronald L. Rubin |
| |
for: Commissioner |
| |
Florida Office of Financial Regulation |
EXHIBIT 2
CERTIFICATE OF
AUTHORITY
State of Florida
Department
of State
I certify from the records
of this office that ARGENT INSTITUTIONAL TRUST COMPANY is a corporation organized under the laws of the State of Florida, filed on June 16,
1998.
The document number of this
corporation is P98000053890.
I further certify that said
corporation has paid all fees due this office through December 31, 2024, that its most recent annual report/uniform business report
was filed on April 8, 2024, and that its status is active.
I further certify that said
corporation has not filed Articles of Dissolution.
Given under my hand
and the Great Seal of the State of Florida at Tallahassee, the Capital, this the Eighth day of April, 2024
 |
|
|
Secretary of State |
| |
Tracking
Number: 8168861068CC
To authenticate
this certificate, visit the following site, enter this number, and then follow the instructions displayed.
https://services.sunbiz.org/Filings/CertificateOfStatus/CertfficateAuthentication |
EXHIBIT 3
CERTIFICATE OF
CORPORATE TRUST POWERS
I, Jeremy W. Smith,
Director, Division of Financial Institutions, Office of Financial Regulation, hereby certify:
THAT,
Argent Institutional Trust Company, Tampa, Florida is a Florida state-chartered financial
institution, as defined in Section 655.005, Florida Statutes, and is authorized to conduct a trust business in the State of Florida
in accordance with the requirements and conditions set forth in the Florida Financial Institutions Codes, Title XXXVIII, Florida Statutes.
GIVEN UNDER MY HAND
this 1st day of November, A.D., 2023.
 |
|
/s/ Jeremy
W. Smith |
| |
Jeremy
W. Smith, Director |
| |
Division of Financial Institutions
Office of Financial Regulation |
| |
|
www.flofr.gov
200 East Gaines
Street, Tallahassee, Florida 32399-0370
(850) 487-9687 •
FAX (850) 410-9663
EXHIBIT 4
BYLAWS OF THE
TRUSTEE
AMENDED AND RESTATED BYLAWS
OF
ARGENT INSTITUTIONAL TRUST COMPANY
ARGENT INSTITUTIONAL TRUST COMPANY
AMENDED AND RESTATED BYLAWS
TABLE OF CONTENTS
| Article/Section Number |
Description |
Page |
| ARTICLE I |
OFFICES OF THE TRUST COMPANY |
1 |
| |
|
|
| 1.01 |
Principal Office |
1 |
| 1.02 |
Other Offices |
1 |
| |
|
|
| ARTICLE II |
SHAREHOLDERS |
1 |
| |
|
|
| 2.01 |
Place of Meeting |
1 |
| 2.02 |
Annual Meetings |
1 |
| 2.03 |
Special Meetings |
1 |
| 2.04 |
Shareholder Lists |
1 |
| 2.05 |
Notice of Meetings |
1 |
| 2.06 |
Waivers of Notice |
2 |
| 2.07 |
Quorum of Shareholders |
2 |
| 2.08 |
Action by Shareholders |
2 |
| 2.09 |
Voting and Proxies |
2 |
| 2.10 |
Action by Unanimous Written Consent |
3 |
| |
|
|
| ARTICLE III |
DIRECTORS |
3 |
| |
|
|
| 3.01 |
Powers of Directors |
3 |
| 3.02 |
Number and Qualifications |
3 |
| 3.03 |
Filling of Vacancies |
3 |
| 3.04 |
Resignation of Directors |
4 |
| 3.05 |
Removal of Directors |
4 |
| 3.06 |
Place of Meetings |
4 |
| 3.07 |
Chairman of the Board |
4 |
| 3.08 |
First Meetings |
4 |
| 3.09 |
Regular Meetings |
4 |
| 3.10 |
Special Meetings |
4 |
| 3.11 |
Quorum of Directors |
4 |
| 3.12 |
Action by Written Consent, Fax and Electronic Mail |
4 |
| 3.13 |
Compensation of Directors |
5 |
| 3.14 |
Minutes of Meetings |
5 |
| |
|
|
| ARTICLE IV |
NOTICES AND TELEPHONE MEETINGS |
5 |
| |
|
|
| 4.01 |
Method of Giving Notice |
5 |
| 4.02 |
Waiver of Notice |
5 |
| 4.03 |
Telephone Meetings |
5 |
| ARTICLE V |
OFFICERS |
6 |
| |
|
|
| 5.01 |
Qualifications |
6 |
| 5.02 |
Compensation of Officers |
6 |
| 5.03 |
Term and Vacancies |
6 |
| 5.04 |
Removal of Officers |
6 |
| 5.05 |
Resignation of Officers |
7 |
| 5.06 |
General Authority of Officers |
7 |
| 5.07 |
Execution of Instruments |
7 |
| |
|
|
| ARTICLE VI |
COMMITTEES |
7 |
| |
|
|
| 6.01 |
Executive Committee |
7 |
| 6.02 |
Audit Committee |
8 |
| 6.03 |
Other Committees |
8 |
| 6.04 |
Removal |
8 |
| |
|
|
| ARTICLE VII |
CERTIFICATES AND SHAREHOLDERS |
9 |
| |
|
|
| 7.01 |
Form of Certificates |
9 |
| 7.02 |
Lost Certificates |
9 |
| 7.03 |
Transfer of Shares |
9 |
| 7.04 |
Record Ownership Conclusive |
9 |
| 7.05 |
Closing Transfer Books |
10 |
| |
|
|
| ARTICLE VIII |
Fiduciary Provisions |
10 |
| |
|
|
| 8.01 |
Fiduciary Files |
10 |
| 8.02 |
Trust Investments |
10 |
| |
|
|
| ARTICLE IX |
OTHER PROVISIONS |
10 |
| |
|
|
| 9.01 |
Distributions |
10 |
| 9.02 |
Reserves |
10 |
| 9.03 |
Records |
11 |
| 9.04 |
Fiscal Year |
11 |
| 9.05 |
Seal |
11 |
| 9.06 |
Indemnification |
11 |
| 9.07 |
Other Indemnification |
11 |
| 9.08 |
Insurance |
11 |
| 9.09 |
Transactions Between the Trust Company and an Officer, Director, or Shareholder |
11 |
| |
|
|
| ARTICLE X |
AMENDMENT AND CONSTRUCTION |
12 |
| |
|
|
| 10.01 |
Amendment |
12 |
| 10.02 |
Severability |
12 |
AMENDED AND RESTATED BYLAWS
OF
ARGENT INSTITUTIONAL TRUST COMPANY
ARTICLE I
OFFICES OF THE TRUST COMPANY
1.01
Principal Office. The principal office of the trust company shall be located in Tampa, Hillsborough County, Florida.
1.02
Other Offices. The trust company may, subject to compliance with all applicable laws and regulations, have offices at such
other places as the board of directors may from time to time determine or as the affairs of the trust company may require.
ARTICLE
II
SHAREHOLDERS
2.01
Place of Meeting. All meetings of shareholders for any purpose shall be held at the principal office of the trust company
or at such place, either within or without the State of Florida, as shall be stated in the notice of the meeting or in a duly executed
waiver of notice thereof.
2.02
Annual Meeting. The annual meeting of shareholders shall be held no later than April 30 on such date, time and place as determined
by the Board of Directors of the Company each year by resolution of the board of directors and specified in the notice of the meeting.
At each such annual meeting, the shareholders shall elect a board of directors and transact such other business as may be properly brought
before the meeting.
2.03
Special Meetings. Special meetings of the shareholders may be called for any purpose at any time by the chairman of the board,
chief executive officer, the board of directors, or the holders of not less than fifty percent (50%) of all the shares entitled to vote
at the meeting.
2.04
Shareholder Lists. At least ten (10) days before each meeting of shareholders, a complete list of the shareholders entitled
to vote at such meeting, arranged in alphabetical order, with the address of each and number of voting shares held by each, shall be
prepared by the officer or agent having charge of the stock transfer books. For a period of ten (10) days prior to the meeting, the list
shall be kept on file at the principal office of the trust company and shall be subject to inspection by any shareholder at any time
during usual business hours. The list shall also be produced and kept open at the time and place of the meeting and shall be subject
to inspection by any shareholder during the whole time of the meeting.
2.05
Notice of Meetings. Written notice stating the place, day and time of the meeting and, in the case of a special meeting, the
purposes for which the meeting is called, shall be delivered not less than ten (10) nor more than sixty (60) days before the date thereof,
either personally or by mail, by or at the direction of the
president, the secretary or the officer or other persons calling the meeting, to each shareholder of record entitled to vote at such meeting.
Only business within the purpose or purposes described in the notice required herein may be conducted at a special meeting of the shareholders.
If mailed, notice shall be deemed to be delivered when deposited in the United States mail, postage prepaid, addressed to the shareholder
at the shareholder's address as it appears on the stock transfer books of the trust company.
2.06
Waivers of Notice.
Whenever any notice is required to be given to any shareholder, under these bylaws, the articles of incorporation, or the laws
of the State of Florida, a written waiver of notice, signed anytime by the person entitled to notice shall be equivalent to giving notice.
Attendance by a shareholder entitled to vote at a meeting, in person or by proxy, shall constitute a waiver of (a) notice of the meeting,
except when the shareholder attends a meeting solely for the purpose, expressed at the beginning of the meeting, of objecting to the
transaction of any business because the meeting is not lawfully called or convened, and (b) an objection to consideration of a particular
matter at the meeting that is not within the purpose of the meeting unless the shareholders object to considering the matter when it
is presented.
2.07
Quorum of Shareholders.
The holders of a majority of the shares issued and outstanding and entitled to vote at such meeting, present in person or by proxy,
shall be requisite and shall constitute a quorum for the transaction of business at all meetings of shareholders, except as otherwise
provided by statute, the articles of incorporation, or these bylaws. If a quorum is not present or represented at any meeting of shareholders,
the shareholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a quorum is present or represented. At any continuation of
a meeting following such adjournment at which a quorum is present or represented, any business may be transacted which might have been
transacted at the meeting as originally notified.
2.08
Action by Shareholders.
When a quorum is present at any meeting, the affirmative vote of the holders of the majority of the shares entitled to vote on,
and who voted for, against, or expressly abstained with respect to, the matter at a shareholders' meeting is the act of the shareholders,
unless the question is one upon which a different vote is required by statute, the articles of incorporation, or these bylaws. The shareholders
present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough shares
to leave less than a quorum.
2.09
Voting and Proxies.
Cumulative voting in the election of directors shall not be permitted. Each outstanding share having voting power shall be entitled
to one vote on each matter submitted to a vote at a meeting of the shareholders. A shareholder may vote either in person or by proxy
executed in writing by the shareholder or by his duly authorized attorney-in-fact, but no proxy shall be valid after eleven (11) months
from the date of its execution, unless otherwise expressly provided in the proxy. Each proxy shall be revocable unless the proxy form
conspicuously states that the proxy is irrevocable and the proxy is coupled with an interest (which includes the appointment as proxy
of a pledgee; a person who purchased or agreed to purchase, or owns or holds an option to purchase, the shares; a creditor of the trust
company who extended it credit under terms requiring the appointment; an employee of the trust company whose employment contract requires
the appointment; and a party to a voting agreement validly created under the laws of the State of Florida). Each proxy shall be filed
with the secretary of the trust company prior to or at the time of the meeting. Any vote must be taken by written ballot upon the oral
or written request of any shareholder.
2.10
Action by Unanimous Written Consent.
Any action required or permitted by statute to be taken at a meeting of the shareholders may be taken without a meeting, without
prior notice, and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holder or holders
of shares having not less than the minimum number of votes that would be necessary to take such action at a meeting at which the holders
of all shares entitled to vote on such action were present and voting. Any such signed consent, or a copy thereof, shall be placed in
the minute book of the trust company.
ARTICLE III
DIRECTORS
3.01
Powers of Directors.
The business and affairs of the trust company shall be managed by its board of directors, which may exercise all powers of the
trust company and do all lawful acts and things as are not by statute, the articles of incorporation, or these bylaws, directed or required
to be exercised or done by the shareholders.
3.02
Number and Oualifications.
The board of directors shall consist of not less than seven (7) nor more than twenty-five (25) directors, the majority of whom
shall be residents of the State of Florida. Directors need not be shareholders of the trust company. The number of directors may be increased
(to not more than 25) or decreased (but not below 7) from time to time by resolution adopted by the board of directors but may not be
increased by more than two (2) between annual meetings. Prior to taking office, each director shall take oath that he/she accepts the
position as director; that he will not violate, nor knowingly permit any officer, director, or employee of the trust company to violate
the laws of the State of Florida in the conduct of the business of the trust company; and that he/she will diligently perform his duties
as director. Such affidavit shall be sworn and subscribed to and spread upon the minutes of the directors' meeting. Without the prior
written consent of the Florida Office of Financial Regulation, no person shall be nominated to serve as a director or shall serve as
a director if (i) the trust company holds a judgment against such person; (ii) the trust company holds a charged-off obligation on which
such person is liable; or (iii) such person has been convicted of a felony. Each director elected shall serve until his successor shall
have been elected and qualified.
3.03
Filling of Vacancies.
A vacancy occurring in the board of directors by reason of death, resignation, or removal may be filled by the Board of Directors
of the Company by an affirmative vote of a majority of the remaining directors, although less than a quorum of the board of directors.
A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office. Any directorship to be filled
by reason of an increase in the number of directors may be filled by election at an annual or special meeting of shareholders called
for that purpose; provided that, if authorized by a resolution of the shareholders, the board of directors, without action by the shareholders,
may fill up to two such directorships during any one year.
3.04
Resignation of Directors.
Any director may resign from his office at any time by delivering his written resignation to the secretary of the trust company,
and such resignation shall be effective immediately upon delivery to the secretary.
3.05
Removal of Directors.
Any director may be removed with or without cause at any special meeting of shareholders, by the affirmative vote of a majority
of the number of shares of the shareholders present in person or by proxy at such meeting and entitled to vote for the election of such
director, if notice of intention to act upon such matter shall have been given in the notice calling such meeting.
3.06
Place of Meetings.
Regular or special meetings of the board of directors may be held either within or without the State of Florida.
3.07
Chairman of the Board.
The chairman of the board of directors, if one be elected by the board of directors, shall preside at all meetings of the board
of directors, if the chairman of the board is also an employee of the company, then such chairman shall also serve as an executive officer
of the Company.
3.08
First Meetings.
The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote
of the shareholders at the annual meeting and no notice of such meeting to the newly elected directors shall be necessary in order to
legally constitute the meeting, provided a quorum of duly qualified directors shall be present. If the shareholders fail to fix the time
and place of such first meeting, it shall be held without notice immediately following, and at the same place as the annual meeting of
the shareholders; provided, however, that if at least a majority (but not less than 5) of the newly elected directors are not present
and qualified, such initial meeting shall be adjourned by those directors who are present and have qualified until the necessary majority
of directors have been qualified and can be convened at a meeting to be called by the president. Until such initial meeting of the newly
elected directors is held, the prior board of directors shall continue in office.
3.09
Regular Meetings.
Regular meetings of the board of directors shall be held at least quarterly and may be held without notice at such time and place
as shall from time to time be determined by resolutions of the board of directors.
3.10
Special Meetings.
Special meetings of the board of directors may be called by the chairman of the board of directors or the chief executive officer
and shall be called by the secretary on the written request of three (3) directors. Notice of any special meeting of the board of directors
shall be given to each director at least two (2) days before the date of the meeting.
3.11
Quorum of Directors.
At all meetings of the board of directors, a majority of the directors shall constitute a quorum for the transaction of business
and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors.
If a quorum shall not be present at any meeting of the directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum shall be present.
3.12
Action by Written Consent, Fax and Electronic Mail.
Any action required or permitted to be taken at a meeting of the board of directors or any committee may be taken without a meeting
if a consent in writing, setting forth the actions so taken, is signed by all of the members of the board of directors or such committee,
as the case may be. Written consents of directors sent by facsimile transmission or electronic mail shall be accepted and effective for
all purposes.
3.13
Compensation of Directors. By resolution of the board of directors, the directors may be paid their expenses, if any, of attending
each meeting of the board of directors and may be paid a fixed sum for attending each meeting of the board of directors or a stated salary
for serving as a director. No such payment shall preclude any director from serving the trust company in any other capacity and receiving
compensation therefor. Members of the executive committee or of special or standing committees may, by resolution of the board of directors,
be allowed like compensation for attending committee meetings.
3.14
Minutes of Meetings. The board of directors shall keep regular minutes of its proceedings and such minutes shall be placed
in the minute book or electronic equivalent of the trust company. Committees of the board of directors shall maintain a separate record
of the minutes of their proceedings, which shall also be placed in the corporate minute book or electronic equivalent.
ARTICLE
IV
NOTICES AND TELEPHONE MEETINGS
4.01
Method of Giving Notice. Any notice to directors or shareholders shall be in writing and shall be delivered personally or
mailed to the directors or shareholders at their respective addresses appearing on the books of the trust company. Notice by mail shall
be deemed to be given at the time when the same shall be deposited in the United States mail, postage prepaid. Notices of meetings and
written consents of directors sent by facsimile transmission or electronic mail shall be accepted and effective for all purposes. Any
notice required to be given to shareholders, under these bylaws, the articles of incorporation, or the laws of the State of Florida,
need not be given to a shareholder if (a) notice of two consecutive annual meetings and all notices of meetings held during the period
between those annual meetings, if any, or (b) all (but in no event less than two) payments (if sent by first class mail) of distributions
or interest on securities during a twelve month period have been mailed to that person, addressed at this address as shown on the records
of the trust company, and have been returned undeliverable. Any action or meeting taken or held without notice to such a person shall
have the same force and effect as if the notice had been duly given. If such a person delivers to the trust company a written notice
setting forth his then current address, requirement that notice be given to that person shall be reinstated.
4.02
Waiver of Notice. Any notice required to be given may be subject to a waiver thereof in writing signed by the person or persons
entitled to receive such notice, whether before or after the time stated therein, and such waiver shall be deemed equivalent to the giving
of such notice in a timely manner. Any such signed waiver of notice, or a signed copy thereof, shall be placed in the minute book of
the trust company. Attendance of such persons at any meeting shall constitute a waiver of notice of such meetings, except where the persons
attend for the express purpose of objecting that the meeting is not lawfully convened.
4.03
Telephone Meetings. Subject to the requirements of the Florida Business Corporation Act, or these bylaws for notice of meetings,
shareholders, members of the board or directors, or members of any committee designated by such board of directors may participate in
and hold a meeting of such shareholders, board of directors, or committee by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to
this Section 4.03 shall constitute presence in person at such meeting, except where a person participates in the meeting for the express
purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.
ARTICLE
V
OFFICERS
5.01
Qualifications. The officers of the trust company need not be shareholders of the trust company or residents of the State
of Florida. The board of directors shall elect annually a chief executive officer (who may also be a member of the board of directors),
a president (who may also be a member of the board of directors), a treasurer, one or more division presidents, one or more vice chairmen,
and a secretary responsible for maintenance of the trust company’s corporate books and records and for the required attestation of signatures.
The secretary and the president may not be the same person. Such other officers and assistant officers as the board of directors may
deem desirable shall be appointed and removed in such other manner as may be prescribed by the board. Except for the offices of president
and secretary, any two (2) or more offices may be held by the same person. Any person holding the title of vice president or below may
be elected as an officer of the company upon the approval of either the chairman or CEO of the company and such approval shall be in
writing and maintained in the permanent records of the company.
5.02
Compensation of Officers. The salaries of all officers of the trust company, with the exception of the chairman of the board
if such chairman is deemed an executive officer of the company shall be fixed by either the chairman of the board, if such chairman is
an executive officer of the company, or the CEO; the chairman’s salary, if an executive officer of the company, shall be fixed by the
Board of Directors of the Company or a committee thereof. The executive officers of the company shall have the power to enter into contracts
for the employment and compensation of officers on such terms as the executive officer deems advisable. No officer shall be disqualified
from receiving a salary or other compensation by reason of the fact that he is also a director of the trust company.
5.03
Term and Vacancies. The officers of the trust company shall hold office until their successors are elected or appointed and
qualified, or until their death, resignation, or removal from office. Any vacancy occurring in any office of the trust company by death,
resignation, removal, or otherwise, may be filled by the chairman or CEO of the company except for a vacancy in the role of chairman
which shall be filled by the Board of Directors of the Company.
5.04
Removal of Officers. Any officer elected or appointed may be removed at any time by the board of directors, but such removal
shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer or employee
shall not of itself create contract rights. Any officer may be removed, either with or without cause, by the board of directors, at any
regular or special meeting, or, except in the case of an officer chosen by the board of directors, by any officer upon whom such power
of removal may be conferred by the board of directors.
5.05
Resignation of Officers. Any officer may resign at any time by giving written notice to the board of directors, or to the
president, or the secretary of the trust company. Any such resignation shall take effect at the date of the receipt of such notice or
at any later specified time; and, unless otherwise specified, the acceptance of such resignation shall not be necessary to make it effective.
5.06
General Authority of Officers. The board of directors, except as otherwise provided in these bylaws, may authorize any officer
to enter into any contract or execute and deliver any instrument in the name of and on behalf of the trust company, and such authority
may be general or confined to specific instances. Unless so authorized, no officer, agent or employee shall have any power or authority
to bind the trust company by any contract or engagement or to pledge its credit or to render it liable pecuniarily for any purpose or
in any amount.
5.07
Execution of Instruments. All documents, instruments or writings of any nature shall be signed, executed, verified,
acknowledged or delivered by such officer and officers or such agent or agents of the trust company and in such manner as the board of
directors may from time to time determine.
ARTICLE
VI
COMMITTEES
6.01
Executive Committee. The board of directors may, by resolution adopted by a majority of the entire board, designate an executive
committee consisting of one or more directors. Each executive committee member shall hold office until the first meeting of the board
of directors after the annual meeting of shareholders and until the member’s successor is elected and qualified, or until the member’s
death, resignation or removal, or until the member shall cease to be a director.
During
the intervals between the meetings of the board of directors, the executive committee may exercise all the authority of the board of
directors; provided, however, that the executive committee shall not have the power to amend or repeal any resolution of the board of
directors that by its terms shall not be subject to amendment or repeal by the executive committee, and the executive committee shall
not have the authority of the board of directors in reference to (i) the amendment of the Articles of Incorporation or Bylaws of the
corporation; (ii) the adoption of a plan of merger or consolidation; (iii) the sale, lease, exchange or other disposition of all or substantially
all the property and assets of the corporation; or (iv) a voluntary dissolution of the corporation or the revocation of any such voluntary
dissolution.
The
executive committee shall meet from time to time on call of the chairman of the board or the president or of any two or more members
of the executive committee. Meetings of the executive committee may be held at such place or places, within or without the State of
Florida, as the executive committee shall determine or as may be specified or fixed in the respective notices or waivers of such
meetings. The executive committee may fix its own rules of procedure, including provision for notice of its meetings. It shall keep
a record of its proceedings and shall report these proceedings to the board of directors at the meeting thereof held next after they
have been taken, and all such proceedings shall be subject to revision or alteration by the board of directors except to the extent
that action shall have been taken pursuant to or in reliance upon such proceedings prior to any such revision or
alteration.
The
executive committee shall act by majority vote of its members; provided, however, that contracts or transactions of and by the corporation
in which officers or directors of the corporation are interested shall require the affirmative vote of a majority of the disinterested
members of the executive committee at a meeting of the executive committee at which the material facts as to the interest and as to the
contract or transaction are disclosed or known to the members of the executive committee prior to the vote.
Members
of the executive committee may participate in committee proceedings by means of conference telephone or similar communications equipment
by means of which all persons participating in the proceedings can hear each other, and such participation shall constitute presence
in person at such proceedings.
The
board of directors may by resolution designate one or more directors as alternate members of the executive committee who may act in the
place and stead of any absent member or members at any meeting of said committee.
6.02
Audit Committee. The board of directors may, by resolution adopted by a majority of the entire board, designate an audit committee
consisting of at least three members. Each member shall be a capable and experienced individual with at least two being directors of
the Holding Company or Trust Company. Each audit committee member shall hold office until the first meeting of the board of directors
after the annual meeting of shareholders and until the member’s successor is elected and qualified, or until the member’s death, resignation
or removal. The audit committee shall meet as often as required to fulfill its responsibilities, but no less than once quarterly. The
committee shall maintain minutes of its meetings.
6.03
Other Committees. The board of directors, by resolution passed by a majority of the entire board of directors, may from time
to time constitute other committees, which shall in each case consist of such number of directors or executive officers, not less than
two (2), and shall have and may exercise such powers as the board of directors may determine and specify in the respective resolutions
appointing them. A majority of all the members of any such committee may determine its action and fix the time and place of any meeting,
unless the board of directors shall otherwise direct. The board of directors shall have power at any time to change the number and the
members (with or without cause) of any such committee, to fill vacancies and to discharge any such committee.
6.04
Removal. The board of directors shall have power at any time to remove any member of any committee, with or without cause,
and to fill vacancies in and to dissolve any such committee.
ARTICLE
VII
CERTIFICATES
AND SHAREHOLDERS
7.01 Form
of Certificates. Certificates shall be delivered representing all shares of stock in the trust company to which shareholders
are entitled. Certificates for shares of stock of the trust company shall be in such form as shall be required by law and as shall
be approved by the board of directors. Every certificate for shares issued by the trust company must be signed (such signatures may
be facsimiles) by the president or a vice president and the secretary or an assistant secretary. Such certificates shall bear a
legend or legends in the form and containing the restrictions required to be stated thereon by the Florida Business Corporation Act,
other provisions of law, the articles of incorporation or these bylaws. Certificates shall be consecutively numbered and shall be
recorded in the books of the trust company as they are issued. Each certificate shall state on the face thereof the holder’s name,
the number and class of shares, the par value of such shares, and such other matters as may be required by law, the articles of
incorporation or these bylaws.
7.02
Lost Certificates. The board of directors may direct a new certificate or certificates to be issued in place of any certificate
previously issued by the trust company alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person
claiming the loss or destruction. In so doing, the board of directors may in its discretion and as a condition precedent to the issuance
of a new certificate (a) require the owner of the lost or destroyed certificate or such owner’s legal representative, to advertise the
same in such manner as it shall require and/or (b) to give the trust company a bond (with a surety or sureties satisfactory to the trust
company) in such sum as it may direct, as indemnity against any claim, or expense resulting from any claim that may be made against the
trust company with respect to the certificate alleged to have been lost or destroyed.
7.03
Transfer of Shares. Shares of stock shall be transferable only on the books of the trust company by the holder thereof in
person or by such holder’s duly authorized attorney. Upon surrender to the trust company or its transfer agent of a certificate representing
shares properly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, the trust company or its
transfer agent shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon
its books.
7.04
Record Ownership Conclusive. The trust company shall be entitled to treat the holder of record of any share or shares of stock
in the trust company as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether or not it has express or other notice thereof, except as
otherwise provided by law or by any stock purchase and redemption agreement to which the stock may be subject, if such agreement has
been formally executed or accepted by the trust company. When shares are registered on the books of the trust company in the names of
two or more persons as joint owners with the right of survivorship, after the death of a joint owner and before the time that the trust
company receives actual written notice that parties other than the surviving joint owner or owners claim an interest in the shares or
any distributions thereon, the trust company may record on its books and otherwise effect the transfer of those shares to any person,
firm, or trust company (including that surviving joint owner individually) and pay any distributions made in respect of those shares,
in each case as if the surviving joint owner or owners were the absolute owners of the shares.
7.05 Closing
Transfer Books. The board of directors shall have the power to close the stock transfer books of the trust company for a
period not exceeding sixty (60) days preceding the date of any meeting of the shareholders or the date for payment of any
distribution by the trust company (other than a distribution involving a purchase or redemption by the trust company of any of its
own shares) or a share dividend or the date for the allotment of rights or the date when any change or conversion or exchange of
capital stock shall go into effect. In lieu of closing the stock transfer books, the board of directors may fix in advance a date,
not exceeding sixty (60) days preceding the date of any meeting of shareholders, or the date for the payment of any distribution by
the trust company (other than a distribution involving a purchase or redemption by the trust company of any of its own shares) or a
share dividend, or the date for allotment of rights, or the date when any change or conversion or exchange of capital stock shall go
into effect, as a record date for the determination of the shareholders entitled to notice of and to vote at any such meeting, or
entitled to receive payment of any such distribution or share dividend, or any such allotment of rights, or to exercise the rights
in respect to any such change, conversion, or exchange of capital stock, and in such case only shareholders of record on the date so
fixed shall be entitled to such notice of and to vote at such meeting, or to receive payment of such distribution or share dividend,
or allotment of rights, or exercise such rights, as the case may be, and notwithstanding any transfer of any stock on the books of
the trust company after any such record date fixed as herein provided.
ARTICLE
VIII
FIDUCIARY
PROVISIONS
8.01
Fiduciary Files. There shall be maintained by the trust company all fiduciary records necessary to assure that its fiduciary
responsibilities have been properly undertaken and discharged.
8.02
Trust Investments. Funds held in a fiduciary capacity shall be invested in accordance with the instrument establishing the
fiduciary relationship and local law. Where such instrument does not specify the character and class investment to be made and does not
vest in the trust company a discretion in the matter, funds held pursuant to such instrument shall be invested in investments in which
corporate fiduciaries may invest under applicable law.
ARTICLE
IX
OTHER
PROVISIONS
9.01
Distributions. The board of directors may authorize the trust company, at any regular or special meeting of the directors,
to make distributions and to declare share dividends subject to the provisions of the articles of incorporation and the laws of the State
of Florida. Such distribution may be in the form of cash or, in the case of share dividends, in shares of the trust company. The authorization
for distributions and share dividends shall be at the discretion of the board of directors.
9.02
Reserves. Before payment of any distribution, the board of directors shall create and set aside funds and reserves as required
by applicable law or as the directors from time to time and in their absolute discretion think proper to provide for contingencies or
to equalize distributions or to repair or maintain any property of the trust company, or for any other purpose they think beneficial
to the trust company. Subject to the requirements of applicable law, the directors may modify or abolish any such reserve or fund in
the manner in which it was created.
9.03
Records. The trust company shall keep correct and complete books and records of account and shall keep minutes of the proceedings
of its shareholders and board of directors, and shall keep at its registered office or principal place of business or at the office of
its transfer agent or registrar a record of its shareholders, giving the names and addresses of all shareholders and the number and class
of the shares held by each.
9.04
Fiscal Year. The fiscal year of the trust company shall, unless otherwise fixed by resolution of the board of directors, be
the calendar year.
9.05
Seal. The trust company’s seal shall be in such form as may be prescribed by the board of directors. The seal may be used
by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced. The seal need not be affixed to any document
signed on behalf of the trust company unless specifically required by resolution of the board of directors.
9.06
Indemnification. The trust company shall indemnify and hold harmless each person who was or is a director or executive officer
of the trust company and may indemnify any other person, including any person who was or is serving as a director, officer, fiduciary
or other representative of another entity at the request of the trust company, and each such person’s heirs and legal representatives
to the fullest extent provided in the trust company’s articles of incorporation.
9.07 Other
Indemnification. The foregoing rights of indemnification and reimbursement shall not be exclusive of any other right to
which any such person may be entitled by law, bylaw, agreement, shareholder’s vote or otherwise.
9.08
Insurance. The trust company shall have the power to purchase and maintain insurance on behalf of any person who is or was
a director, officer, employee or agent of the trust company or who was serving at the request of the association as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against
such person and incurred by such person in any such capacity or arising out of such person’s status as such, whether or not the trust
company would have the power to indemnify such person against such person under the trust company’s articles of incorporation.
9.09
Transactions Between the Trust Company and an Officer, Director, or Shareholder. No contract or other transaction between
the trust company and any of its directors, officers or any trust company or other organization in which any of them are directly or
indirectly interested, shall be void or voidable solely by reason of the interest or relationship of such director or officer if:
| (1) | the
material facts of the relationship or interest of each such director, officer or security holder are known or disclosed: |
| (a) | to
the board of directors and it nevertheless authorizes or ratifies the contract or transaction by a majority of the directors present,
each such interested director to be counted in determining whether a quorum is present but not in calculating the majority necessary
to carry the vote; or |
| (b) | to
the shareholders and they nevertheless authorize or ratify the contract or transaction by
a majority of the shares present, each such interested person to be counted for quorum and
voting purposes; or |
| (2) | the
contract or transaction is fair to the trust company as of the time it is authorized or ratified by the board of directors, or the shareholders. |
ARTICLE
X
AMENDMENT
AND CONSTRUCTION
10.01
Amendment. The board of directors shall have the power to alter, amend, or repeal these bylaws or adopt new bylaws, subject
to the right of the shareholders to rescind any board action with regard to the bylaws at a regular meeting of shareholders or at a special
meeting of shareholders called for such purpose.
10.02
Severabilitv. If any portion of these bylaws shall be invalid or inoperative, then, so far as is reasonable, the remainder
of these bylaws shall be considered valid.
The
undersigned, the secretary of the trust company, hereby certifies that the foregoing bylaws were adopted by the board of directors of
the trust company as of September 11, 2023.
| |
/s/ Robert C. Finely |
| |
Robert C. Finely, Secretary |
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust
Indenture Act of 1939, and in connection with the proposed issue of debt securities, Argent Institutional Trust Company hereby consents
that reports of examinations by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities
and Exchange Commission upon request therefore.
| |
ARGENT INSTITUTIONAL TRUST COMPANY |
| |
|
| |
By: |
/s/ Debra Schachel |
| |
|
Name: Debra Schachel
Title: Vice President |
| |
|
|
| |
Atlanta, Georgia
February 19, 2025
EXHIBIT 7
CONSOLIDATED REPORT OF CONDITION OF
ARGENT FINANCIAL GROUP AND ITS SUBSIDIARIES (INCLUDING ARGENT INSTITUTIONAL TRUST COMPANY)
As of December 31, 2024
S-3
S-3ASR
EX-FILING FEES
0001677576
INNOVATIVE INDUSTRIAL PROPERTIES INC
0001677576
2025-02-21
2025-02-21
0001677576
1
2025-02-21
2025-02-21
0001677576
2
2025-02-21
2025-02-21
0001677576
3
2025-02-21
2025-02-21
0001677576
4
2025-02-21
2025-02-21
0001677576
5
2025-02-21
2025-02-21
0001677576
6
2025-02-21
2025-02-21
0001677576
7
2025-02-21
2025-02-21
0001677576
8
2025-02-21
2025-02-21
iso4217:USD
xbrli:pure
xbrli:shares
|
Calculation of Filing Fee Tables
|
|
S-3
|
|
INNOVATIVE INDUSTRIAL PROPERTIES INC
|
|
Table 1: Newly Registered and Carry Forward Securities
|
|
|
|
Security Type
|
Security Class Title
|
Fee Calculation or Carry Forward Rule
|
Amount Registered
|
Proposed Maximum Offering Price Per Unit
|
Maximum Aggregate Offering Price
|
Fee Rate
|
Amount of Registration Fee
|
Carry Forward Form Type
|
Carry Forward File Number
|
Carry Forward Initial Effective Date
|
Filing Fee Previously Paid in Connection with Unsold Securities to be Carried Forward
|
|
Newly Registered Securities
|
|
Fees to be Paid
|
1
|
Debt
|
Debt Securities
|
457(r)
|
|
|
|
0.0001531
|
|
|
|
|
|
|
Fees to be Paid
|
2
|
Equity
|
Common Stock, par value of $0.001 per share
|
457(r)
|
|
|
|
0.0001531
|
|
|
|
|
|
|
Fees to be Paid
|
3
|
Equity
|
Preferred Stock, par value of $0.001
|
457(r)
|
|
|
|
0.0001531
|
|
|
|
|
|
|
Fees to be Paid
|
4
|
Other
|
Depositary Shares
|
457(r)
|
|
|
|
0.0001531
|
|
|
|
|
|
|
Fees to be Paid
|
5
|
Other
|
Rights
|
457(r)
|
|
|
|
0.0001531
|
|
|
|
|
|
|
Fees to be Paid
|
6
|
Other
|
Warrants
|
457(r)
|
|
|
|
0.0001531
|
|
|
|
|
|
|
Fees to be Paid
|
7
|
Other
|
Units
|
457(r)
|
|
|
|
0.0001531
|
|
|
|
|
|
|
Fees to be Paid
|
8
|
Other
|
Guarantees of Debt Securities
|
457(r)
|
|
|
|
0.0001531
|
|
|
|
|
|
|
Fees Previously Paid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carry Forward Securities
|
|
Carry Forward Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Offering Amounts:
|
|
$
0.00
|
|
$
0.00
|
|
|
|
|
|
|
|
|
Total Fees Previously Paid:
|
|
|
|
$
0.00
|
|
|
|
|
|
|
|
|
Total Fee Offsets:
|
|
|
|
$
0.00
|
|
|
|
|
|
|
|
|
Net Fee Due:
|
|
|
|
$
0.00
|
|
|
|
|
|
1
|
Omitted pursuant to Form S-3 General Instruction II.E. Separate consideration may or may not be received for securities that are issuable on exercise, conversion or exchange of other securities or that are issued in units. In addition, securities registered hereunder may be sold either separately or as units comprised of more than one type of security registered hereunder.
An indeterminate aggregate initial offering price or number of the securities of each identified class is being registered as may from time to time be offered at indeterminate prices.
In accordance with Rules 456(b) and 457(r) under the Securities Act of 1933, as amended (the "Securities Act"), the registrants are deferring payment of all of the registration fee, except as described below.
|
|
|
|
2
|
See note 1.
|
|
|
|
3
|
See note 1.
|
|
|
|
4
|
See note 1.
|
|
|
|
5
|
See note 1.
|
|
|
|
6
|
See note 1.
|
|
|
|
7
|
See note 1.
|
|
|
|
8
|
See note 1.
No separate consideration will be received for any guarantee of debt securities. Accordingly, pursuant to Rule 457(n) of the Securities Act, no separate filing fee is required.
|
|
|
v3.25.0.1
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v3.25.0.1
Offerings
|
Feb. 21, 2025 |
| Offering: 1 |
|
| Offering: |
|
| Fee Previously Paid |
false
|
| Rule 457(r) |
true
|
| Security Type |
Debt
|
| Security Class Title |
Debt Securities
|
| Fee Rate |
0.01531%
|
| Offering Note |
Omitted pursuant to Form S-3 General Instruction II.E. Separate consideration may or may not be received for securities that are issuable on exercise, conversion or exchange of other securities or that are issued in units. In addition, securities registered hereunder may be sold either separately or as units comprised of more than one type of security registered hereunder.
An indeterminate aggregate initial offering price or number of the securities of each identified class is being registered as may from time to time be offered at indeterminate prices.
In accordance with Rules 456(b) and 457(r) under the Securities Act of 1933, as amended (the "Securities Act"), the registrants are deferring payment of all of the registration fee, except as described below.
|
| Offering: 2 |
|
| Offering: |
|
| Fee Previously Paid |
false
|
| Rule 457(r) |
true
|
| Security Type |
Equity
|
| Security Class Title |
Common Stock, par value of $0.001 per share
|
| Fee Rate |
0.01531%
|
| Offering Note |
See note 1.
|
| Offering: 3 |
|
| Offering: |
|
| Fee Previously Paid |
false
|
| Rule 457(r) |
true
|
| Security Type |
Equity
|
| Security Class Title |
Preferred Stock, par value of $0.001
|
| Fee Rate |
0.01531%
|
| Offering Note |
See note 1.
|
| Offering: 4 |
|
| Offering: |
|
| Fee Previously Paid |
false
|
| Rule 457(r) |
true
|
| Security Type |
Other
|
| Security Class Title |
Depositary Shares
|
| Fee Rate |
0.01531%
|
| Offering Note |
See note 1.
|
| Offering: 5 |
|
| Offering: |
|
| Fee Previously Paid |
false
|
| Rule 457(r) |
true
|
| Security Type |
Other
|
| Security Class Title |
Rights
|
| Fee Rate |
0.01531%
|
| Offering Note |
See note 1.
|
| Offering: 6 |
|
| Offering: |
|
| Fee Previously Paid |
false
|
| Rule 457(r) |
true
|
| Security Type |
Other
|
| Security Class Title |
Warrants
|
| Fee Rate |
0.01531%
|
| Offering Note |
See note 1.
|
| Offering: 7 |
|
| Offering: |
|
| Fee Previously Paid |
false
|
| Rule 457(r) |
true
|
| Security Type |
Other
|
| Security Class Title |
Units
|
| Fee Rate |
0.01531%
|
| Offering Note |
See note 1.
|
| Offering: 8 |
|
| Offering: |
|
| Fee Previously Paid |
false
|
| Rule 457(r) |
true
|
| Security Type |
Other
|
| Security Class Title |
Guarantees of Debt Securities
|
| Fee Rate |
0.01531%
|
| Offering Note |
See note 1.
No separate consideration will be received for any guarantee of debt securities. Accordingly, pursuant to Rule 457(n) of the Securities Act, no separate filing fee is required.
|
| X |
- DefinitionThe rate per dollar of fees that public companies and other issuers pay to register their securities with the Commission. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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