Exhibit
4.2


 


DESCRIPTION
OF THE REGISTRANT’S SECURITIES


REGISTERED
PURSUANT TO SECTION 12 OF THE


SECURITIES
EXCHANGE ACT OF 1934


 


The
following is a summary of the general terms of the common stock of Chicago Atlantic Real Estate Finance, Inc., a Maryland corporation
(“we,” “our,” “us” and “the Company”). 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
our charter (the “Charter”) and amended and restated bylaws (the “Bylaws”). Copies of our Charter and Bylaws
are filed as exhibits to our most recent Annual Report on Form 10-K with the United States Securities and Exchange Commission (the “SEC”),
and are incorporated herein by reference.


 


GENERAL


 


Our
Charter provides that we may issue up to 100,000,000 shares of common stock, $0.01 par value per share (our “common stock”),
and up to 10,000,000 shares of preferred stock, $0.01 par value per share (our “preferred stock”). Our Board of Directors
(the “Board”), with the approval of a majority of the entire Board and without any action by our stockholders, may amend
the Charter from time to time 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 have authority to issue. Under Maryland law, our stockholders generally are not liable for our debts or obligations
solely as a result of their status as stockholders.


 


Common
Stock


 


Our
Board may reclassify any unissued shares of our common stock from time to time into one or more classes or series of stock. Subject to
certain provisions of, and except as may otherwise be specified in the Charter, and subject to the rights of the holders of our preferred
stock, if any, and any other class or series of stock hereinafter classified and designated by our Board:


 


		●	the
holders of our common stock shall have the exclusive right to vote for the election of directors and on all other matters requiring stockholder
action, each share entitling the holder thereof to cast one vote on each matter submitted to a vote of stockholders;



 


		●	dividends
or other distributions may be declared and paid or set apart for payment upon our common stock out of any assets or our funds legally
available for the payment of distributions, but only when, as, and if, authorized by our Board; and



 


		●	upon
our voluntary or involuntary liquidation, dissolution or winding up, our net assets legally available for distribution shall, after the
payment of or adequate provision for all known debts and liabilities and any preferential rights of the holders of any then-outstanding shares
of our preferred stock, be distributed pro rata to the holders of our common stock.



 






     


     


    

 


Classified
or Reclassified Shares


 


Prior
to the issuance of classified or reclassified shares of any class or series of stock, our Board by resolution shall: (a) designate that
class or series to distinguish it from all other classes and series of our stock; (b) specify the number of shares to be included in
the class or series; (c) set or change, subject to the provisions of the Charter and Bylaws and subject to the express terms of any class
or series of our stock outstanding at the time, the preferences, conversion or other rights, voting powers (including exclusive voting
rights, if any), restrictions, limitations as to dividends or other distributions, qualifications and terms and conditions of redemption
for each class or series; and (d) cause us to file articles supplementary with the State Department of Assessments and Taxation of Maryland.


 


Stockholders’
Consent in Lieu of Meeting


 


The
MGCL generally provides that, unless the charter of the corporation authorizes stockholder action by less than unanimous consent, holders
of common stock may take action by consent in lieu of a meeting only if it is given by all such stockholders entitled to vote on the
matter. The Charter provides for action by common stockholders by less than unanimous consent, if the action is first advised, and submitted
to stockholders for approval, by our Board.


 


Distributions


 


Our
Board from time to time may authorize and we may pay to our stockholders such dividends or other distributions in cash or other property,
including in shares of one class of our capital stock payable to holders of shares of another class of our stock, as our Board in its
discretion shall determine.


 


Corporate
Opportunities


 


As
permitted by our Charter and approved by resolution of our Board, none of our directors or officers, including any officer or director
who also serves as a director, officer or employee of Chicago Atlantic REIT Manager, LLC (our “Manager”), a subsidiary of
Chicago Atlantic Group, LLC (our “Sponsor”), or serves on the Manager’s Investment Committee, shall be obligated, in
their capacity as such, to offer us the opportunity to participate in any business or investing activity or venture that falls within
our investment guidelines that is presented to such person, other than in their capacity as our officer or director.


 


Ownership
Limitations and Exceptions


 


In
order for us to qualify as a real estate investment trust (“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 qualify as a REIT has been made) or during a proportionate part of a shorter taxable
year. Also, not more than 50% of the value of the outstanding shares of our stock may be owned, directly or indirectly, by five or fewer
individuals (as defined in the Code to include certain entities such as private foundations) during the last half of a taxable year (other
than the first year for which an election to be a REIT has been made). To qualify as a REIT, we must satisfy other requirements as well.


 






    2


     


    

 


Our
Charter contains restrictions on the ownership and transfer of our stock. Our Board may, from time to time, grant waivers from these
restrictions, in its sole discretion. Our Charter provides that, subject to the exceptions described below, no person or entity may own,
or be deemed to own, beneficially or 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 shares of our common stock (referred to as the “common
stock ownership limit”) or 9.8% in value of the outstanding shares of all classes or series of our stock (referred to as the “aggregate
stock ownership limit”). We refer to the common stock ownership limit and the aggregate stock ownership limit collectively as the
“ownership limits.” We refer to the person or entity that, but for operation of the ownership limits or another restriction
on ownership and transfer of our stock as described below, would beneficially own or constructively own shares of our stock in violation
of such limits or restrictions and, if appropriate in the context, a person or entity that would have been the record owner of such shares
of our stock as a “prohibited owner.”


 


The
constructive ownership rules under the Code are complex and may cause shares of stock owned beneficially or constructively by a group
of related individuals and/or entities to be owned beneficially or constructively by one individual or entity. As a result, the acquisition
of less than 9.8%, in value or in number of shares, whichever is more restrictive, of the outstanding shares of our common stock, or
less than 9.8% in value of the outstanding shares of all classes and series of our stock (or the acquisition by an individual or entity
of an interest in an entity that owns, beneficially or constructively, shares of our stock), could cause that individual or entity, or
another individual or entity, to own beneficially or constructively shares of our stock in excess of the ownership limits.


 


Our
Board, in its sole and absolute discretion, may exempt, prospectively or retroactively, a particular stockholder from the ownership limits
or establish a different limit on ownership (referred to as the “excepted holder limit”) if our Board determines that:


 


		●	such
exemption will not cause five or fewer individuals to beneficially own more than 49.9% in value of our outstanding stock; and



 


		●	such
stockholder does not and will not constructively own an interest in a tenant of ours (or a tenant of any entity owned or controlled by
us) that would cause us to own, actually or constructively, more than a 9.9% interest (as set forth in Section 856(d)(2)(B) of the Code)
in such tenant (or our Board of Directors determines that revenue derived from such tenant will not affect our ability to qualify as
a REIT).



 


Any
violation or attempted violation of any such representations or undertakings will result in such stockholder’s shares of stock
being automatically transferred to a charitable trust. As a condition of granting the waiver or establishing the excepted holder limit,
our Board may require an opinion of counsel or a ruling from the Internal Revenue Service, in either case in form and substance satisfactory
to our Board, in its sole and absolute discretion, in order to determine or ensure our status as a REIT and such representations and
undertakings from the person requesting the exception as our Board may require in its sole and absolute discretion to make the determinations
above. Our Board may impose such conditions or restrictions as it deems appropriate in connection with granting such a waiver or establishing
an excepted holder limit.


 






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In
connection with granting a waiver of the ownership limits or creating an excepted holder limit or at any other time, our Board may from
time to time increase or decrease the common stock ownership limit, the aggregate stock ownership limit or both, for all other persons,
unless, after giving effect to such increase, five or fewer individuals could beneficially own, in the aggregate, more than 49.9% in
value of our outstanding stock or we would otherwise fail to qualify as a REIT. A reduced ownership limit will not apply to any person
or entity whose percentage ownership of our common stock or our stock of all classes and series, as applicable, is, at the effective
time of such reduction, in excess of such decreased ownership limit until such time as such person’s or entity’s percentage
ownership of our common stock or our stock of all classes and series, as applicable, equals or falls below the decreased ownership limit,
but any further acquisition of shares of our common stock or stock of all other classes or series, as applicable, will violate the decreased
ownership limit.


 


Our
Charter further prohibits:


 


		●	any
person from beneficially or constructively owning, applying certain attribution rules of the Code, shares of our stock that could result
in our being “closely held” under Section 856(h) of the Code (without regard to whether the ownership interest is held during
the last half of a taxable year) or otherwise cause us to fail to qualify as a REIT;



 


		●	any
person from transferring shares of our stock if the transfer would result in shares of our stock being beneficially owned by fewer than
100 persons (determined under the principles of Section 856(a)(5) of the Code); and



 


		●	any
person from beneficially owning shares of our stock to the extent such ownership would (or, in the sole judgment of our board of directors,
could) result in our failing to qualify as a “domestically controlled qualified investment entity” within the meaning of
Section 897(h) of the Code.



 


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 restrictions on ownership and transfer of our stock described above, or who would have owned
shares of our stock transferred to the trust as described below, must immediately give written notice to us of such event or, in the
case of a proposed or attempted transaction, give us at least 15 days’ prior written notice and provide us with such other
information as we may request in order to determine the effect of such transfer on our status as a REIT.


 






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If
any transfer of shares of our stock would result in shares of our stock being beneficially owned by fewer than 100 persons, the transfer
will be null and void and the intended transferee will acquire no rights in the shares. In addition, if any purported transfer of shares
of our stock or any other event would otherwise result in any person violating the ownership limits or an excepted holder limit established
by our Board, our being “closely held” under Section 856(h) of the Code (without regard to whether the ownership interest
is held during the last half of a taxable year) or our otherwise failing to qualify as a REIT or our being a “domestically controlled
qualified investment entity” within the meaning of Section 897(h) of the Code, then that number of shares (rounded up to the nearest
whole share) that would cause the violation will be automatically transferred to, and held by, a trust for the exclusive benefit of one
or more charitable organizations selected by us, and the intended transferee or other prohibited owner will acquire no rights in the
shares. The automatic transfer will be effective as of the close of business on the business day prior to the date of the violative transfer
or other event that results in a transfer to the trust. If the transfer to the trust as described above is not automatically effective,
for any reason, to prevent violation of the applicable ownership limits or our being “closely held” under Section 856(h)
of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or our otherwise failing
to qualify as a REIT or our being a “domestically controlled qualified investment entity”, then our Charter provides that
the transfer of the shares will be null and void and the intended transferee will acquire no rights in such shares.


 


Shares
of our stock held in the trust will be issued and outstanding shares. The prohibited owner will not benefit economically from ownership
of any shares of our stock held in the trust and will have no rights to distributions and no rights to vote or other rights attributable
to the shares of our stock held in the trust. The trustee of the trust will exercise all voting rights and receive all distributions
with respect to shares held in the trust for the exclusive benefit of the charitable beneficiary of the trust. Any distribution made
before we discover that the shares have been transferred to a trust as described above must be repaid by the recipient to the trustee
upon demand by us. Subject to Maryland law, effective as of the date that the shares have been transferred to the trust, the trustee
will have the authority to rescind as void any vote cast by a prohibited owner before our discovery that the shares have been transferred
to the trust and to recast the vote in accordance with the desires of the trustee acting for the benefit of the charitable beneficiary
of the trust. However, if we have already taken irreversible corporate action, then the trustee may not rescind and recast the vote.


 


Shares
of our stock transferred to the trustee are deemed offered for sale to us, or our designee, at a price per share equal to the lesser
of (i) the price paid by the prohibited owner for the shares (or, in the case of a devise, gift or other transaction, the market
price at the time of such devise, gift or other transaction) and (ii) the market price on the date we accept, or our designee accepts,
such offer. We may reduce the amount so payable to the trustee by the amount of any distribution that we made to the prohibited owner
before we discovered that the shares had been automatically transferred to the trust and that are then owed by the prohibited owner to
the trustee as described above, and we may pay the amount of any such reduction to the trustee for distribution to the charitable beneficiary.
We have the right to accept such offer until the trustee has sold the shares of our stock held in the trust as discussed below. Upon
a sale to us, the interest of the charitable beneficiary in the shares sold terminates, and the trustee must distribute the net proceeds
of the sale to the prohibited owner and must distribute any distributions held by the trustee with respect to such shares to the charitable
beneficiary.


 






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If
we do not buy the shares, the trustee must, within 20 days of receiving notice from us of the transfer of shares to the trust, sell
the shares to a person or entity designated by the trustee who could own the shares without violating the ownership limits or the other
restrictions on ownership and transfer of our stock. After the sale of the shares, the interest of the charitable beneficiary in the
shares transferred to the trust will terminate and the trustee must distribute to the prohibited owner an amount equal to the lesser
of (i) the price paid by the prohibited owner for the shares (or, if the prohibited owner did not give value for the shares in connection
with the event causing the shares to be held in the trust (for example, in the case of a gift, devise or other such transaction), the
market price of the shares on the day of the event causing the shares to be held in the trust) and (ii) the sales proceeds (net
of any commissions and other expenses of sale) received by the trustee for the shares. The trustee may reduce the amount payable to the
prohibited owner by the amount of any distribution that we paid to the prohibited owner before we discovered that the shares had been
automatically transferred to the trust and that are then owed by the prohibited owner to the trustee as described above. Any net sales
proceeds in excess of the amount payable to the prohibited owner must be paid immediately to the charitable beneficiary, together with
any distributions thereon. In addition, if, prior to the discovery by us that shares of stock have been transferred to a 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 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 trustee upon demand. The prohibited owner has no rights in the shares
held by the trustee.


 


In
addition, if our Board determines that a transfer or other event has occurred that would violate the restrictions on ownership and transfer
of our stock described above, our Board 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 our stock, refusing to give effect to the transfer on our books or instituting
proceedings to enjoin the transfer.


 


Every
owner of 5% or more (or such lower percentage as required by the Code or the regulations promulgated thereunder) of our stock, within
30 days after the end of each taxable year, must give us written notice stating the stockholder’s name and address, the number
of shares of each class or series of our stock that the stockholder beneficially owns and a description of the manner in which the shares
are held. Each such owner must provide to us in writing such additional information as we may request in order to determine the effect,
if any, of the stockholder’s beneficial ownership on our status as a REIT and to ensure compliance with the ownership limits. In
addition, any person or entity that is a beneficial owner or constructive owner of shares of our stock and any person or entity (including
the stockholder of record) that is holding shares of our stock for a beneficial owner or constructive owner must, on request, provide
to us such information as we may request in order to determine our status as a REIT and to comply with the requirements of any taxing
authority or governmental authority or to determine such compliance and to ensure compliance with the ownership limits.


 


Any
certificates representing shares of our stock will bear a legend referring to the restrictions on ownership and transfer of our stock
described above.


 


These
restrictions on ownership and transfer of our stock will not apply if our Board determines that it is no longer in our best interests
to attempt to qualify, or to continue to qualify, as a REIT or that compliance is no longer required in order for us to qualify as a
REIT.


 






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The
restrictions on ownership and transfer of our stock described above 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 interests of our stockholders.


 


Other
Rights


 


Holders
of shares of our common stock have no preference, conversion, exchange, sinking fund, redemption or appraisal rights and have no preemptive
rights to subscribe for any other securities of our Company.


 


Transfer
Agent and Registrar


 


The
transfer agent and registrar for our common stock is Continental Stock Transfer & Trust Company.


 


Listing


 


Our
common stock is listed on the Nasdaq Global Market under the symbol “REFI”.


 


CERTAIN
PROVISIONS OF MARYLAND LAW AND OUR CHARTER AND BYLAWS


 


Board
of Directors


 


The
Charter and Bylaws provide that our number of directors initially shall be nine, which number may be increased or decreased only by our
Board pursuant to the Bylaws, but shall never be less than the minimum number required by the MGCL (which is one), nor more than fifteen.
Each of our directors will be elected by our stockholders to serve for a term ending at the next annual meeting of stockholders and when
his or her successor is duly elected and qualifies.


 


Vacancies.
Subject to the terms of any class or series of our preferred stock, vacancies on our Board may be filled only by the affirmative
vote of 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.


 


Voting.
The action of a majority of the directors present at a meeting at which a quorum is present shall be the action of our Board, unless
the concurrence of a greater proportion is required for such action by applicable law, the Charter or the Bylaws.


 


Removal
of Directors. Subject to the rights of holders of shares of one or more classes or series of our preferred stock to elect or remove
one or more directors, any director, or the entire Board, may be removed from office at any time, but only for cause (as defined in our
Charter) and then only by the affirmative vote of a majority of the votes entitled to be cast generally in the election of directors.
This provision, when coupled with the exclusive power of our Board to fill vacancies on our Board, precludes stockholders from removing
incumbent directors (except for cause and upon a substantial affirmative vote) and filling the vacancies created by such removal with
their own nominees.


 






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Election
of Directors. Except as may otherwise be provided in the Charter with respect to holders of any class or series of our preferred
stock, a plurality of all the votes cast at a meeting of stockholders duly called and at which a quorum is present shall be sufficient
to elect a director. Holders of shares of our common stock have no right to cumulative voting in the election of directors. Consequently,
the holders of a majority of the outstanding shares of our 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.


 


REIT
Qualification


 


Our
Charter provides that our Board may revoke or otherwise terminate our REIT election pursuant to Section 856(g) of the Code, without approval
of our stockholders, if our Board determines that it is no longer in our best interests to attempt to, or continue to, qualify as a REIT.
Our Board, in its sole and absolute discretion, also may (a) determine that compliance with any restriction or limitation on stock ownership
and transfers set forth in the Charter is no longer required for REIT qualification and (b) make any other determination or take any
other action pursuant to the provisions of the Charter.


 


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 during the two-year period immediately
prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then-outstanding 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 the corporation and approved by the affirmative vote of at least (i) 80% of the votes entitled to be cast by
holders of outstanding shares of voting stock of the corporation and (ii) 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 corporation’s board of directors may provide that its approval is subject to compliance, at or after the time of
approval, with any terms and conditions determined by the board of directors. By resolution of our Board, we have opted out of the business
combination provisions of the MGCL and provide that any business combination between us and any other person is exempt from the business
combination provisions of the MGCL, provided that the business combination is first approved by our Board (including a majority of directors
who are not affiliates or associates of such persons).


 






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Control
Share Acquisitions


 


The
MGCL provides that holders of “control shares” of a Maryland corporation acquired in a “control share acquisition”
have no voting rights with respect to such 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. Shares owned by the acquirer, an officer of the corporation or an employee of the corporation
who is also a director of the corporation are excluded from shares entitled to vote on the matter.


 


“Control
shares” are voting shares of stock that, 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:


 


		●	one-tenth or
more but less than one-third;



 


		●	one-third or
more but less than a majority; or



 


		●	a
majority or more of all voting power.



 


Control
shares do not include shares 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 making 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 for fair value any or all
of the control shares (except those for which voting rights have previously been approved). Fair value is 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, if a
meeting of stockholders is held at which the voting rights of such shares are considered and not approved, as of the date of such meeting.
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.


 






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The
control share acquisition statute does not apply to shares acquired in a merger, consolidation or statutory share exchange if the corporation
is a party to the transaction or acquisitions approved or exempted by the charter or bylaws of the corporation. The Bylaws contain a
provision exempting from the control share acquisition statute any and all acquisitions by any person of shares of our stock. This provision
may be amended or eliminated at any time in the future by our Board.


 


Subtitle
8


 


Subtitle
8 of Title 3 of the MGCL permits a Maryland corporation with a class of equity securities registered under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), and at least three independent directors to elect, 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 be subject
to any or all of five provisions, including:


 


		●	a
classified board of directors;



 


		●	a
two-thirds vote requirement for removing a director;



 


		●	a
requirement that the number of directors be fixed only by vote of the board of directors;



 


		●	a
requirement that a vacancy on the board of directors be filled only by a vote of the remaining directors in office and for the remainder
of the full term of the class of directors in which the vacancy occurred and until a successor is elected and qualifies; and



 


		●	a
majority requirement for the calling of a stockholder-requested special meeting of stockholders.



 


The
Charter provides that, at such time as we are able to make a Subtitle 8 election, vacancies on our Board may be filled only by the remaining
directors and that directors elected by our Board to fill vacancies will serve for the remainder of the full term of the directorship
in which the vacancy occurred. Through provisions in the Charter and Bylaws unrelated to Subtitle 8, we already (i) vest in
our Board the exclusive power to fix the number of directorships and (ii) require, unless called by our Board, chairman of our Board,
our chief executive officer or our president, the written request of stockholders entitled to cast a majority of all of the votes entitled
to be cast at such a meeting to call a special meeting.


 


Indemnification
and Limitation of Directors’ and Officers’ Liability


 


Maryland
law permits a Maryland corporation to include in its charter a provision limiting the liability of its directors and officers to the
corporation and its stockholders for money damages, except for liability resulting from (i) actual receipt of an improper benefit
or profit in money, property or services or (ii) active and deliberate dishonesty that is established by a final judgment and that
is material to the cause of action. The Charter contains a provision that eliminates the liability of our directors and officers to the
maximum extent permitted by Maryland law.


 






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The
MGCL requires us (unless the Charter provides otherwise, which the 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:


 


		●	the
act or omission of the director or officer was material to the matter giving rise to the proceeding and (a) was committed in bad faith
or (b) 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. 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:


 


		●	a
written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary
for indemnification by us; and



 


		●	a
written undertaking by or on behalf of the director or officer 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.



 


The
Charter obligates us to the maximum extent permitted by Maryland law in effect from time to time, to indemnify and, without requiring
a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of final
disposition of a proceeding to:


 


		●	any
present or former director or officer who is made or threatened to be made a party to, or witness in, a 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,
member, manager, trustee, employee or agent 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.



 


The
Charter also permits us to indemnify and advance expenses to any person who served a predecessor of ours in any of the capacities described
above and to any employee or agent of ours or a predecessor of ours.


 


In
addition to the indemnification provided by the Charter, we have entered into indemnification agreements with our directors and officers
that provide for indemnification to the maximum extent permitted by Maryland law, subject to certain standards to be met and certain
other limitations and conditions as set forth in such indemnification agreements.


 


Advance
Notice of Director Nominations and New Business


 


The
Bylaws provide that, with respect to an annual meeting of our stockholders, nominations of individuals for election to our Board and
the proposal of other business to be considered by our stockholders may be made only (i) pursuant to our notice of the meeting,
(ii) by or at the direction of our Board or (iii) by any stockholder who was a stockholder of record at the record date set
by our Board for determining stockholders entitled to vote at the meeting, at the time of giving the notice required by the Bylaws and
at the time of the meeting, who is entitled to vote at the meeting in the election of each individual so nominated or on such other proposed
business and has provided notice to us within the time period, and containing the information and other materials, specified in the advance
notice provisions of the 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 may be made only (i) by or at the direction of our Board or (ii) if the
meeting has been called for the purpose of electing directors, by any stockholder who was a stockholder of record at the record date
set by our Board for determining stockholders entitled to vote at the meeting, at the time of giving the notice required by the Bylaws
and at the time of the meeting, who is entitled to vote at the meeting in the election of each individual so nominated and who has provided
notice to us within the time period, and containing the information and other materials, specified in the advance notice provisions of
the Bylaws.


 


The
advance notice procedures of the Bylaws provide that, to be timely, a stockholder’s notice with respect to director nominations
or other proposals for an annual meeting must be delivered to our secretary at our principal executive office not earlier than the 150th day
nor later than 5:00 p.m., Eastern Time, on the 120th day prior to the first anniversary of the date of the proxy statement
for our preceding year’s annual meeting. With respect to our first annual meeting or in the event that the date of the annual meeting
is advanced or delayed by more than 30 days from the first anniversary of the date of the preceding year’s annual meeting, to be
timely, a stockholder’s notice must be delivered not earlier than the 150th day prior to the date of such annual
meeting and not later than 5:00 p.m., Eastern Time, on the close of business on the later of the 120th day prior to the
date of such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made.


 






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Meetings
of Stockholders


 


Under
the Bylaws, annual meetings of stockholders will be held each year at a date, time and place determined by our Board. Special meetings
of stockholders may be called by our Board, chairman of our Board, our chief executive officer or our president. Additionally, subject
to the provisions of the Bylaws, special meetings of the stockholders must be called by our secretary upon the written request of stockholders
entitled to cast not less than a majority of the votes entitled to be cast at such meeting. Only matters set forth in the notice of the
special meeting may be considered and acted upon at such a meeting.


 


Amendments
to the Charter and Bylaws


 


Under
the MGCL, a Maryland corporation generally may not amend its charter 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, unless
a lesser percentage (but not less than a majority of all of the votes entitled to be cast on the matter) is specified in the corporation’s
charter. Except for those amendments permitted to be made without stockholder approval under Maryland law or the Charter, the Charter
generally may be amended only if the amendment is first declared advisable by our Board and thereafter approved by the affirmative vote
of stockholders entitled to cast a majority of all of the votes entitled to be cast on the matter.


 


Our
Board has the exclusive power to adopt, alter or repeal any provision of the Bylaws and to make new Bylaws.


 


Transactions
Outside the Ordinary Course of Business


 


Under
the MGCL, a Maryland corporation generally may not dissolve, merge or consolidate with, or convert to, another entity, sell all or substantially
all of its assets or engage in a statutory share exchange unless the action is 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, unless
a lesser percentage (but not less than a majority of all of the votes entitled to be cast on the matter) is specified in the corporation’s
charter. Our Charter provides that these actions must be approved by a majority of all of the votes entitled to be cast on the matter.


 


Dissolution
of the Company


 


The
dissolution of our Company must be declared advisable by a majority of the entire Board and approved by our stockholders by the affirmative
vote of a majority of all of the votes entitled to be cast on the matter.


 






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Effects
of Certain Provisions of Maryland Law and of Our Charter and Bylaws


 


Our
Charter and Bylaws and Maryland law contain provisions that may 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, including advance
notice requirements for director nominations and other stockholder proposals. Likewise, if the provision in our Bylaws opting out of
the control share acquisition provisions of the MGCL were rescinded or if we were to opt into the classified board or other provisions
of Subtitle 8, these provisions of the MGCL could have similar anti-takeover effects.


 


Exclusive
Forum for Certain Litigation


 


Our
Bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland,
or, if that court does not have jurisdiction, the United States District Court for the District of Maryland, Northern Division, will
be the sole and exclusive forum for (a) any Internal Corporate Claim, as such term is defined in the MGCL, (b) any derivative action
or proceeding brought on our behalf (other than actions arising under federal securities laws), (c) any action asserting a claim of breach
of any duty owed by any of our directors, officers or other employees to us or to our stockholders, (d) any action asserting a claim
against us or any of our directors, officers or other employees arising pursuant to any provision of the MGCL or our Charter or Bylaws
or (e) any other action asserting a claim against us or any of our directors, officers or other employees that is governed by the internal
affairs doctrine. These choice of forum provisions will not apply to suits brought to enforce a duty or liability created by the Securities
Act of 1933, as amended (the “Securities Act”), the Exchange Act, or any other claim for which federal courts have exclusive
jurisdiction. Furthermore, our Bylaws provide that, unless we consent in writing to the selection of an alternative forum, the federal
district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the
resolution of any claim arising under the Securities Act. Although our Bylaws contain the choice of forum provisions described above,
it is possible that a court could rule that such provisions are inapplicable for a particular claim or action or that such provisions
are unenforceable. For example, under the Securities Act, federal courts have concurrent jurisdiction over all suits brought to enforce
any duty or liability created by the Securities Act, and investors cannot waive compliance with the federal securities laws and the rules
and regulations thereunder. In addition, the exclusive forum provisions described above do not apply to any actions brought under the
Exchange Act.


 


Although
we believe these provisions will benefit us by limiting costly and time-consuming litigation in multiple forums and by providing
increased consistency in the application of applicable law, these exclusive forum provisions may limit the ability of our stockholders
to bring a claim in a judicial forum that such stockholders find favorable for disputes with us or our directors, officers or employees,
which may discourage such lawsuits against us and our directors, officers and other employees.


 


 


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