Document:

Exhibit 10.2

 

EXECUTION VERSION

 

TAX PROTECTION AGREEMENT

 

THIS TAX PROTECTION
AGREEMENT (this “Agreement”) is made and entered into as of January 30, 2015 by and among Campus Crest Communities,
Inc., a Maryland corporation (the “REIT”), Campus Crest Communities Operating Partnership, L.P., a Delaware
limited partnership (the “Partnership”), and the other persons set forth on Schedule 2.1(i) hereof (each
a “Protected Partner,” and collectively the “Protected Partners”).

 

WHEREAS, pursuant to
the Second Amendment to Purchase and Sale Agreement dated as of November 3, 2014 (the “Contribution Agreement”),
interests in various entities of which the Protected Partners were members or partners and that directly or indirectly own real
property, were acquired by the Partnership or a subsidiary of the Partnership, with the Protected Partners receiving Class A common
units (“OP Units”) of limited partnership interest in the Partnership, cash, or a combination of OP Units and
cash (the “Transaction”).

 

WHEREAS, it is intended
for federal income tax purposes that the Transaction be treated in accordance with Section 15 of the Contribution Agreement;

 

WHEREAS, in accordance
with Section 15 of the Contribution Agreement, the parties desire to enter into this Agreement regarding certain tax matters associated
with the Transaction; and

 

WHEREAS, the REIT and
the Partnership desire to evidence their agreement regarding amounts that may be payable as a result of certain actions being taken
by the Partnership regarding the disposition of certain of the assets of Partnership or other contributed assets and certain debt
obligations of the Partnership, its partners and its subsidiaries.

 

NOW, THEREFORE, in
consideration of the premises and the mutual representations, warranties, covenants and agreements contained herein and in the
Contribution Agreement, the parties hereto hereby agree as follows:

 

ARTICLE 1

 

DEFINITIONS

 

To the extent not otherwise
defined herein, capitalized terms used in this Agreement have the following meanings:

 

“Agreement” has the
meaning set forth in the Recitals.

 

“Cash Consideration” has
the meaning set forth in Section 2.3.

 

“Closing” means the
closing of the transactions contemplated by the Contribution Agreement other than the acquisition by the REIT and/or its affiliates
of additional membership interests in each of Copper Beech Townhome Communities Twenty Six, LLC, Copper Beech Townhome Communities
Twenty Eight, LLC, Copper Beech Townhome Communities Twenty Nine, LLC and Copper Beech Townhome Communities IUP Buy SPE Management,
LLC.

 

“Closing Date”
means the date hereof.

 

“Code”
means the Internal Revenue Code of 1986, as amended.

 

    	 

    	 

    

 

“Consent” means the
prior written consent to do the act or thing for which the consent is required or solicited, which consent may be executed by a
duly authorized officer or agent of the party granting such consent.

 

“Contribution Agreement”
has the meaning set forth in the recitals.

 

“Excess Payment” has
the meaning set forth in Section 4.4

 

“General Partner” means
Campus Crest Communities GP, LLC, the general partner of the Partnership.

 

“Guaranteed Amount” means
the aggregate amount of each Guaranteed Debt that is guaranteed at any time by Partner Guarantors.

 

“Guaranteed Debt” means
any loans incurred (or assumed) by the Partnership or any Subsidiary that are guaranteed by Partner Guarantors pursuant to Section
3.3 hereof.

 

“Indirect Owner” in
the case of a Protected Partner that is an entity classified as an “S corporation”, a partnership or disregarded entity
for federal income tax purposes, any person owning an equity interest in such Protected Partner, and, in the case of any Indirect
Owner that is an entity classified as an “S corporation”, a partnership or disregarded entity for federal income tax
purposes, any person owning an equity interest in such entity.

 

“Initial Per
Unit Minimum Liability Amount” means, for a Protected Partner, (1) from the Closing and until the Second Closing (if
the Second Closing occurs), the quotient of (a) the initial maximum Minimum Liability Amount set forth on Schedule 3.1(a)(i)
applicable to such Protected Partner, divided by (b) the number of OP Units issued to the Protected Partner on the Closing Date,
and (2) from the Second Closing (if the Second Closing occurs), the quotient of (A) sum of (I) the Unit-Based Minimum Liability
Amount for that Protected Partner, determined immediately prior to the Second Closing, plus (II) the difference between the maximum
Minimum Liability Amount applicable to such Protected Partner set forth on Schedule 3.1(a)(ii) applicable to such Protected
Partner minus the initial maximum Minimum Liability Amount set forth on Schedule 3.1(a)(i) applicable to such Protected
Partner, divided by (B) the sum of the number of OP Units held by the Protected Partner immediately prior to the Second Closing
plus the number of OP Units issued to the Protected Partner in the Second Closing Date.

 

“Minimum Liability
Amount” means, for each Protected Partner, initially the amount set forth on Schedule 3.1(a)(i) hereto next to
such Protected Partner’s name, and following the occurrence of the Second Closing (if the Second Closing occurs), initially
the amount set forth on Schedule 3.1(a)(ii) hereto next to such Protected Partner’s name, as amended from time to
time, but in any case which may not exceed at any time the Unit-Based Minimum Liability Amount for such Protected Partner. The
initial aggregate maximum Minimum Liability Amount for all Protected Partners shall be $90,441,089 and, immediately following the
occurrence of the Second Closing (if the Second Closing occurs), the aggregate maximum Minimum Liability Amount shall be $100,000,000
(subject to the Unit-Based Minimum Liability Amount-limit described in this definition).

 

“Nonrecourse Liability”
has the meaning set forth in Treasury Regulations Section 1.752-1(a)(2).

 

“OP Units”
has the meaning set forth in the Recitals.

 

    	 

    	 

    

 

“Partner Guarantors” means
those Protected Partners (or Indirect Owners) who have guaranteed any portion of the Guaranteed Debt pursuant to Section 3.3. The
Partner Guarantors and each Partner Guarantor’s share of the Guaranteed Amount will be set forth on Exhibit A to
Schedule 3.7 hereto, as may be amended from time to time.

 

“Partnership” has the
meaning set forth in the Recitals.

 

“Partnership Agreement”
means the Second Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of February 9, 2012, as amended
through the Closing Date, and as the same may be further amended in accordance with the terms thereof.

 

“Partnership Interest Consideration”
has the meaning set forth in Section 2.3.

 

“Protected
Gain” shall mean any gain that would be allocable to and recognized by a Protected Partner under Section 704(c) of
the Code in the event of the sale of a Protected Property in a fully taxable transaction (and, so, excluding such Protected
Partner’s corresponding share of “book gain,” if any, accruing after the Closing (for the Protected
Properties set forth on Schedule 2.1(ii)(a)) or accruing after the Second Closing (for the Protected Property set forth on
Schedule 2.1(ii)(b))). The initial maximum amount
of Protected Gain with respect to each Protected Partner shall be determined as if the Partnership sold a Protected
Property in a fully taxable transaction on the Closing Date (for the Protected Properties set forth on Schedule 2.1(ii)(a))
or the Second Closing Date (for the Protected Property set forth on Schedule 2.1(ii)(b)) for consideration equal to the
Section 704(c) Value of such Protected Property immediately following the Closing (for the Protected Properties set forth on
Schedule 2.1(ii)(a)) or following the Second Closing (for the Protected Property set forth on Schedule 2.1(ii)(b)). For
purposes of calculating the amount of Section 704(c) gain that is allocated to a Protected Partner, any “reverse
Section 704(c) gain” allocated to such Partner pursuant to Treasury Regulations § 1.704-3(a)(6) shall not be taken
into account unless, as a result of adjustments to the Gross Asset Value (as defined in the Partnership Agreement) of any
Protected Property pursuant to clause (b) of the definition of Gross Asset Value as set forth in the Partnership Agreement,
all or a portion of the gain recognized by the Partnership that would have been Section 704(c) gain without regard to such
adjustments becomes or is treated as “reverse Section 704(c) gain” or Section 704(b) gain under Section 704 of
the Code, then such gain shall continue to be treated as Section 704(c) gain.

 

“Protected Partner”
means (i) those persons set forth on Schedule 2.1(i) hereto as a “Protected Partner” and (ii) any person who
acquires OP Units from a Protected Partner in a transaction in which gain or loss is not recognized in whole or in part and in
which such transferee’s adjusted basis, as determined for federal income tax purposes, is determined in whole or in part
by reference to the adjusted basis of a Protected Partner in such OP Units.

 

“Protected Property”
means (i) each of the properties identified as a Protected Property on Schedule 2.1(ii)(a) hereto and, following the consummation
of the Second Closing, each of the properties identified as a Protected Property on either Schedule 2.1(ii)(a) or on Schedule
2.1(ii)(b) hereto; (ii) a direct or indirect interest owned by the Partnership in any Subsidiary that owns an interest in a
Protected Property, if the disposition of such interest would result in the recognition of Protected Gain with respect to a Protected
Partner; and (iii) any other property that the Partnership directly or indirectly receives that is in whole or in part a “substituted
basis property” as defined in Section 7701(a)(42) of the Code with respect to a Protected Property or interest therein. For
the avoidance of doubt, if any Protected Property is transferred to another entity in a transaction in which gain or loss is not
recognized, and if the acquiring entity’s disposition of such Protected Property would cause the Protected Partners to recognize
gain or loss as a result thereof, such Protected Property (including any interest in such entity acquired directly or indirectly
by the Partnership in connection therewith) shall still be subject to this Agreement.

 

    	 

    	 

    

 

“Qualified Guarantee” has
the meaning set forth in Section 3.3.

 

“Qualified Guarantee Indebtedness”
has the meaning set forth in Section 3.3.

 

“REIT”
has the meaning set forth in the Recitals.

 

“Second Closing”
means the closing of the acquisition by the REIT and/or its affiliates of additional membership interests in each of Copper Beech
Townhome Communities Twenty Six, LLC, Copper Beech Townhome Communities Twenty Eight, LLC, Copper Beech Townhome Communities Twenty
Nine, LLC and Copper Beech Townhome Communities IUP Buy SPE Management, LLC.

 

“Second Closing
Date” means the date of the Second Closing.

 

“Section 704(c)
Value” means the fair market value of a Protected Property as set forth next to each Protected Property on Schedule
2.1(ii).

 

“Subsidiary” means any
entity in which the Partnership owns a direct or indirect interest.

 

“Successor Partnership”
has the meaning set forth in Section 2.2.

 

“Tax Claim”
has the meaning set forth in Section 7.1.

 

“Tax Proceeding”
has the meaning set forth in Section 7.1.

 

“Tax Protection Period”
means:

 

(1) with respect to
the obligations of the Partnership set forth in Article 2 hereof

 

(X) with
respect to the Protected Properties set forth on Schedule 2.1(ii)(a), the period commencing on the Closing Date and ending
at 12:01 AM on the day after the earlier of (a) seventh (7th) anniversary of the Second Closing (if the Second Closing
occurs) or (b) March 31, 2022; and

 

(Y) with
respect to the Protected Property set forth on Schedule 2.1(ii)(b), the period commencing on the Second Closing Date and
ending at 12:01 AM on the day after the earlier of (a) seventh (7th) anniversary of the Second Closing (if the Second
Closing occurs) or (b) March 31, 2022; and

 

(2) with respect to
the obligations of the Partnership set forth in Article 3 hereof, the period commencing on the Closing Date and ending at 12:01
AM on the day after the earlier of (a) seventh (7th) anniversary of the Second Closing (if the Second Closing occurs)
or (b) March 31, 2022.

 

“Transaction” has the
meaning set forth in the Recitals.

 

“Unit-Based
Minimum Liability Amount” means, at any given time for a Protected Partner, the product of (a) the Initial Per Unit Minimum
Liability Amount applicable to such Protected Partner, multiplied by (b) the number of OP Units then held by such Protected Partner.

 

    	 

    	 

    

 

ARTICLE
2

 

RESTRICTIONS
ON DISPOSITIONS OF PROTECTED PROPERTIES;

REPORTING
OF TRANSACTION

 

2.1          General
Prohibition on Disposition of Protected Properties. The REIT and the Partnership agree for the benefit of each Protected
Partner, for the term of the Tax Protection Period, that in the event that the Partnership, directly or indirectly sells, exchanges,
transfers, or otherwise disposes of a Protected Property or any interest therein (without regard to whether such disposition is
voluntary or involuntary) in a transaction that would cause a Protected Partner to recognize any Protected Gain, the provisions
of Article 4 shall apply and the Partnership shall make the payments to the Protected Partners provided for in Article 4.

 

Without limiting the
foregoing, the term “sale, exchange, transfer or disposition” by the Partnership shall be deemed to include, and the
rights of the Protected Partners with respect thereto under Article 4 shall extend to:

 

		(a)	any direct or indirect disposition by a Subsidiary of any Protected Property or any interest therein;

 

		(b)	any direct or indirect disposition by the Partnership of any Protected Property (or any direct
or indirect interest therein) that is subject to Section 704(c)(1)(B) of the Code and the Treasury Regulations thereunder; and

 

		(c)	any distribution by the Partnership to a Protected Partner that is subject to Section 737 of the
Code and the Treasury Regulations thereunder.

 

Without limiting the
foregoing, a disposition shall include any transfer, voluntary or involuntary, by the Partnership or a Subsidiary in a foreclosure
proceeding, pursuant to a deed in lieu of foreclosure, or in a bankruptcy proceeding.

 

2.2           Exceptions
Where No Gain Recognized. Notwithstanding the restrictions set forth in Section 2.1, the Partnership or a Subsidiary may
dispose of any Protected Property (or an interest therein), and Article 4 shall not apply thereto, if and to the extent that such
disposition qualifies as a like-kind exchange under Section 1031 of the Code, or an involuntary conversion under Section 1033 of
the Code, or other transaction (including, but not limited to, a contribution of property to any entity that qualifies for the
non-recognition of gain under Section 721 or Section 351 of the Code, or a merger or consolidation of the Partnership with or into
another entity that qualifies for taxation as a “partnership” for federal income tax purposes (a “Successor
Partnership”)) that does not result (in the year of such disposition or in a later year within the Tax Protection Period)
in the recognition of Protected Gain to a Protected Partner. In further clarification thereof in the case of a Section 1031 like-kind
exchange, if such exchange is with a “related party” within the meaning of Section 1031(f)(3) of the Code, any direct
or indirect disposition by such related party of the Protected Property or any other transaction prior to the expiration of the
two (2)-year period following such exchange and within the Tax Protection Period that would cause Section 1031(f)(1) of the Code
to apply with respect to such Protected Property (including by reason of the application of Section 1031(f)(4) of the Code) and
a result of which is to cause a Protected Partner to recognize Protected Gain shall be considered a violation of Section 2.1 by
the Partnership.

 

    	 

    	 

    

 

2.3           Mergers.
Notwithstanding the foregoing, Section 2.1 shall not apply to a voluntary, actual disposition by a Protected Partner of OP Units
in connection with a merger or consolidation of the Partnership pursuant to which (1) the Protected Partner is offered either cash
or property treated as cash pursuant to Section 731 of the Code (“Cash Consideration”) or partnership interests
in a partnership that would be treated as the continuing partnership under the principles of Section 708 of the Code and the receipt
of such partnership interests would not result in the recognition of gain for federal income tax purposes by the Protected Partner
(“Partnership Interest Consideration”); (2) the Protected Partner has the ability to elect to receive solely
Partnership Interest Consideration in exchange for his OP Units and the continuing partnership has agreed in writing to assume
the obligations of the Partnership under this Agreement; (3) no Protected Gain is recognized by the Partnership as a result of
any partner of the Partnership receiving Cash Consideration; and (4) the Protected Partner elects to receive Cash Consideration.

 

2.4           Transactions.
For federal, state and local income tax purposes, the Partnership shall report the Transaction in a manner consistent with Section
15 of the Contribution Agreement.

 

ARTICLE 3

 

ALLOCATION OF LIABILITIES;

POST-TAX PROTECTION PERIOD GUARANTEE
OPPORTUNITIES

 

3.1           Minimum
Liability Allocation. . Immediately following the Closing and during the entire Tax Protection Period, each Protected Partner
will be allocated Nonrecourse Liabilities by the Partnership at least equal to the Minimum Liability Amount for such Protected
Partner; provided further that the Partnership shall not, during or with respect to the Tax Protection Period, take any
position contrary or inconsistent to such allocation in any federal or state income tax returns (including, without limitation,
information returns, such as Schedules K-1, provided to partners in the Partnership and returns of Subsidiaries of the Partnership)
or any dealings involving the Internal Revenue Service (including, without limitation, any audit, administrative appeal or any
judicial proceeding involving the income tax returns of the Partnership or the tax treatment of any holder of partnership interests
the Partnership). The Partnership will use the optional method under Treasury Regulation Section 1.752-3(a)(3) to allocate Nonrecourse
Liabilities considered secured by any property acquired by the Partnership pursuant to the Transaction to and for the benefit of
the Protected Partners to the extent that the “built-in gain” allocable to the Protected Partner under Section 704(c)
of the Code with respect to those properties exceeds the amount of the Nonrecourse Liabilities considered secured by such property
allocated to the Protected Partners under Treasury Regulation Section 1.752-3(a)(2).

 

    	 

    	 

    

 

3.2           Post-Tax
Protection Period Opportunities.

 

(a)    
      Without limiting any of the other obligations of the Partnership under this Agreement, from
and after the expiration of the Tax Protection Period, the Partnership shall, upon a request from a Protected Partner, use commercially
reasonable efforts to permit such Protected Partner to enter into an agreement with the Partnership to bear the economic risk
of loss as to a portion of the Partnership’s recourse indebtedness by undertaking an obligation to restore a portion of
its negative capital account balance upon liquidation of such Protected Partner’s interest in the Partnership and/or to
bear financial liability under a Guarantee Agreement substantially in the form of Schedule 3.7 hereto for indebtedness
that would be considered Qualifying Guarantee Indebtedness under Section 3.3 hereof, if such Protected Partner shall provide information
from its professional tax advisor satisfactory to the Partnership showing that, in the absence of such agreement, such Protected
Partner likely would not be allocated from the Partnership sufficient indebtedness under Section 752 of the Code and the at-risk
provisions under Section 465 of the Code to avoid the recognition of gain (other than gain required to be recognized by reason
of actual cash distributions from the Partnership). The Partnership and its professional tax advisors shall cooperate in good
faith with such Protected Partner and its professional tax advisors to provide such information regarding the allocation of the
Partnership liabilities and the nature of such liabilities as is reasonably necessary in order to determine the Protected Partner’s
adjusted tax basis in its OP Units and at-risk amount. If the Partnership permits a Protected Partner to enter into an agreement
under this Section 3.2, the Partnership shall be under no further obligation with respect thereto, and the Partnership shall not
be required to indemnify such Protected Partner for any damage incurred, in connection with or as a result of such agreement or
the indebtedness, including without limitation a refinancing or prepayment thereof or taking any of the other actions required
by Article 3 hereof with respect to Qualified Guarantee Indebtedness.

 

(b)     
     Notwithstanding the foregoing, if, after the expiration of the Tax Protection Period, due to a change
in tax law after the date hereof, either the Partnership determines, or a Protected Partner is advised by counsel, that there
is a material risk that such Protected Partner may no longer continue to be allocated debt as a result of a guarantee entered
into pursuant to Section 3.3, such Protected Partner may request (i) that the Partnership elect to utilize “transition relief
rules” relating to such guarantee to permit and the Partnership shall elect to utilize such transition rules, provided that
(1) the change in law provides for transition relief rules, and (2) the transition relief rules do not have a material adverse
effect on the Partnership and its partners (other than the Protected Partner) other than a material adverse effect resulting solely
from the continued allocation pursuant to Section 752 of the Code and Treasury Regulations thereunder of Partnership liabilities
to the Protected Partner equal to the amount the liabilities guaranteed by the Protected Partner, or (ii) a modification of such
Guarantee Agreement and the Partnership will use its commercially reasonable efforts to work with the lender with respect to such
Guaranteed Debt to have the Guarantee Agreement amended in a manner that will permit such Protected Partner to be allocated such
Protected Partner’s Guaranteed Amount with respect to the Guaranteed Debt, or use commercially reasonable efforts to permit
such Protected Partner to enter into an agreement with the Partnership to bear the economic risk of loss as to a portion of the
Partnership’s recourse indebtedness by undertaking an obligation to restore a portion of its negative capital account balance
upon liquidation of such Protected Partner’s interest in the Partnership. For the avoidance of doubt, each Protected Partner
hereby acknowledges and agrees that the Partnership shall not be treated as violating its obligations to use commercially reasonable
efforts as described in Section 3.2 to the extent that, after such a change of tax law, the allocation of Partnership indebtedness
for tax purposes to the Protected Partner cannot be achieved due to the unwillingness of such Protected Partner either to provide
a guarantee or similar instrument that complies with the new tax law rules, elect to utilize transition rules (subject to the
limitations above), or enter into an agreement with the Partnership to bear the economic risk of loss as to a portion of the Partnership’s
recourse indebtedness by undertaking an obligation to restore a portion of its negative capital account balance upon liquidation
of such Protected Partner’s interest in the Partnership; provided, however, that the Partnership’s obligations
as set forth in the last sentence of Section 3.1 shall continue to apply, but only to the extent permitted by applicable tax law
(including by virtue of the “transition relief rules” included in the relevant tax law). Any cost and expenses incurred
as a result of such a change in tax law shall be borne equally by the Partnership, on the one hand, and the relevant Protected
Partner, on the other hand.

 

    	 

    	 

    

 

3.3           Qualified
Guarantee Indebtedness and Qualified Guarantee: Treatment of Qualified Guarantee Indebtedness as Guaranteed Debt.

 

For purposes of this Agreement:

 

“Qualified Guarantee
Indebtedness” means indebtedness that satisfies all of the conditions set forth in this Section 3.3, including (i) the
debt to be guaranteed must be considered indebtedness of the Partnership for purposes of determining the adjusted tax basis in
their partnership interests of the partners in the Partnership; and (ii) the debt to be guaranteed must be considered indebtedness
of the Partnership for purposes of determining the adjusted tax basis in their partnership interests of the partners in the Partnership.

 

A “Qualified
Guarantee” means a guarantee by the Partner Guarantors pursuant to a Guarantee Agreement that satisfies the conditions
set forth in Section 3.3(a), including that the guarantee must cause the Guaranteed Amount to be included in basis for federal
income tax purposes of the Partner Guarantor and considered to be “at risk” for purposes of Section 465 of the Code.

 

The conditions that must
be satisfied at all times with respect to any Guaranteed Debt offered pursuant to Section 3.2 and the guarantees with respect thereto
are as follows:

 

		(a)	each such guarantee shall be a “bottom dollar guarantee” such that the lender with respect
to the Guaranteed Debt is required to pursue all other collateral and security for the Guaranteed Debt (other than any “bottom
dollar guarantees” permitted pursuant to this paragraph (a) and/or Section 3.5 below) prior to seeking to collect on such
a guarantee, and the lender shall have recourse against the guarantee only if, and solely to the extent that, the total amount
recovered by the lender with respect to the Guaranteed Debt after the lender has exhausted its remedies as set forth above is less
than the aggregate of the Guaranteed Amounts with respect to such Guaranteed Debt (plus the aggregate amounts of any other guarantees
(x) that are in effect with respect to such Guaranteed Debt at the time the guarantees pursuant Section 3.2 are entered into, or
(y) that are entered into after the date the guarantees pursuant to this Article 3 are entered into with respect to such Guaranteed
Debt and that comply with Section 3.5 below, but only to the extent that, in either case, such guarantees are “bottom dollar
guarantees” with respect to the Guaranteed Debt), and the maximum aggregate liability of each Partner Guarantor for all Guaranteed
Debt shall be limited to the amount actually guaranteed by such Partner Guarantor;

 

		(b)	the fair market value of the collateral against which the lender has recourse pursuant to the Guaranteed
Debt, determined as of the time the guarantee is entered into (an independent appraisal relied upon by the lender in making the
loan shall be conclusive evidence of such fair market value when the guarantee is being entered into in connection with the closing
of such loan), shall not be less than 150% of the sum of (1) the aggregate of the Guaranteed Amounts with respect to such Guaranteed
Debt, plus (2) the dollar amount of any other indebtedness that is senior to or pari passu with the Guaranteed Debt and as to which
the lender thereunder has recourse against property that is collateral of the Guaranteed Debt, plus (3) the aggregate amounts of
any other guarantees that are in effect with respect to such Guaranteed Debt at the time the guarantees pursuant to Section 3.2
are entered into with respect to such Guaranteed Debt and that comply with Section 3.3(e) below, but only to the extent that such
guarantees are “bottom dollar guarantees” with respect to the Guaranteed Debt);

 

    	 

    	 

    

 

		(c)	(i) the executed guarantee must be delivered to the lender, and (ii) (A) the execution of the guarantee
by the Partner Guarantors must be acknowledged by the lender as an inducement to it to make a new loan, to continue an existing
loan (which continuation is not otherwise required), or to grant a material consent under an existing loan (which consent is not
otherwise required to be granted) or, alternatively, (B) the guarantee must otherwise be enforceable under the laws of the state
governing the loan and in which the property securing the loan is located or in which the lender has a significant place of business
(with any bona fide branch or office of the lender through which the loan is made, negotiated, or administered being deemed a “significant
place of business” for the purposes hereof);

 

		(d)	as to each Partner Guarantor that is executing a guarantee pursuant to this Agreement, there must
be no other person that would be considered to “bear the economic risk of loss,” within the meaning of Treasury Regulations
Section 1.752-2, or would be considered to be “at risk” for purposes of Section 465(b) of the Code with respect to
that portion of such debt for which such Partner Guarantor is being made liable for purposes of satisfying the Partnership’s
obligations to such Partner Guarantor under this Article 3;

 

		(e)	the aggregate Guaranteed Amounts with respect to the Guaranteed Debt will not exceed 25% of the amount
of the Guaranteed Debt outstanding at the time the guarantee is executed. Except for guarantees already in place at the time a
guarantee opportunity is presented to the Protected Partners, at no time can there be guarantees with respect to the Guaranteed
Debt that are provided by other persons that are “pari passu” with or at a lower level of risk than the guarantees
provided by the Protected Partners. If there are guarantees already in place at the time a guarantee opportunity is presented to
the Protected Partners that are “pari passu” with or at a lower level of risk than the guarantees provided by the Protected
Partners, then the amount of Guaranteed Debt subject to such existing guarantees shall be added to the Guaranteed Amount for purposes
of calculating the 25% limitation set forth in this Section 3.3(e); and

 

		(f)	the obligor with respect to the Guaranteed Debt is the Partnership or an entity which is and will
continue to be under the legal control of the Partnership (which shall include a partnership or limited liability company in which
the Partnership or a wholly-owned Subsidiary of the Partnership is the sole managing general partner or sole managing member, as
applicable) and which the equity interest of the Partnership in both capital and profits is not less than 50%.

 

3.4           Covenant
With Respect to Guaranteed Debt Collateral. The Partnership covenants with the Partner Guarantors with respect to the Guaranteed
Debt that it will not pledge the collateral with respect to a Guaranteed Debt to secure any other indebtedness (unless such other
indebtedness is, by its terms, subordinate in all respects to the Guaranteed Debt for which such collateral is security) or otherwise
voluntarily dispose of or reduce the amount of such collateral unless either (A) after giving effect thereto the conditions in
Section 3.3(b) would continue to be satisfied with respect to the Guaranteed Debt, and the Guaranteed Debt otherwise would continue
to be Qualified Guarantee Indebtedness, or (B) the Partnership obtains from the lender with respect to the original Guaranteed
Debt a full and complete release of any Partner Guarantor unless the Partner Guarantor expressly requests that it not be released.

 

3.5           Limitation
on Additional Guarantees With Respect to Debt Secured by Collateral for Guaranteed Debt. The Partnership shall not
offer the opportunity or make available to any person or entity other than a Protected Partner (or Indirect Owner) a guarantee
of any Guaranteed Debt or other debt that is secured, directly or indirectly, by any collateral for Guaranteed Debt unless (i)
such debt by its terms is subordinate in all respects to the Guaranteed Debt or, if such other guarantees are of the Guaranteed
Debt itself, such guarantees by their terms must be paid in full before the lender can have recourse to the Partner Guarantors
(i.e., the first dollar amount of recovery by the applicable lenders must be applied to the Guaranteed Amount); provided, however,
that the foregoing shall not apply with respect to additional guarantees of Guaranteed Debt so long as the conditions set
forth in Sections 3.3(b) and (e) would be satisfied immediately after the implementation of such additional guarantee (determined
in the case of Section 3.3(b), based upon the fair market value of the collateral for such Guaranteed Debt at the time the additional
guarantee is entered into and adding the amount of such additional guarantee(s) to the sum of the amounts guaranteed by Protected
Partners under Section 3.2 plus any other preexisting “bottom dollar guarantee” previously permitted pursuant to this
Section 3.5 or Sections 3.3(a) and (b) above, for purposes of making the computation provided for in Section 3.3(b)), and (ii)
such other guarantees do not have the effect of reducing the amount of the Guaranteed Debt that is includible by any Partner Guarantor
in its adjusted tax basis for its OP Units pursuant to Treasury Regulations Section 1.752-2.

 

    	 

    	 

    

 

3.6           [RESERVED]

 

3.7           Presumption
as to Schedule 3.7. The form of the Guarantee Agreement attached hereto as Schedule 3.7 shall be conclusively
presumed to satisfy the conditions set forth in Section 3.3 and to have caused the Guaranteed Debt to be considered allocable to
the Guarantor Partner who enters into such Guarantee Agreement pursuant to Treasury Regulation § 1.752-2 and Section 465 of
the Code so long as all of the following conditions are met with respect such Guaranteed Debt:

 

		(i)	there are no other guarantees in effect with respect to such Guaranteed Debt (other than the guarantees
contemporaneously being entered into by the Partner Guarantors pursuant to Section 3.2);

 

		(ii)	the collateral securing such Guaranteed Debt is not, and shall not thereafter become, collateral for
any other indebtedness that is senior to or pari passu with such Guaranteed Debt;

 

		(iii)	the lender with respect to such Guaranteed Debt is not the Partnership, any Subsidiary or other entity
in which the Partnership owns a direct or indirect interest, the REIT, any other partner in the Partnership, or any person related
to any partner in the Partnership as determined for purposes of Treasury Regulation § 1.752-2 or any person that would be
considered a “related party” as determined for purposes of Section 465 of the Code; and

 

		(iv)	none of the REIT, nor any other partner in the Partnership, nor any person related to any partner
in the Partnership as determined for purposes of Treasury Regulation § 1.752-2 shall have provided, or shall thereafter provide,
collateral for, or otherwise shall have entered into, or shall thereafter enter into, a relationship that would cause such person
or entity to be considered to bear the risk of loss with respect to such Guaranteed Debt, as determined for purposes of Treasury
Regulation § 1.752-2 or that would cause such entity to be considered “at risk” with respect to such Guaranteed
Debt, as determined for purposes of Section 465 of the Code.

 

ARTICLE 4

 

REMEDIES FOR BREACH

 

4.1           Monetary
Damages. In the event that the Partnership or a Subsidiary breaches its obligations set forth in Article 2 or Article 3
with respect to a Protected Partner (or Indirect Owner), the Protected Partner’s (and Indirect Owner’s) sole right
shall be to receive from the Partnership, and the Partnership shall pay to Protected Partner as damages, an amount equal to:

 

    	 

    	 

    

 

(i)          in
the case of a violation of Article 3, the aggregate federal, state and local income taxes (including any applicable federal unearned
income Medicare contribution under Section 1411 of the Code) incurred by the Protected Partner (or Indirect Owner) as a result
of the income or gain allocated to, or otherwise recognized by, such Protected Partner (or Indirect Owner) by reason of such breach;
and

 

(ii)         in
the case of a violation of Article 2, the aggregate federal, state, and local income taxes (including any applicable federal unearned
income Medicare contribution under Section 1411 of the Code) incurred with respect to the Protected Gain incurred with respect
to the Protected Property that is allocable to such Protected Partner (or Indirect Owner);

 

plus an additional
amount so that, after the payment by such Protected Partner (or Indirect Owner) of all federal, state and local income taxes on
amounts received pursuant to this Section 4.1 (including any tax liability incurred as a result of such Protected Partner’s
(or Indirect Owner’s) receipt of such indemnity payment), such Protected Partner (or Indirect Owner) retains an amount equal
to its total federal, state and local income tax liability incurred as a result of such breach.

 

For purposes of computing
the amount of the indemnity payment owed to a Protected Partner or Indirect Owner, (i) any deduction for state and local income
taxes payable as a result thereof shall be treated as fully deductible for purposes of computing federal income taxes (taking into
account any limitation or phaseout of itemized deductions applicable to taxpayers in the highest federal income tax bracket), and
(ii) a Protected Partner’s tax liability shall be computed using the highest federal, state and local marginal income tax
rates that would be applicable to such Protected Partner's taxable income (taking into account the character of such income or
gain) for the year with respect to which the taxes must be paid, and, except as described in clause (i), without regard to any
deductions, losses or credits that may be available to such Protected Partner that would reduce or offset its actual taxable income
or actual tax liability if such deductions, losses or credits could be utilized by the Protected Partner to offset other income,
gain or taxes of the Protected Partner, either in the current year, in earlier years, or in later years. In the case of a Protected
Partner that is a partnership, “S corporation” or a disregarded entity for federal income tax purposes, the preceding
sentence shall be applied treating each Indirect Owner of such partnership, “S corporation” or disregarded entity as
if it were directly a Protected Partner.

 

    	 

    	 

    

 

4.2           Process
for Determining Damages. If the Partnership or a Subsidiary has breached or violated any of the covenants set forth in
Article 2 or Article 3 or a Protected Partner asserts that the Partnership or a Subsidiary has breached or violated any of the
covenants set forth in Article 2 or Article 3 (a “Prohibited Transaction”), the Partnership and the Protected
Partner agree to negotiate in good faith to resolve any disagreements regarding any such breach or violation and the amount of
damages, if any, payable to such Protected Partner under Section 4.1. If any such disagreement cannot be resolved by the Partnership
and such Protected Partner within (i) 60 days after the receipt of notice from the Partnership of such breach pursuant to Section
4.3, (ii) 60 days after the receipt of a notice from the Protected Partner that the Partnership or a Subsidiary has breached its
obligations under this Agreement, which notice shall set forth the amount of income asserted to be recognized by the Protected
Partner and the payment required to be made to such Protected Partner under Section 4.1 as a result of the breach, (iii) 10 days
following the date that the Partnership notifies the Protected Partner (and its Indirect Owners) of its intention to settle, compromise
and/or concede any Tax Claim or Proceeding pursuant to Section 7.2, or (iv) 10 days following any final determination of any Tax
Claim or Proceeding, the Partnership and the Protected Partner shall jointly retain a nationally recognized “Big Four”
independent public accounting firm (an “Accounting Firm”) to act as an arbitrator to resolve as expeditiously
as possible all points of any such disagreement (including, without limitation, whether a breach of any of the covenants set forth
in Article 2 and Article 3 has occurred and, if so, the amount of damages to which the Protected Partner is entitled as a result
thereof, determined as set forth in Section 4.1). All determinations made by the Accounting Firm with respect to the resolution
of any breach or violation of any of the covenants set forth in Article 2 and Article 3 and the amount of damages payable to the
Protected Partner under Section 4.1 shall, subject to any subsequent Tax Claim or Proceeding, and subject to the last sentence
of this Section 4.2, be final, conclusive and binding on the Partnership and the Protected Partner. The fees and expenses of any
Accounting Firm incurred in connection with any such determination shall be shared equally by the Partnership and the Protected
Partner; provided, however, that if the amount determined by the Accounting Firm to be owed by the Partnership to
the Protected Partner is more than 5% higher than the amount proposed by the Partnership to be owed to such Protected Partner prior
to the submission of the matter to the Accounting Firm, then all of the fees and expenses of any Accounting Firm incurred in connection
with any such determination shall be paid by the Partnership, and if the amount determined by the Accounting Firm to be owed by
the Partnership to the Protected Partner is less than 95% of the amount proposed by the Partnership to be owed to the Protected
Partner prior to the submission of the matter to the Accounting Firm then all fees and expenses of any Accounting Firm incurred
in connection with any such determination shall be paid by the Protected Partner. In the case of any Tax Claim or Proceeding that
is resolved pursuant to a final determination or that is settled, compromised and/or conceded pursuant to Section 7.2, the amount
of taxes due to the Internal Revenue Service or other taxing authority shall, to the extent that such taxes relate to matters covered
in this Agreement, be presumed to be damages resulting from a breach of this Agreement, and the amount of any such damages shall
be increased by any interest and penalties required to be paid by the Protected Partner (or Indirect Owner) with respect to such
taxes (other than interest and penalties resulting from a failure of the Protected Partner (or Indirect Owner) to timely and properly
file any tax return or to timely pay any tax, unless such failure resulted solely from the Protected Partner (or Indirect Owner)
reporting and paying its taxes in a manner consistent with the Partnership) so that the amount of the damages under Section 4.1
shall not be less than the amount required to be paid to the Internal Revenue Service or other taxing authority that pertains to
matters covered in this Agreement.

 

4.3           Required
Notices; Time for Payment. In the event that there has been a breach of Article 2 or Article 3, the Partnership shall provide
to the Protected Partners (or Indirect Owners), notice of the transaction or event giving rise to such breach, along with a calculation
of the amount of income to be recognized by any Protected Partner (or Indirect Owner), and the amount required to be paid to such
Protected Partner (or Indirect Owner), under Section 4.1 by reason thereof, not later than 30 days following the date that the
Partnership becomes aware that such transaction or event constitutes a breach of this Agreement.

 

(b)      
    Notwithstanding anything to the contrary contained herein, the Partnership may not enter into a
Prohibited Transaction unless, at least fourteen (14) days prior to entering into such transaction, the Partnership will
have provided the Protected Partner with evidence reasonably satisfactory to the Protected Partner that, following such
transaction, and including any proceeds from such transaction, the Partnership will have the requisite liquidity to make any
necessary indemnification payments required pursuant to this Agreement. The Protected Partner shall have the right to seek
and obtain specific performance or injunctive relief with respect to this Section 4.3(b).

 

    	 

    	 

    

 

(c)     
     All payments required to be made under Section 4.1 to any Protected Partner (or Indirect Owner)
shall be made to such Protected Partner (or Indirect Owner) no less than five (5) days prior to the due date of the quarterly
estimated tax payment for individuals which next follows the date that the transaction giving rise to the obligation
hereunder is consummated; and provided further that any payment required to be made under Section 4.1 to any Protected
Partner (or Indirect Owner) resulting from a Tax Claim or Proceeding shall be made on or before the date that the relevant
taxes are required to be paid as a result of any final determination of such Tax Claim or Proceeding or any settlement,
compromise and/or concession of such Tax Claim or Proceeding pursuant to Section 7.2. In the event of a payment made after
the date required pursuant to this Section 4.3, interest shall accrue on the aggregate amount required to be paid from such
date to the date of actual payment at a rate equal to the lesser of the (i) the “prime rate” of interest, as
published in the Wall Street Journal (or if no longer published there, as announced by Citibank) effective as of the date the
payment is required to be made plus 10% or (ii) 20%, but not to exceed the maximum amount permitted by law.

 

4.4           Additional
Damages for Breaches of Section 3.4. Notwithstanding any of the foregoing in this Article 4, in the event that the Partnership
should breach any of its covenants set forth in Section 3.4 hereof and a Protected Partner (or Indirect Owner) is required to make
a payment in respect of such indebtedness that it would not have had to make if such breach had not occurred (an “Excess
Payment”), then, in addition to the damages provided for in the other Sections of this Article 4, the Partnership shall
pay to such Protected Partner (or Indirect Owner) an amount equal to the sum of (i) the Excess Payment, and (ii) an amount equal
to the aggregate federal, state and local income taxes required to be paid by the Protected Partner (computed as set forth in Section
4.1) as a result of any payment required under this Section 4.4. Such amount shall be paid within fifteen (15) days of the Partnership’s
receipt of notice from the Protected Partner (or Indirect Owner) of the Partnership’s breach of the covenants set forth in
Section 3.4 hereof.

 

ARTICLE 5

 

SECTION 704(C) METHOD AND ALLOCATIONS

 

Notwithstanding any provision of the Partnership
Agreement, the Partnership shall use, and shall cause any other Subsidiary to use, the “traditional method” under Treasury
Regulations Section 1.704-3(b) for purposes of making all allocations under Section 704(c) of the Code with respect to the Protected
Properties and for all other properties acquired by the Partnership pursuant to the Contribution Agreement to take into
account the book-tax disparities as of the Closing Date (or, the Second Closing Date, as relevant) and with respect to any
revaluation of such property pursuant to Treasury Regulations Sections 1.704-1(b)(2)(iv)(f), 1.704-1(b)(2)(iv)(g), or 1.704-3(a)(6)
with no “curative allocations”, “remedial allocations” or adjustments to other items to offset the effects
of the “ceiling rule,” including upon any sale of any such property.

 

ARTICLE 6

 

[RESERVED]

 

ARTICLE 7

 

TAX PROCEEDINGS

 

7.1           Notice
of Tax Audits. If any claim, demand, assessment (including a notice of proposed assessment) or other assertion is made
with respect to taxes against the Protected Partners or the Partnership, the calculation of which involves a matter covered in
this Agreement, that could result in tax liability to a Protected Partner (“Tax Claim”) or if the REIT
or the Partnership receives any notice from any jurisdiction with respect to any current or future audit, examination, investigation
or other proceeding (“Tax Proceeding”) involving the Protected Partners or the Partnership or that otherwise
could involve a matter covered in this Agreement and could directly or indirectly affect the Protected Partners (adversely or otherwise),
the REIT or the Partnership, as applicable, shall promptly notify the Protected Partners of such Tax Claim or Tax Proceeding.

 

    	 

    	 

    

 

7.2           Control
of Tax Proceedings. The REIT, as the sole member in the general partner of the Partnership, shall have the right
to control the defense, settlement or compromise of any Tax Proceeding or Tax Claim; provided, however, that the
REIT shall not consent to the entry of any judgment or enter into any settlement with respect to such Tax Claim or Tax Proceeding
that could result in tax liability to a Protected Partner (or Indirect Owner) without the prior written consent of the affected
Protected Partner (unless, and only to the extent, that any taxes required to be paid by the Protected Partner (or Indirect Owners)
as a result thereof would be required to be reimbursed by the Partnership and the REIT under Article 4, and the Partnership and
the REIT agree in connection with such settlement or consent to make such required payments); provided further that the
Partnership shall keep Protected Partners duly informed of the progress thereof to the extent that such Proceeding or Tax Claim
could directly or indirectly affect (adversely or otherwise) the Protected Partners (or Indirect Owners) and that the Protected
Partner shall have the right to review and comment on any and all submissions made to the Internal Revenue Service, a court, or
other governmental body with respect to such Tax Claim or Tax Proceeding and that the Partnership will consider such comments in
good faith.

 

7.3           Timing
of Tax Returns: Periodic Tax Information. The Partnership shall cause to be delivered to each Protected Partner, as soon
as practicable each year, the Schedules K-1 that the Partnership is required to deliver to such Protected Partner with respect
to the prior taxable year. In addition, the Partnership agrees to provide to each Protected Partner, upon request, an estimate
of the taxable income expected to be allocable for a specified taxable year from the Partnership to such Protected Partner, provided
that such estimates shall not be required to be provided more frequently than once each calendar quarter.

 

ARTICLE 8

 

AMENDMENT OF THIS AGREEMENT; WAIVER OF
CERTAIN PROVISIONS;

 

8.1           Amendment.
This Agreement may not be amended, directly or indirectly (including by reason of a merger between the Partnership and another
entity) except by a written instrument signed by the REIT (and if different, the general partner of the Partnership) and each of
the Protected Partners.

 

8.2           Waiver.
Notwithstanding the foregoing, upon written request by the Partnership, each Protected Partner (or Indirect Owner), in its sole
discretion, may waive the payment of any damages that is otherwise payable to such Protected Partner (or Indirect Owner) pursuant
to Article 4 hereof. Such a waiver shall be effective only if obtained in writing from the affected Protected Partner (or Indirect
Owner).

 

ARTICLE 9

 

MISCELLANEOUS

 

9.1           Additional Actions
and Documents. Each of the parties hereto hereby agrees to take or cause to be taken such further actions, to execute,
deliver, and file or cause to be executed, delivered and filed such further documents, and will obtain such consents, as may be
necessary or as may be reasonably requested in order to fully effectuate the purposes, terms and conditions of this Agreement.

 

    	 

    	 

    

 

9.2           Assignment.
No party hereto shall assign its or his rights or obligations under this Agreement, in whole or in part, except by operation of
law, without the prior written consent of the other parties hereto, and any such assignment contrary to the terms hereof shall
be null and void and of no force and effect.

 

9.3           Successors and
Assigns. This Agreement shall be binding upon and shall inure to the benefit of the Protected Partner and their respective
successors and permitted assigns, whether so expressed or not. This Agreement shall be binding upon the REIT, the Partnership,
and any entity that is a direct or indirect successor, whether by merger, transfer, spin-off or otherwise, to all or substantially
all of the assets of either the REIT or the Partnership (or any prior successor thereto as set forth in the preceding portion of
this sentence), provided that none of the foregoing shall result in the release of liability of the REIT and the Partnership hereunder.
The REIT and the Partnership covenant with and for the benefit of the Protected Partner (and Indirect Owners) not to undertake
any transfer of all or substantially all of the assets of either entity (whether by merger, transfer, spin-off or otherwise) unless
the transferee has acknowledged in writing and agreed in writing to be bound by this Agreement, provided that the foregoing shall
not be deemed to permit any transaction otherwise prohibited by this Agreement.

 

9.4           Subsidiary
Entities. Any entity controlled by the Partnership or the REIT that holds an interest in the Protected Properties shall
be bound by all of the limitations and restriction to which the Partnership is subject hereunder as if such entity were originally
a signatory to this Agreement in lieu of the Partnership and the REIT.

 

9.5           Modification:
Waiver. No failure or delay on the part of any party hereto in exercising any power or right hereunder shall operate as
a waiver thereof nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps
to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The
rights and remedies of the parties hereunder are cumulative and not exclusive of any rights or remedies which they would otherwise
have. No modification or waiver of any provision of this Agreement, nor consent to any departure by any party therefrom, shall
in any event be effective unless the same shall be in writing, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or demand on any party in any case shall entitle such party to any other
or further notice or demand in similar or other circumstances.

 

9.6           Captions.
The Article and Section headings contained in this Agreement are inserted for convenience of reference only, shall not be deemed
to be a part of this Agreement for any purpose, and shall not in any way define or affect the meaning, construction or scope of
any of the provisions hereof.

 

9.7           Notices.
All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered, mailed or transmitted, and shall be effective upon receipt, if delivered personally, mailed by
registered or certified mail (postage prepaid, return receipt requested) to the parties at the following addresses (or at such
other address for a party as shall be specified by like changes of address) or sent by electronic transmission to the telecopier
number specified below:

 

		(i)	if to the Partnership, or the REIT, to:

 

c/o Campus Crest
Communities, Inc.

2100 Rexford Road, Suite 414

Charlotte, North Carolina 28211

Attention: Chief Financial Officer

Facsimile: (704) 973-0965

 

    	 

    	 

    

 

		(ii)	if to a Protected Partner, to the address on file with the Partnership.

 

Each party may designate
by notice in writing a new address to which any notice, demand, request or communication may thereafter be so given, served or
sent. Each notice, demand, request, or communication which shall be hand delivered, sent, mailed, or faxed in the manner described
above, shall be deemed sufficiently given, served, sent, received or delivered for all purposes at such time as it is delivered
to the addressee (with the return receipt, the delivery receipt, or (with respect to a facsimile) the answerback being deemed conclusive,
but not exclusive, evidence of such delivery) or at such time as delivery is refused by the addressee upon presentation.

 

9.8           Counterparts.
This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and each
of which shall be deemed an original.

 

9.9           Governing
Law. The interpretation and construction of this Agreement, and all matters relating thereto, shall be governed by the
laws of the State of Delaware, without regard to the choice of law provisions thereof.

 

9.10        Consent
to Jurisdiction; Enforceability.

 

(i)          This
Agreement and the duties and obligations of the parties hereunder shall be enforceable against any of the parties in the courts
of the State of Delaware. For such purpose, each party hereto hereby irrevocably submits to the nonexclusive jurisdiction of such
courts and agrees that all claims in respect of this Agreement may be heard and determined in any of such courts.

 

(ii)         Each
party hereto hereby irrevocably agrees that a final judgment of any of the courts specified above in any action or proceeding relating
to this Agreement shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.

 

9.11         Severability.
If any part of any provision of this Agreement shall be invalid or unenforceable in any respect, such part shall be ineffective
to the extent of such invalidity or unenforceability only, without in any way affecting the remaining parts of such provision or
the remaining provisions of this Agreement.

 

9.12         Costs
of Disputes. Except as otherwise expressly set forth in this Agreement, the nonprevailing party in any dispute arising
hereunder shall bear and pay the costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses)
incurred by the prevailing party or parties in connection with resolving such dispute.

 

    	 

    	 

    

 

9.13         Representations
and Warranties Regarding Authority.

 

(i)          Representations
and Warranties of the REIT and the Partnership. Each of the REIT and the Partnership has the requisite corporate or other (as
the case may be) power and authority to enter into this Agreement and to perform its respective obligations hereunder. The execution
and delivery of this Agreement by each of the REIT and the Partnership and the performance of each of its respective obligations
hereunder have been duly authorized by all necessary trust, partnership, or other (as the case may be) action on the part of each
of the REIT and the Partnership. This Agreement has been duly executed and delivered by each of the REIT and the Partnership and
constitutes a valid and binding obligation of each of the REIT and the Partnership, enforceable against each of the REIT and the
Partnership in accordance with its terms, except as such enforcement may be limited by (i) applicable bankruptcy or insolvency
laws (or other laws affecting creditors’ rights generally) or (ii) general principles of equity. The execution and delivery
of this Agreement by each of the REIT and the Partnership do not, and the performance by each of its respective obligations hereunder
will not, conflict with, or result in any violation of (x) the Partnership Agreement or (y) any other agreement applicable to the
REIT and/or the Partnership, other than, in the case of clause (y), any such conflicts or violations that would not materially
adversely affect the performance by the Partnership and the REIT of their obligations hereunder.

 

(ii)         Representations
and Warranties of the Protected Partners. Each of the Protected Partners has the requisite corporate or other (as the case
may be) power and authority to enter into this Agreement and to perform its respective obligations hereunder. The execution and
delivery of this Agreement by each of the Protected Partners and the performance of each of its respective obligations hereunder
have been duly authorized by all necessary trust, partnership, or other (as the case may be) action on the part of each of the
Protected Partners. This Agreement has been duly executed and delivered by each of the Protected Partners and constitutes a valid
and binding obligation of each of the Protected Partners.

 

[SIGNATURE
PAGE FOLLOWS]

 

    	 

    	 

    

 

IN WITNESS WHEREOF, the
REIT, the Partnership, and the Protected Partners, have caused this Agreement to be signed by their respective officers (or general
partners) thereunto duly authorized all as of the date first written above.

 

	 	CAMPUS CREST COMMUNITIES, INC.
	 	 	 
	 	By:	/s/ Aaron Halfacre
	 	Name:	Aaron Halfacre
	 	Title:	Executive Vice President and Chief Investment Officer
	 	 	 
	 	CAMPUS CREST COMMUNITIES OPERATING PARTNERSHIP, L.P.
	 	By:	Campus Crest GP, LLC, its general partner
	 	By:	Campus Crest Communities, Inc., its sole member
	 	 	 
	 	By:	/s/ Aaron Halfacre
	 	Name:	Aaron Halfacre
	 	Title:	Executive Vice President and Chief Investment Officer
	 	 	 
	 	McWhirter Family Limited Partnership
	 	 	 
	 	By:	/s/ John R. McWhirter
	 	Name:	John R. McWhirter
	 	Title:	General Partner
	 	 	 
	 	By:	/s/ Jeanette D. McWhirter
	 	Name:	Jeanette D. McWhirter
	 	Title:	General Partner
	 	 	 
	 	/s/ John W. McWhiter
	 	John W. McWhirter
	 	 
	 	/s/ Jodi McWhiter
	 	Jodi McWhirter
	 	 
	 	/s/ Thomas D. Simco
	 	Thomas D. Simco

 

    	 

    	 

    

 

	 	/s/ Betty Simco
	 	Betty Simco
	 	 
	 	/s/ Mark McWhiter
	 	Mark McWhirter
	 	 
	 	/s/ Deborah McWhiter
	 	Deborah McWhirter
	 	 
	 	/s/ Andrew J. McWhiter
	 	Andrew J. McWhirter
	 	 
	 	/s/ Mary James
	 	Mary James
	 	 
	 	/s/ Eric Heiser
	 	Eric Heiser
	 	 
	 	/s/ Rebeccas Heiser
	 	Rebecca Heiser
	 	 
	 	/s/ Brian McWhiter
	 	Brian McWhirter
	 	 
	 	/s/ Susan McWhiter
	 	Susan McWhirter
	 	 
	 	Heiser Properties, LLC
	 	 	 
	 	/s/ Robert F. Heiser
	 	Name:	Robert F. Heiser
	 	Title:	Authorized Signatory
	 	 	 
	 	/s/ Judy Heiser
	 	Name:	Judy Heiser
	 	Title:	Authorized Signatory

 

    	 

    	 

    

 

	 	/s/ Gail McWhiter
	 	Gail McWhirter
	 	 
	 	/s/ Frederick Brenner
	 	Frederick Brenner
	 	 
	 	/s/ Patricia Oldford
	 	Patricia Oldford
	 	 
	 	/s/ Chris Summers
	 	Chris Summers
	 	 
	 	/s/ Maria Summers
	 	Maria Summers
	 	 
	 	/s/ Thomas Foley
	 	Thomas Foley

 

    	 

    	 

    

 

Schedule 2.1(i)

 

Protected Partners

 

	Name of Protected Partner
	 
	McWhirter Family Limited Partnership
	John W. McWhirter
	Jodi McWhirter
	Thomas & Betty Simco
	Mark & Deborah McWhirter
	Andrew J. McWhirter
	Mary James
	Eric & Rebecca Heiser
	Brian & Susan McWhirter
	Heiser Properties
	Gail McWhirter
	Frederick Brenner
	Patricia Oldford
	Chris & Maria Summers
	Thomas Foley

 

    	 

    	 

    

 

Schedule 2.1(ii)

 

First Closing Protected Properties

 

	Entity	 	Property	 	City	 	State	 	Section 704(c) Value 
Fair Market Value	 
	 	 	 	 	 	 	 	 	 	 
	CBTC 3, LLC	 	IUP P1	 	Indiana	 	PA	 	$	13,942,706	 
	 	 	 	 	 	 	 	 	 	 	 
	CBTC 4, LLC	 	IUP P2	 	Indiana	 	PA	 	$	10,009,171	 
	 	 	 	 	 	 	 	 	 	 	 
	CBTC 7, LLC	 	Radford	 	Radford	 	VA	 	$	23,973,448	 
	 	 	 	 	 	 	 	 	 	 	 
	CBTC 9, LLC	 	Northbrook	 	State College	 	PA	 	$	26,696,589	 
	 	 	 	 	 	 	 	 	 	 	 
	CBTC 13, LLC	 	Mt. Pleasant P1	 	Mt. Pleasant	 	MI	 	$	34,097,830	 
	 	 	 	 	 	 	 	 	 	 	 
	CBTC 15, LLC	 	Bowling Green P1	 	Bowling Green	 	OH	 	$	13,633,666	 
	 	 	 	 	 	 	 	 	 	 	 
	CBTC 17, LLC	 	Bowling Green P2	 	Bowling Green	 	OH	 	$	7,507,755	 
	 	 	 	 	 	 	 	 	 	 	 
	CBTC 16, LLC	 	Grand Valley P1	 	Allendale	 	MI	 	$	36,281,964	 
	 	 	 	 	 	 	 	 	 	 	 
	CBTC 24, LLC	 	Grand Valley P2	 	Allendale	 	MI	 	$	17,302,678	 
	 	 	 	 	 	 	 	 	 	 	 
	CBTC 20, LLC	 	Missouri	 	Columbia	 	MO	 	$	39,129,761	 
	 	 	 	 	 	 	 	 	 	 	 
	CBTC 21, LLC	 	Statesboro P1	 	Statesboro	 	GA	 	$	44,723,700	 
	 	 	 	 	 	 	 	 	 	 	 
	CBTC 25, LLC	 	South Carolina P1	 	Columbia	 	SC	 	$	52,956,657	 
	 	 	 	 	 	 	 	 	 	 	 
	CBTC 32, LLC	 	South Carolina P2	 	Columbia	 	SC	 	$	11,108,995	 
	 	 	 	 	 	 	 	 	 	 	 
	CBTC 35, LLC	 	San Marcos P2	 	San Marcos	 	TX	 	$	25,582,568	 
	 	 	 	 	 	 	 	 	 	 	 
	CBTC 36, LLC	 	Statesboro P2	 	Statesboro	 	GA	 	$	14,825,669	 
	 	 	 	 	 	 	 	 	 	 	 
	CBTC 38, LLC	 	Mt. Pleasant P2	 	Mt. Pleasant	 	MI	 	$	14,103,688	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Total	 	 	 	$	385,876,845	 

 

    	 

    	 

    

 

Schedule 2.1(ii)()

 

Second Closing Protected Properties

 

	Entity	 	Property	 	City	 	State	 	Section 704(c) Value 
Fair Market Value	 
	 	 	 	 	 	 	 	 	 	 
	CBTC 29, LLC	 	San Marcos P1	 	San Marcos	 	TX	 	$	51,211,123	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Total	 	 	 	$	51,211,123	 

 

    	 

    	 

    

 

Schedule 3.1(a)

 

Initial Minimum Liability Amount

 

	Protected Partner	 	Minimum Liability Amount	 
	MFLP	 	$	23,799,360	 
	John W. McWhirter	 	$	3,926,641	 
	Jodi McWhirter	 	$	3,926,656	 
	Thomas & Betty Simco	 	$	7,898,438	 
	Mark & Deborah McWhirter	 	$	7,564,668	 
	Andrew J. McWhirter	 	$	3,797,840	 
	Mary James	 	$	3,782,169	 
	Eric & Rebecca Heiser	 	$	7,549,329	 
	Brian & Susan McWhirter	 	$	7,539,278	 
	Heiser Properties	 	$	7,562,341	 
	Gail McWhirter	 	$	1,261,816	 
	Frederick Brenner	 	$	5,933,412	 
	Patricia Oldford	 	$	2,908,474	 
	Chris & Maria Summers	 	$	2,990,667	 
	Thomas Foley	 	 	—	 
	TOTAL	 	$	90,441,089	 

 

    	 

    	 

    

 

Schedule 3.1(a)(ii)

 

Minimum Liability Amount – Following
Occurrence of the Second Closing

 

	Protected Partner	 	Minimum Liability Amount	 
	MFLP	 	$	26,285,821	 
	John W. McWhirter	 	$	4,337,428	 
	Jodi McWhirter	 	$	4,337,444	 
	Thomas & Betty Simco	 	$	8,724,381	 
	Mark & Deborah McWhirter	 	$	8,358,307	 
	Andrew J. McWhirter	 	$	4,196,161	 
	Mary James	 	$	4,178,973	 
	Eric & Rebecca Heiser	 	$	8,341,483	 
	Brian & Susan McWhirter	 	$	8,330,460	 
	Heiser Properties	 	$	8,355,754	 
	Gail McWhirter	 	$	1,394,768	 
	Frederick Brenner	 	$	6,574,137	 
	Patricia Oldford	 	$	3,222,194	 
	Chris & Maria Summers	 	$	3,346,578	 
	Thomas Foley	 	$	16,111	 
	TOTAL	 	$	100,000,000	 

 

    	 

    	 

    

 

Schedule 3.7

 

Form of Guarantee

 

    	 

    	 

    

 

GUARANTEE

 

This Guarantee is made
and entered into as of the ____ day of ___________ ____, by the persons listed on Exhibit A annexed hereto (the
“Guarantors”) for the benefit of the Lender set forth on Exhibit B annexed hereto and made
a part hereof (the “Lender”) which term shall include any person or entity who hereafter holds the Note (as
defined below) in accordance with the terms hereof).

 

RECITALS

 

WHEREAS, the Lender has
loaned to the borrower set forth on Exhibit B (the “Borrower”) the amount set forth opposite
such Lender’s name on Exhibit B, which loan (i) is evidenced by the promissory note described on Exhibit C
hereto (the “Note”), (ii) has a current outstanding balance in the amount set forth on Exhibit B
annexed hereto, and (ii) is secured by a mortgage or deed of trust on the collateral described on Exhibit D annexed
hereto (the “Deed of Trust”), with the property and other assets securing such Deed of Trust referred to as
the “Collateral”);

 

WHEREAS, the Borrower is
either Campus Crest Communities Operating Partnership L.P., a Delaware limited partnership (the “Partnership”)
or a Subsidiary of the Partnership in which the Partnership owns a [__%] or greater interest in the Subsidiary;

 

WHEREAS, the Guarantors
are limited partners in the Partnership; and

 

WHEREAS, the Guarantors
are executing and delivering this Guarantee to guarantee a portion of the Borrower’s payments with respect to the Note, subject
to and otherwise in accordance with the terms and conditions hereinafter set forth.

 

NOW THEREFORE, in consideration
of the foregoing recitals and facts and other good and valuable consideration, the receipt and legal sufficiency of which are hereby
acknowledged, each of the Guarantors hereby agree as follows:

 

1.   Guarantee
and Performance of Payment.

 

(a)            The
Guarantors hereby irrevocably and unconditionally guarantee the collection by the Lender of, and hereby agree to pay to the Lender
upon demand (following (1) foreclosure of the Deed of Trust, exercise of the powers of sale thereunder and/or acceptance by
the Lender of a deed to the Collateral in lieu of foreclosure, and (2) the exhaustion of the exercise of any and all remedies
available to the Lender against the Borrower, including, without limitation, realizing upon the assets of the Borrower other than
the Collateral against which the Lender may have recourse), an amount equal to the excess, if any, of the Guaranteed Amount set
forth on Exhibit B over the Lender Proceeds (as hereinafter defined) (which excess is referred to as the “Aggregate
Guarantee Liability”). The amounts payable by each Guarantor in respect of the guarantee obligations hereunder shall
be in the same proportion as the dollar amounts listed next to such Guarantor’s name on Exhibit A attached
hereto bears to the total Guaranteed Amount set forth on Exhibit A, provided that, notwithstanding
anything to the contrary contained in this Guarantee, each Guarantor’s aggregate obligation under this Guarantee shall be
limited to the dollar amount set forth on Exhibit A attached hereto next to such Guarantor’s name. The
Guarantors’ obligations as set forth in this paragraph 1(a) are hereinafter referred to as the “Guaranteed Obligations.”

 

    	 

    	 

    

 

(b)           For
the purposes of this Guarantee, the term “Lender Proceeds” shall mean the aggregate of (i) the Foreclosure
Proceeds (as hereinafter defined) plus (ii) all amounts collected by the Lender from the Borrower (other than payments of
principal, interest or other amounts required to be paid by the Borrower to Lender under the terms of the Note that are paid by
the Borrower to the Lender at a time when no default has occurred under the Note and is continuing) or realized by the Lender from
the sale of assets of the Borrower other than the Collateral.

 

(c)           For
the purposes of this Guarantee, the term “Foreclosure Proceeds” shall have the applicable meaning set forth
below with respect to the Collateral:

 

1.             If
at least one bona fide third party unrelated to the Lender (and including, without limitation, any of the Guarantors) bids for
such Collateral at a sale thereof, conducted upon foreclosure of the related Deed of Trust or exercise of the power of sale thereunder,
Foreclosure Proceeds shall mean the highest amount bid for such Collateral by the party that acquires title thereto (directly or
through a nominee) at or pursuant to such sale. For the proposes of determining such highest bid, amounts bid for the Collateral
by the Lender shall be taken into account notwithstanding the fact that such bids may constitute credit bids which offset against
the amount due to the Lender under the Note.

 

2.             If
there is no such unrelated third-party at such sale of the Collateral so that the only bidder at such sale is the Lender or its
designee, the Foreclosure Proceeds shall be deemed to be fair market value (the “Fair Market Value”) of the
Collateral as of the date of the foreclosure sale, as such Fair Market Value shall be mutually agreed upon by the Lender and the
Guarantor or determined pursuant to subparagraph 1(d).

 

3.             If
the Lender receives and accepts a deed to the Collateral in lieu of foreclosure in partial satisfaction of the Borrower’s
obligations under the Note, the Foreclosure Proceeds shall be deemed to be the Fair Market Value of such Collateral as of the date
of delivery of the deed-in-lieu of foreclosure, as such Fair Market Value shall be mutually agreed upon by the Lender and the Guarantor
or determined pursuant to subparagraph 1(d).

 

(d)           Fair
Market Value of the Collateral (or any item thereof) shall be the price at which a willing seller not compelled to sell would sell
such Collateral, and a willing buyer not compelled to buy would purchase such Collateral, free and clear of all mortgages but subject
to all leases and reciprocal easements and operating agreements. If the Lender and the Guarantor are unable to agree upon the Fair
Market Value of any Collateral in accordance with subparagraphs 1(c) 2. or 3. above, as applicable, within twenty (20) days
after the date of the foreclosure sale or the delivery of the deed-in-lieu of foreclosure, as applicable, relating to such Collateral,
either party may have the Fair Market Value of such Collateral determined by appraisal by appointing an appraiser having the qualifications
set forth below to determine the same and by notifying the other party of such appointment within twenty (20) days after the
expiration of such twenty (20) day period. If the other party shall fail to notify the first party, within twenty (20) days
after its receipt of notice of the appointment by the first party, of the appointment by the other party of an appraiser having
the qualifications set forth below, the appraiser appointed by the first party shall alone make the determination of such Fair
Market Value. Appraisers appointed by the parties shall be members of the Appraisal Institute (MAI) and shall have at least
ten years’ experience in the valuation of properties similar to the Collateral being valued in the greater metropolitan area
in which such Collateral is located. If each party shall appoint an appraiser having the aforesaid qualifications and if such appraisers
cannot, within thirty (30) days after the appointment of the second appraiser, agree upon the determination hereinabove required,
then they shall select a third appraiser which third appraiser shall have the aforesaid qualifications, and if they fail so to
do within forty (40) days after the appointment of the second appraiser they shall notify the parties hereto, and either party
shall thereafter have the right, on notice to the other, to apply for the appointment of a third appraiser to the chapter of the
American Arbitration Association or its successor organization located in the metropolitan area in which the Collateral is located
or to which the Collateral is proximate or if no such chapter is located in such metropolitan area, in the metropolitan area closest
to the Collateral in which such a chapter is located. Each appraiser shall render its decision as to the Fair Market Value of the
Collateral in question within thirty (30) days after the appointment of the third appraiser and shall furnish a copy thereof
to the Lender and the Guarantor. The Fair Market Value of the Collateral shall then be calculated as the average of (i) the
Fair Market Value determined by the third appraiser and (ii) whichever of the Fair Market Values determined by the first two
appraisers is closer to the Fair Market Value determined by the third appraiser; provided, however, that if the Fair Market
Value determined by the third appraiser is higher or lower than both Fair Market Values determined by the first two appraisers,
such Fair Market Value determined by the third appraiser shall be disregarded and the Fair Market Value of the Collateral shall
then be calculated as the average of the Fair Market Value determined by the first two appraisers. The Fair Market Value of a Property,
as so determined, shall be binding and conclusive upon the Lender and the Guarantors. Guarantors shall bear the cost of its own
appraiser and, subject to subparagraph 1(e), shall bear all reasonable costs of appointing, and the expenses of, any other appraiser
appointed pursuant to this subparagraph (1)(d).

 

    	 

    	 

    

 

(e)    
      Notwithstanding anything in the preceding subparagraphs of this paragraph 1, (i) in
no event shall the aggregate amount required to be paid pursuant to this Guarantee by the Guarantors as a group with respect
to all defaults under the Note and the Deed of Trust securing the obligations thereunder exceed the Guaranteed Amount set
forth on Exhibit B hereto, and (ii) the aggregate obligation of each Guarantor hereunder with respect to the
Guaranteed Obligation shall be limited to the lesser of (I) the product of (w) the Individual Guarantee Percentage
for such Guarantor set forth on Exhibit A hereto multiplied by (x) the Guaranteed Amount, or
(II) the product of (y) such Guarantor’s Individual Guarantee Percentage multiplied by (z) the Aggregate
Guarantee Liability.

 

(f)  
         In confirmation of the foregoing, and without limitation, the Lender must
first exhaust all of its rights and remedies against all property of the Borrower as to which the Lender has (or may have) a
right of recourse, including, without limitation, the institution and prosecution to completion of appropriate foreclosure
proceedings under the Deed of Trust, before exercising any right or remedy or making any claim, under this Guarantee.

 

(g)           The
obligations under this Guarantee shall be personal to each Guarantor and shall not be affected by any transfer of all or any part
of a Guarantor’s interests in the Partnership; provided, however, that if a Guarantor has disposed of all of its equity interests
in the Partnership, the obligations of such Guarantor under this Guarantee shall terminate 12 months after the date of such
disposition (the “Termination Date”) provided (i) the Guarantor notifies the Lender that it is terminating
its obligations under this Guarantee as of the Termination Date and (ii) the fair market value of the Collateral exceeds the
outstanding balance of the Note, including accrued and unpaid interest, as of the Termination Date. Further, no Guarantor shall
have the right to recover from the Borrower any amounts such Guarantor pays pursuant to this Guarantee (except and only to the
extent that the amount paid to the Lender by such Guarantor exceeds the amount required to be paid by such Guarantor under the
terms of this Guarantee).

 

(h)           The
obligations of any Guarantor who is an individual as a Guarantor hereunder shall terminate with respect to such Guarantor one week
after the death of such Guarantor if, as a result of the death of such Guarantor, all property held by the Guarantor on the date
of death would have a basis for federal income tax purposes equal to the fair market value of such property on such date (unless
a later date were to be elected by the executor of the Guarantor’s estate in accordance with the applicable provisions of
the Internal Revenue Code).

 

    	 

    	 

    

 

2.             Intent
to Benefit Lender. This Guarantee is expressly for the benefit of the Lender. The Guarantors intend that the Lender shall have
the right to enforce the obligations of the Guarantors hereunder separately and independently of the Borrower, subject to the provisions
of paragraph 1 hereof, without any requirement whatsoever of resort by the Lender to any other party. The Lender’s rights
to enforce the obligations of the Guarantors hereunder are material elements of this Guarantee. This Guarantee shall not be modified,
amended or terminated (other than as specifically provided herein) without the written consent of the Lender. The Borrower shall
furnish a copy of this Guarantee to the Lender contemporaneously with its execution.

 

3.             Waivers.
Each Guarantor intends to bear the ultimate economic responsibility for the payment hereof of the Guaranteed Obligations to the
extent set forth in paragraph 1 above. Pursuant to such intent:

 

(a)           Except
as expressly set forth in paragraph 1 above, each Guarantor expressly waives any right (pursuant to any law, rule, arrangement
or relationship) to compel the Lender, or any subsequent holder of the Note or any beneficiary of the Deed of Trust to sue or enforce
payment thereof or pursue any other remedy in the power of the Borrower, the Lender or any subsequent holder of the Note or any
beneficiary of the Deed of Trust whatsoever, and failure of the Borrower or the Lender or any subsequent holder of the Note or
any beneficiary of the Deed of Trust to do so shall not exonerate, release or discharge a Guarantor from its absolute unconditional
obligations under this Guarantee. Each Guarantor hereby binds and obligates itself, and its permitted successors and assignees,
for performance of the Guaranteed Obligations according to the terms hereof, whether or not the Guaranteed Obligations or any portion
thereof are valid now or hereafter enforceable against the Borrower or shall have been incurred in compliance with any of the conditions
applicable thereto, subject, however, in all respects to the Guarantee Limit and the other limitations set forth in paragraph 1.

 

(b)           Each
Guarantor expressly waives any right (pursuant to any law, rule, arrangement, or relationship) to compel any other person (including,
but not limited to, the Borrower, the Partnership, any subsidiary of the Partnership or the Borrower, or any other partner or affiliate
of the Partnership or the Borrower) to reimburse or indemnify such Guarantor for all or any portion of amounts paid by such Guarantor
pursuant to this Guarantee to the extent such amounts do not exceed the amounts required to be paid by such Guarantor pursuant
to paragraph 1 hereof (taking into account the limitations set forth therein).

 

(c)           Except
as expressly set forth in paragraph 1 above, if and only to the extent that the Borrower has made similar waivers under the
Note or the Deed of Trust, each Guarantor expressly waives: (i) the defense of the statute of limitations in any action hereunder
or for the collection or performance of the Note or the Deed of Trust; (ii) any defense that may arise by reason o£
the incapacity, or lack of authority of the Borrower, the revocation or repudiation hereof by such Guarantor, the revocation or
repudiation of the Note or the Deed of Trust by the Borrower, the failure of the Lender to file or enforce a claim against the
estate (either in administration, bankruptcy or any other proceeding) of the Borrower; the unenforceability in whole or in part
of the Note, the Deed of Trust or any other document or instrument related thereto; the Lender’s election, in any proceeding
by or against the Borrower under the federal Bankruptcy Code, of the application of Section 1111(b)(2) of the federal Bankruptcy
Code; or any borrowing or grant of a security interest under Section 364 of the federal Bankruptcy Code; (iii) presentment,
demand for payment, protest, notice of discharge, notice of acceptance of this Guarantee or occurrence of, or any default in connection
with, the Note or the Deed of Trust, and indulgences and notices of any other kind whatsoever, including, without limitation, notice
of the disposition of any collateral for the Note; (iv) any defense based upon an election of remedies (including, if available,
an election to proceed by non-judicial foreclosure) or other action or omission by the Lender or any other person or entity which
destroys or otherwise impairs any indemnification, contribution or subrogation rights of such Guarantor or the right of such Guarantor,
if any, to proceed against the Borrower for reimbursement, or any combination thereof; (v) subject to Paragraph 4 below,
any defense based upon any taking, modification or release of any collateral or guarantees for the Note, or any failure to create
or perfect any security interest in, or the taking of or failure to take any other action with respect to any collateral securing
payment or performance of the Note; (vi) any rights or defenses based upon any right to offset or claimed offset by such Guarantor
against any indebtedness or obligation now or hereafter owed to such Guarantor by the Borrower; or (vii) any rights or defenses
based upon any rights or defenses of the Borrower to the Note or the Deed of Trust (including, without limitation, the failure
or value of consideration, any statute of limitations, accord and satisfaction, and the insolvency of the Borrower); it being intended,
except as expressly set forth in Paragraph 1 above, that such Guarantor shall remain liable hereunder, to the extent set forth
herein, notwithstanding any act, omission or thing which might otherwise operate as a legal or equitable discharge of any of such
Guarantor or of the Borrower.

 

    	 

    	 

    

 

4.             Amendment
of Note and Deed of Trust. Without in any manner limiting the generality of the foregoing, the Lender or any subsequent holder
of the Note or beneficiary of the Deed of Trust may, from time to time, without notice to or consent of the Guarantors, agree to
any amendment, waiver, modification or alteration of the Note or the Deed of Trust relating to the Borrower and its rights and
obligations thereunder (including, without limitation, renewal, waiver or variation of the maturity of the indebtedness evidenced
by the Note, increase or reduction of the rate of interest payable under the Note, release, substitution or addition of any Guarantor
or endorser and acceptance or release of any security for the Note), it being understood and agreed by the Lender, however, that
the Guarantor’s obligations hereunder are subject, in all events, to the limitations set forth in Paragraph 1; provided
that (i) in the event that the Lender consents to the release of any Collateral securing the Note pursuant to the Deed of Trust,
the Guaranteed Amount shall be reduced by the Fair Market Value of such Collateral on the date of such release (determined as set
forth in Section 1(d)); and (ii) upon any material change to the Note or the Deed of Trust, including, without limitation,
the maturity date or the interest rate of the Note, or upon any release or substitution of any Collateral securing the Note, within
thirty (30) days of any Guarantor’s receipt of actual notice of such event, subject to the following sentence, such
Guarantor may elect to terminate such Guarantor’s obligations under this Guarantee by written notice to the Lender. Such
termination shall take effect on the 31st day following such actual notice, provided that no default under the Guaranteed
Obligation has occurred and is then continuing.

 

5.             Termination
of Guarantee. Subject to paragraph 4, this Guarantee is irrevocable as to any and all of the Guaranteed Obligations.

 

6.             Independent
Obligations. Except as expressly set forth in paragraph 1, the obligations of each Guarantor hereunder are independent
of the obligations of the Borrower, and a separate action (or actions) may be brought by a Lender against the Guarantors, whether
or not actions are brought against the Borrower. Each Guarantor expressly waives any and all rights of subrogation, reimbursement,
indemnity, exoneration, contribution or any other claim which such Guarantor may now or hereafter have against the Borrower, or
any other person directly or contingently liable for the payment or performance of the Note and the Deed of Trust arising from
the existence or performance of this Guarantee (including, but not limited to, the Partnership, Campus Crest Communities, Inc.,
or any other partner of the Partnership) (except and only to the extent that a Guarantor makes a payment to the Lender in excess
of the amount required to be paid under paragraph 1 and the limitations set forth therein).

 

    	 

    	 

    

 

7.             Understanding
With Respect to Waivers. Each Guarantor warrants and represents that each of the waivers set forth above are made with full
knowledge of their significance and consequences, and that under the circumstances, the waivers are reasonable and not contrary
to public policy or law. If any of said waivers are determined to be contrary to any applicable law or public policy, such waiver
shall be effective only to the maximum extent permitted by law.

 

8.             No
Assignment. No Guarantor shall be entitled to assign his or her rights or obligations under this Guarantee to any other person
without the written consent of the Lender.

 

9.             Entire
Agreement. The parties agree that this Guarantee contains the entire understanding and agreement between them with respect to the
subject matter hereof and cannot be amended, modified or superseded, except by an agreement in writing signed by the parties.

 

10.           Notices.
Any notice given pursuant to this Guarantee shall be in writing and shall be deemed given when delivered personally, or sent by
registered or certified mail, postage prepaid, as follows:

 

If to the Partnership:

 

Campus Crest Communities Operating
Partnership, L.P.

Campus Crest Communities, Inc.

2100 Rexford Road, Suite 414

Charlotte, NC 28211

Attention: Chief Financial Officer

Facsimile: (704) 937-0965

 

or to such other address with respect to which
notice is subsequently provided in the manner set forth above; and

 

If to a Guarantor, to
the address set forth on Exhibit A hereto, or to such other address with respect to which notice is subsequently
provided in the manner set forth above.

 

11.           Applicable
Law. This Guarantee shall be governed by, interpreted under and construed in accordance with the laws of the State of Delaware
without reference to its choice of law provisions.

 

12.           Consent
to Jurisdiction: Enforceability

 

(a)            This
Guarantee and the duties and obligations of the parties hereto shall be enforceable against each Guarantor in the courts of the
State of Delaware. For such purpose, each Guarantor hereby irrevocably submits to the nonexclusive jurisdiction of such courts
and agrees that all claims in respect of this Guarantee may be heard and determined in any of such courts.

 

(b)           Each
Guarantor hereby irrevocably agrees that a final judgment of any of the courts specified above in any action or proceeding relating
to this Guarantee shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.

 

    	 

    	 

    

 

13.           Condition
of Borrower. Each Guarantor is fully aware of the financial condition of the Borrower and is executing and delivering this
Guarantee based solely upon its own independent investigation of all matters pertinent hereto and is not relying in any manner
upon any representation or statement of the Lender or the Borrower. Each Guarantor represents and warrants that it is in a position
to obtain, and hereby assumes full responsibility for obtaining, any additional information concerning the Borrower’s financial
conditions and any other matter pertinent hereto as it may desire, and it is not relying upon or expecting the Lender to furnish
to it any information now or hereafter in the Lender’s possession concerning the same. By executing this Guarantee, each
Guarantor knowingly accepts the full range of risks encompassed within a contract of this type, which risks it acknowledges.

 

14.           Expenses.
Each Guarantor agrees that, promptly after receiving Lender’s notice therefor, such Guarantor shall reimburse Lender, subject
to the limitation set forth in subparagraph 1(e) and to the extent that such reimbursement is not made by Borrower, for all reasonable
expenses (including, without limitation, reasonable attorneys fees and disbursements) incurred by Lender in connection with the
collection of the Guaranteed Obligations or any portion thereof or with the enforcement of this Guarantee.

 

IN WITNESS WHEREOF, the
undersigned Guarantors set forth on Exhibit A hereto have executed this Guarantee as of the date first set forth
above.Exhibit 4.1

 

SELECT INCOME REIT

 

TO

 

 

Indenture

 

Dated as of February 3, 2015

 

Senior Debt Securities

 

 

Certain Sections of this Indenture relating to Sections 310 through 318,
 inclusive, of the Trust Indenture Act of 1939:

 

	
Trust Indenture Act Section
    	
 
    	
Indenture Section
    
	
§ 310(a)(1)
    	
 
    	
609
    
	
(a)(2)
    	
 
    	
609
    
	
(a)(3)
    	
 
    	
Not Applicable
    
	
(a)(4)
    	
 
    	
Not Applicable
    
	
(a)(5)
    	
 
    	
609
    
	
(b)
    	
 
    	
608
    
	
§ 311(a)
    	
 
    	
613
    
	
(b)
    	
 
    	
613
    
	
§ 312(a)
    	
 
    	
701
    
	
(b)
    	
 
    	
702
    
	
(c)
    	
 
    	
702
    
	
§ 313(a)
    	
 
    	
703
    
	
(b)
    	
 
    	
Article 14, Not Applicable
    
	
(c)
    	
 
    	
703
    
	
(d)
    	
 
    	
703
    
	
§ 314(a)
    	
 
    	
704
    
	
(b)
    	
 
    	
Article 14, Not Applicable
    
	
(c)
    	
 
    	
102
    
	
(d)
    	
 
    	
Article 14, Not Applicable
    
	
(e)
    	
 
    	
102
    
	
§ 315(a)
    	
 
    	
601, 603
    
	
(b)
    	
 
    	
602
    
	
(c)
    	
 
    	
601
    
	
(d)
    	
 
    	
601, 603
    
	
(e)
    	
 
    	
514
    
	
§ 316(a)(1)(A)
    	
 
    	
512
    
	
(a)(1)(B)
    	
 
    	
513
    
	
(a)(2)
    	
 
    	
Not Applicable
    
	
(b)
    	
 
    	
508
    
	
(c)
    	
 
    	
104
    
	
§ 317(a)(1)
    	
 
    	
503
    
	
(a)(2)
    	
 
    	
504
    
	
(b)
    	
 
    	
1003
    
	
§ 318
    	
 
    	
107
    

 

NOTE:  This reconciliation and tie shall not, for any purpose, be deemed to be part of the Indenture.

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    
	
ARTICLE ONE
    
	
 
    
	
DEFINITIONS AND OTHER   PROVISIONS OF GENERAL APPLICATION
    
	
 
    
	
Section 101
    	
Definitions
    	
1
    
	
Section 102
    	
Compliance Certificates and   Opinions
    	
7
    
	
Section 103
    	
Form of Documents Delivered   to Trustee
    	
8
    
	
Section 104
    	
Acts of Holders; Record Dates
    	
8
    
	
Section 105
    	
Notices, Etc., to Trustee   and Company
    	
10
    
	
Section 106
    	
Notice to Holders; Waiver
    	
10
    
	
Section 107
    	
Conflict with Trust Indenture   Act
    	
11
    
	
Section 108
    	
Effect of Headings and Table of   Contents
    	
11
    
	
Section 109
    	
Successors and Assigns
    	
11
    
	
Section 110
    	
Separability Clause
    	
11
    
	
Section 111
    	
Benefits of Indenture
    	
11
    
	
Section 112
    	
Governing Law
    	
12
    
	
Section 113
    	
Legal Holidays
    	
12
    
	
Section 114
    	
Language of Notices, Etc.
    	
12
    
	
Section 115
    	
No Personal Liability
    	
12
    
	
 
    	
 
    	
 
    
	
ARTICLE TWO
    
	
 
    
	
SECURITY FORMS
    
	
 
    	
 
    	
 
    
	
Section 201
    	
Forms Generally
    	
12
    
	
Section 202
    	
Form of Legend for Global   Securities
    	
13
    
	
Section 203
    	
Form of Trustee’s   Certificate of Authentication
    	
13
    
	
Section 204
    	
Securities in Global Form
    	
14
    
	
 
    	
 
    	
 
    
	
ARTICLE THREE
    
	
 
    
	
THE SECURITIES
    
	
 
    	
 
    	
 
    
	
Section 301
    	
Amount Unlimited; Issuable in   Series
    	
14
    
	
Section 302
    	
Denominations
    	
18
    
	
Section 303
    	
Execution, Authentication,   Delivery and Dating
    	
18
    
	
Section 304
    	
Temporary Securities
    	
19
    
	
Section 305
    	
Registration, Registration of   Transfer and Exchange
    	
20
    
	
Section 306
    	
Mutilated, Destroyed, Lost and   Stolen Securities
    	
21
    
	
Section 307
    	
Payment of Interest; Interest   Rights Preserved
    	
22
    
	
Section 308
    	
Persons Deemed Owners
    	
23
    
	
Section 309
    	
Cancellation
    	
23
    
	
Section 310
    	
Computation of Interest
    	
24
    

 

i

 

	
Section 311
    	
CUSIP Numbers
    	
24
    
	
 
    	
 
    	
 
    
	
ARTICLE FOUR
    
	
 
    
	
SATISFACTION AND   DISCHARGE
    
	
 
    	
 
    	
 
    
	
Section 401
    	
Satisfaction and Discharge of   Indenture
    	
24
    
	
Section 402
    	
Application of Trust Money
    	
25
    
	
 
    	
 
    	
 
    
	
ARTICLE FIVE
    
	
 
    
	
REMEDIES
    
	
 
    	
 
    	
 
    
	
Section 501
    	
Events of Default
    	
26
    
	
Section 502
    	
Acceleration of Maturity;   Rescission and Annulment
    	
26
    
	
Section 503
    	
Collection of Indebtedness and   Suits for Enforcement by Trustee
    	
27
    
	
Section 504
    	
Trustee May File Proofs of   Claim
    	
28
    
	
Section 505
    	
Trustee May Enforce Claims   Without Possession of Securities
    	
28
    
	
Section 506
    	
Application of Money Collected
    	
29
    
	
Section 507
    	
Limitation on Suits
    	
29
    
	
Section 508
    	
Unconditional Right of Holders   to Receive Principal, Premium and Interest
    	
30
    
	
Section 509
    	
Restoration of Rights and   Remedies
    	
30
    
	
Section 510
    	
Rights and Remedies Cumulative
    	
30
    
	
Section 511
    	
Delay or Omission Not Waiver
    	
30
    
	
Section 512
    	
Control by Holders
    	
30
    
	
Section 513
    	
Waiver of Past Defaults
    	
31
    
	
Section 514
    	
Undertaking for Costs
    	
31
    
	
Section 515
    	
Waiver of Usury, Stay or   Extension Laws
    	
31
    
	
 
    	
 
    	
 
    
	
ARTICLE SIX
    
	
 
    
	
THE TRUSTEE
    
	
 
    	
 
    	
 
    
	
Section 601
    	
Certain Duties and   Responsibilities
    	
32
    
	
Section 602
    	
Notice of Defaults
    	
32
    
	
Section 603
    	
Certain Rights of Trustee
    	
32
    
	
Section 604
    	
Not Responsible for Recitals or   Issuance of Securities
    	
33
    
	
Section 605
    	
May Hold Securities
    	
33
    
	
Section 606
    	
Money Held in Trust
    	
34
    
	
Section 607
    	
Compensation and Reimbursement
    	
34
    
	
Section 608
    	
Conflicting Interests
    	
34
    
	
Section 609
    	
Corporate Trustee Required;   Eligibility
    	
34
    
	
Section 610
    	
Resignation and Removal;   Appointment of Successor
    	
35
    
	
Section 611
    	
Acceptance of Appointment by   Successor
    	
36
    
	
Section 612
    	
Merger, Conversion, Consolidation   or Succession to Business
    	
37
    
	
Section 613
    	
Preferential Collection of   Claims Against Company
    	
37
    

 

ii

 

	
Section 614
    	
Appointment of Authenticating   Agent
    	
38
    
	
Section 615
    	
Rules by Trustee
    	
39
    
	
 
    	
 
    	
 
    
	
ARTICLE SEVEN
    
	
 
    
	
HOLDERS’ LISTS AND   REPORTS BY TRUSTEE AND COMPANY
    
	
 
    	
 
    	
 
    
	
Section 701
    	
Company to Furnish Trustee Names   and Addresses of Holders
    	
40
    
	
Section 702
    	
Preservation of Information;   Communications to Holders
    	
40
    
	
Section 703
    	
Reports by Trustee
    	
40
    
	
Section 704
    	
Reports by Company
    	
41
    
	
 
    	
 
    	
 
    
	
ARTICLE EIGHT
    
	
 
    
	
CONSOLIDATION, MERGER,   CONVEYANCE, TRANSFER OR LEASE
    
	
 
    	
 
    	
 
    
	
Section 801
    	
Company   May Consolidate, Etc., Only on Certain Terms
    	
41
    
	
Section 802
    	
Successor Substituted
    	
42
    
	
 
    	
 
    	
 
    
	
ARTICLE NINE
    
	
 
    
	
SUPPLEMENTAL INDENTURES
    
	
 
    	
 
    	
 
    
	
Section 901
    	
Supplemental Indentures Without   Consent of Holders
    	
42
    
	
Section 902
    	
Supplemental Indentures With   Consent of Holders
    	
43
    
	
Section 903
    	
Execution of Supplemental   Indentures
    	
44
    
	
Section 904
    	
Effect of Supplemental   Indentures
    	
44
    
	
Section 905
    	
Conformity with Trust Indenture   Act
    	
45
    
	
Section 906
    	
Reference in Securities to   Supplemental Indentures
    	
45
    
	
 
    	
 
    	
 
    
	
ARTICLE TEN
    
	
 
    
	
COVENANTS
    
	
 
    	
 
    	
 
    
	
Section 1001
    	
Payment of Principal, Premium   and Interest
    	
45
    
	
Section 1002
    	
Maintenance of Office or Agency
    	
45
    
	
Section 1003
    	
Money for Securities Payments to   Be Held in Trust
    	
46
    
	
Section 1004
    	
Statement by Officers as to   Default
    	
47
    
	
Section 1005
    	
Existence
    	
47
    
	
Section 1006
    	
Waiver of Certain Covenants
    	
47
    
	
 
    	
 
    	
 
    
	
ARTICLE ELEVEN
    
	
 
    
	
REDEMPTION OF SECURITIES
    
	
 
    	
 
    	
 
    
	
Section 1101
    	
Applicability of Article
    	
47
    
	
Section 1102
    	
Election to Redeem; Notice to   Trustee
    	
47
    
	
Section 1103
    	
Selection by Trustee of   Securities to Be Redeemed
    	
48
    

 

iii

 

	
Section 1104
    	
Notice of Redemption
    	
48
    
	
Section 1105
    	
Deposit of Redemption Price
    	
49
    
	
Section 1106
    	
Securities Payable on Redemption   Date
    	
50
    
	
Section 1107
    	
Securities Redeemed in Part
    	
50
    
	
 
    	
 
    	
 
    
	
ARTICLE TWELVE
    
	
 
    
	
SINKING FUNDS
    
	
 
    	
 
    	
 
    
	
Section 1201
    	
Applicability of Article
    	
50
    
	
Section 1202
    	
Satisfaction of Sinking Fund   Payments with Securities
    	
51
    
	
Section 1203
    	
Redemption of Securities for   Sinking Fund
    	
51
    
	
 
    	
 
    	
 
    
	
ARTICLE THIRTEEN
    
	
 
    
	
DEFEASANCE AND COVENANT   DEFEASANCE
    
	
 
    	
 
    	
 
    
	
Section 1301
    	
Company’s Option to Effect   Defeasance or Covenant Defeasance
    	
51
    
	
Section 1302
    	
Defeasance and Discharge
    	
51
    
	
Section 1303
    	
Covenant Defeasance
    	
52
    
	
Section 1304
    	
Conditions to Defeasance or   Covenant Defeasance
    	
52
    
	
Section 1305
    	
Deposited Money and Government   Obligations to Be Held in Trust; Miscellaneous Provisions
    	
54
    
	
Section 1306
    	
Reinstatement
    	
55
    

 

iv

 

INDENTURE, dated as of February 3, 2015 between Select Income REIT, a real estate investment trust organized and existing under the laws of the State of Maryland (herein called the “Company”) having its principal office at Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458-1634, and U.S. Bank National Association, a national banking organization organized and existing under the laws of the United States, as Trustee (herein called the “Trustee”).

 

RECITALS OF THE COMPANY

 

The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured debentures, notes or other evidences of indebtedness (herein called the “Securities”), to be issued in one or more series as in this Indenture provided.

 

All things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done.

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

 

For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Securities or of series thereof, as follows:

 

ARTICLE ONE

 

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

 

Section 101           Definitions

 

For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

 

(a)           the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;

 

(b)           all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;

 

(c)           all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with United States generally accepted accounting principles, and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the Issue Date;

 

(d)           unless otherwise specifically set forth herein, all calculations or determinations of a Person shall be performed or made on a consolidated basis in accordance with generally accepted accounting principles;

 

 

(e)           unless the context otherwise requires, any reference to an “Article” or a “Section” refers to an Article or a Section, as the case may be, of this Indenture; and

 

(f)            the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

 

“Act,” when used with respect to any Holder, has the meaning specified in Section 104.

 

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person.  For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Authenticating Agent” means any Person authorized by the Trustee pursuant to Section 614 to act on behalf of the Trustee to authenticate Securities of one or more series.

 

“Authorized Newspaper” means a newspaper, in the English language or in an official language of the country of publication, customarily published on each Business Day, whether or not published on Saturdays, Sundays or holidays, and of general circulation in each place in connection with which the term is used or in the financial community of each such place.  Where successive publications are required to be made in Authorized Newspapers, the successive publications may be made in the same or in different newspapers in the same city meeting the foregoing requirements and in each case on any Business Day.

 

“Bankruptcy Law” means Title 11, United States Bankruptcy Code of 1978, as amended, or any similar United States federal or state law relating to bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or relief of debtors or any amendment to, succession to or change in any such law.

 

“Board” means either the board of trustees of the Company or any duly authorized committee of that board.

 

“Board Resolution” means a copy of a resolution certified by a Secretary or Assistant Secretary of the Company to have been duly adopted by the Board and to be in full force and effect on the date of such certification, and delivered to the Trustee.

 

“Business Day,” when used with respect to any Place of Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law or executive order to close.

 

“Commission” means the Securities and Exchange Commission, from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this

 

2

 

instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.

 

“Company” means the Person named as the “Company” in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor Person.

 

“Company Request” or “Company Order” means a written request or order signed in the name of the Company by a Managing Trustee, its Chief Executive Officer, its Chief Operating Officer, its Chief Financial Officer, its President or a Vice President, and by its Treasurer, an Assistant Treasurer, its Controller, its Secretary or an Assistant Secretary, and delivered to the Trustee.

 

“Corporate Trust Office” means the principal office of the Trustee at which at any particular time its corporate trust business shall be administered, which on the date hereof is located at One Federal Street, 3rd Floor, Boston, Massachusetts 02110.

 

“corporation” means a corporation, association, partnership, limited liability, joint-stock or other company, real estate investment trust or business trust.

 

“Covenant Defeasance” has the meaning specified in Section 1303.

 

“Custodian” means any receiver, trustee, assignee, liquidator or other similar official under any Bankruptcy Law.

 

“Defaulted Interest” has the meaning specified in Section 307.

 

“Defeasance” has the meaning specified in Section 1302.

 

“Depositary” means, with respect to Securities of any series issuable in whole or in part in the form of one or more Global Securities, a clearing agency registered under the Exchange Act that is designated to act as Depositary for such Securities as contemplated by Section 301.

 

“Event of Default” has the meaning specified in Section 501.

 

“Exchange Act” means the Securities Exchange Act of 1934 and any statute successor thereto, in each case as amended from time to time.

 

“Expiration Date” has the meaning specified in Section 104.

 

“Global Security” means a Security that evidences all or part of the Securities of any series and bears the legend set forth in Section 202 (or such legend as may be specified as contemplated by Section 301 for such Securities).

 

“Government Obligation” has the meaning specified in Section 1304.

 

3

 

“Holder” means a Person in whose name a Security is registered in the Security Register.

 

“Indenture” means this instrument as originally executed and as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively.  The term “Indenture” shall also include the terms of particular series of Securities established as contemplated by Section 301.

 

“interest,” when used with respect to an Original Issue Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity.

 

“Interest Payment Date,” when used with respect to any Security, means the Stated Maturity of an installment of interest on such Security.

 

“Investment Company Act” means the Investment Company Act of 1940 and any statute successor thereto, in each case as amended from time to time.

 

“Issue Date” means the date of initial issuance of the Securities pursuant to this Indenture.

 

“Maturity,” when used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.

 

“Notice of Default” means a written notice of the kind specified in Section 501(d).

 

“Officer’s Certificate” means a certificate signed on behalf of the Company by a Managing Trustee, the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer, the Controller, the President, a Vice President, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company and delivered to the Trustee.

 

“Opinion of Counsel” means a written opinion of legal counsel addressed to the Trustee. The counsel may be an employee of or counsel to the Company or any Affiliate.

 

“Original Issue Discount Security” means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502.

 

“Outstanding,” when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except:

 

(i)            Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;

 

4

 

(ii)           Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made;

 

(iii)          Securities as to which Defeasance has been effected pursuant to Section 1302 or satisfaction and discharge has been effected pursuant to Article Four; and

 

(iv)          Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company;

 

provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given, made or taken any request, demand, authorization, direction, notice, consent, waiver or other action hereunder as of any date, or whether a quorum is present at a meeting of Holders of Securities, (A) the principal amount of an Original Issue Discount Security which shall be deemed to be Outstanding shall be the amount of the principal thereof which would be due and payable as of such date upon acceleration of the Maturity thereof to such date pursuant to Section 502, (B) if, as of such date, the principal amount payable at the Stated Maturity of a Security is not determinable, the principal amount of such Security which shall be deemed to be Outstanding shall be the amount as specified or determined as contemplated by Section 301, (C) the principal amount of a Security denominated in one or more foreign currencies or currency units which shall be deemed to be Outstanding shall be the U.S. dollar equivalent, determined as of such date in the manner provided as contemplated by Section 301, of the principal amount of such Security (or, in the case of a Security described in Clause (A) or (B) above, of the amount determined as provided in such Clause), and (D) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent, waiver or other action, or upon any such determination as to the presence of a quorum, only Securities that a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded.  Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor.

 

“Paying Agent” means any Person authorized by the Company to pay the principal of or any premium or interest on any Securities on behalf of the Company.

 

“Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

 

5

 

“Place of Payment,” when used with respect to the Securities of any series, means the place or places where the principal of and any premium and interest on the Securities of that series are payable as specified as contemplated by Section 301.

 

“Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.

 

“Redemption Date,” when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture.

 

“Redemption Price,” when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture.

 

“Regular Record Date” for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 301.

 

“Responsible Officer,” when used with respect to the Trustee, means the chairman or any vice-chairman of the board of directors, the chairman or any vice-chairman of the executive committee of the board of directors, the chairman of the trust committee, the president, any vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any trust officer or assistant trust officer, the controller or any assistant controller or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his or her knowledge of and familiarity with the particular subject and who shall have responsibility for the administration of this Indenture.

 

“Securities” has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture.

 

“Securities Act” means the Securities Act of 1933 and any statute successor thereto, in each case as amended from time to time.

 

“Security Register” and “Security Registrar” have the respective meanings specified in Section 305.

 

“Special Record Date” for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 307.

 

“Stated Maturity,” when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.

 

6

 

“Subsidiary” means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries.  For the purposes of this definition, “voting stock” means the equity interest that ordinarily has voting power for the election of directors, managers or trustees of an entity, or persons performing similar functions, whether at all times or only so long as no senior class of equity interest has such voting power by reason of any contingency.

 

“Trust Indenture Act” means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, “Trust Indenture Act” means, to the extent required by any such amendment, the Trust Indenture Act of 1939 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.

 

“Vice President,” when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title “vice president.”

 

Section 102           Compliance Certificates and Opinions

 

Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee such certificates and opinions as may be required under the Trust Indenture Act.  Each such certificate or opinion shall be given in the form of an Officer’s Certificate, if to be given by an officer of the Company, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirements set forth in this Indenture.

 

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (except for certificates provided for in Section 1004) shall include,

 

(1)           a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

 

(2)           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;

 

(3)           a statement that, in the opinion of each such individual, such individual has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

7

 

(4)           a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

 

Section 103           Form of Documents Delivered to Trustee

 

In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

 

Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his or her certificate or opinion is based are erroneous.  Any such certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

 

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

 

Section 104           Acts of Holders; Record Dates

 

Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company.  Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments.  Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.

 

The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him or her the execution thereof.  Where such execution is by a signer acting in a capacity other than his or her individual capacity, such certificate or affidavit shall also constitute sufficient proof of his or her authority.  The fact and

 

8

 

date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.

 

The ownership of Securities shall be proved by the Security Register.

 

Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security.

 

The Company may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to give, make or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders of Securities of such series; provided, that the Company may not set a record date for, and the provisions of this paragraph shall not apply with respect to, the giving or making of any notice, declaration, request or direction referred to in the next paragraph.  If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of the relevant series on such record date, and no other Holders, shall be entitled to take the relevant action, whether or not such Holders remain Holders after such record date; provided, that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date.  Nothing in this paragraph shall be construed to prevent the Company from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken.  Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Trustee in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 106.

 

The Trustee may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to join in the giving or making of (i) any Notice of Default, (ii) any declaration of acceleration referred to in Section 502, (iii) any request to institute proceedings referred to in Section 507(b) or (iv) any direction referred to in Section 512, in each case with respect to Securities of such series.  If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of such series on such record date, and no other Holders, shall be entitled to join in such notice, declaration, request or direction, whether or not such Holders remain Holders after such record date; provided, that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date.  Nothing in this paragraph shall be construed to prevent the Trustee from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action

 

9

 

taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken.  Promptly after any record date is set pursuant to this paragraph, the Trustee, at the Company’s expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Company in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 106.

 

With respect to any record date set pursuant to this Section, the party hereto that sets such record date may designate any day as the “Expiration Date” and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the other party in writing, and to each Holder of Securities of the relevant series in the manner set forth in Section 106, on or prior to the existing Expiration Date.  If an Expiration Date is not designated with respect to any record date set pursuant to this Section, the party hereto that sets such record date shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this paragraph.

 

Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with regard to any particular Security may do so with regard to all or any part of the principal amount of such Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such principal amount.

 

Section 105           Notices, Etc., to Trustee and Company

 

Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,

 

(1)           the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, Attention: Corporate Trust Department, Re: Select Income REIT [Title of Securities], or

 

(2)           the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company.

 

Section 106           Notice to Holders; Waiver

 

Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at the address of such Holder as it appears in the Security Register, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice.  Notwithstanding any other provision of this Indenture or any Security of any series other than a provision that expressly states that this paragraph is not applicable to the Securities of such series, when this Indenture or

 

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any Security provides for notice of any event (including any notice of redemption) to a Holder of Securities in global form (whether by mail or otherwise), such notice shall be sufficiently given if given to the Depositary for such Security (or its designee) pursuant to the customary procedures of such Depositary.  In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders.  Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice.  Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

 

In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

 

Section 107           Conflict with Trust Indenture Act

 

If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act which is required thereunder to be a part of and govern this Indenture, the latter provision shall control.  If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act which may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be.

 

Section 108           Effect of Headings and Table of Contents

 

The Article and Section headings herein and the Table of Contents hereof are for convenience only and shall not affect the construction hereof.

 

Section 109           Successors and Assigns

 

All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not.

 

Section 110           Separability Clause

 

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 111           Benefits of Indenture

 

Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders of Securities any benefit or any legal or equitable right, remedy or claim under this Indenture.

 

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Section 112           Governing Law

 

This Indenture and the Securities shall be governed by and construed in accordance with the law of the State of New York.

 

Section 113           Legal Holidays

 

In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Securities (other than a provision of any Security which specifically states that such provision shall apply in lieu of this Section)) payment of interest or principal (and premium, if any) need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity.

 

Section 114           Language of Notices, Etc.

 

Any request, demand, authorization, direction, notice, consent or waiver required or permitted under this Indenture shall be in the English language, except that any published notice may be in an official language of the country of publication.

 

Section 115           No Personal Liability

 

THE AMENDED AND RESTATED DECLARATION OF TRUST ESTABLISHING SELECT INCOME REIT, DATED MARCH 9, 2012, AS AMENDED, AS FILED WITH THE STATE DEPARTMENT OF ASSESSMENTS AND TAXATION OF MARYLAND, PROVIDES THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF SELECT INCOME REIT SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, SELECT INCOME REIT. ALL PERSONS DEALING WITH SELECT INCOME REIT IN ANY WAY SHALL LOOK ONLY TO THE ASSETS OF SELECT INCOME REIT FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

 

ARTICLE TWO

 

SECURITY FORMS

 

Section 201           Forms Generally

 

The Securities of each series shall be in substantially the forms set forth in Exhibit A hereto or in such other form (including temporary or permanent global form) as shall be established by or pursuant to a Board Resolution or in one or more Officer’s Certificates or indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depositary therefor or as may, consistently herewith, be determined by the officers executing such Securities

 

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as evidenced by their execution thereof. If the form of Securities of any series is established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 303 for the authentication and delivery of such Securities (or any such temporary global Security).

 

The definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities.

 

Section 202           Form of Legend for Global Securities

 

Unless otherwise specified as contemplated by Section 301 for the Securities evidenced thereby, every Global Security authenticated and delivered 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 A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO SELECT INCOME REIT OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE 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 203           Form of Trustee’s Certificate of Authentication

 

The Trustee’s certificates of authentication shall be in substantially the following form:

 

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

 

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As Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Authorized Signatory
    

 

Section 204           Securities in Global Form.

 

If Securities of or within a series are issuable in global form, as specified as contemplated by Section 301, then, notwithstanding clause (i) of Section 301 and the provisions of Section 302, any such Security shall represent such of the Outstanding Securities of such series as shall be specified therein and may provide that it shall represent the aggregate amount of Outstanding Securities from time to time endorsed thereon and that the aggregate amount of Outstanding Securities represented thereby may from time to time be reduced to reflect exchanges.  Any endorsement of a Security in global form to reflect the amount, or any increase or decrease in the amount, of Outstanding Securities represented thereby shall be made by the Trustee in such manner and upon instructions given by such Person or Persons as shall be specified therein or in the Company Order to be delivered to the Trustee pursuant to Section 303 or Section 304.  Subject to the provisions of Section 303 and, if applicable, Section 304, the Trustee shall deliver and redeliver any Security in permanent global form in the manner and upon instructions given by the Person or Persons specified therein or in the applicable Company Order.  If a Company Order pursuant to Section 303 or Section 304 has been, or simultaneously is, delivered, any instructions by the Company with respect to endorsement or delivery or redelivery of a Security in global form shall be in writing but need not comply with Section 102 and need not be accompanied by an Opinion of Counsel.

 

The provisions of the last sentence of Section 303 shall apply to any Security represented by a Security in global form if such Security was never issued and sold by the Company and the Company delivers to the Trustee the Security in global from together with written instructions (which need not comply with Section 102 and need not be accompanied by an Opinion of Counsel) with regard to the reduction in the principal amount of Securities represented thereby, together with the written statement contemplated by the last sentence of Section 303.

 

Notwithstanding the provisions of Section 307, unless otherwise specified as contemplated by Section 301, payment of principal of and any premium and interest on any Security in permanent global form shall be made to the Person or Persons specified therein.

 

ARTICLE THREE

 

THE SECURITIES

 

Section 301           Amount Unlimited; Issuable in Series

 

The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.

 

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The Securities may be issued in one or more series.  There shall be either (i) established in or pursuant to a Board Resolution and, subject to Section 303, set forth, or determined in the manner provided, in an Officer’s Certificate, or (ii) established in one or more Officer’s Certificates or indentures supplemental hereto, prior to the issuance of Securities of any series,

 

(a)           the title of the Securities of the series (which shall distinguish the Securities of the series from Securities of any other series, except to the extent that additional Securities of an existing series are being issued);

 

(b)           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 304, 305, 306, 906 or 1107 and except for any Securities which, pursuant to Section 303, are deemed never to have been authenticated and delivered hereunder);

 

(c)           the Person to whom any interest on a Security of the series shall be payable, if other than the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest and the extent to which, or the manner in which, any interest payable on a temporary global Security on an Interest Payment Date will be paid if other than in the manner provided in Section 304;

 

(d)           the date or dates on which the principal of any Securities of the series is payable;

 

(e)           the rate or rates at which the Securities of the series shall bear interest, if any, or the method by which such rate shall be determined, the date or dates from which such interest shall accrue, or the method by which such date or dates shall be determined, the Interest Payment Dates on which any such interest shall be payable and the Regular Record Date for any such interest payable on any Interest Payment Date;

 

(f)            the place or places where the principal of and any premium and interest on any Securities of the series shall be payable;

 

(g)           the period or periods within which, the price or prices at which and the terms and conditions upon which any Securities of the series may be redeemed, in whole or in part, at the option of the Company and, if other than by a Board Resolution, the manner in which any election by the Company to redeem the Securities shall be evidenced;

 

(h)           the obligation, if any, of the Company to redeem or purchase any Securities of the series pursuant to any sinking fund or analogous provisions or at the option of the Holder thereof and the period or periods within which, the price or prices at which and the terms and conditions upon which any Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;

 

(i)            if other than minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof, the denominations in which Securities of such series shall be issuable;

 

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(j)            whether the amount of payments of principal, premium, if any, or interest, if any, on the Securities of the series may be determined with reference to an index, formula or other method (which index, formula or method may be based, without limitation, on one or more interest rate, currency, commodity, equity or other indices), and the manner in which such amounts shall be determined;

 

(k)           the currency or currencies, including composite currencies, in which payment of the principal of and any premium and interest on any Securities of the series shall be payable, if other than the currency of the United States of America, and the manner of determining the equivalent thereof in the currency of the United States of America for purposes of the definition of “Outstanding” in Section 101;

 

(l)            if the principal of and any premium and interest on the Securities of the series are to be payable, at the election of the Company or a Holder thereof, in a currency or currencies, including composite currencies, other than that or those in which the Securities are stated to be payable, the currency or currencies in which payment of the principal of and any premium and interest on Securities of such series as to which such election is made shall be payable, the periods within which and the terms and conditions upon which such election is to be made and the amount so payable (or the manner in which such amount shall be determined);

 

(m)          if other than the principal amount thereof, the portion of the principal amount of any Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 502;

 

(n)           if the principal amount payable at the Stated Maturity of any Securities of the series will not be determinable as of any one or more dates prior to the Stated Maturity, the amount which shall be deemed to be the principal amount of such Securities as of any such date for any purpose thereunder or hereunder, including the principal amount thereof which shall be due and payable upon any Maturity other than the Stated Maturity or which shall be deemed to be Outstanding as of any date prior to the Stated Maturity (or, in any such case, the manner in which such amount deemed to be the principal amount shall be determined);

 

(o)           any addition to or change in the provisions related to satisfaction and discharge in Article Four or defeasance in Article Thirteen, or the inapplicability of such Articles or provisions therein to the Securities of such series;

 

(p)           if applicable, that any Securities of the series shall be issuable in whole or in part in the form of one or more temporary or permanent Global Securities and, in such case, the respective Depositaries for such Global Securities, the form of any legend or legends which shall be borne by any such Global Security in addition to or in lieu of that set forth in Section 202 and any circumstances in addition to or in lieu of those set forth in clause (a) of the last paragraph of Section 305 in which any such Global Security may be exchanged in whole or in part for Securities registered, and any transfer of such Global Security in whole or in part may be registered, in the name or names of Persons other than the Depositary for such Global Security or a nominee thereof;

 

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(q)           any addition to 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 502;

 

(r)            any addition to or change in the provisions set forth in Article Ten which applies to Securities of the series;

 

(s)            if applicable, that the Securities of the series are convertible into or exchangeable for any securities of any Person (including the Company), the period or periods within which, the price or prices at which and the terms and conditions upon which, and the limitations and restrictions, if any, upon which, any Securities of the series shall be so convertible or exchangeable, and any additions or changes to this Indenture, if any, to permit or facilitate such conversion or exchange;

 

(t)            the place or places where any Securities of the series may be surrendered for registration of transfer, where Securities of the series may be surrendered for exchange, where Securities of the series that are convertible or exchangeable may be surrendered for conversion or exchange, as applicable, and where notices and demands to or upon the Company in respect of the Securities of the series and this Indenture may be served;

 

(u)           the form of the Securities of such series;

 

(v)           whether the Securities of such series are to be issued as Original Issue Discount Securities and the amount of discount with which such Securities may be issued;

 

(w)          the guarantors, if any, of the Securities of such series, and the form and terms of the guarantees (including provisions relating to seniority or subordination of such guarantees and the release of the guarantors), if any, of any payment or other obligations on such Securities and any additions or changes to this Indenture to permit or facilitate guarantees of such Securities;

 

(x)           whether the Securities of such series are subject to subordination and the terms of such subordination;

 

(y)           if any payment or other obligations on Securities of such series are to be secured by any property, the nature of such security and provisions related thereto;

 

(z)           any restriction or condition on the transferability of the Securities of such series;

 

(aa)         any addition or change in the provisions related to compensation and reimbursement of the Trustee which applies to Securities of such series;

 

(bb)         provisions, if any, granting special rights to Holders of Securities of such series upon the occurrence of specified events;

 

(cc)         any addition or change in the provisions related to supplemental indentures set forth in Sections 901, 902 and 904 which applies to Securities of such series; and

 

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(dd)         any other terms of the Securities of such series (which terms shall not be inconsistent with the provisions of the TIA, but may modify, amend, supplement or delete any of the terms of this Indenture with respect to such series).

 

All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section 303) set forth, or determined in the manner provided, in the Officer’s Certificate referred to above or in any such indenture supplemental hereto.

 

If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officer’s Certificate setting forth the terms of the series.

 

Section 302           Denominations

 

Unless otherwise provided as contemplated by Section 301 with respect to the Securities of any series, any Securities of such series, other than Securities issued in global form (which may be of any denomination), shall be issuable in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.

 

Section 303           Execution, Authentication, Delivery and Dating

 

The Securities shall be executed on behalf of the Company by its Chairman of the Board, its Vice Chairman of the Board, its President, one of its Vice Presidents or its Treasurer.  The signature of any of these officers on the Securities may be manual or facsimile.

 

Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.

 

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities.  If the forms or terms of the Securities of the series have been established by or pursuant to one or more Board Resolutions as permitted by Sections 201 and 301, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating,

 

(a)           if the forms of such Securities have been established by or pursuant to Board Resolution as permitted by Section 201, that such forms have been established in conformity with the provisions of this Indenture;

 

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(b)           if the terms of such Securities have been established by or pursuant to Board Resolution as permitted by Section 301, that such terms have been established in conformity with the provisions of this Indenture; and

 

(c)           that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

 

If such forms or terms have been so established, the Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee.

 

Notwithstanding the provisions of Section 301 and of the two preceding paragraphs, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver the Officer’s Certificate otherwise required pursuant to Section 301 or the Company Order and Opinion of Counsel otherwise required pursuant to such preceding paragraphs at or prior to the authentication of each Security of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued.

 

Each Security shall be dated the date of its authentication.

 

No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder.  Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 309, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture.

 

Section 304           Temporary Securities

 

Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities.

 

If temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay.  After the preparation of

 

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definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder.  Upon surrender for cancellation of any one or more temporary Securities of any series, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor one or more definitive Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount.  Until so exchanged, the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series and tenor.

 

Section 305           Registration, Registration of Transfer and Exchange

 

The Company shall cause to be kept at an office or agency to be maintained by the Company in accordance with Section 1002 a register (being the combined register of the Security Registrar and all transfer agents designated pursuant to Section 1002 for the purpose of registration of transfer of Securities and sometimes collectively referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and the registration of transfers of Securities.  The Trustee is hereby appointed “Security Registrar” for the purpose of registering Securities and transfers of Securities as herein provided.

 

Upon surrender for registration of transfer of any Security of a series at the office or agency of the Company maintained pursuant to Section 1002 for such purpose in a Place of Payment for that series, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount.

 

At the option of the Holder, Securities of any series may be exchanged for other Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency.  Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive.

 

All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.

 

Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee or any transfer agent) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or the attorney of such Holder duly authorized in writing.

 

No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or

 

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exchange of Securities, other than exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.

 

If the Securities of any series (or of any series and specified tenor) are to be redeemed in part, the Company shall not be required (A) to issue, register the transfer of or exchange any Securities of that series (or of that series and specified tenor, as the case may be) during a period beginning at the opening of business 15 days before any selection of Securities of that series to be redeemed and ending at the close of business on the day of the mailing of the relevant notice of redemption, or (B) to register the transfer of or exchange any Security so selected for redemption, in whole or in part, except the unredeemed portion of any Security being redeemed in part.

 

The provisions of clauses (a), (b) and (c) below shall apply only to Global Securities:

 

(a)           Notwithstanding any other provision in this Indenture, no Global Security may be exchanged in whole or in part for Securities registered, and no transfer of a Global Security in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Security or a nominee thereof unless (i) such Depositary (A) has notified the Company that it is unwilling or unable to continue as Depositary for such Global Security or (B) has ceased to be a clearing agency registered under the Exchange Act and, in the case of each of (A) and (B), a successor Depositary is not appointed by the Company within 90 days after such notice is received by the Company or the Company becomes aware of such cessation, respectively, (ii) there shall have occurred and be continuing an Event of Default with respect to such Global Security and the Security Registrar has received a written request from an owner of a beneficial interest in such Global Security to receive registered securities or (iii) there shall exist such circumstances, if any, in addition to or in lieu of the foregoing as have been specified for this purpose as contemplated by Section 301.

 

(b)           Subject to clause (a) above, any exchange of a Global Security for other Securities may be made in whole or in part, and all Securities issued in exchange for a Global Security or any portion thereof shall be registered in such names as the Depositary for such Global Security shall direct.

 

(c)           Every Security authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant to this Section, Section 304, 306, 906 or 1107 or otherwise, shall be authenticated and delivered in the form of, and shall be, a Global Security, unless such Security is registered in the name of a Person other than the Depositary for such Global Security or a nominee thereof.

 

Section 306           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 as

 

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may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and the Trustee shall authenticate and deliver, 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.

 

Notwithstanding the provisions of the previous two paragraphs, 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.

 

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 307           Payment of Interest; Interest Rights Preserved

 

Except as otherwise provided as contemplated by Section 301 with respect to any series of Securities, interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest.

 

Any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in clause (a) or (b) below:

 

(a)           The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner.  The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in

 

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trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided.  Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment.  The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be given to each Holder of Securities of such series in the manner set forth in Section 106, not less than 10 days prior to such Special Record Date.  Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (b).

 

(b)           The Company may make payment of any Defaulted Interest on the Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such manner of payment shall be deemed practicable by the Trustee.

 

Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.

 

Section 308           Persons Deemed Owners

 

Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of and any premium and (subject to Section 307) any interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

 

Section 309           Cancellation

 

All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it.  The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold, and all Securities so delivered shall be promptly cancelled by the Trustee.  No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section,

 

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except as expressly permitted by this Indenture.  All cancelled Securities held by the Trustee shall be disposed of as directed by a Company Order or, in the absence of such a Company Order, in the Trustee’s customary manner, which manner shall be communicated in writing to the Company.

 

Section 310           Computation of Interest

 

Except as otherwise specified as contemplated by Section 301 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months.

 

Section 311           CUSIP Numbers.

 

The Company in issuing the Securities may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use such “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 identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will notify the Trustee of any change “CUSIP” numbers.

 

ARTICLE FOUR

 

SATISFACTION AND DISCHARGE

 

Section 401           Satisfaction and Discharge of Indenture

 

This Indenture shall upon Company Request cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when

 

(a)           either

 

(i)            all Securities theretofore authenticated and delivered (other than (A) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 306 and (B) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 1003) have been delivered to the Trustee for cancellation; or

 

(ii)           all such Securities not theretofore delivered to the Trustee for cancellation

 

(A)          have become due and payable, or

 

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(B)          will become due and payable at their Stated Maturity within one year, or

 

(C)          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,

 

and the Company, in the case of (A), (B) or (C) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose money in an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal and any premium and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be; provided that with respect to a Redemption Date, if all or a portion of the redemption price is based on or consists of a redemption premium that is required to be calculated based on a treasury rate or other floating or adjustable rate a specified number of days prior to the redemption date, the redemption price deposited shall be sufficient for purposes of this paragraph to the extent that the redemption price so deposited is calculated using an amount equal to such premium computed using such treasury rate or other floating or adjustable rate as of such specified number of days preceding the date of such deposit;

 

(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 607, the obligations of the Trustee to any Authenticating Agent under Section 614 and, if money shall have been deposited with the Trustee pursuant to subclause (ii) of clause (a) of this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003 shall survive such satisfaction and discharge.

 

Section 402           Application of Trust Money

 

Subject to the provisions of the last paragraph of Section 1003, all money deposited with the Trustee pursuant to Section 401 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 any premium and interest for whose payment such money has been deposited with the Trustee.

 

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ARTICLE FIVE

 

REMEDIES

 

Section 501           Events of Default

 

“Event of Default,” wherever used herein with respect to Securities of any series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

 

(a)           default in the payment of the principal of or any premium on any Security of that series at its Maturity; or

 

(b)           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 30 days; or

 

(c)           default in the deposit of any sinking fund payment, when and as due by the terms of a Security of that series and continuance of such default for a period of 30 days; or

 

(d)           default in the performance of, or breach of, any covenant of the Company in this Indenture (other than a covenant a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has been expressly included in this Indenture solely for the benefit of a series of Securities other than that series), and continuance of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least a majority 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

 

(e)           the Company pursuant to or within the meaning of any Bankruptcy Law (i) commences a voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary case, or (iii) consents to the appointment of a Custodian of it or for all or substantially all of its property; or

 

(f)            a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (i) is for relief against the Company in an involuntary case, (ii) appoints a Custodian of the Company or for all or substantially all of its property, or (iii) orders the liquidation of the Company, and the order or decree remains unstayed and in effect for 90 days; or

 

(g)           any other Event of Default provided with respect to Securities of that series.

 

Section 502           Acceleration of Maturity; Rescission and Annulment

 

If an Event of Default (other than an Event of Default specified in Section 501(e) or 501(f)) with respect to Securities of any series at the time Outstanding occurs and is continuing,

 

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then in every such case the Trustee or the Holders of not less than a majority of the principal amount of the Outstanding Securities of that series may declare the principal amount of all the Securities of that series (or, if any Securities of that series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified by the terms thereof) 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 specified amount) shall become immediately due and payable.  If an Event of Default specified in clause (e) or (f) of Section 501 with respect to Securities of any series at the time Outstanding occurs, the principal amount of all the Securities of that series (or, if any Securities of that series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified by the terms thereof) shall automatically, and without any declaration or other action on the part of the Trustee or any Holder, become immediately due and payable.

 

At any time after such a declaration of acceleration with respect to 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 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 if

 

(a)           the Company has paid or deposited with the Trustee a sum sufficient to pay

 

(i)            all overdue interest on all Securities of that series,

 

(ii)           the principal of (and premium, if any, on) any Securities of that series which have become due otherwise than by such declaration of acceleration and any interest thereon at the rate or rates prescribed therefor in such Securities,

 

(iii)          to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Securities, and

 

(iv)          all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and

 

(b)           all Events of Default with respect to Securities of that series, other than the non-payment of the principal of Securities of that series which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513.

 

No such rescission shall affect any subsequent default or impair any right consequent thereon.

 

Section 503           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

 

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(b)           default is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof,

 

the Company will, 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 any such premium (if any) and interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal and premium (if any) and on 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 an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may in its discretion 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 reasonably necessary 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 504           Trustee May File Proofs of Claim

 

In case of any judicial proceeding relative to the Company (or any other obligor upon the Securities), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding.  In particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any 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 607.

 

No provision of this Indenture 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; provided, however, that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and be a member of a creditors’ or other similar committee.

 

Section 505           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

 

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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 506           Application of Money Collected

 

Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or any premium 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 under Section 607;

 

SECOND:  To the payment of the amounts then due and unpaid for principal of and any premium 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 any premium and interest, respectively; and

 

THIRD:  To the Company.

 

Section 507           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 other remedy under this Indenture or any Security of any series, 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 a majority 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 reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request;

 

(d)           the Trustee for 60 days after its receipt of such notice, request and offer of indemnity 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 and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture or any Security of any series to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or

 

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to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture or any Security of any series, except in the manner herein or therein provided and for the equal and ratable benefit of all of such Holders.

 

Section 508           Unconditional Right of Holders to Receive Principal, Premium 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 any premium and (subject to Section 307) interest on such Security on the respective Stated Maturities 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 509           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 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 510           Rights and Remedies Cumulative

 

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

Section 511           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 512           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

 

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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, and

 

(b)           the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.

 

Section 513           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 waive any past default hereunder with respect to such series and its consequences, except a default

 

(a)           in the payment of the principal of or any premium or interest on any Security of such series, or

 

(b)           in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected.

 

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 514           Undertaking for Costs

 

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, a court may require any party litigant in such suit to file an undertaking to pay the costs of such suit, and may assess costs against any such party litigant, in the manner and to the extent provided in the Trust Indenture Act; provided that neither this Section nor the Trust Indenture Act shall be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Company.

 

Section 515           Waiver of Usury, Stay or Extension Laws

 

The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any usury, stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

 

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ARTICLE SIX

 

THE TRUSTEE

 

Section 601           Certain Duties and Responsibilities

 

The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act.  Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.  Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.

 

Section 602           Notice of Defaults

 

If a default occurs hereunder with respect to Securities of any series, the Trustee shall give the Holders of Securities of such series notice of such default as and to the extent provided by the Trust Indenture Act; provided, however, that in the case of any default of the character specified in clause (d) of Section 501 with respect to Securities of such series, no such notice to Holders shall be given until at least 30 days after the occurrence thereof.  For the purpose of this Section, the term “default” means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such series.

 

Section 603           Certain Rights of Trustee

 

Subject to the provisions of Section 601:

 

(a)           the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

 

(b)           any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order, and any resolution of the Board shall be sufficiently evidenced by a Board Resolution;

 

(c)           whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer’s Certificate;

 

(d)           the Trustee may consult with counsel of its own selection and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

 

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(e)           the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

 

(f)            the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney;

 

(g)           the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder;

 

(h)           the Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture;

 

(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 actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture; and

 

(j)            the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and the Person employed to act hereunder.

 

Section 604           Not Responsible for Recitals or Issuance of Securities

 

The recitals contained herein and in the Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Company, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness.  The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities.  Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of Securities or the proceeds thereof.

 

Section 605           May Hold Securities

 

The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal with the

 

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Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent.

 

Section 606           Money Held in Trust

 

Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law.  The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company.

 

Section 607           Compensation and Reimbursement

 

The Company agrees

 

(1)           to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

 

(2)           except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and

 

(3)           to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder.

 

Section 608           Conflicting Interests

 

If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture.  To the extent permitted by such Act, the Trustee shall not be deemed to have a conflicting interest by virtue of being a trustee under this Indenture with respect to Securities of more than one series [or a trustee under — list here any prior indentures between the Company and the Trustee that have not been satisfied and discharged and that may be excluded by the proviso to Section 310(b)(1) of the Trust Indenture Act].

 

Section 609           Corporate Trustee Required; Eligibility

 

There shall at all times be one (and only one) Trustee hereunder with respect to the Securities of each series, which may be Trustee hereunder for Securities of one or more other series.  Each Trustee shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such, and has a combined capital and surplus of at least $50,000,000.  If any such Person publishes reports of condition at least annually, pursuant to law or to the requirements of its

 

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supervising or examining authority, then for the purposes of this Section and to the extent permitted by the Trust Indenture Act, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.  If at any time the Trustee with respect to the Securities of any series shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

 

Section 610                                Resignation and Removal; Appointment of Successor

 

No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 611.

 

The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company.  If the instrument of acceptance by a successor Trustee required by Section 611 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

 

The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company.

 

If at any time:

 

(1)                                 the Trustee shall fail to comply with Section 608 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or

 

(2)                                 the Trustee shall cease to be eligible under Section 609 and shall fail to resign after written request therefor by the Company or by any such Holder, or

 

(3)                                 the Trustee shall become incapable of acting or shall be adjudged bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,

 

then, in any such case, (A) the Company by a Board Resolution may remove the Trustee with respect to all Securities, or (B) subject to Section 514, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of such Holder and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees.

 

If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such

 

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successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 611.  If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 611, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company.  If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders of Securities of such series and accepted appointment in the manner required by Section 611, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of such Holder and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

 

The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of such series in the manner provided in Section 106.  Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office.

 

Section 611                                Acceptance of Appointment by Successor

 

In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.

 

In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (a) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (b) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring

 

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Trustee, and (c) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.

 

Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in the first or second preceding paragraph, as the case may be.

 

No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article.

 

Section 612                                Merger, Conversion, Consolidation or Succession to Business

 

Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto.  In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.

 

Section 613                                Preferential Collection of Claims Against Company

 

If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor).  For purposes of Section 311(b)(4) and (6) of the Trust Indenture Act, the following terms shall mean:

 

(a)                                 “cash transaction” means any transaction in which full payment for goods or securities sold is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand; and

 

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(b)                                 “self-liquidating paper” means any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred by the Company for the purpose of financing the purchase, processing, manufacturing, shipment, storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of, or a lien upon, the goods, wares or merchandise or the receivables or proceeds arising from the sale of the goods, wares or merchandise previously constituting the security, provided the security is received by the Trustee simultaneously with the creation of the creditor relationship with the Company arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation.

 

Section 614                                Appointment of Authenticating Agent

 

The Trustee may appoint an Authenticating Agent or Agents with respect to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon original issue and upon exchange, registration of transfer or partial redemption thereof or pursuant to Section 306, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder.  Any such appointment shall be evidenced by an instrument in writing signed by a Responsible Officer of the Trustee, and a copy of such instrument shall be promptly furnished to the Company.  Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent.  Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority.  If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.  If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.

 

Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.

 

An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company.  The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the

 

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Company.  Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give notice of such appointment in the manner provided in Section 106 to all Holders of Securities of the series with respect to which such Authenticating Agent will serve.  Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent.  No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.

 

The Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section, and the Trustee shall be entitled to be reimbursed for such payments, subject to the provisions of Section 607.

 

If an appointment with respect to one or more series is made pursuant to this Section, the Securities of such series may have endorsed thereon, in addition to the Trustee’s certificate of authentication, an alternative certificate of authentication in the following form:

 

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

 

	
 
    	
 
    
	
 
    	
As Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
As Authenticating Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Authorized Signatory
    

 

If all of the Securities of a series may not be originally issued at one time, and if the Trustee does not have an office capable of authenticating Securities upon original issuance located in a Place of Payment where the Company wishes to have Securities of such series authenticated upon original issuance, the Trustee, if so requested by the Company in writing (which writing need not comply with Section 102 and need not be accompanied by an Opinion of Counsel), shall appoint in accordance with this Section an Authenticating Agent having an office in a Place of Payment designated by the Company with respect to such series of Securities.

 

Section 615                                Rules by Trustee

 

The Trustee may make reasonable rules for any Act of Holders or a meeting of Holders of one or more series of Securities.

 

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ARTICLE SEVEN

 

HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY

 

Section 701                                Company to Furnish Trustee Names and Addresses of Holders

 

The Company will furnish or cause to be furnished to the Trustee

 

(a)                                 semi-annually, not later than 15 days after each Regular Record Date or in the case of any series of Securities on which semi-annual interest is not payable, not more than 15 days after such semi-annual dates specified by the Trustee, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Securities of each series as of the Regular Record Date or such semi-annual date, as the case may be, and

 

(b)                                 at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished;

 

excluding from any such list names and addresses received by the Trustee in its capacity as Security Registrar.

 

Section 702                                Preservation of Information; Communications to Holders

 

The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 701 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar.  The Trustee may destroy any list furnished to it as provided in Section 701 upon receipt of a new list so furnished.

 

The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act.

 

Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act.

 

Section 703                                Reports by Trustee

 

The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto.

 

A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which any Securities are listed, with the Commission and with the Company.  The Company will notify the Trustee when any Securities are listed on or delisted from any stock exchange.

 

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Section 704                                Reports by Company

 

The Company shall file with the Trustee and the Commission, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto; provided that any such information, documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within 15 days after the same is so required to be filed with the Commission.

 

ARTICLE EIGHT

 

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

 

Section 801                                Company May Consolidate, Etc., Only on Certain Terms

 

The Company shall not consolidate with or merge into any other Person or convey, transfer or lease all or substantially all of its properties and assets to any Person (other than a direct or indirect wholly owned subsidiary of the Company), and the Company shall not permit any Person (other than a direct or indirect wholly owned subsidiary of the Company) to consolidate with or merge into the Company, unless:

 

(a)                                 The Company is the surviving corporation (as defined herein) or, in case the Company shall consolidate with or merge into another Person or convey, transfer or lease all or substantially all of its properties and assets to any Person, the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, all or substantially all of the properties and assets of the Company shall be a corporation, partnership or trust organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of and any premium and interest on all the Securities and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed;

 

(b)                                 immediately after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Company or any Subsidiary as a result of such transaction as having been incurred by the Company or such Subsidiary at the time of such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing; and

 

(c)                                  the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.

 

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Section 802                                Successor Substituted

 

Upon any consolidation of the Company with, or merger of the Company into, any other Person or any conveyance, transfer or lease all or substantially all of the properties and assets of the Company in accordance with Section 801, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities.

 

ARTICLE NINE

 

SUPPLEMENTAL INDENTURES

 

Section 901                                Supplemental Indentures Without Consent of Holders

 

Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

 

(a)                                 to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company herein and in the Securities; or

 

(b)                                 to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company; or

 

(c)                                  to add any additional Events of Default for the benefit of the Holders of all or any series of Securities (and if such additional Events of Default are to be for the benefit of less than all series of Securities, stating that such additional Events of Default are expressly being included solely for the benefit of such series); or

 

(d)                                 to add to or change any of the provisions of this Indenture to such extent 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, or to permit or facilitate the issuance of Securities in uncertificated form; or

 

(e)                                  to add to, change or eliminate any of the provisions of this Indenture in respect of one or more series of Securities, provided that any such addition, change or elimination (i) shall neither (A) apply to any Security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (B) modify the rights of the Holder of any such Security with respect to such provision or (ii) shall become effective only when there is no such Security Outstanding; or

 

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(f)                                   to add guarantees of or to secure all or any series of the Securities; or

 

(g)                                  to establish the forms or terms of Securities of any series as permitted by Sections 201 and 301; or

 

(h)                                 to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 611; or

 

(i)                                     to cure any ambiguity, to correct or supplement any provision contained herein or in any indenture supplemental hereto which may be defective or inconsistent with any other provision contained herein or in any supplemental indenture or to conform the terms hereof, as amended and supplemented, that are applicable to the Securities of any series to the description of the terms of such Securities in the offering memorandum, prospectus supplement or other offering document applicable to such Securities at the time of initial sale thereof; or

 

(j)                                    to supplement any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the defeasance (whether legal or covenant defeasance) or satisfaction and discharge of any series of Securities; provided that any such action shall not adversely affect the interests of the Holders of Securities of such series or any other series of Securities in any material respect; or

 

(k)                                 to prohibit the authentication and delivery of additional series of Securities; or

 

(l)                                     to add to or change or eliminate any provision of this Indenture as shall be necessary or desirable in accordance with any amendments to the Trust Indenture Act;

 

(m)                             to comply with the rules of any applicable Depositary; or

 

(n)                                 to make any other provisions with respect to matters or questions arising under this Indenture, provided that such action pursuant to this clause (n) shall not adversely affect the interests of the Holders of Securities of any series in any material respect.

 

Section 902                                Supplemental Indentures With Consent of Holders

 

With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities of each series affected by such supplemental indenture, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby,

 

(a)                                 change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of

 

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interest thereon or any premium payable upon the redemption thereof, or reduce the amount of the principal of an Original Issue Discount Security or any other Security which would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502, or change any Place of Payment where, or the coin or currency in which, any Security or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or

 

(b)                                 reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or

 

(c)                                  modify any of the provisions of this Section, Section 513 or Section 1006, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby; provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to “the Trustee” and concomitant changes in this Section and Section 1006, or the deletion of this proviso, in accordance with the requirements of Section 611 and clause (h) of Section 901.

 

A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.

 

It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

 

Section 903                                Execution of Supplemental Indentures

 

In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture.  The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

 

Section 904                                Effect of Supplemental Indentures

 

Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

 

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Section 905                                Conformity with Trust Indenture Act

 

Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act.

 

Section 906                                Reference in Securities to Supplemental Indentures

 

Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture.  If the Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series.

 

ARTICLE TEN

 

COVENANTS

 

Section 1001                         Payment of Principal, Premium and Interest

 

The Company covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the principal of and any premium and interest on the Securities of that series in accordance with the terms of the Securities and this Indenture.

 

Section 1002                         Maintenance of Office or Agency

 

The Company will maintain in each Place of Payment for any series of Securities an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that 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 that series and this Indenture may be served.  The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency.  If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, 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.

 

The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes 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 obligation to maintain an office or agency in each Place of Payment 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 location of any such other office or agency.

 

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Section 1003                         Money for Securities Payments to Be Held in Trust

 

If the Company shall at any time act as its own Paying Agent with respect to any series of Securities, it will, on or before each due date of the principal of or any premium or interest on any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal and any premium and interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act.

 

Whenever the Company shall have one or more Paying Agents for any series of Securities, it will, prior to each due date of the principal of or any premium or interest on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay the principal and any premium or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act.

 

The Company will cause each Paying Agent for any series of Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will (1) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent and (2) during the continuance of any default by the Company (or any other obligor upon the Securities of that series) in the making of any payment in respect of the Securities of that series, upon the written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent for payment in respect of the Securities of that series.

 

The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.

 

Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of or any premium or interest on any Security of any series and remaining unclaimed for two years after such principal, premium or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in an Authorized Newspaper in each Place of Payment, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company.

 

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Section 1004                         Statement by Officers as to Default

 

The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officer’s Certificate, stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge.

 

Section 1005                         Existence

 

Subject to Article Eight, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises; provided, however, that the Company shall not be required to preserve any such right or franchise if the Board shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company.

 

Section 1006                         Waiver of Certain Covenants

 

Except as otherwise specified as contemplated by Section 301 for Securities of such series, the Company may, with respect to the Securities of any series, omit in any particular instance to comply with any term, provision or condition set forth in any covenant provided pursuant to clause (r) of Section 301 or clause (b) or (h) of Section 901 for the benefit of the Holders of such series or in Section 1005, if before the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Securities of such series shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect.

 

ARTICLE ELEVEN

 

REDEMPTION OF SECURITIES

 

Section 1101                         Applicability of Article

 

Securities of any series which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 301 for such Securities) in accordance with this Article.

 

Section 1102                         Election to Redeem; Notice to Trustee

 

The election of the Company to redeem any Securities shall be evidenced by a Board Resolution or in another manner specified as contemplated by Section 301 for such Securities.  In case of any redemption at the election of the Company of less than all the Securities of any series (including any such redemption affecting only a single Security), the Company shall, at

 

47

 

least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount of Securities of such series to be redeemed and, if applicable, of the tenor of the Securities to be redeemed (unless all of the Securities of a specified tenor are to be redeemed).  In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officer’s Certificate evidencing compliance with such restriction.

 

Section 1103                         Selection by Trustee of Securities to Be Redeemed

 

If less than all the Securities of any series are to be redeemed (unless all the Securities of such series and of a specified tenor are to be redeemed or unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by such method as the Trustee shall deem appropriate and which may provide for the selection for redemption of a portion of the principal amount of any Security of such series, provided that the unredeemed portion of the principal amount of any Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security.  If less than all the Securities of such series and of a specified tenor are to be redeemed (unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 60 days (subject to Section 1104) prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series and specified tenor not previously called for redemption in accordance with the preceding sentence.

 

The Trustee shall promptly notify the Company in writing of the Securities selected for redemption as aforesaid and, in case of any Securities selected for partial redemption as aforesaid, the principal amount thereof to be redeemed.

 

The provisions of the two preceding paragraphs shall not apply with respect to any redemption affecting only a single Security, whether such Security is to be redeemed in whole or in part.  In the case of any such redemption in part, the unredeemed portion of the principal amount of the Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security.

 

For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed.

 

Section 1104                         Notice of Redemption

 

Notice of redemption shall be given in the manner provided in Section 106 to the Holders of Securities to be redeemed not less than 30 nor more than 60 days prior to the Redemption Date, except that any notice of redemption may be given more than 60 days prior to a Redemption Date if the notice is issued in connection with a Defeasance of Securities pursuant to

 

48

 

Article Thirteen hereof or a satisfaction and discharge of this Indenture pursuant to Article Four hereof.  In connection with any redemption of Securities, any such redemption may, at the Company’s discretion, be subject to satisfaction of one or more conditions precedent. In addition, if such redemption or notice is subject to satisfaction of one or more conditions precedent, such notice may state that, in the Company’s discretion, the Redemption Date may be delayed until such time as any or all such conditions shall be satisfied (or waived by the Company in its sole discretion), or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied (or waived by the Company in its sole discretion) by the Redemption Date, or by the Redemption Date so delayed.

 

All notices of redemption shall state:

 

(a)                                 the Redemption Date,

 

(b)                                 the Redemption Price,

 

(c)                                  if less than all the Outstanding Securities of any series consisting of more than a single Security are to be redeemed, the identification (and, in the case of partial redemption of any such Securities, the principal amounts) of the particular Securities to be redeemed and, if less than all the Outstanding Securities of any series consisting of a single Security are to be redeemed, the principal amount of the particular Security to be redeemed,

 

(d)                                 that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date,

 

(e)                                  the place or places where such Securities are to be surrendered for payment of the Redemption Price,

 

(f)                                   that the redemption is for a sinking fund, if such is the case,

 

(g)                                  the applicable “CUSIP” numbers, if any, and

 

(h)                                 if applicable, that such redemption may be subject to satisfaction of one or more conditions precedent.

 

A notice of redemption published as contemplated by Section 106 need not identify the particular Registered Securities to be redeemed.

 

Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company’s request, by the Trustee in the name and at the expense of the Company.

 

Section 1105                         Deposit of Redemption Price

 

Prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the Redemption Price of, and

 

49

 

(except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date.

 

Section 1106                         Securities Payable on Redemption Date

 

Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest.  Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued interest to the Redemption Date; provided, however, that, unless otherwise specified as contemplated by Section 301, installments of interest whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 307.

 

If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal and any premium shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security.

 

Section 1107                         Securities Redeemed in Part

 

Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or the attorney of such Holder duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series and of like tenor, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered.

 

ARTICLE TWELVE

 

SINKING FUNDS

 

Section 1201                         Applicability of Article

 

The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of any series except as otherwise specified as contemplated by Section 301 for such Securities.

 

The minimum amount of any sinking fund payment provided for by the terms of any Securities is herein referred to as a “mandatory sinking fund payment,” and any payment in excess of such minimum amount provided for by the terms of such Securities is herein referred to as an “optional sinking fund payment.”  If provided for by the terms of any Securities, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 1202.

 

50

 

Each sinking fund payment shall be applied to the redemption of Securities as provided for by the terms of such Securities.

 

Section 1202                         Satisfaction of Sinking Fund Payments with Securities

 

The Company (1) may deliver Outstanding Securities of a series (other than any previously called for redemption) and (2) may apply as a credit Securities of a series which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to any Securities of such series required to be made pursuant to the terms of such Securities as and to the extent provided for by the terms of such Securities; provided that the Securities to be so credited have not been previously so credited.  The Securities to be so credited shall be received and credited for such purpose by the Trustee at the Redemption Price, as specified in the Securities so to be redeemed, for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.

 

Section 1203                         Redemption of Securities for Sinking Fund

 

Not less than 30 days prior to each sinking fund payment date for any Securities, the Company will deliver to the Trustee an Officer’s Certificate specifying the amount of the next ensuing sinking fund payment for such Securities pursuant to the terms of such Securities, 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 Securities pursuant to Section 1202 and will also deliver to the Trustee any Securities to be so delivered.  Not less than 15 days prior to 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 1103 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 1104.  Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 1106 and 1107.

 

ARTICLE THIRTEEN

 

DEFEASANCE AND COVENANT DEFEASANCE

 

Section 1301                         Company’s Option to Effect Defeasance or Covenant Defeasance

 

The Company may, at its option, at any time, elect to have either Section 1302 or Section 1303 applied to any Securities or any series of Securities, as the case may be, upon compliance with the conditions set forth below in this Article.

 

Section 1302                         Defeasance and Discharge

 

Upon the Company’s exercise under Section 1301 hereof of the option to have this Section 1302 applied to any Securities or any series of Securities, as the case may be, the Company shall be deemed to have been discharged from its obligations with respect to such Outstanding Securities on the date the conditions set forth in Section 1304 are satisfied (hereinafter “Defeasance”).  For this purpose, such Defeasance means that the Company shall be

 

51

 

deemed to have paid and discharged the entire indebtedness represented by such Securities and to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following, which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of such Securities to receive, solely from the trust fund described in Section 1304 and as more fully set forth in such Section, payments in respect of the principal of and any premium and interest on such Securities when such payments are due, (b) the Company’s obligations with respect to such Securities under Sections 304, 305, 306, 1002 and 1003, (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and (d) this Article.  Subject to compliance with this Article, the Company may exercise its option under this Section 1302 notwithstanding the prior exercise of its option under Section 1303.

 

Section 1303                         Covenant Defeasance

 

Upon the Company’s exercise of the option to have this Section 1303 applied to any Securities or any series of Securities, as the case may be, (a) the Company shall be released from its obligations with respect to such Securities under Section 801 and any covenants provided pursuant to clause (r) of Section 301, Section 1005, Section 1006 or clause (b) or (h) of Section 901 for the benefit of the Holders of such Securities and (b) the occurrence of any event specified in clause (d) of Section 501 (with respect to any of clause (c) of Section 801 and any such covenants provided pursuant to clause (r) of Section 301, Section 1005, Section 1006 or clause (b) or (h) of Section 901) shall not be deemed to be an Event of Default on and after the date the conditions set forth in Section 1304 are satisfied (hereinafter “Covenant Defeasance”).  For this purpose, such Covenant Defeasance means that, with respect to such Securities, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such Section or Article, whether directly or indirectly by reason of any reference elsewhere herein to any such Section or Article or by reason of any reference in any such Section or Article to any other provision herein or in any other document, but the remainder of this Indenture and such Securities shall be unaffected thereby.

 

Section 1304                         Conditions to Defeasance or Covenant Defeasance

 

The following shall be the conditions to the application of either Section 1302 or Section 1303, as applicable, to any Securities or any series of Securities, as the case may be:

 

(a)                                 The Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee which satisfies the requirements contemplated by Section 609 and agrees to comply with the provisions of this Article applicable to it) 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) money in an amount, or (ii) Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, money in an amount, or (iii) a combination thereof, in each case sufficient to pay and discharge, and which shall be applied by the Trustee (or any such other qualifying trustee) to pay and discharge, the principal of, and any premium (if any) and interest on, such Securities on the respective Stated Maturities or the applicable Redemption Date, in

 

52

 

accordance with the terms of this Indenture and such Securities; provided that with respect to a Redemption Date, if all or a portion of the redemption price is based on or consists of a redemption premium that is required to be calculated based on a treasury rate or other floating or adjustable rate a specified number of days prior to the redemption date, the redemption price deposited shall be sufficient for purposes of the immediately preceding sentence to the extent that the redemption price so deposited is calculated using an amount equal to such premium computed using such treasury rate or other floating or adjustable rate as of such specified number of days preceding the date of such deposit.  As used herein, “Government Obligations” means, with respect to any series of Securities, securities that are (x) direct obligations of the government that issued the currency in which such series is denominated (or, if such series is denominated in euros, the direct obligations of any government that is a member of the European Monetary Union) for the payment of which its full faith and credit is pledged or (y) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of such government the payment of which is unconditionally guaranteed as a full faith and credit obligation by such government, which, in either case, are not callable or redeemable at the option of the issuer thereof and shall also include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any Government Obligation where the relevant government is the United States of America or a specific payment of principal of or interest on any such Government Obligation held by such custodian for the account of the holder of such 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 depository receipt from any amount received by the custodian in respect of the such Government Obligation or the specific payment of principal of or interest on such Government Obligation evidenced by such depository receipt.

 

(b)                                 In the event of an election to have Section 1302 apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee 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 this Indenture, there has been a change in the applicable Federal income tax law, in either case (i) or (ii) to the effect that the Holders of the Outstanding Securities of such series will not recognize 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, in the same manner and at the same times as would be the case if such deposit, Defeasance and discharge had not occurred.

 

(c)                                  In the event of an election to have Section 1303 apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of the Outstanding Securities of such series will not recognize 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 amount, in the same manner and at the same times as would be the case if such deposit and Covenant Defeasance had not occurred.

 

(d)                                 No Event of Default with respect to the Securities of such series shall have occurred and be continuing at the time of such deposit (other than an Event of Default resulting from transactions occurring contemporaneously with the borrowing of funds, or the borrowing of funds, to be applied to such deposit or other indebtedness which is being repaid, repurchased,

 

53

 

redeemed, defeased (whether legal or covenant defeasance) or discharged, and, in each case, the granting of liens in connection therewith).

 

(e)                                  Such Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture or any agreement or instrument governing any other indebtedness which is being repaid, repurchased, redeemed, defeased (whether legal or covenant defeasance) or discharged) to which the Company is a party or by which the Company is bound.

 

(f)                                   The Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent to the Defeasance or the Covenant Defeasance have been satisfied.

 

The Defeasance or Covenant Defeasance will be effective on the day on which all the applicable conditions above have been satisfied. Upon satisfaction of such conditions, the Trustee shall, upon written request, execute proper instrument(s) acknowledging such Defeasance or Covenant Defeasance.

 

Section 1305                         Deposited Money and Government Obligations to Be Held in Trust; Miscellaneous Provisions

 

Subject to the provisions of the last paragraph of Section 1003, all money and Government Obligations (including the proceeds thereof) deposited with the Trustee or other qualifying trustee (solely for purposes of this Section and Section 1306, the Trustee and any such other trustee are referred to collectively, for purposes of this Section 1305, as the “Trustee”) pursuant to Section 1304 in respect of any Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any such Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Securities, of all sums due and to become due thereon in respect of principal and premium (if any) and interest, but such money need not be segregated from other funds except to the extent required by law.

 

The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the Government Obligations deposited pursuant to Section 1304 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of Outstanding Securities.

 

Anything in this Article Thirteen to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or Government Obligations held by it as provided in Section 1304 hereof which, in the opinion or based on a report or certificate of a nationally recognized firm of independent public accountants, investment bank or appraisal firm expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect an equivalent Defeasance or Covenant Defeasance, as the case may be.

 

54

 

Section 1306        Reinstatement

 

If the Trustee or the Paying Agent is unable to apply any money in accordance with Section 1302 or 1303 by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company’s obligations under this Indenture and the Securities of such series shall be revived and reinstated as though no deposit had occurred pursuant to this Article Thirteen until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 1302 or 1303; provided, however, that if the Company makes any payment of principal of (and premium, if any) or interest on any Security following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of the Securities of such series to receive such payment from the money held by the Trustee or the Paying Agent.

 

This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.  In proving the existence of this Indenture it shall not be necessary to produce more than one copy.

 

55

 

In Witness Whereof, the parties hereto have caused this Indenture to be duly executed, all as of the day and year first above written.

 

 

	
 
    	
SELECT INCOME REIT
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/ John C. Popeo
    
	
 
    	
 
    	
Name: John C. Popeo
    
	
 
    	
 
    	
Title: Treasurer and Chief   Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
U.S. BANK NATIONAL   ASSOCIATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/ David W. Doucette
    
	
 
    	
 
    	
Name: David W. Doucette
    
	
 
    	
 
    	
Title: Vice President
    

 

 

EXHIBIT A

 

FORM OF REGISTERED SECURITY

 

[Face of Registered Security]

 

	
No.
    	
$                
    

 

Select Income REIT, a real estate investment trust organized under the laws of Maryland (herein called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to                               , or registered assigns, the principal sum of                              Dollars on                                      [If the Security is to bear interest prior to Maturity, insert — , and to pay interest thereon from                        or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on                  and              in each year, commencing                  , at the rate of        % per annum, until the principal hereof is paid or made available for payment, provided that any principal and premium (if any), and any such installment of interest, which is overdue shall bear interest at the rate of        % per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand.  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the            or            (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date.  Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture].

 

[If the Security is not to bear interest prior to Maturity, insert — The principal of this Security shall not bear interest except in the case of a default in payment of principal upon acceleration, upon redemption or at Stated Maturity and in such case the overdue principal and any overdue premium shall bear interest at the rate of        % per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment.  Interest on any overdue principal or premium (if any) shall be payable on demand.  Any such interest on overdue principal or premium which is not paid on demand shall bear interest at the rate of        % per annum (to the extent that the payment of such interest on interest shall be legally enforceable), from the date of such demand until the amount so demanded is paid or made available for payment.  Interest on any overdue interest shall be payable on demand.]

 

A-1

 

Payment of the principal of (and premium, if any) and any such interest on this Security will be made at the office or agency of the Company maintained for that purpose in            , in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.

 

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

THE AMENDED AND RESTATED DECLARATION OF TRUST ESTABLISHING SELECT INCOME REIT, DATED MARCH 9, 2012, AS AMENDED, AS FILED WITH THE STATE DEPARTMENT OF ASSESSMENTS AND TAXATION OF MARYLAND, PROVIDES THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF SELECT INCOME REIT SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, SELECT INCOME REIT. ALL PERSONS DEALING WITH SELECT INCOME REIT IN ANY WAY SHALL LOOK ONLY TO THE ASSETS OF SELECT INCOME REIT FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

 

 

	
Dated:
    	
Select Income REIT
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Title:
    

 

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

 

 

	
Dated:
    	
 
    

 

U.S. Bank National Association, As Trustee

 

	
By
    	
 
    	
 
    
	
 
    	
Authorized Signatory
    	
 
    

 

A-2

 

[Reverse of Registered Security]

 

This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of                        [, as supplemented] (herein called the “Indenture,” which term shall have the meaning assigned to it in such instrument), between the Company and                         , as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.  This Security is one of the series designated on the face hereof [if applicable, insert — , limited in aggregate principal amount to $      ].

 

[If applicable, insert — The Securities of this series are subject to redemption upon not less than 30 days’ notice by mail or pursuant to such rules and procedures of the Depositary that apply to such notices, [if applicable, insert — (1) on                  in any year commencing with the year           and ending with the year           through operation of the sinking fund for this series at a Redemption Price equal to 100% of the principal amount, and (2)] at any time [if applicable, insert — on or after                  ,     ], as a whole or in part, at the election of the Company, at the following Redemption Prices (expressed as percentages of the principal amount): If redeemed [if applicable, insert — on or before                     ,     %, and if redeemed] during the 12-month period beginning                  of the years indicated,

 

	
Year
    	
 
    	
Redemption Price For Redemption
   Through Operation of the Sinking
   Fund
    	
 
    	
Redemption Price For Redemption
   Otherwise Than Through
   Operation of the Sinking Fund
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

and thereafter at a Redemption Price equal to     % of the principal amount, together in the case of any such redemption [if applicable, insert — (whether through operation of the sinking fund or otherwise)] with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]

 

[If applicable, insert — The Securities of this series are subject to redemption upon not less than 30 days’ notice by mail or pursuant to such rules and procedures of the Depositary that apply to such notices, (1) on                                in any year commencing with the year          and ending with the year          through operation of the sinking fund for this series at the Redemption Prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below, and (2) at any time [if applicable, insert — on or after                               ], as a whole or in part, at the election of the Company, at the Redemption Prices for redemption otherwise than through operation of the sinking fund

 

A-3

 

(expressed as percentages of the principal amount) set forth in the table below: If redeemed during the 12-month period beginning                          of the years indicated,

 

	
Year
    	
 
    	
[Redemption Price For
   Redemption Through Operation of
   the Sinking Fund]
    	
 
    	
Redemption Price [For
   Redemption Otherwise Than
   Through Operation of the
   Sinking Fund]
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

and thereafter at a Redemption Price equal to     % of the principal amount, together in the case of any such redemption (whether through operation of the sinking fund or otherwise) with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]

 

[If applicable, insert — Notwithstanding the foregoing, the Company may not, prior to                      , redeem any Securities of this series as contemplated by [if applicable, insert — Clause (2) of] the preceding paragraph as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of moneys borrowed having an interest cost to the Company (calculated in accordance with generally accepted financial practice) of less than     % per annum.]

 

[If applicable, insert — The sinking fund for this series provides for the redemption on                                  in each year beginning with the year          and ending with the year               of [if applicable, insert — not less than $                      (“mandatory sinking fund”) and not more than] $         aggregate principal amount of Securities of this series.  Securities of this series acquired or redeemed by the Company otherwise than through [if applicable, insert — mandatory] sinking fund payments may be credited against subsequent [if applicable, insert — mandatory] sinking fund payments otherwise required to be made [if applicable, insert — , in the inverse order in which they become due].]

 

[If the Security is subject to redemption of any kind, insert — In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.]

 

[If applicable, insert — The Indenture contains provisions for defeasance at any time of [the entire indebtedness of this Security] [or] [certain restrictive covenants and Events of Default with respect to this Security] [, in each case] upon compliance with certain conditions set forth in the Indenture.]

 

[If the Security is not an Original Issue Discount Security, insert — If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the

 

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Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.]

 

[If the Security is an Original Issue Discount Security, insert — If an Event of Default with respect to Securities of this series shall occur and be continuing, an amount of principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.  Such amount shall be equal to [— insert formula for determining the amount.] Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal, premium and interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the Company’s obligations in respect of the payment of the principal of and premium and interest, if any, on the Securities of this series shall terminate.]

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Securities at the time Outstanding of each series to be affected.  The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 

As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or this Security or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than a majority in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity.  The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.

 

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

 

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As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or the attorney of such Holder duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

The Securities of this series are issuable only in registered form without coupons in denominations of $         and any integral multiple of $          in excess thereof.  As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

 

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

 

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

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