As filed with the U.S. Securities and Exchange
Commission on January 28, 2022
Registration No. 333-261347
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM F-3
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
MDJM LTD
(Exact name of registrant as specified in its charter)
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Cayman Islands
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Not Applicable
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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Suite C-1505, Saidun Center
Xikang Road, Heping District, Tianjin
People’s Republic of China
+ 86-2283520851
(Address and telephone number of Registrant’s
principal executive offices)
Cogency Global Inc.
122 East 42nd Street, 18th Floor
New York, NY 10168
800-221-0102
(Name, address, and telephone number of agent for
service)
With a Copy to:
Ying Li, Esq.
Guillaume de Sampigny, Esq.
Hunter Taubman Fischer &
Li LLC
48 Wall Street, Suite 1100
New York, NY 10005
212-530-2206
Approximate date of commencement of proposed sale
to the public: From time to time after the effective date of the registration statement.
If only securities
being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ¨
If any of the securities
being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box. x
If this Form is
filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is
a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is
a registration statement pursuant to General Instruction I.C. or a post-effective amendment thereto that shall become effective upon filing
with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ¨
If this Form is
a post-effective amendment to a registration statement filed pursuant to General Instruction I.C. filed to register additional securities
or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ¨
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging growth company
x
If an emerging growth
company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not
to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to
Section 7(a)(2)(B) of the Securities Act. ¨
†The term “new or revised financial
accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification
after April 5, 2012.
CALCULATION OF REGISTRATION FEE
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Title
of Each Class of Securities to be Registered
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Amount
to be
Registered(1)(2)
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Proposed
Maximum
Aggregate
Price
Per Share
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Proposed
Maximum
Aggregate
Offering
Price(3)
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Amount of
Registration
Fee(5)
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Ordinary
shares, $0.001 par value(4)
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Preferred
shares(4)
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Debt
securities(4)
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Warrants(4)
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Rights(4)
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Units(4)
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Total
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$
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70,000,000
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$
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6,489.00
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(1)
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The registrant is registering an indeterminate number of securities for offer and sale from time to time at indeterminate prices, which shall have an aggregate offering price not to exceed $70,000,000. In addition, pursuant to Rule 416(a) under the Securities Act of 1933, as amended, this registration statement shall be deemed to cover any additional number of securities that may be issued from time to time to prevent dilution as a result of a distribution, split, combination, or similar transaction. Securities registered hereunder may be sold separately, or together with other securities registered hereunder.
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(2)
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Includes consideration to be received by the registrant, if applicable, for registered securities that are issuable upon exercise, conversion, or exchange of other registered securities.
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(3)
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Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
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(4)
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Pursuant to General Instruction II.C. of Form F-3, the table lists each of the classes of securities being registered and the aggregate proceeds to be raised, but does not specify by each class information as to the amount to be registered, proposed maximum offering price per unit, and proposed maximum aggregate offering price.
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(5)
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Previously paid.
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The Registrant hereby amends this registration
statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment that
specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the
Securities Act, or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
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The information in this prospectus is not complete and may be changed. We may not sell the securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting any offer to buy these securities in any jurisdiction where such offer or sale is not permitted.
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SUBJECT TO COMPLETION, DATED JANUARY
28, 2022
PROSPECTUS
$70,000,000 of
Ordinary Shares
Preferred Shares
Debt Securities
Warrants
Rights
and
Units
MDJM LTD
We may, from time to time, in one or more
offerings, offer and sell up to $70,000,000 of our ordinary shares, par value $0.001 per share (“Ordinary Shares”), preferred
shares, debt securities, warrants, rights, and units, or any combination thereof, together or separately as described in this prospectus.
In this prospectus, references to the term “securities” refers, collectively, to our Ordinary Shares, preferred shares, debt
securities, warrants, rights, and units. The prospectus supplement for each offering of securities will describe in detail the plan of
distribution for that offering. For general information about the distribution of the securities offered, please see “Plan of Distribution”
in this prospectus.
This prospectus provides a general description
of the securities we may offer. We will provide the specific terms of the securities offered in one or more supplements to this prospectus.
We may also authorize one or more free writing
prospectuses to be provided to you in connection with these offerings. You should read this prospectus, any prospectus supplement, and
any free writing prospectus before you invest in any of our securities. The prospectus supplement and any related free writing prospectus
may add, update, or change information contained in this prospectus. You should read carefully this prospectus, the applicable prospectus
supplement, and any related free writing prospectus, as well as the documents incorporated or deemed to be incorporated by reference,
before you invest in any of our securities. This prospectus may not be used to offer or sell any securities unless accompanied by the
applicable prospectus supplement.
Our Ordinary Shares are listed on the Nasdaq Capital Market, or “Nasdaq,”
under the symbol “MDJH.” On January 27, 2022, the last reported sale price of our Ordinary Shares on Nasdaq was $1.83
per share. The aggregate market value of our outstanding Ordinary Shares held by non-affiliates, or public float, as of January 28,
2022, was approximately $4.37 million, which was calculated based on 1,455,216 Ordinary Shares held by non-affiliates and the price of
$3.00 per share, which was the closing price of our Ordinary Shares on Nasdaq on December 1, 2021. Pursuant to General Instruction I.B.5
of Form F-3, in no event will we sell our securities in a public primary offering with a value exceeding more than one-third of our
public float in any 12-month period so long as our public float remains below $75 million. During the 12 calendar months prior to and
including the date of this prospectus, we have not offered or sold any securities pursuant to General Instruction I.B.5 of Form F-3.
Investing in our securities involves a
high degree of risk. Before making an investment decision, please read the information under the heading “Risk Factors” beginning
on page 18 of this prospectus and risk factors set forth in our most recent annual report on Form 20-F, in other reports incorporated
herein by reference, and in an applicable prospectus supplement under the heading “Risk Factors.”
We may offer and sell the securities from time
to time at fixed prices, at market prices, or at negotiated prices, to or through underwriters, to other purchasers, through agents, or
through a combination of these methods. If any underwriters are involved in the sale of any securities with respect to which this prospectus
is being delivered, the names of such underwriters and any applicable commissions or discounts will be set forth in a prospectus supplement.
The offering price of such securities and the net proceeds we expect to receive from such sale will also be set forth in a prospectus
supplement. See “Plan of Distribution” elsewhere in this prospectus for a more complete description of the ways in which the
securities may be sold.
Unless
otherwise stated, as used in this prospectus, the terms “we,” “us,” “our,” “MDJM,”
and the “Company” refer to MDJM LTD, a Cayman Islands company, and the terms “Mingda Tianjin” or the “VIE”
refer to Mingdajiahe (Tianjin) Co., Ltd., a company organized under the laws of the PRC.
We are a holding company incorporated in the
Cayman Islands and not a Chinese operating company. As a holding company with no material operations of our own, we conduct our operations
through our subsidiaries in the United Kingdom and the VIE and its subsidiaries in China. For accounting purposes, we control and receive
the economic benefits of the VIE and its subsidiaries through certain contractual arrangements (the “VIE Agreements”), which
enables us to consolidate the financial results of the VIE and its subsidiaries in our consolidated financial statements under U.S. GAAP,
and the structure involves unique risks to investors. Our securities offered in this offering are securities of our offshore holding
company in the Cayman Islands instead of securities of the VIE or its subsidiaries in China. The VIE structure provides contractual exposure
to foreign investment in China-based companies where Chinese law prohibits direct foreign investment in the operating companies. For
a description of the VIE Agreements, see “Prospectus Summary—Our Corporate Structure—VIE Agreements among WFOE, the
VIE, and the Mingda Tianjin Shareholders.” As a result of our use of the VIE structure, you may never directly hold equity interests
in the VIE or its subsidiaries.
Because we do not directly hold equity interests
in the VIE or its subsidiaries, we are subject to risks and uncertainties of the interpretations and applications of PRC laws and regulations,
including but not limited to, regulatory review of overseas listing of PRC companies through special purpose vehicles and the validity
and enforcement of the VIE Agreements among our wholly owned PRC subsidiary, the VIE, and the shareholders of the VIE. We are also subject
to the risks and uncertainties about any future actions of the PRC government in this regard that could disallow the VIE structure, which
would likely result in a material change in our operations, ant the value of our Ordinary Shares may depreciate significantly or become
worthless. The VIE Agreements have not been tested in a court of law in China as of the date of this prospectus. See “Risk Factors—Risks
Relating to Doing Business in the PRC.”
We are subject to certain legal and operational
risks associated with having the majority of our operations in China. PRC laws and regulations governing our current business operations
are sometimes vague and uncertain, and as a result these risks may result in material changes in the operations of the VIE and its subsidiaries,
significant depreciation or a complete loss of the value of our Ordinary Shares, or a complete hindrance of our ability to offer, or
continue to offer, our securities to investors. Recently, the PRC government adopted a series of regulatory actions and issued statements
to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities
market, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. As
of the date of this prospectus, we, our subsidiaries, and the VIE and its subsidiaries have not been involved in any investigations on
cybersecurity review initiated by any PRC regulatory authority, nor has any of them received any inquiry, notice, or sanction. As confirmed
by our PRC counsel, we will not be subject to cybersecurity review with the Cyberspace Administration of China, or the CAC, when the
Cybersecurity Review Measures become effective on February 15, 2022, since we currently do not have over one million users’ personal
information and do not anticipate that we will be collecting over one million users’ personal information in the foreseeable future,
which we understand might otherwise subject us to the Cybersecurity Review Measures; we are also not subject to network data security
review by the CAC if the the Draft Regulations on the Network Data Security Administration (Draft for Comments) (the “Security
Administration Draft”) are enacted as proposed, since we currently do not have over one million users’ personal information
and do not collect data that affects or may affect national security and we do not anticipate that we will be collecting over one million
users’ personal information or data that affects or may affect national security in the foreseeable future, which we understand
might otherwise subject us to the Security Administration Draft. See “Risk Factors—Risks Relating to Doing Business in the
PRC—Recent greater oversight by the CAC over data security, particularly for companies seeking to list on a foreign exchange, could
adversely impact our business and our offering.” According to our PRC counsel, no relevant laws or regulations in the PRC explicitly
require us to seek approval from the China Securities Regulatory Commission for our overseas listing. As of the date of this prospectus,
we, our subsidiaries, and the VIE and its subsidiaries have not received any inquiry, notice, warning, or sanctions regarding our overseas
listing from the China Securities Regulatory Commission or any other PRC governmental authorities. Since these statements and regulatory
actions are newly published, however, official guidance and related implementation rules have not been issued. It is highly uncertain
what the potential impact such modified or new laws and regulations will have on the daily business operations of our subsidiaries and
VIE, our ability to accept foreign investments, and our listing on an U.S. exchange. The Standing Committee of the National People’s
Congress (the “SCNPC”) or PRC regulatory authorities may in the future promulgate laws, regulations, or implementing rules that
require us, our subsidiaries, or the VIE to obtain regulatory approval from Chinese authorities for listing in the U.S.
In addition, our Ordinary Shares may be prohibited
from trading on a national exchange or over-the-counter under the Holding Foreign Companies Accountable Act, if the Public Company Accounting
Oversight Board (United States) (the “PCAOB”) is unable to inspect our auditor for three consecutive years beginning in 2021.
Our auditor, RBSM LLP, is an independent registered public accounting firm with the PCAOB, and as an auditor of publicly traded companies
in the U.S., is subject to laws in the U.S., pursuant to which the PCAOB conducts regular inspections to assess its compliance with the
applicable professional standards. The PCAOB currently has access to inspect the working papers of our auditor and our auditor is not
subject to the determinations announced by the PCAOB on December 16, 2021. If trading in our Ordinary Shares is prohibited under the
Holding Foreign Companies Accountable Act in the future because the PCAOB determines that it cannot inspect or fully investigate our
auditor at such future time, Nasdaq may determine to delist our Ordinary Shares. On June 22, 2021, the U.S. Senate passed the Accelerating
Holding Foreign Companies Accountable Act, which, if passed by the U.S. House of Representatives and signed into law, would reduce the
period of time for foreign companies to comply with PCAOB audits to two consecutive years instead of three, thus reducing the time period
for triggering the prohibition on trading. See “Risk Factors—Risks Relating to Doing Business in the PRC—Recent joint
statement by the SEC and the PCAOB, proposed rule changes submitted by Nasdaq, and the Holding Foreign Companies Accountable Act all
call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their
auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our continued
listing or future offerings of our securities in the U.S.”
As
of the date of this prospectus, our Company, our subsidiaries, and the VIE have not distributed any earnings or settled any amounts owed
under the VIE Agreements, nor do they have any plan to distribute earnings or settle amounts owed under the VIE Agreements in the foreseeable
future. As of the date of this prospectus, none of our subsidiaries or VIE have made any dividends or distributions to our Company and
our Company has not made any dividends or distributions to our shareholders. We intend to keep any future earnings to finance the expansion
of our business, and we do not anticipate that any cash dividends will be paid in the foreseeable future. If we determine to pay dividends
on any of our Ordinary Shares in the future, as a holding company, we will be dependent on receipt of funds from our Hong Kong subsidiary,
MDJCC Limited, and our UK subsidiary, MD Local Global Limited. MDJCC Limited will rely on payments made from Mingda Tianjin to
our PRC subsidiary, Beijing Mingda Jiahe Technology Development Co., Ltd., pursuant to the VIE Agreements, and the distribution
of such payments to MDJCC Limited; MD Local Global Limited will rely on payments from its subsidiary Mansions Estate Agent Ltd. There
were no cash transfers and transfers of other assets between MDJM LTD, its subsidiaries, and the VIE during the six months ended June
30, 2021 and the fiscal years ended December 31, 2020, 2019, and 2018. See “Prospectus Summary—Asset Transfers Between Our
Company, Our Subsidiaries, and the VIE,” “Prospectus Summary—Selected Condensed Consolidated Financial Schedule,”
and our unaudited condensed consolidated interim financial statements for the six months ended June 30, 2021 and our audited consolidated
financial statements for the fiscal years ended December 31, 2020, 2019, and 2018.
Neither the U.S. Securities and Exchange Commission
nor any state securities commission nor any other regulatory body has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is ,
2022.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement
that we filed with the U.S. Securities and Exchange Commission (the “SEC”) utilizing a “shelf” registration process.
Under this shelf registration process, we may, from time to time, sell the securities described in this prospectus in one or more offerings,
up to a total offering amount of $70,000,000.
This prospectus provides you with a general description
of the securities we may offer. This prospectus and any accompanying prospectus supplement do not contain all of the information included
in the registration statement. We have omitted parts of the registration statement in accordance with the rules and regulations of
the SEC. Statements contained in this prospectus and any accompanying prospectus supplement about the provisions or contents of any agreement
or other documents are not necessarily complete. If the SEC rules and regulations require that an agreement or other document be
filed as an exhibit to the registration statement, please see that agreement or document for a complete description of these matters.
This prospectus may be supplemented by a prospectus supplement that may add, update, or change information contained or incorporated by
reference in this prospectus. You should read both this prospectus and any prospectus supplement or other offering materials together
with additional information described under the headings “Where You Can Find Additional Information” and “Incorporation
of Documents by Reference.”
Each time we sell securities under this shelf
registration, we will provide a prospectus supplement that will contain certain specific information about the terms of that offering,
including a description of any risks related to the offering. A prospectus supplement may also add, update, or change information contained
in this prospectus (including documents incorporated herein by reference). If there is any inconsistency between the information in this
prospectus and the applicable prospectus supplement, you should rely on the information in the prospectus supplement. The registration
statement we filed with the SEC includes exhibits that provide more details on the matters discussed in this prospectus. You should read
this prospectus and the related exhibits filed with the SEC and the accompanying prospectus supplement together with additional information
described under the headings “Incorporation of Documents by Reference” before investing in any of the securities offered.
The information in this prospectus is accurate
as of the date on the front cover. Information incorporated by reference into this prospectus is accurate as of the date of the document
from which the information is incorporated. You should not assume that the information contained in this prospectus is accurate as of
any other date.
You should rely only on the information provided
or incorporated by reference in this prospectus or in the prospectus supplement. We have not authorized anyone to provide you with additional
or different information. This document may only be used where it is legal to sell these securities.
As permitted by SEC rules and regulations,
the registration statement of which this prospectus forms a part includes additional information not contained in this prospectus. You
may read the registration statement and the other reports we file with the SEC at its website or at its offices described below under
“Where You Can Find Additional Information.”
COMMONLY USED DEFINED TERMS
Unless otherwise indicated or the context requires
otherwise, references in this prospectus or in a prospectus supplement to:
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“China” or the “PRC” are to the People’s Republic of China, excluding Taiwan and the special administrative regions of Hong Kong and Macau for the purposes of this prospectus only;
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“Exchange Act” are to the Securities Exchange Act of 1934;
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“fiscal year” are to the period from January 1 to December 31 of the year;
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“Mansions Estate” are to Mansions Estate Agent Ltd, a United Kingdom company, in which MD UK (defined below) holds 51% of the equity interests;
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“MDJH Hong Kong” are to our wholly owned subsidiary, MDJCC Limited, a Hong Kong corporation;
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“MD UK” are to our wholly owned subsidiary, MD Local Global Limited, a United Kingdom company;
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“Mingda Tianjin” or the “VIE” are to Mingdajiahe (Tianjin) Co., Ltd., a company organized under the laws of the PRC, formerly known as Tianjin Mingda Jiahe Real Estate Co. Ltd., which we control via the VIE Agreements among WFOE (defined below), Mingda Tianjin, and the Mingda Tianjin Shareholders (defined below);
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“Mingda Tianjin Shareholders” are to Siping Xu, Yang Li, Xia Ding, Qiang Ma, Liang Zhang, Meina Guo, Zhenyuan Huang, Mengnan Wang, Jie Zhang, and Lei Cai, collectively holding 100% of the equity interests in Mingda Tianjin;
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“Ordinary Shares” are to the ordinary shares of MDJM, par value $0.001 per share;
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“primary real estate market” are to the market for newly constructed and completed residential and commercial real properties, “primary real estate agency services” are to agency services provided for the primary real estate market, “secondary real estate market” are to the market for all residential and commercial real properties other than those for sale in the primary real estate market, and “secondary real estate brokerage services” are to brokerage services provided for the secondary real estate market;
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“RMB” or “Renminbi” are to the legal currency of China;
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“Sarbanes-Oxley Act” are to the Sarbanes-Oxley Act of 2002;
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“Securities Act” are to the Securities Act of 1933, as amended;
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“Securities Exchange Commission,” the “SEC,” “Commission,” or similar terms are to the U.S. Securities Exchange Commission;
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the “PRC operating entities” are to our PRC subsidiary and the VIE and its subsidiaries;
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“UK” are to the United Kingdom;
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“US$,” “U.S. dollars,” or “dollars” are to the legal currency of the United States;
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“U.S. GAAP” are to generally accepted accounting principles in the United States;
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“VIE” are to variable interest entity;
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“we,” “us,” “our,” “MDJM,” and the “Company”
are to MDJM LTD, a Cayman Islands company;
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“WFOE” are to Beijing Mingda Jiahe Technology Development Co., Ltd., a limited liability company organized under the laws of the PRC, which is wholly-owned by MDJH Hong Kong;
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“Xishe” are to Xishe (Tianjin) Business Management Co. Ltd., a limited liability company organized under the laws of the PRC, which was wholly-owned by Mingda Tianjin;
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“Xishe Media” are to Xishe (Tianjin) Culture and Media Co., Ltd., a limited liability company organized under the laws of the PRC, which was wholly owned by Xishe; and
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“Xishe Xianglin” are to Xishe Xianglin (Tianjin) Business Operations & Management Co. Ltd., a limited liability company organized under the laws of the PRC, which was controlled by Xishe, which held 51% equity ownership, and Zhongcai Nongchuang (Beijing) Technology Co., Ltd., an unrelated third party to us, which held 49% equity interest.
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, an applicable prospectus supplement,
and our SEC filings that are incorporated by reference into this prospectus contain or incorporate by reference forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical
fact are “forward-looking statements,” including any projections of earnings, revenue or other financial items, any statements
of the plans, strategies, and objectives of management for future operations, any statements concerning proposed new projects or other
developments, any statements regarding future economic conditions or performance, any statements of management’s beliefs, goals,
strategies, intentions, and objectives, and any statements of assumptions underlying any of the foregoing. The words “believe,”
“anticipate,” “estimate,” “plan,” “expect,” “intend,” “may,” “could,”
“should,” “potential,” “likely,” “projects,” “continue,” “will,”
and “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking
statements contain these identifying words. Forward-looking statements reflect our current views with respect to future events, are based
on assumptions, and are subject to risks and uncertainties. We cannot guarantee that we actually will achieve the plans, intentions, or
expectations expressed in our forward-looking statements and you should not place undue reliance on these statements. There are a number
of important factors that could cause our actual results to differ materially from those indicated or implied by forward-looking statements.
These important factors include those discussed under the heading “Risk Factors” contained or incorporated by reference in
this prospectus and in the applicable prospectus supplement and any free writing prospectus we may authorize for use in connection with
a specific offering. These factors and the other cautionary statements made in this prospectus should be read as being applicable to all
related forward-looking statements whenever they appear in this prospectus. Except as required by law, we undertake no obligation to update
publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.
Prospectus
Summary
Our Corporate Structure
We are a holding company incorporated in the
Cayman Islands and not a Chinese operating company. As a holding company with no material operations of our own, we conduct our operations
through our subsidiaries in the U.K. and the VIE and its subsidiaries in China. The VIE Agreements were entered into by and among WFOE,
the VIE, and the Mingda Tianjin Shareholders, which include the Exclusive Business Cooperation Agreement, the Share Pledge Agreement,
the Exclusive Option Agreement, and Powers of Attorney. For accounting purposes, we control and receive the economic benefits of the
VIE and its subsidiaries through the VIE Agreements, which enables us to consolidate the financial results of the VIE and its subsidiaries
in our consolidated financial statements under U.S. GAAP, and the structure involves unique risks to investors.. Our securities offered
in this offering are securities of our offshore holding company in the Cayman Islands instead of securities of the VIE or its subsidiaries
in China. The VIE structure provides contractual exposure to foreign investment in China-based companies where Chinese law prohibits
direct foreign investment in the operating companies. For a description of the VIE Agreements, see “—VIE Agreements among
WFOE, the VIE, and the Mingda Tianjin Shareholders.” As a result of our use of the VIE structure, you may never directly hold equity
interests in the VIE or its subsidiaries.
The following diagram illustrates our corporate structure, including
our significant subsidiaries and the VIE, as of the date of this prospectus:
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(1)
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Our CEO and chairman of the board of directors,
Mr. Siping Xu, holds 87.37% of the equity interests in our holding company MDJM through MDJH Ltd, which is 100% owned by Mr. Xu.
The minority shareholders and public shareholders hold 1.54% and 11.09% of the equity interests in MDJM, respectfully.
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(2)
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Ocean Tide Wealth Limited, a specialist mortgage broker and a company
incorporated and registered in England and Wales, and Mingzhe Zhang together holds 49% of the equity interests in Mansions Estate;
and
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(3)
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The Minda Tianjin Shareholders collectively hold 100% of the equity
interests in Mingda Tianjin.
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Investors are purchasing securities
of our holding company, MDJM, instead of securities of our operating entities. Our operations are conducted through MD UK, Mansions Estate,
and Mingda Tianjin.
VIE Agreements among WFOE, the VIE, and
the Mingda Tianjin Shareholders
Due to PRC legal restrictions on foreign ownership
in the real estate sector, neither we nor our subsidiaries own any equity interest in Mingda Tianjin. Instead, for accounting purposes,
we control and receive the economic benefits of Mingda Tianjin’s business operation through the VIE Agreements, which enables us
to consolidate the financial results of the VIE and its subsidiaries in our consolidated financial statements under U.S. GAAP. WFOE,
Mingda Tianjin, and the Mingda Tianjin Shareholders entered into the VIE Agreements on April 28, 2018. The VIE Agreements are designed
to provide WFOE with the power, rights, and obligations to Mingda Tianjin as set forth under the VIE Agreements. We have evaluated the
guidance in Financial Accounting Standards Board Accounting Standards Codification 810 and determined that we are regarded as the primary
beneficiary of the VIE for accounting purposes, as a result of our direct ownership in WFOE and the provisions of the VIE Agreements.
Each of the VIE Agreements is described in detail
below:
Exclusive Business Cooperation Agreement
Pursuant to the Exclusive Business Cooperation
Agreement between Mingda Tianjin and WFOE, WFOE provides Mingda Tianjin with technical support, consulting services, intellectual services,
and other management services relating to Mingda Tianjin’s day-to-day business operations and management on an exclusive basis,
utilizing its advantages in technology, human resources, and information. Additionally, Mingda Tianjin granted an irrevocable and exclusive
option to WFOE to purchase from Mingda Tianjin, any or all of Mingda Tianjin’s assets at the lowest purchase price permitted under
PRC laws. Should WFOE exercise such option, the parties will enter into a separate asset transfer or similar agreement. For services rendered
to Mingda Tianjin by WFOE under this agreement, WFOE is entitled to collect a service fee approximately equal to the net income of Mingda
Tianjin after the deduction of the required PRC statutory reserve.
The Exclusive Business Cooperation Agreement will
remain in effect for 10 years unless it is terminated by WFOE with 30-day prior notice. Mingda Tianjin does not have the right to terminate
that agreement unilaterally. WFOE may unilaterally extend the term of that agreement with prior written notice.
The CEO of WFOE, Mr. Siping Xu, is currently
managing Mingda Tianjin pursuant to the terms of the Exclusive Business Cooperation Agreement. WFOE has absolute authority relating to
the management of Mingda Tianjin, including decisions with regard to expenses, salary raises and bonuses, hiring, firing, and other operational
functions. The Exclusive Business Cooperation Agreement does not prohibit related party transactions. Our audit committee is required
to review and approve in advance any related party transactions, including transactions involving WFOE or Mingda Tianjin.
Share Pledge Agreement
Under the Share Pledge Agreement between WFOE,
and the Mingda Tianjin Shareholders, the Mingda Tianjin Shareholders pledged all of their equity interests in Mingda Tianjin to WFOE to
guarantee the performance of Mingda Tianjin’s obligations under the Exclusive Business Cooperation Agreement. Under the terms of
the Share Pledge Agreement, in the event that Mingda Tianjin or the Mingda Tianjin Shareholders breach their respective contractual obligations
under the Exclusive Business Cooperation Agreement, WFOE, as pledgee, will be entitled to certain rights, including the right to collect
dividends generated by the pledged equity interests. The Mingda Tianjin Shareholders also agreed that upon occurrence of any event of
default, as set forth in the Share Pledge Agreement, WFOE is entitled to dispose of the pledged equity interest in accordance with applicable
PRC laws. The Mingda Tianjin Shareholders further agreed not to dispose of the pledged equity interests or take any actions that would
prejudice WFOE’s interest.
The Share Pledge Agreement is effective until
all payments due under the Exclusive Business Cooperation Agreement have been paid by Mingda Tianjin. WFOE will cancel or terminate the
Share Pledge Agreement upon Mingda Tianjin’s full payment of fees payable under the Exclusive Business Cooperation Agreement.
The purposes of the Share Pledge Agreement are
to (1) guarantee the performance of Mingda Tianjin’s obligations under the Exclusive Business Cooperation Agreement, (2) make
sure the Mingda Tianjin Shareholders do not transfer or assign the pledged equity interests, or create or allow any encumbrance that would
prejudice WFOE’s interests without WFOE’s prior written consent, and (3) provide WFOE control over Mingda Tianjin. In
the event Mingda Tianjin breaches its contractual obligations under the Exclusive Business Cooperation Agreement, WFOE will be entitled
to foreclose on the Mingda Tianjin Shareholders’ equity interests in Mingda Tianjin and may (1) exercise its option to purchase
or designate third parties to purchase part or all of their equity interests in Mingda Tianjin and in this situation, WFOE may terminate
the VIE Agreements after acquisition of all equity interests in Mingda Tianjin or form new VIE structure with the third parties designated
by WFOE; or (2) dispose the pledged equity interests and be paid in priority out of proceeds from the disposal, in which case the
VIE structure will be terminated.
Exclusive Option Agreement
Under the Exclusive Option Agreement, the Mingda
Tianjin Shareholders irrevocably granted WFOE (or its designee) an exclusive option to purchase, to the extent permitted under PRC law,
once or at multiple times, at any time, part or all of their equity interests in Mingda Tianjin. The option price is equal to the capital
paid in by the Mingda Tianjin Shareholders subject to any appraisal or restrictions required by applicable PRC laws and regulations. As
of December 31, 2020, if WFOE exercised such option, the total option price that would be paid to all of the Mingda Tianjin Shareholders
would be approximately $1,586,834, which is the aggregate registered capital of Mingda Tianjin. The option purchase price will increase
in case the Mingda Tianjin Shareholders make additional capital contributions to Mingda Tianjin.
Under the Exclusive Option Agreement, WFOE may
at any time under any circumstances, purchase, or have its designated person purchase, at its discretion, to the extent permitted under
PRC law, all or part of the Mingda Tianjin Shareholders’ equity interests in Mingda Tianjin. The Exclusive Option Agreement, together
with the Share Pledge Agreement, Exclusive Business Cooperation Agreement, and the Power of Attorney, enable WFOE to exercise effective
control over Mingda Tianjin.
The agreement remains effective for a term of
10 years and may be renewed at WFOE’s election.
Powers of Attorney
Under each of the Powers of Attorney, the Mingda
Tianjin Shareholders authorize WFOE to act on their behalf as their exclusive agent and attorney with respect to all rights as shareholders,
including: (a) attending shareholders’ meetings; (b) exercising all the shareholder’s rights, including voting,
that shareholders are entitled to under the laws of China and the articles of association of Mingda Tianjin, including the sale or transfer
or pledge or disposition of shares in part or in whole; and (c) designating and appointing on behalf of shareholders the legal representative,
the executive director, supervisor, the chief executive officer, and other senior management members of Mingda Tianjin.
The term of each of the Powers of Attorney is
the same as the term of the Exclusive Option Agreement. The Powers of Attorney are irrevocable and continuously valid from the date of
execution of the Powers of Attorney, so long as the Mingda Tianjin Shareholders are shareholders of Mingda Tianjin.
Risks Associated with Our Corporate Structure
and the VIE Agreements
Because we do not directly hold equity interests
in the VIE and its subsidiaries, we are subject to risks and uncertainties of the interpretations and applications of PRC laws and regulations,
including but not limited to, regulatory review of overseas listing of PRC companies through special purpose vehicles, and the validity
and enforcement of the VIE Agreements among WFOE, Mingda Tianjin, and the Mingda Tianjin Shareholders. We are also subject to the risks
and uncertainties about any future actions of the PRC government in this regard that could disallow the VIE structure, which would likely
result in a material change in our operations, and the value of our ordinary shares may depreciate significantly or become worthless.
The VIE Agreements have not been tested in a court of law in China as of the date of this prospectus.
The VIE Agreements may not be effective as
direct ownership in providing operational control. For instance, Mingda Tianjin and the Mingda Tianjin Shareholders could breach their
VIE Agreements with WFOE by, among other things, failing to conduct their operations in an acceptable manner or taking other actions
that are detrimental to our interests. The Mingda Tianjin Shareholders may not act in the best interests of our Company or may not perform
their obligations under these contracts. Such risks exist throughout the period in which we intend to operate certain portions of our
business through the VIE Agreements with Mingda Tianjin. In the event that Mingda Tianjin or the Mingda Tianjin Shareholders fail to
perform their respective obligations under the VIE Agreements, we may have to incur substantial costs and expend additional resources
to enforce such arrangements. In addition, even if legal actions are taken to enforce such arrangements, there is uncertainty as to whether
the courts of the PRC would recognize or enforce judgments of U.S. courts against us or such persons predicated upon the civil liability
provisions of the securities laws of the United States or any state. See “Item 3. Key Information—D. Risk Factors—Risks
Relating to Doing Business in the PRC—Our contractual arrangements with Mingda Tianjin and its shareholders may not be effective
in providing control over Mingda Tianjin” and “Item 3. Key Information—D. Risk Factors—Risks Relating to Doing
Business in the PRC—Our contractual agreements with Mingda Tianjin are governed by the laws of the PRC and we may have difficulty
in enforcing any rights we may have under these contractual arrangements” in our most recent annual report on Form 20-F (the
“2020 Annual Report”).
We are subject to certain legal and operational
risks associated with having the majority of our operations in China. PRC laws and regulations governing our current business operations
are sometimes vague and uncertain, and as a result these risks may result in material changes in the operations of the VIE and its subsidiaries,
significant depreciation or a complete loss of the value of our Ordinary Shares, or a complete hindrance of our ability to offer, or
continue to offer, our securities to investors. Recently, the PRC government adopted a series of regulatory actions and issued statements
to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities
market, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. As
of the date of this prospectus, we, our subsidiaries, and the VIE and its subsidiaries have not been involved in any investigations on
cybersecurity review initiated by any PRC regulatory authority, nor has any of them received any inquiry, notice, or sanction. As confirmed
by our PRC counsel, we will not be subject to cybersecurity review with CAC when the Cybersecurity Review Measures become effective on
February 15, 2022, since we currently do not have over one million users’ personal information and do not anticipate that we will
be collecting over one million users’ personal information in the foreseeable future, which we understand might otherwise subject
us to the draft Measures for Cybersecurity Censorship. See “Risk Factors—Risks Relating to Doing Business in the PRC—Recent
greater oversight by the CAC over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact
our business and our offering.” According to our PRC counsel, no relevant laws or regulations in the PRC explicitly require us
to seek approval from the China Securities Regulatory Commission for our overseas listing. As of the date of this prospectus, we, our
subsidiaries, and the VIE and its subsidiaries have not received any inquiry, notice, warning, or sanctions regarding our overseas listing
from the China Securities Regulatory Commission or any other PRC governmental authorities. Since these statements and regulatory actions
are newly published, however, official guidance and related implementation rules have not been issued. It is highly uncertain what
the potential impact such modified or new laws and regulations will have on the daily business operations of our subsidiaries and VIE,
our ability to accept foreign investments, and our listing on a U.S. exchange. The SCNPC or PRC regulatory authorities may in the future
promulgate laws, regulations, or implementing rules that require us, our subsidiaries, or the VIE to obtain regulatory approval
from Chinese authorities for listing in the U.S. If we do not receive or maintain the approval, or inadvertently conclude that such approval
is not required, or applicable laws, regulations, or interpretations change such that we are required to obtain approval in the future,
we may be subject to an investigation by competent regulators, fines or penalties, or an order prohibiting us from conducting an offering,
and these risks could result in a material adverse change in our operations and the value of our Ordinary Shares, significantly limit
or completely hinder our ability to offer or continue to offer securities to investors, or cause such securities to significantly decline
in value or become worthless.
In addition, our Ordinary Shares may be prohibited
from trading on a national exchange or over-the-counter under the Holding Foreign Companies Accountable Act if the PCAOB is unable to
inspect our auditor for three consecutive years beginning in 2021. Our auditor, RBSM LLP, is an independent registered public accounting
firm with the PCAOB, and as an auditor of publicly traded companies in the U.S., is subject to laws in the U.S., pursuant to which the
PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. The PCAOB currently has access
to inspect the working papers of our auditor and our auditor is not subject to the determinations announced by the PCAOB on December
16, 2021. If trading in our Ordinary Shares is prohibited under the Holding Foreign Companies Accountable Act in the future because the
PCAOB determines that it cannot inspect or fully investigate our auditor at such future time, Nasdaq may determine to delist our Ordinary
Shares. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if passed by
the U.S. House of Representatives and signed into law, would reduce foreign companies to comply with PCAOB audits within two consecutive
years instead of three, thus reducing the time period for triggering the prohibition on trading. See “Risk Factors—Risks
Relating to Doing Business in the PRC—The recent joint statement by the SEC and the PCAOB, proposed rule changes submitted
by Nasdaq, and the Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging
market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB.
These developments could add uncertainties to our listing.”
Business Overview
We conduct our business in China through the
PRC operating entities. The following description of our business is a description of the business of the PRC operating entities. See
“—Our Corporate Structure—VIE Agreements among WFOE, the VIE, and the Mingda Tianjin Shareholders” for a summary
of the VIE Agreements.
The PRC operating entities primarily provide primary
real estate agency services to their real estate developer clients, and provide, on an as-needed basis, real estate consulting services,
and independent training services. Currently, their primary market is in the Tianjin Autonomous Municipality, one of the richest cities
in the PRC, ranking seventh in the PRC based upon GDP per capita in 2020, according to China Statistical Yearbook. Since 2014, the PRC
operating entities have expanded their market presence to other first and second tier cities in China, including Chengdu of Sichuan province,
and Suzhou and Yangzhou of Jiangsu province.
In 2018, through Xishe, Xishe Xianglin, and Xishe
Media, the PRC operating entities started to provide tourism development services, which included real estate marketing and planning services,
real estate agency services, and advertisement planning services. The PRC operating entities suspended the tourism development services
and dissolved Xishe Media and Xishe Xianglin in August 2021 and Xishe in September 2021.
The PRC operating entities’ primary real
estate agency services offerings include providing primary agency sales services to residential real estate developers at any stages
of the development and sale of a residential real estate project. Since the inception of Mingda Tianjin in 2002, the PRC operating entities
have been engaged in the sale of 71 unique residential real estate projects, with 52 projects reaching 100% sales completion status as
of June 30, 2021. The PRC operating entities typically serve large and mid-sized real estate developers, such as Ping An Real Estate
Co., Ltd., China Vanke Co., Ltd., China Merchants Property Development Co. Ltd., Tianjin Metro Resources Investment Co., Ltd.,
Jingrui Real Estate (Group) Co., Ltd., Tianjin Real Estate Development (Group) Co., Ltd., Tianjin Teda Development Co., Ltd.,
and Tianjin City Investment Binhai Real Estate Management Co., Ltd., or promising emerging local developers in the markets that
they operate. The PRC operating entities primarily generate revenue through sales commissions, which are either fixed or progressive.
We generated 98.7%, 98.2%, and 97.1% of our total revenue through the PRC operating entities’ primary agency sales services during
the six months ended June 30, 2021, fiscal 2020, and fiscal 2019, respectively. The PRC operating entities have traditionally provided
exclusive primary agency sales services where they are the exclusive sales agent. While we expect the exclusive sales agent arrangements
to continue to be the main part of the PRC operating entities’ business, since 2016 the PRC operating entities have strategically
bid on and won real estate projects as co-sale agents, where they collaborate with other primary agency sales service providers to act
as co-agents in a sale. During the six months ended June 30, 2021, fiscal 2020, and fiscal 2019, 33.14%, 37.46%, and 22.26%, respectively,
of our revenue was derived from sales in real estate projects where the PRC operating entities acted as co-agents providing primary agency
sales services to their developer clients. We believe that co-sale opportunities allow the PRC operating entities to tap into developer
clients they have not previously collaborated, or who utilized their traditional primary sales agents.
The PRC operating entities also provide, on an
as-needed basis, real estate consulting services with respect to any stages or a combination of stages of the development and sale of
a residential real estate project. Types of real estate consulting services that the PRC operating entities are capable of providing include
consulting, marketing strategy planning and strategy, and advertising services and sales strategies. The PRC operating entities provide
stand-alone real estate consulting services to clients based upon a consulting service plan they created that tailors to each client’s
specific challenges and needs. They charge service fees based upon a monthly fixed charge, as well as a project completion fee in some
circumstances. We generated 1.3%, 1.8%, and 2.7% of our total revenue through the PRC operating entities’ consulting services during
the six months ended June 30, 2021, fiscal 2020, and fiscal 2019, respectively.
For their independent training services, the PRC
operating entities are engaged by existing or prior real estate developer clients to provide independent third-party training services
to the primary agency sales agents the developers have engaged. The PRC operating entities started a pilot project in 2016 for this service
offering and began generating revenue in 2018. In this role, the PRC operating entities strive to leverage their expertise and experience
in researching and creating sales programs and strategies uniquely tailored to each project and establishing and operating a sales project
from end to end to evaluate the performance of another sales team, and if needed, create sales strategy, training, and operating manuals
for a sales team, as well as establishing the operating frameworks of a successfully-run sales program. Through their independent third-party
training services, the PRC operating entities intend to establish their reputation in new local markets, which are key to their contemplated
expansion on a national level. We generated $0, $0, and $4,704 revenue through the PRC operating entities’ independent training
services during the six months ended June 30, 2021, fiscal 2020, and fiscal 2019, respectively.
The PRC operating entities started generating
revenue in the second quarter of 2019 from tourism development services provided by Xishe Xianglin. The PRC operating entities generated
$0, $0, and $49,169 revenue through tourism development services during the six months ended June 30, 2021, fiscal 2020, and fiscal
2019, respectively.
The PRC operating entities commenced their operations
in 2002. Our revenue was $2,712,679, $5,868,725, and $5,679,977 for the six months ended June 30, 2021, and the years ended December 31,
2020 and 2019, respectively. Our net loss was $231,121 for the six months ended June 30, 2021 and our net income was $253,893 and
$299,364 for the years ended December 31, 2020 and 2019, respectively.
COVID-19 Impact
The spread of COVID-19 has caused business disruptions
beginning in January 2020, including the closure of the majority of businesses in mainland China. In March 2020, the World Health
Organization declared the outbreak of COVID-19 as a global pandemic, which continues to spread throughout the world. The spread of COVID-19
has caused public health officials to recommend precautions to mitigate the spread of the virus, such as, ceasing traveling to non-essential
jobs, curtailing all unnecessary travel, and staying at home as much as possible. Because of the quarantines and travel restrictions mandated
by the Chinese government, from the end of January to mid-March of 2020, many real estate projects the PRC operating entities
were promoting and selling were suspended, which adversely impacted their business during that period. Because the PRC operating entities’
operating income and earnings have historically been lower during the first quarter than other quarters due to the winter and the Chinese
New Year holiday period, however, we believe this seasonality partially mitigated the adverse impact on the PRC operating entities’
full-year operating results in 2020. Starting from the end of March 2020, the COVID-19 pandemic appeared to have slowed down in China
and these real estate projects began to reopen. Although we believe the PRC operating entities’ operations have resumed to the level
before the COVID-19 pandemic since April 2020 and even though the PRC operating entities currently expect to continue the promotion
and sales of real estate projects as they typically did, to the extent the COVID-19 pandemic further impacts the PRC operating entities’
promotion and sale of real estate projects, their financial condition, results of operations, and cash flows could be adversely affected.
Summary of Risk Factors
Investing in our securities involves significant risks. You should
carefully consider all of the information in this prospectus before making an investment in our securities. Below please find a summary
of the principal risks we face, organized under relevant headings. These risks are discussed more fully under “Item 3. Key Information—D.
Risk Factors” in the 2020 Annual Report and in the section titled “Risk Factors” beginning on page 18 of this prospectus.
Risks Relating to Our Business and Industry
(for a more detailed discussion, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business and Industry”
in the 2020 Annual Report)
Risks and uncertainties related to our business
include, but are not limited to, the following:
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our business is susceptible to fluctuations in the real estate market
of China (see page 5 of the 2020 Annual Report);
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our business may be materially and adversely affected by government
measures aimed at China’s real estate industry (see page 6 of the 2020 Annual Report);
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our financial condition, results of operations, and cash flows may
be adversely affected by public health epidemics, including the COVID-19 outbreak (see page 7 of the 2020 Annual Report);
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failure to maintain or enhance our brands or image could have a
material and adverse effect on our business and results of operations (see page 7 of the 2020 Annual Report);
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there is no guarantee that we will be able to win bids from real
estate developers at a similar rate as we did in 2020, 2019, and 2018, if we are unable to maintain similar bid-winning rates as
right now, our results of operations and prospects may be materially and adversely affected (see page 8 of the 2020 Annual Report);
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there is no guarantee that we will be able to maintain our sales
performance as we did in 2020, 2019, and 2018. In the event that our sales performance declines due to factors outside of our control
or due to the deterioration of our performance, our results of operations and prospects may be materially and adversely affected
(see page 8 of the 2020 Annual Report);
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if we are unable to compete successfully, our financial condition
and results of operations may be harmed (see page 9 of the 2020 Annual Report);
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our results of operations and cash flows may fluctuate due to seasonal
variations in the real estate market and the non-recurring nature of our services provided to real estate developers (see page 10
of the 2020 Annual Report);
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our sales, revenue, and operations will be affected if the prospective
buyers are not able to secure mortgage financing on attractive terms, if at all (see page 10 of the 2020 Annual Report);
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our reliance on a concentrated number of real estate developers
may materially and adversely affect us (see page 12 of the 2020 Annual Report);
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we face long cycles to settle our accounts receivable and customer
deposits, which could materially and adversely affect our results of operations (see page 12 of the 2020 Annual Report); and
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If we fail to hire, train, and retain qualified managerial and other
employees, our business and results of operations could be materially and adversely affected (see page 12 of the 2020 Annual Report).
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Risks Relating to Doing Business in
the PRC (for a more detailed discussion, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business
in the PRC” in our 2020 Annual Report and “Risk Factors—Risks Relating to Doing Business in the PRC” beginning
on page 18 of this prospectus)
We face risks and uncertainties relating to doing
business in the PRC in general, including, but not limited to, the following:
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our current corporate structure and business operations may be affected
by the newly enacted Foreign Investment Law (see page 15 of the 2020 Annual Report);
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changes in China’s economic, political, social conditions
or government policies could have a material adverse effect on our business and operations (see page 15 of the 2020 Annual Report);
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PRC laws and regulations governing our current business operations
are sometimes vague and uncertain and any changes in such laws and regulations may impair our ability to operate profitable (see
page 16 of the 2020 Annual Report);
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you may experience difficulties in effecting service of legal process,
enforcing foreign judgments, or bringing actions in China against us or our management named in the prospectus based on foreign laws.
It may also be difficult for you or overseas regulators to conduct investigations or collect evidence within China (see page 16 of
the 2020 Annual Report);
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regulations relating to offshore investment activities by PRC residents
may limit our ability to acquire PRC companies and could adversely affect our business (see page 18 of the 2020 Annual Report);
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because our business is conducted in RMB and the price of our Ordinary
Shares is quoted in U.S. dollars, changes in currency conversion rates may affect the value of your investments (see page 19 of the
2020 Annual Report);
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under the PRC Enterprise Income Tax Law, or the EIT Law, we may
be classified as a “resident enterprise” of China, which could result in unfavorable tax consequences to us and our non-PRC
shareholders (see page 19 of the 2020 Annual Report);
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there are significant uncertainties under the EIT Law relating to
the withholding tax liabilities of our PRC subsidiary, and dividends payable by our PRC subsidiary to our offshore subsidiaries may
not qualify to enjoy certain treaty benefits (see page 20 of the 2020 Annual Report);
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our contractual arrangements with Mingda Tianjin and its shareholders
may not be effective in providing control over Mingda Tianjin (see page 20 of the 2020 Annual Report);
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because we conduct our business through Mingda Tianjin, a VIE, if
we fail to comply with applicable law, we could be subject to severe penalties and our business could be adversely affected (see
page 20 of the 2020 Annual Report);
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the disclosures in our reports and other filings with the SEC and
our other public pronouncements are not subject to the scrutiny of any regulatory bodies in the PRC (see page 21 of the 2020 Annual
Report);
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the failure to comply with PRC regulations relating to mergers and
acquisitions of domestic projects by offshore special purpose vehicles may subject us to severe fines or penalties and create other
regulatory uncertainties regarding our corporate structure (see page 22 of the 2020 Annual Report);
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our contractual agreements with Mingda Tianjin are governed by the
laws of the PRC and we may have difficulty in enforcing any rights we may have under these contractual arrangements (see page 22
of the 2020 Annual Report);
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if the PRC government determines that the VIE Agreements constituting
part of the VIE structure do not comply with PRC regulations, or if these regulations change or are interpreted differently in the
future, we may be unable to assert our contractual rights over the assets of the VIE, and our Ordinary Shares may decline in value
or become worthless (see page 18 of this prospectus);
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uncertainties in the interpretation and enforcement of PRC laws
and regulations and changes in policies, rules, and regulations in China, which may be quick with little advance notice, could limit
the legal protection available to you and us (see page 18 of this prospectus);
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Given the Chinese government’s significant oversight and discretion
over the conduct of our business, the Chinese government may intervene or influence our operations at any time, which could result
in a material change in our operations and/or the value of our Ordinary Shares (see page 19 of this prospectus);
|
|
|
●
|
any actions by the Chinese government, including any decision to
intervene or influence the operations of our PRC subsidiary or the VIE or to exert control over any offering of securities conducted
overseas and/or foreign investment in China-based issuers, may cause us to make material changes to the operations of our PRC subsidiary
or the VIE, may limit or completely hinder our ability to offer or continue to offer securities to investors, and may cause the value
of such securities to significantly decline or be worthless (see page 19 of this prospectus);
|
|
|
|
|
|
|
●
|
recent greater oversight by the CAC over data security, particularly
for companies seeking to list on a foreign exchange, could adversely impact our business and our offering (see page 19 of this
prospectus);
|
|
|
|
|
|
|
●
|
the Opinions recently issued by the General Office of the Central
Committee of the Communist Party of China and the General Office of the State Council may subject us to additional compliance requirement
in the future (see page 20 of this prospectus); and
|
|
|
|
|
|
|
●
|
Recent joint statement by the SEC and the PCAOB, proposed rule changes
submitted by Nasdaq, and the Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be
applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are
not inspected by the PCAOB. These developments could add uncertainties to our continued listing or future offerings of our securities
in the U.S. (see page 20 of this prospectus).
|
Risks Relating to Our Ordinary Shares
and the Trading Market (for a more detailed discussion, see “Item 3. Key Information—D. Risk Factors—Risks Relating
to Our Ordinary Shares and the Trading Market” in our 2020 Annual Report)
In addition to the risks described above, we are
subject to general risks and uncertainties relating to our Ordinary Shares and the trading market, including, but not limited to, the
following:
|
|
●
|
because we are a Cayman Islands company and all of our business
is conducted in the PRC, you may be unable to bring an action against us or our officers and directors or to enforce any judgment
you may obtain (see page 23 of the 2020 Annual Report);
|
|
|
|
|
|
|
●
|
since our chief executive officer owns 87.4% of our Ordinary Shares,
he has the ability to elect directors and approve matters requiring shareholder approval by way of ordinary resolution or special
resolution (see page 23 of the 2020 Annual Report);
|
|
|
|
|
|
|
●
|
since we are deemed a “controlled company” under the
Nasdaq listing rules, we may follow certain exemptions from certain corporate governance requirements that could adversely affect
our public shareholders (see page 23 of the 2020 Annual Report);
|
|
|
|
|
|
|
●
|
we do not intend to pay dividends for the foreseeable future (see
page 23 of the 2020 Annual Report);
|
|
|
|
|
|
|
●
|
the market price of our Ordinary Shares may be volatile or may decline
regardless of our operating performance (see page 24 of the 2020 Annual Report);
|
|
|
|
|
|
|
●
|
if we cease to qualify as a foreign private issuer, we would be
required to comply fully with the reporting requirements of the Exchange Act applicable to U.S. domestic issuers, and we would incur
significant additional legal, accounting and other expenses that we would not incur as a foreign private issuer (see page 25 of the
2020 Annual Report);
|
|
|
|
|
|
|
●
|
because we are a foreign private issuer and are exempt from certain
Nasdaq corporate governance standards applicable to U.S. issuers, you will have less protection than you would have if we were a
domestic issuer (see page 25 of the 2020 Annual Report);
|
|
|
|
|
|
|
●
|
anti-takeover provisions in our amended and restated memorandum
and articles of association may discourage, delay, or prevent a change in control (see page 26 of the 2020 Annual Report); and
|
|
|
|
|
|
|
●
|
the laws of the Cayman Islands may not provide our shareholders
with benefits comparable to those provided to shareholders of corporations incorporated in the United States (see page 26 of the
2020 Annual Report).
|
Permission Required from PRC Authorities
We
are currently not required to obtain permission from any of the PRC authorities to operate and issue our securities to foreign investors.
In addition, we, our subsidiaries, and Mingda Tianjin and its subsidiaries are not required to obtain permission or approval relating
to our securities from the PRC authorities, including the China Securities Regulatory Commission or the CAC, for our subsidiaries or Mingda
Tianjin’s operations, nor have we or our subsidiaries or Mingda Tianjin received any denial for our subsidiaries or Mingda Tianjin’s
operations with respect to this offering. Recently, however, the General Office of the Central Committee of the Communist Party of China
and the General Office of the State Council jointly issued the “Opinions on Severely Cracking Down on Illegal Securities Activities
According to Law,” or the “Opinions,” which were made available to the public on July 6, 2021. The Opinions emphasized
the need to strengthen the administration over illegal securities activities and the need to strengthen the supervision over overseas
listings by Chinese companies. Effective measures, such as promoting the construction of relevant regulatory systems, will be taken to
deal with the risks and incidents of China-concept overseas listed companies, cybersecurity, data privacy protection requirements, and
similar matters. The Opinions and any related implementing rules to be enacted may subject us to compliance requirements in the future.
Given the current regulatory environment in the PRC, we are still subject to the uncertainty of different interpretation and enforcement
of the rules and regulations in the PRC adverse to us, which may take place quickly with little advance notice. See “Risk
Factors—Risks Relating to Doing Business in the PRC—The Opinions recently issued by the General Office of the Central Committee
of the Communist Party of China and the General Office of the State Council may subject us to additional compliance requirement in the
future.”
Asset Transfers Between Our Company, Our
Subsidiaries, and the VIE
As of the date of this prospectus, our Company,
our subsidiaries, and the VIE have not distributed any earnings or settled any amounts owed under the VIE Agreements. Our Company, our
subsidiaries, and the VIE do not have any plan to distribute earnings or settle amounts owed under the VIE Agreements in the foreseeable
future.
During the six months ended June 30, 2021
and the fiscal years ended December 31, 2020, 2019, and 2018, there were no cash transfers and transfers of other assets between
our Company, our subsidiaries, and the VIE.
Dividends or Distributions Made to Our Company
and U.S. Investors and Tax Consequences
As
of the date of this prospectus, none of our subsidiaries or VIE have made any dividends or distributions to our Company and our Company
has not made any dividends or distributions to our shareholders. We intend to keep any future earnings to finance the expansion
of our business, and we do not anticipate that any cash dividends will be paid in the foreseeable future. Subject to the passive foreign
investment company rules, the gross amount of distributions we make to investors with respect to our Ordinary Shares (including the amount
of any taxes withheld therefrom) will be taxable as a dividend, to the extent that the distribution is paid out of our current or accumulated
earnings and profits, as determined under U.S. federal income tax principles.
Under Cayman Islands law, a Cayman Islands company
may pay a dividend on its shares out of either profit or share premium amount, provided that in no circumstances may a dividend be paid
if this would result in the company being unable to pay its debts due in the ordinary course of business.
If we determine to pay dividends on any of
our Ordinary Shares in the future, as a holding company, we will be dependent on receipt of funds from our Hong Kong subsidiary, MDJH
Hong Kong, and our UK subsidiary, MD UK. MDJH Hong Kong will rely on payments made from Mingda Tianjin to WFOE, pursuant to the VIE Agreements,
and the distribution of such payments to MDJH Hong Kong; MD UK will rely on payments from its subsidiary Mansions Estate. According to
the PRC Enterprise Income Tax Law, such payments from subsidiaries to parent companies in China are subject to the PRC enterprise income
tax at a rate of 25%. In addition, if Mingda Tianjin or its subsidiaries or branch offices incur debt on their own behalf in the future,
the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us.
Current PRC regulations permit WFOE to pay dividends
to MDJH Hong Kong only out of its accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations.
In addition, each of our operating entities in China is required to set aside at least 10% of its after-tax profits each year, if any,
to fund a statutory reserve until such reserve reaches 50% of its registered capital. Each of such entity in China is also required to
further set aside a portion of its after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is
determined at the discretion of its board of directors. Although the statutory reserves can be used, among other ways, to increase the
registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable
as cash dividends except in the event of liquidation.
The PRC government also imposes controls on the
conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in
completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits,
if any. Furthermore, if our operating entities in the PRC incur debt on their own in the future, the instruments governing the debt may
restrict their ability to pay dividends or make other payments. If we or our subsidiaries are unable to receive all of the revenue from
our operations through the VIE Agreements, we may be unable to pay dividends on our Ordinary Shares.
Cash dividends, if any, on our Ordinary Shares
will be paid in U.S. dollars. If we are considered a PRC tax resident enterprise for tax purposes, any dividends we pay to our overseas
shareholders may be regarded as China-sourced income and as a result may be subject to PRC withholding tax at a rate of up to 10.0%.
Pursuant to the Arrangement between Mainland China
and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance
Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC project.
However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied, including without limitation
that (a) the Hong Kong resident enterprise must be the beneficial owner of the relevant dividends; and (b) the Hong Kong resident
enterprise must directly hold no less than 25% share ownership in the PRC project during the 12 consecutive months preceding its receipt
of the dividends. In current practice, a Hong Kong resident enterprise must obtain a tax resident certificate from the Hong Kong tax authority
to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case
basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and
enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to dividends to be paid by WFOE to
its immediate holding company, MDJH Hong Kong. As of the date of this prospectus, we have not applied for the tax resident certificate
from the relevant Hong Kong tax authority. MDJH Hong Kong intends to apply for the tax resident certificate when WFOE plans to declare
and pay dividends to MDJH Hong Kong. See “Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in
the PRC—There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiary,
and dividends payable by our PRC subsidiary to our offshore subsidiaries may not qualify to enjoy certain treaty benefits” in our
most recent annual report on Form 20-F.
Under existing PRC foreign exchange regulations,
payments of current account items, including profit distributions, interest payments, and trade and service-related foreign exchange transactions,
can be made in foreign currencies, without prior approval of State Administration of Foreign Exchange (“SAFE”), by complying
with certain procedural requirements. Specifically, without prior approval of SAFE, cash generated from the operations in PRC may be used
to pay dividends to our Company. As of the date of this prospectus, WFOE has conducted the foreign exchange registration related to our
Company under the existing PRC foreign exchange regulations, which enables WFOE to legally distribute its earnings to our Company.
Our
Company’s ability to settle amounts owed under the VIE Agreements relies upon payments made from the VIE to WFOE in accordance with
the VIE Agreements. For services rendered to the VIE by WFOE under the Exclusive Business Cooperation Agreement, WFOE is entitled to collect
a service fee from the VIE. Pursuant to the Exclusive Option Agreement, WFOE may at any time and under any circumstances purchase
all or part of the equity interests in the VIE when and to the extent permitted by PRC laws. For restrictions and limitations on our ability
to settle amounts owed under the VIE Agreements, please see “Item 3. Key Information—D. Risk Factors—Risks Relating
to Doing Business in the PRC—Our contractual arrangements with Mingda Tianjin and its shareholders may not be effective in providing
control over Mingda Tianjin” in our most recent annual report on Form 20-F and “Risk Factors—Risks Relating to
Doing Business in the PRC—If the PRC government determines that the contractual arrangements constituting part of the VIE structure
do not comply with PRC regulations, or if these regulations change or are interpreted differently in the future, we may be unable to assert
our contractual rights over the assets of the VIE, and our Ordinary Shares may decline in value or become worthless.”
Selected Condensed Consolidated Financial Schedule
The following tables present selected condensed
consolidated financial data of MDJM, the VIE and subsidiaries of the VIE, WFOE and other subsidiaries of MDJM for the six months ended
June 30, 2021 and the fiscal years ended December 31, 2020, 2019, and 2018, and balance sheet data as of June 30, 2021
and December 31, 2020, 2019, and 2018, which have been derived from our unaudited condensed consolidated interim financial statements
for the unaudited interim periods and our audited consolidated financial statements for those respective years.
In the table below, “Parent” refers
to our holding company, MDJM; “Other subsidiaries” refers to MDJH Hong Kong and MD UK, which are wholly owned subsidiaries
of MDJM.
CONDENSED CONSOLIDATED
BALANCE SHEET
|
Condensed Consolidating Balance Sheets
|
|
As of June 30,
2021
|
|
|
|
|
Parent
|
|
|
VIE and its subsidiaries
|
|
|
WFOE
|
|
|
Other
Subsidiaries
|
|
|
Eliminating
Adjustments
|
|
|
Consolidated
Totals
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash
|
|
$
|
1,823,804
|
|
|
$
|
108,819
|
|
|
$
|
500,582
|
|
|
$
|
3,099,311
|
|
|
$
|
-
|
|
|
$
|
5,532,516
|
|
|
Accounts receivable, net of allowance
|
|
|
-
|
|
|
|
3,670,277
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,670,277
|
|
|
Inter-group balance due from VIE, WFOE and subsidiaries
|
|
|
500,130
|
|
|
|
3,077,124
|
|
|
|
1,356,518
|
|
|
|
1,333,568
|
|
|
|
(6,267,340
|
)
|
|
|
-
|
|
|
Inter-group investments
|
|
|
3,100,000
|
|
|
|
642,654
|
|
|
|
-
|
|
|
|
500,000
|
|
|
|
(4,242,654
|
)
|
|
|
-
|
|
|
Other assets
|
|
|
1,125
|
|
|
|
586,171
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
587,296
|
|
|
Total Assets
|
|
$
|
5,425,059
|
|
|
$
|
8,085,045
|
|
|
$
|
1,857,100
|
|
|
$
|
4,932,879
|
|
|
$
|
(10,509,994
|
)
|
|
$
|
9,790,089
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
7,992
|
|
|
$
|
573,949
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
581,941
|
|
|
Inter-group balance due to VIE and subsidiaries
|
|
|
1,333,568
|
|
|
|
1,709,385
|
|
|
|
1,367,739
|
|
|
|
1,840,297
|
|
|
|
(6,250,989
|
)
|
|
|
-
|
|
|
Other liabilities
|
|
|
-
|
|
|
|
272,694
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
272,694
|
|
|
Total Liabilities
|
|
|
1,341,560
|
|
|
|
2,556,028
|
|
|
|
1,367,739
|
|
|
|
1,840,297
|
|
|
|
(6,250,989
|
)
|
|
|
854,635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inter-group investments
|
|
|
-
|
|
|
|
642,654
|
|
|
|
526,511
|
|
|
|
3,100,000
|
|
|
|
(4,269,165
|
)
|
|
|
-
|
|
|
Common stocks
|
|
|
1,295
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10,380
|
|
|
|
11,675
|
|
|
Capital and additional paid-in capital
|
|
|
4,283,337
|
|
|
|
2,572,437
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(10,380
|
)
|
|
|
6,845,394
|
|
|
Statutory reserve
|
|
|
-
|
|
|
|
327,140
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
327,140
|
|
|
Accumulated profits (loss)
|
|
|
(201,133
|
)
|
|
|
2,155,602
|
|
|
|
(35,390
|
)
|
|
|
(7,418
|
)
|
|
|
-
|
|
|
|
1,911,661
|
|
|
Accumulated other comprehensive income (loss)
|
|
|
-
|
|
|
|
(6,337
|
)
|
|
|
(1,760
|
)
|
|
|
-
|
|
|
|
10,160
|
|
|
|
2,063
|
|
|
Non-controlling interest
|
|
|
-
|
|
|
|
(162,479
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(162,479
|
)
|
|
Total Equities
|
|
|
4,083,499
|
|
|
|
5,529,017
|
|
|
|
489,361
|
|
|
|
3,092,582
|
|
|
|
(4,259,005
|
)
|
|
|
9,097,933
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Equities
|
|
$
|
5,425,059
|
|
|
$
|
8,085,045
|
|
|
$
|
1,857,100
|
|
|
$
|
4,932,879
|
|
|
$
|
(10,509,994
|
)
|
|
$
|
9,790,089
|
|
|
Condensed Consolidating Balance Sheets
|
|
As of December
31, 2020
|
|
|
|
|
Parent
|
|
|
VIE
and its subsidiaries
|
|
|
WFOE
|
|
|
Other
Subsidiaries
|
|
|
Eliminating
Adjustments
|
|
|
Consolidated
Totals
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash
|
|
$
|
4,976,511
|
|
|
$
|
633,689
|
|
|
$
|
500,477
|
|
|
$
|
16
|
|
|
$
|
-
|
|
|
$
|
6,110,693
|
|
|
Accounts receivable, net of allowance
|
|
|
-
|
|
|
|
4,062,343
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,062,343
|
|
|
Inter-group balance due from VIE, WFOE and subsidiaries
|
|
|
500,080
|
|
|
|
2,437,199
|
|
|
|
1,335,280
|
|
|
|
1,330,316
|
|
|
|
(5,602,875
|
)
|
|
|
-
|
|
|
Inter-group investments
|
|
|
-
|
|
|
|
634,770
|
|
|
|
-
|
|
|
|
500,000
|
|
|
|
(1,134,770
|
)
|
|
|
-
|
|
|
Other assets
|
|
|
2,258
|
|
|
|
577,471
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
579,729
|
|
|
Total Assets
|
|
$
|
5,478,849
|
|
|
$
|
8,345,472
|
|
|
$
|
1,835,757
|
|
|
$
|
1,830,332
|
|
|
$
|
(6,737,645
|
)
|
|
$
|
10,752,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
-
|
|
|
$
|
1,373,662
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,373,662
|
|
|
Inter-group balance due to VIE and subsidiaries
|
|
|
1,330,316
|
|
|
|
1,094,508
|
|
|
|
1,342,691
|
|
|
|
1,835,606
|
|
|
|
(5,603,121
|
)
|
|
|
-
|
|
|
Other liabilities
|
|
|
-
|
|
|
|
263,615
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
263,615
|
|
|
Total Liabilities
|
|
|
1,330,316
|
|
|
|
2,731,785
|
|
|
|
1,342,691
|
|
|
|
1,835,606
|
|
|
|
(5,603,121
|
)
|
|
|
1,637,277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inter-group investments
|
|
|
-
|
|
|
|
634,770
|
|
|
|
520,053
|
|
|
|
-
|
|
|
|
(1,154,823
|
)
|
|
|
-
|
|
|
Common stocks
|
|
|
1,295
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10,380
|
|
|
|
11,675
|
|
|
Capital and additional paid-in capital
|
|
|
4,283,337
|
|
|
|
2,572,437
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(10,380
|
)
|
|
|
6,845,394
|
|
|
Statutory reserve
|
|
|
-
|
|
|
|
327,140
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
327,140
|
|
|
Accumulated profits (loss)
|
|
|
(136,100
|
)
|
|
|
2,309,609
|
|
|
|
(25,579
|
)
|
|
|
(5,273
|
)
|
|
|
-
|
|
|
|
2,142,657
|
|
|
Accumulated other comprehensive income
(loss)
|
|
|
-
|
|
|
|
(56,449
|
)
|
|
|
(1,408
|
)
|
|
|
-
|
|
|
|
20,299
|
|
|
|
(37,558
|
)
|
|
Total MDJM Ltd stockholders’ equity
|
|
|
4,148,532
|
|
|
|
5,787,507
|
|
|
|
493,066
|
|
|
|
(5,273
|
)
|
|
|
(1,134,524
|
)
|
|
|
9,289,308
|
|
|
Non-controlling interest
|
|
|
-
|
|
|
|
(173,820
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(173,820
|
)
|
|
Total Liabilities and Equities
|
|
$
|
5,478,848
|
|
|
$
|
8,345,472
|
|
|
$
|
1,835,757
|
|
|
$
|
1,830,333
|
|
|
$
|
(6,737,645
|
)
|
|
$
|
10,752,765
|
|
|
Condensed Consolidating Balance Sheets
|
|
As of December
31, 2019
|
|
|
|
|
Parent
|
|
|
VIE and its subsidiaries
|
|
|
WFOE
|
|
|
Other
Subsidiaries
|
|
|
Eliminating
Adjustments
|
|
|
Consolidated
Totals
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash
|
|
$
|
4,995,834
|
|
|
$
|
1,056,600
|
|
|
$
|
500,234
|
|
|
$
|
9
|
|
|
$
|
-
|
|
|
$
|
6,552,677
|
|
|
Accounts receivable, net of allowance
|
|
|
-
|
|
|
|
2,155,158
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,155,158
|
|
|
Inter-group balance due from VIE, WFOE and subsidiaries
|
|
|
500,030
|
|
|
|
2,353,325
|
|
|
|
1,362,012
|
|
|
|
1,440,764
|
|
|
|
(5,656,131
|
)
|
|
|
-
|
|
|
Inter-group investments
|
|
|
-
|
|
|
|
308,607
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(308,607
|
)
|
|
|
-
|
|
|
Other assets
|
|
|
1,532
|
|
|
|
723,462
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
724,994
|
|
|
Total Assets
|
|
$
|
5,497,396
|
|
|
$
|
6,597,152
|
|
|
$
|
1,862,246
|
|
|
$
|
1,440,773
|
|
|
$
|
(5,964,738
|
)
|
|
$
|
9,432,829
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
550
|
|
|
$
|
594,231
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
594,781
|
|
|
Inter-group balance due to VIE and subsidiaries
|
|
|
1,440,764
|
|
|
|
700,785
|
|
|
|
1,365,464
|
|
|
|
1,944,720
|
|
|
|
(5,451,733
|
)
|
|
|
-
|
|
|
Other liabilities
|
|
|
-
|
|
|
|
339,119
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
339,119
|
|
|
Total Liabilities
|
|
|
1,441,314
|
|
|
|
1,634,135
|
|
|
|
1,365,464
|
|
|
|
1,944,720
|
|
|
|
(5,451,733
|
)
|
|
|
933,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inter-group investments
|
|
|
-
|
|
|
|
(287,076
|
)
|
|
|
(488,029
|
)
|
|
|
-
|
|
|
|
775,105
|
|
|
|
-
|
|
|
Common stocks
|
|
|
1,261
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10,380
|
|
|
|
11,641
|
|
|
Capital and additional paid-in capital
|
|
|
4,172,624
|
|
|
|
3,168,120
|
|
|
|
488,029
|
|
|
|
-
|
|
|
|
(1,094,092
|
)
|
|
|
6,734,681
|
|
|
Statutory reserve
|
|
|
-
|
|
|
|
262,954
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
262,954
|
|
|
Accumulated profits (loss)
|
|
|
(117,804
|
)
|
|
|
2,061,728
|
|
|
|
8,828
|
|
|
|
(3,947
|
)
|
|
|
(1
|
)
|
|
|
1,948,804
|
|
|
Accumulated other comprehensive income
(loss)
|
|
|
-
|
|
|
|
(350,979
|
)
|
|
|
(75
|
)
|
|
|
-
|
|
|
|
70,709
|
|
|
|
(280,345
|
)
|
|
Total MDJM Ltd stockholders’ equity
|
|
|
4,056,081
|
|
|
|
4,854,747
|
|
|
|
8,753
|
|
|
|
(3,947
|
)
|
|
|
(237,899
|
)
|
|
|
8,677,735
|
|
|
Non-controlling interest
|
|
|
-
|
|
|
|
(178,806
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(178,806
|
)
|
|
Total Liabilities and Equities
|
|
$
|
5,497,395
|
|
|
$
|
6,310,076
|
|
|
$
|
1,374,217
|
|
|
$
|
1,940,773
|
|
|
$
|
(5,689,632
|
)
|
|
$
|
9,432,829
|
|
|
Condensed Consolidating Balance Sheets
|
|
As of December
31, 2018
|
|
|
|
|
Parent
|
|
|
VIE
and its subsidiaries
|
|
|
WFOE
|
|
|
Other
Subsidiaries
|
|
|
Eliminating
Adjustments
|
|
|
Consolidated
Totals
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash
|
|
$
|
5,626,079
|
|
|
$
|
1,066,478
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
6,692,557
|
|
|
Accounts receivable, net of allowance
|
|
|
-
|
|
|
|
1,767,804
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,767,804
|
|
|
Inter-group balance due from VIE, WFOE and subsidiaries
|
|
|
-
|
|
|
|
663,620
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(663,620
|
)
|
|
|
-
|
|
|
Other assets
|
|
|
-
|
|
|
|
2,190,792
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,756,056
|
)
|
|
|
434,736
|
|
|
Total Assets
|
|
$
|
5,626,079
|
|
|
$
|
5,688,694
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(2,419,676
|
)
|
|
$
|
8,895,097
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
-
|
|
|
$
|
712,782
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
712,782
|
|
|
Inter-group balance due to VIE and subsidiaries
|
|
|
1,565,174
|
|
|
|
328,459
|
|
|
|
-
|
|
|
|
3,126
|
|
|
|
(1,896,759
|
)
|
|
|
-
|
|
|
Total Liabilities
|
|
|
1,565,174
|
|
|
|
1,041,241
|
|
|
|
-
|
|
|
|
3,126
|
|
|
|
(1,896,759
|
)
|
|
|
712,782
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inter-group investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
Common stocks
|
|
|
1,241
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10,380
|
|
|
|
11,621
|
|
|
Capital and additional paid-in capital
|
|
|
4,102,238
|
|
|
|
3,164,196
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(602,139
|
)
|
|
|
6,664,295
|
|
|
Statutory reserve
|
|
|
-
|
|
|
|
232,542
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
232,542
|
|
|
Accumulated profits (loss)
|
|
|
(42,574
|
)
|
|
|
1,571,810
|
|
|
|
-
|
|
|
|
(3,126
|
)
|
|
|
-
|
|
|
|
1,526,110
|
|
|
Accumulated other comprehensive income
(loss)
|
|
|
-
|
|
|
|
(298,429
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
68,842
|
|
|
|
(229,587
|
)
|
|
Total MDJM Ltd stockholders’ equity
|
|
|
4,060,905
|
|
|
|
4,670,119
|
|
|
|
-
|
|
|
|
(3,126
|
)
|
|
|
(522,917
|
)
|
|
|
8,204,981
|
|
|
Non-controlling interest
|
|
|
-
|
|
|
|
(22,666
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(22,666
|
)
|
|
Total Liabilities and Equities
|
|
$
|
5,626,079
|
|
|
$
|
5,688,694
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(2,419,676
|
)
|
|
$
|
8,895,097
|
|
CONDESED CONSOLIDATING STATEMENT OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
AND CONSED CONSOLIDATED STATEMENT OF CASH FLOWS
Condensed Consolidating Statement of Operations and
Comprehensive Income (Loss)
|
|
For the Six
Months Ended June 30, 2021
|
|
|
|
|
Parent
|
|
|
VIE and its subsidiaries
|
|
|
WFOE
|
|
|
Other
Subsidiaries
|
|
|
Eliminating
Adjustments
|
|
|
Consolidated
Totals
|
|
|
Revenue
|
|
$
|
-
|
|
|
$
|
2,712,679
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
2,712,679
|
|
|
Payroll and payroll taxes
|
|
|
-
|
|
|
|
(2,281,869
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,281,869
|
)
|
|
Professional fees
|
|
|
-
|
|
|
|
(334,686
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(334,686
|
)
|
|
Other G&A expenses
|
|
|
(71,425
|
)
|
|
|
(301,662
|
)
|
|
|
(3,732
|
)
|
|
|
(2,146
|
)
|
|
|
-
|
|
|
|
(378,965
|
)
|
|
Loss from operations
|
|
|
(71,425
|
)
|
|
|
(205,538
|
)
|
|
|
(3,732
|
)
|
|
|
(2,146
|
)
|
|
|
-
|
|
|
|
(282,841
|
)
|
|
Other income (expenses)
|
|
|
6,394
|
|
|
|
46,084
|
|
|
|
(6,079
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
46,399
|
|
|
Income tax
|
|
|
-
|
|
|
|
5,321
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,321
|
|
|
Net loss
|
|
|
(65,031
|
)
|
|
|
(154,133
|
)
|
|
|
(9,811
|
)
|
|
|
(2,146
|
)
|
|
|
-
|
|
|
|
(231,121
|
)
|
|
Change in foreign currency translation adjustments
|
|
|
|
|
|
|
51,439
|
|
|
|
(352
|
)
|
|
|
|
|
|
|
|
|
|
|
51,087
|
|
|
Comprehensive income attributable to non-controlling
interest
|
|
|
-
|
|
|
|
(11,466
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(11,466
|
)
|
|
Comprehensive loss attributable to MDJM
Ltd ordinary shareholders
|
|
$
|
(65,031
|
)
|
|
$
|
(114,160
|
)
|
|
$
|
(10,163
|
)
|
|
$
|
(2,146
|
)
|
|
$
|
-
|
|
|
$
|
(191,500
|
)
|
|
Condensed Consolidating Statement of Cash Flows
|
|
For the Six
Months Ended June 30, 2021
|
|
|
|
|
Parent
|
|
|
VIE and its subsidiaries
|
|
|
WFOE
|
|
|
Other
Subsidiaries
|
|
|
Eliminating
Adjustments
|
|
|
Consolidated
Totals
|
|
|
Net Cash Provided by (Used in) Operating Activities
|
|
$
|
(52,656
|
)
|
|
$
|
(536,246
|
)
|
|
$
|
(6,101
|
)
|
|
$
|
(705
|
)
|
|
$
|
6,188
|
|
|
$
|
(589,520
|
)
|
|
Net Cash Provided by (Used in) Investing Activities
|
|
|
-
|
|
|
|
4,379
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,379
|
|
|
Net Cash Provided by (Used in) Financing Activities
|
|
|
(3,100,050
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
3,100,000
|
|
|
|
50
|
|
|
|
-
|
|
Effect of exchange rate changes on cash,
cash equivalents, and
restricted cash
|
|
|
-
|
|
|
|
7,002
|
|
|
|
6,207
|
|
|
|
-
|
|
|
|
(6,245
|
)
|
|
|
6,964
|
|
|
Net change in cash, cash equivalents and restricted cash
|
|
|
(3,152,706
|
)
|
|
|
(524,865
|
)
|
|
|
106
|
|
|
|
3,099,295
|
|
|
|
(7
|
)
|
|
|
(578,177
|
)
|
|
Cash, cash equivalents, and restricted
cash - beginning of the period
|
|
|
4,976,511
|
|
|
|
633,687
|
|
|
|
500,478
|
|
|
|
16
|
|
|
|
2
|
|
|
|
6,110,693
|
|
|
Cash, cash equivalents, and restricted
cash - end of the period
|
|
$
|
1,823,805
|
|
|
$
|
108,822
|
|
|
$
|
500,583
|
|
|
$
|
3,099,311
|
|
|
$
|
(5
|
)
|
|
$
|
5,532,516
|
|
Condensed Consolidating Statement of Operations and
Comprehensive Income (Loss)
|
|
For the Year
Ended December 31, 2020
|
|
|
|
|
Parent
|
|
|
VIE and its subsidiaries
|
|
|
WFOE
|
|
|
Other
Subsidiaries
|
|
|
Eliminating
Adjustments
|
|
|
Consolidated
Totals
|
|
|
Revenue
|
|
$
|
-
|
|
|
$
|
5,868,725
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
5,868,725
|
|
|
Payroll and payroll taxes
|
|
|
-
|
|
|
|
(4,668,507
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(4,668,507
|
)
|
|
Professional fees
|
|
|
-
|
|
|
|
(404,850
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(404,850
|
)
|
|
Other G&A expenses
|
|
|
(73,420
|
)
|
|
|
(476,212
|
)
|
|
|
(3,552
|
)
|
|
|
(1,326
|
)
|
|
|
-
|
|
|
|
(554,510
|
)
|
|
Loss from operations
|
|
|
(73,420
|
)
|
|
|
319,156
|
|
|
|
(3,552
|
)
|
|
|
(1,326
|
)
|
|
|
-
|
|
|
|
240,858
|
|
|
Other income (expenses)
|
|
|
55,125
|
|
|
|
21,665
|
|
|
|
(30,855
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
45,935
|
|
|
Income tax
|
|
|
-
|
|
|
|
(32,900
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(32,900
|
)
|
|
Net income (loss)
|
|
|
(18,295
|
)
|
|
|
307,921
|
|
|
|
(34,407
|
)
|
|
|
(1,326
|
)
|
|
|
-
|
|
|
|
253,893
|
|
|
Net loss attributable to noncontrolling
interest
|
|
|
|
|
|
|
4,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,146
|
|
|
Net income (loss) attributable to MDJM
Ltd ordinary shareholders
|
|
$
|
(18,295
|
)
|
|
$
|
312,067
|
|
|
$
|
(34,407
|
)
|
|
$
|
(1,326
|
)
|
|
$
|
-
|
|
|
$
|
258,039
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(18,295
|
)
|
|
$
|
307,921
|
|
|
$
|
(34,407
|
)
|
|
$
|
(1,326
|
)
|
|
$
|
-
|
|
|
$
|
253,893
|
|
|
Change in foreign currency translation adjustments
|
|
|
|
|
|
|
253,252
|
|
|
|
(1,333
|
)
|
|
|
|
|
|
|
|
|
|
|
251,919
|
|
|
Comprehensive income attributable to non-controlling
interest
|
|
|
-
|
|
|
|
(9,132
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(9,132
|
)
|
Comprehensive income (loss) attributable
to MDJM Ltd ordinary
shareholders
|
|
$
|
(18,295
|
)
|
|
$
|
552,041
|
|
|
$
|
(35,740
|
)
|
|
$
|
(1,326
|
)
|
|
$
|
-
|
|
|
$
|
496,680
|
|
|
Condensed Consolidating Statement of Cash Flows
|
|
For the Year
Ended December 31, 2020
|
|
|
|
|
Parent
|
|
|
VIE and its subsidiaries
|
|
|
WFOE
|
|
|
Other
Subsidiaries
|
|
|
Eliminating
Adjustments
|
|
|
Consolidated
Totals
|
|
|
Net Cash Provided by (Used in) Operating Activities
|
|
$
|
(130,070
|
)
|
|
$
|
(467,461
|
)
|
|
$
|
(30,869
|
)
|
|
$
|
8
|
|
|
$
|
30,259
|
|
|
$
|
(598,133
|
)
|
|
Net Cash Provided by (Used in) Investing Activities
|
|
|
-
|
|
|
|
1,076
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,076
|
|
|
Net Cash Provided by (Used in) Financing Activities
|
|
|
110,747
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
110,747
|
|
Effect of exchange rate changes on cash,
cash equivalents, and
restricted cash
|
|
|
-
|
|
|
|
43,471
|
|
|
|
31,113
|
|
|
|
-
|
|
|
|
(30,258
|
)
|
|
|
44,326
|
|
|
Net change in cash, cash equivalents and restricted cash
|
|
|
(19,323
|
)
|
|
|
(422,914
|
)
|
|
|
244
|
|
|
|
8
|
|
|
|
1
|
|
|
|
(441,984
|
)
|
|
Cash, cash equivalents, and restricted
cash - beginning of the period
|
|
|
4,995,834
|
|
|
|
1,056,600
|
|
|
|
500,234
|
|
|
|
9
|
|
|
|
1
|
|
|
|
6,552,678
|
|
|
Cash, cash equivalents, and restricted
cash - end of the period
|
|
$
|
4,976,511
|
|
|
$
|
633,686
|
|
|
$
|
500,477
|
|
|
$
|
17
|
|
|
$
|
2
|
|
|
$
|
6,110,693
|
|
Condensed Consolidating Statement of Operations and
Comprehensive Income (Loss)
|
|
For the Year
Ended December 31, 2019
|
|
|
|
|
Parent
|
|
|
VIE and its subsidiaries
|
|
|
WFOE
|
|
|
Other
Subsidiaries
|
|
|
Eliminating
Adjustments
|
|
|
Consolidated
Totals
|
|
|
Revenue
|
|
$
|
-
|
|
|
$
|
5,679,977
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
5,679,977
|
|
|
Payroll and payroll taxes
|
|
|
-
|
|
|
|
(3,710,697
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,710,697
|
)
|
|
Professional fees
|
|
|
-
|
|
|
|
(634,372
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(634,372
|
)
|
|
Other G&A expenses
|
|
|
(101,948
|
)
|
|
|
(870,204
|
)
|
|
|
(3,373
|
)
|
|
|
(821
|
)
|
|
|
(2
|
)
|
|
|
(976,348
|
)
|
|
Income (loss) from operations
|
|
|
(101,948
|
)
|
|
|
464,704
|
|
|
|
(3,373
|
)
|
|
|
(821
|
)
|
|
|
(2
|
)
|
|
|
358,560
|
|
|
Other income
|
|
|
26,719
|
|
|
|
3,256
|
|
|
|
12,201
|
|
|
|
-
|
|
|
|
-
|
|
|
|
42,176
|
|
|
Income tax
|
|
|
-
|
|
|
|
(101,372
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(101,372
|
)
|
|
Net income (loss)
|
|
|
(75,229
|
)
|
|
|
366,588
|
|
|
|
8,828
|
|
|
|
(821
|
)
|
|
|
(2
|
)
|
|
|
299,364
|
|
|
Net loss attributable to noncontrolling
interest
|
|
|
|
|
|
|
153,742
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
153,742
|
|
|
Net income (loss) attributable to MDJM
Ltd ordinary shareholders
|
|
$
|
(75,229
|
)
|
|
$
|
520,330
|
|
|
$
|
8,828
|
|
|
$
|
(821
|
)
|
|
$
|
(2
|
)
|
|
$
|
453,106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(75,229
|
)
|
|
$
|
366,588
|
|
|
$
|
8,828
|
|
|
$
|
(821
|
)
|
|
$
|
(2
|
)
|
|
$
|
299,364
|
|
|
Change in foreign currency translation adjustments
|
|
|
-
|
|
|
|
(53,081
|
)
|
|
|
(75
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(53,156
|
)
|
|
Comprehensive loss attributable to non-controlling
interest
|
|
|
-
|
|
|
|
2,398
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,398
|
|
Comprehensive income (loss) attributable
to MDJM Ltd ordinary
shareholders
|
|
$
|
(75,229
|
)
|
|
$
|
315,905
|
|
|
$
|
8,753
|
|
|
$
|
(821
|
)
|
|
$
|
(2
|
)
|
|
$
|
248,606
|
|
|
Condensed Consolidating Statement of Cash Flows
|
|
For the Year
Ended December 31, 2019
|
|
|
|
|
Parent
|
|
|
VIE and its subsidiaries
|
|
|
WFOE
|
|
|
Other
Subsidiaries
|
|
|
Eliminating
Adjustments
|
|
|
Consolidated
Totals
|
|
|
Net Cash Provided by (Used in) Operating Activities
|
|
$
|
(76,212
|
)
|
|
$
|
166,368
|
|
|
$
|
8,828
|
|
|
$
|
(821
|
)
|
|
$
|
(99,664
|
)
|
|
$
|
(1,501
|
)
|
|
Net Cash Provided by (Used in) Investing Activities
|
|
|
-
|
|
|
|
(190,829
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
|
|
(190,828
|
)
|
|
Net Cash Provided by (Used in) Financing Activities
|
|
|
(554,034
|
)
|
|
|
28,239
|
|
|
|
495,722
|
|
|
|
830
|
|
|
|
99,649
|
|
|
|
70,406
|
|
Effect of exchange rate changes on cash,
cash equivalents, and
restricted cash
|
|
|
-
|
|
|
|
(13,659
|
)
|
|
|
(4,316
|
)
|
|
|
-
|
|
|
|
18
|
|
|
|
(17,957
|
)
|
|
Net change in cash, cash equivalents and restricted cash
|
|
|
(630,246
|
)
|
|
|
(9,881
|
)
|
|
|
500,234
|
|
|
|
9
|
|
|
|
4
|
|
|
|
(139,880
|
)
|
|
Cash, cash equivalents, and restricted
cash - beginning of the period
|
|
|
5,626,079
|
|
|
|
1,066,478
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6,692,557
|
|
|
Cash, cash equivalents, and restricted
cash - end of the period
|
|
$
|
4,995,833
|
|
|
$
|
1,056,597
|
|
|
$
|
500,234
|
|
|
$
|
9
|
|
|
$
|
4
|
|
|
$
|
6,552,677
|
|
Condensed Consolidating Statement of Operations and
Comprehensive Income (Loss)
|
|
For the Year
Ended December 31, 2018
|
|
|
|
|
Parent
|
|
|
VIE and its subsidiaries
|
|
|
WFOE
|
|
|
Other
Subsidiaries
|
|
|
Eliminating
Adjustments
|
|
|
Consolidated
Totals
|
|
|
Revenue
|
|
$
|
-
|
|
|
$
|
2,408,448
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
2,408,448
|
|
|
Payroll and payroll taxes
|
|
|
-
|
|
|
|
(2,214,975
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,214,975
|
)
|
|
Other G&A expenses
|
|
|
(42,574
|
)
|
|
|
(712,152
|
)
|
|
|
-
|
|
|
|
(3,126
|
)
|
|
|
-
|
|
|
|
(757,852
|
)
|
|
Loss from operations
|
|
|
(42,574
|
)
|
|
|
(518,679
|
)
|
|
|
-
|
|
|
|
(3,126
|
)
|
|
|
-
|
|
|
|
(564,379
|
)
|
|
Other income (expenses)
|
|
|
-
|
|
|
|
26,565
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
26,565
|
|
|
Income tax
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Net loss
|
|
|
(42,574
|
)
|
|
|
(492,114
|
)
|
|
|
-
|
|
|
|
(3,126
|
)
|
|
|
-
|
|
|
|
(537,814
|
)
|
|
Net loss attributable to noncontrolling
interest
|
|
|
-
|
|
|
|
(21,843
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(21,843
|
)
|
|
Net loss attributable to MDJM Ltd ordinary
shareholders
|
|
$
|
(42,574
|
)
|
|
$
|
(470,271
|
)
|
|
$
|
-
|
|
|
$
|
(3,126
|
)
|
|
$
|
-
|
|
|
$
|
(515,971
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(42,574
|
)
|
|
$
|
(492,114
|
)
|
|
$
|
-
|
|
|
$
|
(3,126
|
)
|
|
$
|
-
|
|
|
$
|
(537,814
|
)
|
|
Change in foreign currency translation adjustments
|
|
|
-
|
|
|
|
(170,344
|
)
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(170,344
|
)
|
|
Comprehensive loss attributable to non-controlling
interest
|
|
|
-
|
|
|
|
823
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
823
|
|
|
Comprehensive loss attributable to MDJM
Ltd ordinary shareholders
|
|
$
|
(42,574
|
)
|
|
$
|
(661,635
|
)
|
|
$
|
-
|
|
|
$
|
(3,126
|
)
|
|
$
|
-
|
|
|
$
|
(707,335
|
)
|
|
Condensed Consolidating Statement of Cash Flows
|
|
For the Year
Ended December 31, 2018
|
|
|
|
|
Parent
|
|
|
VIE and its subsidiaries
|
|
|
WFOE
|
|
|
Other
Subsidiaries
|
|
|
Eliminating
Adjustments
|
|
|
Consolidated
Totals
|
|
|
Net Cash Provided by (Used in) Operating Activities
|
|
$
|
(42,574
|
)
|
|
$
|
(971,441
|
)
|
|
$
|
(3,126
|
)
|
|
$
|
-
|
|
|
$
|
373,639
|
|
|
$
|
(643,502
|
)
|
|
Net Cash Provided by (Used in) Investing Activities
|
|
|
-
|
|
|
|
(313,965
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
312,750
|
|
|
|
(1,215
|
)
|
|
Net Cash Provided by (Used in) Financing Activities
|
|
|
4,103,479
|
|
|
|
(999,261
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
999,261
|
|
|
|
4,103,479
|
|
Effect of exchange rate changes on cash,
cash equivalents, and
restricted cash
|
|
|
-
|
|
|
|
(94,126
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
210,181
|
|
|
|
116,055
|
|
|
Net change in cash, cash equivalents and restricted cash
|
|
|
4,060,905
|
|
|
|
(2,378,793
|
)
|
|
|
(3,126
|
)
|
|
|
-
|
|
|
|
1,895,831
|
|
|
|
3,574,817
|
|
|
Cash, cash equivalents, and restricted
cash - beginning of the period
|
|
|
-
|
|
|
|
3,117,739
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
|
|
3,117,740
|
|
|
Cash, cash equivalents, and restricted
cash - end of the period
|
|
$
|
4,060,905
|
|
|
$
|
738,946
|
|
|
$
|
(3,126
|
)
|
|
$
|
-
|
|
|
$
|
1,895,832
|
|
|
$
|
6,692,557
|
|
Corporate Information
Our principal executive offices are located at
Suite C-1505, Saidun Center, Xikang Road, Heping District, Tianjin, People’s Republic of China, and our phone number is +86-2283520851.
We maintain a corporate website at http://www.mdjhchina.com. The information contained in, or accessible from, our website or any other
website does not constitute a part of this prospectus. Our agent for service of process in the United States is Cogency Global Inc., 122
East 42nd Street, 18th Floor, New York, NY 10168.
RISK FACTORS
Investing in our securities involves risks. Before
making an investment decision, you should carefully consider the risks described under “Risk Factors” in the applicable prospectus
supplement and under the heading “Item 3. Key Information—D. Risk Factors” in our annual report on Form 20-F for
the fiscal year ended December 31, 2020, which is incorporated in this prospectus by reference, as updated by our subsequent filings
under the Exchange Act that are incorporated herein by reference, together with all of the other information appearing in this prospectus
or incorporated by reference into this prospectus and any applicable prospectus supplement, in light of your particular investment objectives
and financial circumstances. In addition to those risk factors, there may be additional risks and uncertainties of which management is
not aware or focused on or that management deems immaterial. Our business, financial condition, or results of operations could be materially
adversely affected by any of these risks. The trading price of our securities could decline due to any of these risks, and you may lose
all or part of your investment.
In addition, investing in our securities is
highly speculative and involves a significant degree of risk. We are a holding company incorporated in the Cayman Islands and not a Chinese
operating company. As a holding company with no material operations of our own, we conduct our operations through our subsidiaries in
the U.K. and the VIE and its subsidiaries in China. Due to PRC legal restrictions on foreign ownership in the real estate sector, we
do not have any equity ownership of the VIE; instead, we control and receive the economic benefits of the VIE’s business operations
through the VIE Agreements. Our securities offered in this offering are securities of our offshore holding company in the Cayman Islands
instead of securities of the VIE or its subsidiaries in China. The Chinese regulatory authorities could disallow our structure, which
could result in a material change in our operations and the value of our securities could decline or become worthless. Set forth below
are certain risks related to the VIE structure and recent regulatory initiatives implemented by the relevant PRC government entities.
Risks Relating to Doing Business in the PRC
If the PRC government determines that the
VIE Agreements constituting part of the VIE structure do not comply with PRC regulations, or if these regulations change or are interpreted
differently in the future, we may be unable to assert our contractual rights over the assets of the VIE, and our Ordinary Shares may decline
in value or become worthless.
Recently, the PRC government adopted a series
of regulatory actions and issued statements to regulate business operations in China, including those related to VIEs. There are currently
no relevant laws or regulations in the PRC that prohibit companies whose entity interests are within the PRC from listing on overseas
stock exchanges. The VIE Agreements have not been tested in a court of law in China as of the date of this prospectus. Although we believe
that our corporate structure and VIE Agreements comply with current applicable PRC laws and regulations, in the event that PRC government
determines that the VIE Agreements constituting part of the VIE structure do not comply with PRC regulations, or if these regulations
change or are interpreted differently in the future, we may be unable to assert our contractual rights over the assets of the VIE, and
our Ordinary Shares may decline in value or become worthless.
Uncertainties in the interpretation and
enforcement of PRC laws and regulations and changes in policies, rules, and regulations in China, which may be quick with little advance
notice, could limit the legal protection available to you and us.
The PRC legal system is based on written statutes.
Unlike common law systems, it is a system in which legal cases have limited value as precedents. In the late 1970s, the PRC government
began to promulgate a comprehensive system of laws and regulations governing economic matters in general. The legislation over the past
three decades has significantly increased the protection afforded to various forms of foreign or private-sector investment in China. The
PRC operating entities are subject to various PRC laws and regulations generally applicable to companies in China. Since these laws and
regulations are relatively new and the PRC legal system continues to rapidly evolve, however, the interpretations of many laws, regulations,
and rules are not always uniform and enforcement of these laws, regulations, and rules involve uncertainties.
From time to time, we may have to resort to administrative
and court proceedings to enforce our legal rights. Since PRC administrative and court authorities have significant discretion in interpreting
and implementing statutory and contractual terms, however, it may be more difficult to evaluate the outcome of administrative and court
proceedings and the level of legal protection we enjoy in the PRC legal system than in more developed legal systems. Furthermore, the
PRC legal system is based in part on government policies, internal rules, and regulations (some of which are not published in a timely
manner or at all) that may have retroactive effect and may change quickly with little advance notice. As a result, we may not be aware
of our violation of these policies and rules until sometime after the violation. Such uncertainties, including uncertainties over
the scope and effect of our contractual, property (including intellectual property), and procedural rights, and any failure to respond
to changes in the regulatory environment in China could materially and adversely affect our business and impede our ability to continue
our operations.
Given the Chinese government’s
significant oversight and discretion over the conduct of our business, the Chinese government may intervene or influence our operations
at any time, which could result in a material change in our operations and/or the value of our Ordinary Shares.
The Chinese government has significant oversight
and discretion over the conduct of our business and may intervene or influence our operations at any time as the government deems appropriate
to further regulatory, political and societal goals, which could result in a material change in our operations and/or the value of our
Ordinary Shares.
The Chinese government has recently published
new policies that significantly affected certain industries such as the education and internet industries, and we cannot rule out the
possibility that it will in the future release regulations or policies regarding our industry that could adversely affect our business,
financial condition and results of operations. Furthermore, if China adopts more stringent standards with respect to certain areas such
as environmental protection or corporate social responsibilities, we may incur increased compliance costs or become subject to additional
restrictions in our operations. Certain areas of the law, including intellectual property rights and confidentiality protections in China
may also not be as effective as in the United States or other countries. In addition, we cannot predict the effects of future developments
in the PRC legal system on our business operations, including the promulgation of new laws, or changes to existing laws or the interpretation
or enforcement thereof. These uncertainties could limit the legal protections available to us and our investors, including you.
Any actions by the Chinese government, including
any decision to intervene or influence the operations of our PRC subsidiary or the VIE or to exert control over any offering of securities
conducted overseas and/or foreign investment in China-based issuers, may cause us to make material changes to the operations of our PRC
subsidiary or the VIE, may limit or completely hinder our ability to offer or continue to offer securities to investors, and may cause
the value of such securities to significantly decline or be worthless.
The Chinese government has exercised and continues
to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. The ability
of our subsidiaries and VIE to operate in China may be impaired by changes in its laws and regulations, including those relating to taxation,
environmental regulations, land use rights, foreign investment limitations, and other matters. The central or local governments of China
may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts
on our part to ensure our PRC subsidiary and the VIE’s compliance with such regulations or interpretations. As such, our PRC subsidiary
and the VIE may be subject to various government and regulatory interference in the provinces in which they operate. They could be subject
to regulation by various political and regulatory entities, including various local and municipal agencies and government sub-divisions.
They may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to
comply.
Furthermore, it is uncertain when and whether
we will be required to obtain permission from the PRC government to list on U.S. exchanges in the future, and even when such permission
is obtained, whether it will be denied or rescinded. Although we believes our Company, our PRC subsidiary, and the VIE are currently not
required to obtain permission from any Chinese authorities and have not received any notice of denial of permission to list on the U.S.
exchange, our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to our
business or industry, particularly in the event permission to list on U.S. exchanges may be later required, or withheld or rescinded once
given.
Accordingly, government actions in the future,
including any decision to intervene or influence the operations of our PRC subsidiary or the VIE at any time or to exert control over
an offering of securities conducted overseas and/or foreign investment in China-based issuers, may cause us to make material changes to
the operations of our PRC subsidiary or the VIE, may limit or completely hinder our ability to offer or continue to offer securities to
investors, and/or may cause the value of such securities to significantly decline or be worthless.
Recent greater oversight by the CAC over
data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our business and our offering.
On December 28, 2021, the CAC and other relevant
PRC governmental authorities jointly promulgated the Cybersecurity Review Measures, which will take effect on February 15, 2022. The
Cybersecurity Review Measures provide that, in addition to critical information infrastructure operators (“CIIOs”) that intend
to purchase Internet products and services, net platform operators engaging in data processing activities that affect or may affect national
security must be subject to cybersecurity review by the Cybersecurity Review Office of the PRC. According to the Cybersecurity Review
Measures, a cybersecurity review assesses potential national security risks that may be brought about by any procurement, data processing,
or overseas listing. The Cybersecurity Review Measures require that an online platform operator which possesses the personal information
of at least one million users must apply for a cybersecurity review by the CAC if it intends to be listed in foreign countries.
On November 14, 2021, the CAC published the
Security Administration Draft, which provides that data processing operators engaging in data processing activities that affect or may
affect national security must be subject to network data security review by the relevant Cyberspace Administration of the PRC. According
to the Security Administration Draft, data processing operators who possess personal data of at least one million users or collect data
that affects or may affect national security must be subject to network data security review by the relevant Cyberspace Administration
of the PRC. The deadline for public comments on the Security Administration Draft was December 13, 2021.
As of the date of this prospectus, we have
not received any notice from any authorities identifying our PRC subsidiary or the VIE as CIIOs or requiring us to go through cybersecurity
review or network data security review by the CAC. When the Cybersecurity Review Measures become effective, and if the Security Administration
Draft is enacted as proposed, we believe that the operations of our PRC subsidiary and the VIE and our listing will not be affected and
that we will not be subject to cybersecurity review by the CAC for this offering, given that our PRC subsidiary and the VIE possess personal
data of fewer than one million individual clients and do not collect data that affects or may affect national security in their business
operations as of the date of this prospectus and do not anticipate that they will be collecting over one million users’ personal
information or data that affects or may affect national security in the near future. There remains uncertainty, however, as to how the
Cybersecurity Review Measures and the Security Administration Draft will be interpreted or implemented and whether the PRC regulatory
agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity
Review Measures and the Security Administration Draft. If any such new laws, regulations, rules, or implementation and interpretation
come into effect, we will take all reasonable measures and actions to comply and to minimize the adverse effect of such laws on us. We
cannot guarantee, however, that we will not be subject to cybersecurity review and network data security review in the future. During
such reviews, we may be required to suspend our operation or experience other disruptions to our operations. Cybersecurity review and
network data security review could also result in negative publicity with respect to our Company and diversion of our managerial and
financial resources, which could materially and adversely affect our business, financial conditions, and results of operations.
The Opinions recently issued by the General
Office of the Central Committee of the Communist Party of China and the General Office of the State Council may subject us to additional
compliance requirement in the future.
Recently, the General Office of the Central Committee
of the Communist Party of China and the General Office of the State Council jointly issued the Opinions, which were made available to
the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities
and the supervision on overseas listings by China-based companies. These opinions proposed to take effective measures, such as promoting
the construction of relevant regulatory systems, to deal with the risks and incidents facing China-based overseas-listed companies and
the demand for cybersecurity and data privacy protection. The aforementioned policies and any related implementation rules to be
enacted may subject us to additional compliance requirement in the future. As the Opinions were recently issued, official guidance and
interpretation of the Opinions remain unclear in several respects at this time. Therefore, we cannot assure you that we will remain fully
compliant with all new regulatory requirements of the Opinions or any future implementation rules on a timely basis, or at all.
Recent joint statement by the SEC and
the PCAOB, proposed rule changes submitted by Nasdaq, and the Holding Foreign Companies Accountable Act all call for additional and more
stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S.
auditors who are not inspected by the PCAOB. These developments could add uncertainties to our continued listing or future offerings
of our securities in the U.S.
On April 21, 2020, SEC Chairman Jay Clayton
and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the risks associated
with investing in companies based in or have substantial operations in emerging markets including China. The joint statement emphasized
the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers in China and higher risks of fraud in
emerging markets.
On May 18, 2020, Nasdaq filed three proposals
with the SEC to (i) apply a minimum offering size requirement for companies primarily operating in a “Restrictive Market,”
(ii) adopt a new requirement relating to the qualification of management or the board of directors for Restrictive Market companies,
and (iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the company’s
auditor.
On May 20, 2020, the U.S. Senate passed the
Holding Foreign Companies Accountable Act requiring a foreign company to certify it is not owned or controlled by a foreign government
if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection. If the
PCAOB is unable to inspect the company’s auditors for three consecutive years, the issuer’s securities are prohibited to
trade on a national exchange. On December 2, 2020, the U.S. House of Representatives approved the Holding Foreign Companies Accountable
Act. On December 18, 2020, the Holding Foreign Companies Accountable Act was signed into law.
On March 24, 2021, the SEC adopted interim
final rules relating to the implementation of certain disclosure and documentation requirements of the Holding Foreign Companies Accountable
Act.
On June 22, 2021, the U.S. Senate passed the
Accelerating Holding Foreign Companies Accountable Act, which, if passed by the U.S. House of Representatives and signed into law, would
reduce the number of consecutive non-inspection years required for triggering the prohibitions under the Holding Foreign Companies Accountable
Act from three years to two, and thus, would reduce the time before our securities may be prohibited from trading or delisted.
On September 22, 2021, the PCAOB adopted a
final rule implementing the Holding Foreign Companies Accountable Act, which provides a framework for the PCAOB to use when determining,
as contemplated under the Holding Foreign Companies Accountable Act, whether the board of directors of a company is unable to inspect
or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or
more authorities in that jurisdiction.
On December 2, 2021, the SEC adopted amendments
to finalize rules implementing the submission and disclosure requirements in the Holding Foreign Companies Accountable Act.
On December 16, 2021, the PCAOB issued a report
on its determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in
mainland China and in Hong Kong because of positions taken by PRC and Hong Kong authorities in those jurisdictions.
The lack of access to the PCAOB inspection
in China prevents the PCAOB from fully evaluating audits and quality control procedures of the auditors based in China. As a result,
investors may be deprived of the benefits of such PCAOB inspections. The inability of the PCAOB to conduct inspections of auditors in
China makes it more difficult to evaluate the effectiveness of these accounting firm’s audit procedures or quality control procedures
as compared to auditors outside of China that are subject to the PCAOB inspections, which could cause investors and potential investors
to lose confidence in the audit procedures and reported financial information and the quality of the financial statements of those companies
who have China-based auditors.
Our auditor, RBSM LLP, is an independent registered
public accounting firm with the PCAOB, and as an auditor of publicly traded companies in the U.S., is subject to laws in the U.S., pursuant
to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. The PCAOB currently
has access to inspect the working papers of our auditor and our auditor is not subject to the determinations announced by the PCAOB on
December 16, 2021. However, the recent developments would add uncertainties to our offering and we cannot assure you whether Nasdaq or
regulatory authorities would apply additional and more stringent criteria to us since we are an emerging growth company and the majority
of our operations are conducted in China. Furthermore, the Holding Foreign Companies Accountable Act, which requires that the PCAOB be
permitted to inspect an issuer’s public accounting firm within three years, may result in the delisting of our Company in the future
if the PCAOB is unable to inspect our accounting firm at such future time. The Accelerating Holding Foreign Companies Accountable Act,
if passed by the U.S. House of Representatives and signed into law, would reduce the period of time for foreign companies to comply with
PCAOB audits to two consecutive years instead of three, thus reducing the time period for triggering the prohibition on trading.
OFFER STATISTICS AND EXPECTED TIMETABLE
We may from time to time, offer and sell any combination
of the securities described in this prospectus up to a total dollar amount of $70,000,000 in one or more offerings. The securities offered
under this prospectus may be offered separately, together, or in separate series, and in amounts, at prices, and on terms to be determined
at the time of sale. We will keep the registration statement of which this prospectus is a part effective until such time as all of the
securities covered by this prospectus have been disposed of pursuant to and in accordance with such registration statement.
CAPITALIZATION AND INDEBTEDNESS
Our capitalization will be set forth in the applicable
prospectus supplement or in a report on Form 6-K subsequently furnished to the SEC and specifically incorporated by reference into
this prospectus.
DILUTION
If required, we will set forth in a prospectus
supplement the following information regarding any material dilution of the equity interests of investors purchasing securities in an
offering under this prospectus:
|
|
●
|
the net tangible book value per share of our equity securities before and after the offering;
|
|
|
|
|
|
|
●
|
the amount of the increase in such net tangible book value per share attributable to the cash payments made by purchasers in the offering; and
|
|
|
|
|
|
|
●
|
the amount of the immediate dilution from the public offering price which will be absorbed by such purchasers.
|
USE OF PROCEEDS
We intend to use the net proceeds from the sale
of securities we offer as indicated in the applicable prospectus supplement, information incorporated by reference, or free writing prospectus.
DESCRIPTION OF SHARE CAPITAL
The following description of our share capital
and provisions of our amended and restated memorandum and articles of association are summaries and do not purport to be complete. Reference
is made to our amended and restated memorandum and articles of association which are currently effective (and which is referred to in
this section as, respectively, the “memorandum” and the “articles”).
We were incorporated as an exempted company with
limited liability under the Companies Act (2021 Revision) of the Cayman Islands, or the “Cayman Companies Law,” on January 26,
2018. A Cayman Islands exempted company:
|
|
●
|
is a company that conducts its business mainly outside the Cayman Islands;
|
|
|
|
|
|
|
●
|
is prohibited from trading in the Cayman Islands with any person, firm or corporation except in furtherance of the business of the exempted company carried on outside the Cayman Islands (and for this purpose can effect and conclude contracts in the Cayman Islands and exercise in the Cayman Islands all of its powers necessary for the carrying on of its business outside the Cayman Islands);
|
|
|
|
|
|
|
●
|
does not have to hold an annual general meeting;
|
|
|
|
|
|
|
●
|
does not have to make its register of members open to inspection by shareholders of that company;
|
|
|
|
|
|
|
●
|
may obtain an undertaking against the imposition of any future taxation;
|
|
|
|
|
|
|
●
|
may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;
|
|
|
|
|
|
|
●
|
may register as a limited duration company; and
|
|
|
|
|
|
|
●
|
may register as a segregated portfolio company.
|
Ordinary Shares
As of the date of this prospectus, our authorized
share capital is $50,000 divided into 50,000,000 Ordinary Shares, par value $0.001 per share, and there were 11,675,216 Ordinary Shares
issued and outstanding. All of our issued and outstanding Ordinary Shares are fully paid and non-assessable. Our Ordinary Shares are issued
in registered form, and are issued when registered in our register of members. Each holder of our Ordinary Shares will be entitled to
receive a certificate in respect of such Ordinary Shares. Our shareholders who are non-residents of the Cayman Islands may freely hold
and vote their Ordinary Shares. We may not issue shares or warrants to bearer.
Subject to the provisions of the Cayman Companies
Law and our articles regarding redemption and purchase of the shares, the directors have general and unconditional authority to allot
(with or without confirming rights of renunciation), grant options over or otherwise deal with any unissued shares to such persons, at
such times and on such terms and conditions as they may decide. Such authority could be exercised by the directors to allot shares which
carry rights and privileges that are preferential to the rights attaching to Ordinary Shares. No share may be issued at a discount except
in accordance with the provisions of the Cayman Companies Law. The directors may refuse to accept any application for shares, and may
accept any application in whole or in part, for any reason or for no reason.
Markets
Our Ordinary Shares have been listed on the Nasdaq
Capital Market January 8, 2019 under the symbol “MDJH.”
Transfer Agent and Registrar
The transfer agent and registrar for our Ordinary
Shares is Transhare Corporation, located at Bayside Center 1, 17755 North US Highway 19, Suite 140, Clearwater, FL 33764.
Dividends
Subject to the provisions of the Cayman Companies
Law and any rights attaching to any class or classes of shares under and in accordance with the articles:
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(a)
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the directors may declare dividends or distributions out of our funds which are lawfully available for that purpose; and
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(b)
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our shareholders may, by ordinary resolution, declare dividends but no such dividend shall exceed the amount recommended by the directors.
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Subject to the requirements of the Cayman Companies
Law regarding the application of a company’s share premium account and with the sanction of an ordinary resolution, dividends may
be declared and paid out of any share premium account. The directors when paying dividends to shareholders may make such payment either
in cash or in specie.
Unless provided by the rights attached to a share,
no dividend shall bear interest.
Voting Rights
Subject to any rights or restrictions as to voting
attached to any shares, unless any share carries special voting rights, on a show of hands every shareholder who is present in person
and every person representing a shareholder by proxy shall have one vote per Ordinary Share. On a poll, every shareholder who is present
in person and every person representing a shareholder by proxy shall have one vote for each share of which he or the person represented
by proxy is the holder. In addition, all shareholders holding shares of a particular class are entitled to vote at a meeting of the holders
of that class of shares. Votes may be given either personally or by proxy.
Variation of Rights of Shares
Whenever our capital is divided into different
classes of shares, the rights attaching to any class of share (unless otherwise provided by the terms of issue of the shares of that class)
may be varied either with the consent in writing of the holders of not less than two-thirds of the issued shares of that class, or with
the sanction of a resolution passed by a majority of not less than two-thirds of the holders of shares of the class present in person
or by proxy at a separate general meeting of the holders of shares of that class.
Unless the terms on which a class of shares was
issued state otherwise, the rights conferred on the shareholder holding shares of any class shall not be deemed to be varied by the creation
or issue of further shares ranking pari passu with the existing shares of that class.
Alteration of Share Capital
Subject to the Cayman Companies Law, our shareholders
may, by ordinary resolution:
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(a)
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increase our share capital by new shares of the amount fixed by that ordinary resolution and with the attached rights, priorities and privileges set out in that ordinary resolution;
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(b)
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consolidate and divide all or any of our share capital into shares of larger amount than our existing shares;
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(c)
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convert all or any of our paid up shares into stock, and reconvert that stock into paid up shares of any denomination;
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(d)
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sub-divide our shares or any of them into shares of an amount smaller than that fixed, so, however, that in the sub-division, the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in case of the share from which the reduced share is derived; and
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(e)
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cancel shares which, at the date of the passing of that ordinary resolution, have not been taken or agreed to be taken by any person and diminish the amount of our share capital by the amount of the shares so cancelled or, in the case of shares without nominal par value, diminish the number of shares into which our capital is divided.
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Subject to the Cayman Companies Law and to any
rights for the time being conferred on the shareholders holding a particular class of shares, our shareholders may, by special resolution,
reduce our share capital in any way.
Calls on Shares and Forfeiture
Subject to the terms of allotment, the directors
may make calls on the shareholders in respect of any monies unpaid on their shares including any premium and each shareholder shall (subject
to receiving at least 14 clear days’ notice specifying when and where payment is to be made), pay to us the amount called on his
shares. Shareholders registered as the joint holders of a share shall be jointly and severally liable to pay all calls in respect of the
share. If a call remains unpaid after it has become due and payable the person from whom it is due and payable shall pay interest on the
amount unpaid from the day it became due and payable until it is paid at the rate fixed by the terms of allotment of the share or in the
notice of the call or if no rate is fixed, at the rate of 10 percent per annum. The directors may, at their discretion, waive payment
of the interest wholly or in part.
We have a first and paramount lien on all shares
(whether fully paid up or not) registered in the name of a shareholder (whether solely or jointly with others). The lien is for all monies
payable to us by the shareholder or the shareholder’s estate:
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(a)
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either alone or jointly with any other person, whether or not that other person is a shareholder; and
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(b)
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whether or not those monies are presently payable.
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At any time the directors may declare any share
to be wholly or partly exempt from the lien on shares provisions of the articles.
We may sell, in such manner as the directors may
determine, any share on which the sum in respect of which the lien exists is presently payable, if due notice that such sum is payable
has been given (as prescribed by the articles) and, within 14 days of the date on which the notice is deemed to be given under the articles,
such notice has not been complied with.
Unclaimed Dividend
A dividend that remains unclaimed for a period
of six years after it became due for payment shall be forfeited to, and shall cease to remain owing by, our Company.
Forfeiture or Surrender of Shares
If a shareholder fails to pay any call, the directors
may give to such shareholder not less than 14 clear days’ notice requiring payment and specifying the amount unpaid including any
interest which may have accrued, any expenses which have been incurred by us due to that person’s default and the place where payment
is to be made. The notice shall also contain a warning that if the notice is not complied with, the shares in respect of which the call
is made will be liable to be forfeited.
If such notice is not complied with, the directors
may, before the payment required by the notice has been received, resolve that any share the subject of that notice be forfeited (which
forfeiture shall include all dividends or other monies payable in respect of the forfeited share and not paid before such forfeiture).
A forfeited share may be sold, re-allotted or
otherwise disposed of on such terms and in such manner as the directors determine and at any time before a sale, re-allotment or disposition
the forfeiture may be cancelled on such terms as the directors think fit.
A person whose shares have been forfeited shall
cease to be a shareholder in respect of the forfeited shares, but shall, notwithstanding such forfeiture, remain liable to pay to us all
monies which at the date of forfeiture were payable by him to us in respect of the shares, together with all expenses and interest from
the date of forfeiture or surrender until payment, but his liability shall cease if and when we receive payment in full of the unpaid
amount.
A declaration, whether statutory or under oath,
made by a director or the secretary shall be conclusive evidence that the person making the declaration is a director or secretary and
that the particular shares have been forfeited or surrendered on a particular date.
Subject to the execution of an instrument of transfer,
if necessary, the declaration shall constitute good title to the shares.
Share Premium Account
The directors shall establish a share premium
account and shall carry the credit of such account from time to time to a sum equal to the amount or value of the premium paid on the
issue of any share or capital contributed or such other amounts required by the Cayman Companies Law.
Redemption and Purchase of Own Shares
Subject to the Cayman Companies Law and any rights
for the time being conferred on the shareholders holding a particular class of shares, we may by action of our directors:
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(a)
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issue shares that are to be redeemed or liable to be redeemed, at our option or the shareholder holding those redeemable shares, on the terms and in the manner our directors determine before the issue of those shares;
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(b)
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with the consent by special resolution of the shareholders holding shares of a particular class, vary the rights attaching to that class of shares so as to provide that those shares are to be redeemed or are liable to be redeemed at our option on the terms and in the manner which the directors determine at the time of such variation; and
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(c)
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purchase all or any of our own shares of any class including any redeemable shares on the terms and in the manner which the directors determine at the time of such purchase.
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We may make a payment in respect of the redemption
or purchase of its own shares in any manner authorized by the Cayman Companies Law, including out of any combination of capital, our profits
and the proceeds of a fresh issue of shares made for the purpose of the redemption.
When making a payment in respect of the redemption
or purchase of shares, the directors may make the payment in cash or in specie (or partly in one and partly in the other) if so authorized
by the terms of the allotment of those shares or by the terms applying to those shares, or otherwise by agreement with the shareholder
holding those shares.
Transfer of Shares
Provided that a transfer of Ordinary Shares complies
with applicable rules of the Nasdaq Capital Market, a shareholder may transfer Ordinary Shares to another person by completing an
instrument of transfer in a common form or in a form prescribed by Nasdaq, or in any other form approved by the directors, executed:
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(a)
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where the Ordinary Shares are fully paid, by or on behalf of that shareholder; and
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(b)
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where the Ordinary Shares are partly paid, by or on behalf of that shareholder and the transferee.
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The transferor shall be deemed to remain the holder
of an Ordinary Share until the name of the transferee is entered into the register of members of our Company.
Our board of directors may, in its absolute discretion,
decline to register any transfer of any Ordinary Share that has not been fully paid up or is subject to a company lien. Our board of directors
may also decline to register any transfer of such Ordinary Share unless:
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(a)
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the instrument of transfer is lodged with our Company, accompanied by the certificate for the Ordinary Shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer;
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(b)
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the instrument of transfer is in respect of only one class of Ordinary Shares;
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(c)
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the instrument of transfer is properly stamped, if required;
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(d)
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the Ordinary Share transferred is fully paid and free of any lien in favor of us;
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(e)
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any fee related to the transfer has been paid to us; and
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(f)
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the transfer is not to more than four joint holders.
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If our directors refuse to register a transfer,
they are required, within three months after the date on which the instrument of transfer was lodged, to send to each of the transferor
and the transferee notice of such refusal.
This, however, is unlikely to affect market transactions
of the Ordinary Shares purchased by investors in a public offering. Since our Ordinary Shares are listed on the Nasdaq Capital Market,
the legal title to such Ordinary Shares and the registration details of those Ordinary Shares in our register of members remain with DTC/Cede &
Co. All market transactions with respect to those Ordinary Shares will then be carried out without the need for any kind of registration
by the directors, as the market transactions will all be conducted through the DTC systems.
The registration of transfers may, on 14 calendar
days’ notice being given by advertisement in such one or more newspapers or by electronic means, be suspended and our register of
members closed at such times and for such periods as our board of directors may from time to time determine. The registration of transfers,
however, may not be suspended, and the register may not be closed, for more than 30 days in any year.
Inspection of Books and Records
Holders of our Ordinary Shares will have no general
right under the Cayman Companies Law to inspect or obtain copies of our register of members or our corporate records.
General Meetings
As a Cayman Islands exempted company, we are not
obligated by the Cayman Companies Law to call shareholders’ annual general meetings; accordingly, we may, but shall not be obliged
to, in each year hold a general meeting as an annual general meeting. Any annual general meeting held shall be held at such time and place
as may be determined by our board of directors. All general meetings other than annual general meetings shall be called extraordinary
general meetings.
The directors may convene general meetings whenever
they think fit. General meetings shall also be convened on the written requisition of one or more of the shareholders entitled to attend
and vote at our general meetings who (together) hold not less than ten percent of the rights to vote at such general meeting in accordance
with the notice provisions in the articles, specifying the purpose of the meeting and signed by each of the shareholders making the requisition.
If the directors do not convene such meeting for a date not later than 21 clear days’ after the date of receipt of the written requisition,
those shareholders who requested the meeting may convene the general meeting themselves within three months after the end of such period
of 21 clear days in which case reasonable expenses incurred by them as a result of the directors failing to convene a meeting shall be
reimbursed by us.
At least 14 days’ notice of an extraordinary
general meeting and 21 days’ notice of an annual general meeting shall be given to shareholders entitled to attend and vote at such
meeting. The notice shall specify the place, the day and the hour of the meeting and the general nature of that business. In addition,
if a resolution is proposed as a special resolution, the text of that resolution shall be given to all shareholders. Notice of every general
meeting shall also be given to the directors and our auditors.
Subject to the Cayman Companies Law and with the
consent of the shareholders who, individually or collectively, hold at least 90 percent of the voting rights of all those who have a right
to vote at a general meeting, a general meeting may be convened on shorter notice.
The presence of one third of the shareholders,
whether in person or represented by proxy, shall constitute a quorum at a general meeting.
If, within 15 minutes from the time appointed
for the general meeting, or at any time during the meeting, a quorum is not present, the meeting, if convened upon the requisition of
shareholders, shall be cancelled. In any other case it shall stand adjourned to the same time and place seven days or to such other time
or place as is determined by the directors.
The chairman may, with the consent of a meeting
at which a quorum is present, adjourn the meeting. When a meeting is adjourned for seven days or more, notice of the adjourned meeting
shall be given in accordance with the articles.
At any general meeting a resolution put to the
vote of the meeting shall be decided on a show of hands, unless a poll is (before, or on, the declaration of the result of the show of
hands) demanded by the chairman of the meeting or by at least two shareholders having the right to vote on the resolutions or one or more
shareholders present who together hold not less than ten percent of the voting rights of all those who are entitled to vote on the resolution.
Unless a poll is so demanded, a declaration by the chairman as to the result of a resolution and an entry to that effect in the minutes
of the meeting, shall be conclusive evidence of the outcome of a show of hands, without proof of the number or proportion of the votes
recorded in favor of, or against, that resolution.
If a poll is duly demanded it shall be taken in
such manner as the chairman directs and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was
demanded.
In the case of an equality of votes, whether on
a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded, shall
not be entitled to a second or casting vote.
Directors
We may by ordinary resolution, from time to time,
fix the maximum and minimum number of directors to be appointed. Under the Articles, we are required to have a minimum of one director
and the maximum number of directors shall be unlimited.
A director may be appointed by ordinary resolution
or by the directors. Any appointment may be to fill a vacancy or as an additional director.
Unless the remuneration of the directors is determined
by the shareholders by ordinary resolution, the directors shall be entitled to such remuneration as the directors may determine.
The shareholding qualification for directors may
be fixed by our shareholders by ordinary resolution and unless and until so fixed no share qualification shall be required.
Unless removed or re-appointed, each director
shall be appointed for a term expiring at the next-following annual general meeting, if one is held. At any annual general meeting held,
our directors will be elected by an ordinary resolution of our shareholders. At each annual general meeting, each director so elected
shall hold office for a one-year term and until the election of their respective successors in office or removed.
A director may be removed by ordinary resolution.
A director may at any time resign or retire from
office by giving us notice in writing. Unless the notice specifies a different date, the director shall be deemed to have resigned on
the date that the notice is delivered to us.
Subject to the provisions of the articles, the
office of a director may be terminated forthwith if:
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(a)
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he is prohibited by the law of the Cayman Islands from acting as a director;
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(b)
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he is made bankrupt or makes an arrangement or composition with his creditors generally;
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(c)
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he resigns his office by notice to us;
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(d)
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he only held office as a director for a fixed term and such term expires;
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(e)
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in the opinion of a registered medical practitioner by whom he is being treated he becomes physically or mentally incapable of acting as a director;
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(f)
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he is given notice by the majority of the other directors (not being less than two in number) to vacate office (without prejudice to any claim for damages for breach of any agreement relating to the provision of the services of such director);
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(g)
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he is made subject to any law relating to mental health or incompetence, whether by court order or otherwise; or
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(h)
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without the consent of the other directors, he is absent from meetings of directors for continuous period of six months.
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Each of the compensation committee and the nominating
and corporate governance committee shall consist of at least three directors and the majority of the committee members shall be independent
within the meaning of Section 5605(a)(2) of the Nasdaq listing rules. The audit committee shall consist of at least three directors,
all of whom shall be independent within the meaning of Section 5605(a)(2) of the Nasdaq listing rules and will meet the
criteria for independence set forth in Rule 10A-3 or Rule 10C-1 of the Exchange Act.
Powers and Duties of Directors
Subject to the provisions of the Cayman Companies
Law and our memorandum and articles, our business shall be managed by the directors, who may exercise all our powers. No prior act of
the directors shall be invalidated by any subsequent alteration of our memorandum or articles. To the extent allowed by the Cayman Companies
Law, however, shareholders may by special resolution validate any prior or future act of the directors which would otherwise be in breach
of their duties.
The directors may delegate any of their powers
to any committee consisting of one or more persons who need not be shareholders and may include non-directors so long as the majority
of those persons are directors; any committee so formed shall in the exercise of the powers so delegated conform to any regulations that
may be imposed on it by the directors.
The board of directors may establish any local
or divisional board of directors or agency and delegate to it its powers and authorities (with power to sub-delegate) for managing any
of our affairs whether in the Cayman Islands or elsewhere and may appoint any persons to be members of a local or divisional board of
directors, or to be managers or agents, and may fix their remuneration.
The directors may from time to time and at any
time by power of attorney or in any other manner they determine appoint any person, either generally or in respect of any specific matter,
to be our agent with or without authority for that person to delegate all or any of that person’s powers.
The directors may from time to time and at any
time by power of attorney or in any other manner they determine appoint any person, whether nominated directly or indirectly by the directors,
to be our attorney or our authorized signatory and for such period and subject to such conditions as they may think fit. The powers, authorities
and discretions, however, must not exceed those vested in, or exercisable, by the directors under the articles.
The board of directors may remove any person so
appointed and may revoke or vary the delegation.
The directors may exercise all of our powers to
borrow money and to mortgage or charge its undertaking, property and assets both present and future and uncalled capital or any part thereof,
to issue debentures and other securities whether outright or as collateral security for any debt, liability or obligation of ours or our
parent undertaking (if any) or any subsidiary undertaking of us or of any third party.
A director shall not, as a director, vote in respect
of any contract, transaction, arrangement or proposal in which he has an interest which (together with any interest of any person connected
with him) is a material interest (otherwise than by virtue of his interests, direct or indirect, in shares or debentures or other securities
of, or otherwise in or through, us) and if he shall do so his vote shall not be counted, nor in relation thereto shall he be counted in
the quorum present at the meeting, but (in the absence of some other material interest than is mentioned below) none of these prohibitions
shall apply to:
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(a)
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the giving of any security, guarantee or indemnity in respect of:
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(i)
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money lent or obligations incurred by him or by any other person for our benefit or any of our subsidiaries; or
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(ii)
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a debt or obligation of ours or any of our subsidiaries for which the director himself has assumed responsibility in whole or in part and whether alone or jointly with others under a guarantee or indemnity or by the giving of security;
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(b)
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where we or any of our subsidiaries is offering securities in which offer the director is or may be entitled to participate as a holder of securities or in the underwriting or sub-underwriting of which the director is to or may participate;
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(c)
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any contract, transaction, arrangement or proposal affecting any other body corporate in which he is interested, directly or indirectly and whether as an officer, shareholder, creditor or otherwise howsoever, provided that he (together with persons connected with him) does not to his knowledge hold an interest representing one percent or more of any class of the equity share capital of such body corporate (or of any third body corporate through which his interest is derived) or of the voting rights available to shareholders of the relevant body corporate;
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(d)
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any act or thing done or to be done in respect of any arrangement for the benefit of the employees of us or any of our subsidiaries under which he is not accorded as a director any privilege or advantage not generally accorded to the employees to whom such arrangement relates; or
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(e)
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any matter connected with the purchase or maintenance for any director of insurance against any liability or (to the extent permitted by the Cayman Companies Law) indemnities in favor of directors, the funding of expenditure by one or more directors in defending proceedings against him or them or the doing of anything to enable such director or directors to avoid incurring such expenditure.
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A director may, as a director, vote (and be counted
in the quorum) in respect of any contract, transaction, arrangement or proposal in which he has an interest which is not a material interest
or as described above.
Capitalization of Profits
The directors may resolve to capitalize:
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(a)
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any part of our profits not required for paying any preferential dividend (whether or not those profits are available for distribution); or
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(b)
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any sum standing to the credit of our share premium account or capital redemption reserve, if any.
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The amount resolved to be capitalized must be
appropriated to the shareholders who would have been entitled to it had it been distributed by way of dividend and in the same proportions.
Liquidation Rights
If we are wound up, the shareholders may, subject
to the articles and any other sanction required by the Cayman Companies Law, pass a special resolution allowing the liquidator to do either
or both of the following:
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to divide in specie among the shareholders the whole or any part of our assets and, for that purpose, to value any assets and to determine how the division shall be carried out as between the shareholders or different classes of shareholders; and
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(b)
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to vest the whole or any part of the assets in trustees for the benefit of shareholders and those liable to contribute to the winding up.
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The directors have the authority to present a
petition for our winding up to the Grand Court of the Cayman Islands on our behalf without the sanction of a resolution passed at a general
meeting.
Register of Members
Under the Cayman Companies Law, we must keep a
register of members and there should be entered therein:
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the names and addresses of the members of the company, a statement of the shares held by each member, which: distinguishes each share by its number (so long as the share has a number); confirms the amount paid, or agreed to be considered as paid, on the shares of each member; confirms the number and category of shares held by each member; and confirms whether each relevant category of shares held by a member carries voting rights under the Articles, and if so, whether such voting rights are conditional;
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the date on which the name of any person was entered on the register as a member; and
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the date on which any person ceased to be a member.
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For these purposes, “voting rights”
means rights conferred on shareholders, including the right to appoint or remove directors, in respect of their shares to vote at general
meetings of the company on all or substantially all matters. A voting right is conditional where the voting right arises only in certain
circumstances.
Under the Cayman Companies Law, the register of
members of our Company is prima facie evidence of the matters set out therein (that is, the register of members will raise a presumption
of fact on the matters referred to above unless rebutted) and a shareholder registered in the register of members is deemed as a matter
of the Cayman Companies Law to have legal title to the shares as set against its name in the register of members. Upon the completion
of this offering, the register of members will be immediately updated to record and give effect to the issuance of shares by us to the
custodian or its nominee. Once our register of members has been updated, the shareholders recorded in the register of members will be
deemed to have legal title to the shares set against their name.
If the name of any person is incorrectly entered
in or omitted from our register of members, or if there is any default or unnecessary delay in entering on the register the fact of any
person having ceased to be a shareholder of our company, the person or shareholder aggrieved (or any shareholder of our Company or our
Company itself) may apply to the Grand Court of the Cayman Islands for an order that the register be rectified, and the Court may either
refuse such application or it may, if satisfied of the justice of the case, make an order for the rectification of the register.
Preferred Shares
Our articles of association allow our board of
directors a broad discretion from time to time to issue shares with or without preferred, deferred, or other special rights or restrictions,
whether in regard to dividend, voting, return of capital, or otherwise.
Our board of directors may issue preferred shares
without action by our shareholders to the extent there are authorized but unissued shares available.
You should refer to the prospectus supplement
relating to the series of preferred shares being offered for the specific terms of that series, including:
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title of the series and the number of shares in the series;
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the price at which the preferred shares will be offered;
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the dividend rate or rates or method of calculating the rates, the dates on which the dividends will be payable, whether or not dividends will be cumulative or noncumulative, and, if cumulative, the dates from which dividends on the preferred shares being offered will cumulate;
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the voting rights, if any, of the holders of preferred shares being offered;
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the provisions for a sinking fund, if any, and the provisions for redemption, if applicable, of the preferred shares being offered, including any restrictions on the foregoing as a result of arrearage in the payment of dividends or sinking fund installments;
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the liquidation preference per share;
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the terms and conditions, if applicable, upon which the preferred shares being offered will be convertible into our Ordinary Shares, including the conversion price, or the manner of calculating the conversion price, and the conversion period;
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the terms and conditions, if applicable, upon which the preferred shares being offered will be exchangeable for debt securities, including the exchange price, or the manner of calculating the exchange price, and the exchange period;
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any listing of the preferred shares being offered on any securities exchange;
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a discussion of any material federal income tax considerations applicable to the preferred shares being offered;
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any preemptive rights;
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the relative ranking and preferences of the preferred shares being offered as to dividend rights and rights upon liquidation, dissolution, or the winding up of our affairs;
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any limitations on the issuance of any class or series of preferred shares ranking senior or equal to the series of preferred shares being offered as to dividend rights and rights upon liquidation, dissolution, or the winding up of our affairs; and
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any additional rights, preferences, qualifications, limitations, and restrictions of the series.
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Upon issuance, the preferred shares will be fully
paid and nonassessable, which means that its holders will have paid their purchase price in full and we may not require them to pay additional
funds.
Any preferred share terms selected by the board
of directors could decrease the amount of earnings and assets available for distribution to holders of our Ordinary Shares or adversely
affect the rights and power, including voting rights, of the holders of our Ordinary Shares without any further vote or action by the
shareholders. The rights of holders of our Ordinary Shares will be subject to, and may be adversely affected by, the rights of the holders
of any preferred shares that may be issued by us in the future. The issuance of preferred shares could also have the effect of delaying
or preventing a change in control of our company or make removal of management more difficult.
Differences in Corporate Law
The Cayman Companies Law is derived, to a large
extent, from the older Companies Acts of England and Wales but does not follow recent United Kingdom statutory enactments, and accordingly
there are significant differences between the Cayman Companies Law and the current Companies Act of England and Wales. In addition, the
Cayman Companies Law differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of
certain significant differences between the provisions of the Cayman Companies Law applicable to us and the comparable laws applicable
to companies incorporated in the State of Delaware in the United States.
Mergers and Similar Arrangements
The Cayman Companies Law permits mergers and consolidations
between Cayman Islands companies and between Cayman Islands companies and non-Cayman Islands companies. For these purposes, (a) “merger”
means the merging of two or more constituent companies and the vesting of their undertaking, property, and liabilities in one of such
companies as the surviving company, and (b) a “consolidation” means the combination of two or more constituent companies
into a consolidated company and the vesting of the undertaking, property and liabilities of such companies to the consolidated company.
In order to effect such a merger or consolidation, the directors of each constituent company must approve a written plan of merger or
consolidation, which must then be authorized by (a) a special resolution of the shareholders of each constituent company, and (b) such
other authorization, if any, as may be specified in such constituent company’s articles of association. The plan must be filed with
the Registrar of Companies together with a declaration as to the solvency of the consolidated or surviving company, a list of the assets
and liabilities of each constituent company, and an undertaking that a copy of the certificate of merger or consolidation will be given
to the shareholders and creditors of each constituent company and that notification of the merger or consolidation will be published in
the Cayman Islands Gazette. Court approval is not required for a merger or consolidation which is effected in compliance with these statutory
procedures.
A merger between a Cayman Islands parent company
and its Cayman Islands subsidiary or subsidiaries does not require authorization by a resolution of shareholders. For this purpose, a
subsidiary is a company of which at least 90% of the issued shares entitled to vote are owned by the parent company.
The consent of each holder of a fixed or floating
security interest of a constituent company is required unless this requirement is waived by a court in the Cayman Islands.
Except in certain limited circumstances, a dissenting
shareholder of a Cayman Islands constituent company is entitled to payment of the fair value of his or her shares upon dissenting from
a merger or consolidation. The exercise of such dissenter rights will preclude the exercise by the dissenting shareholder of any other
rights to which he or she might otherwise be entitled by virtue of holding shares, except for the right to seek relief on the grounds
that the merger or consolidation is void or unlawful.
In addition, there are statutory provisions that
facilitate the reconstruction and amalgamation of companies, provided that the arrangement is approved by a majority in number of each
class of shareholders and creditors with whom the arrangement is to be made, and who must, in addition, represent three-fourths in value
of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting,
or meetings, convened for that purpose. The convening of the meetings and subsequently the arrangement must be sanctioned by the Grand
Court of the Cayman Islands. While a dissenting shareholder has the right to express to the court the view that the transaction ought
not to be approved, the court can be expected to approve the arrangement if it determines that:
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(a)
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the statutory provisions as to the required majority vote have been met;
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(b)
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the shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minority to promote interests adverse to those of the class;
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(c)
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the arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his interest; and
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(d)
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the arrangement is not one that would more properly be sanctioned under some other provision of the Cayman Companies Law.
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When a takeover offer is made and accepted by
holders of 90% of the shares affected within four months, the offeror may, within a two-month period commencing on the expiration of such
four month period, require the holders of the remaining shares to transfer such shares on the terms of the offer. An objection can be
made to the Grand Court of the Cayman Islands but this is unlikely to succeed in the case of an offer which has been so approved unless
there is evidence of fraud, bad faith or collusion.
If an arrangement and reconstruction is thus approved,
or if a takeover offer is made and accepted, a dissenting shareholder would have no rights comparable to appraisal rights, which would
otherwise ordinarily be available to dissenting shareholders of Delaware corporations, providing rights to receive payment in cash for
the judicially determined value of the shares.
Shareholders’ Suits
In principle, we will normally be the proper plaintiff
to sue for a wrong done to us as a company, and as a general rule, a derivative action may not be brought by a minority shareholder. However,
based on English law authorities, which would in all likelihood be of persuasive authority in the Cayman Islands, the Cayman Islands courts
can be expected to follow and apply the common law principles (namely the rule in Foss v. Harbottle and the exceptions thereto)
so that a non-controlling shareholder may be permitted to commence a class action against or derivative actions in the name of the company
to challenge:
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an act which is illegal or ultra vires with respect to the company and is therefore incapable of ratification by the shareholders;
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an act which, although not ultra vires, requires authorization by a qualified (or special) majority (that is, more than a simple majority) which has not been obtained; and
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an act which constitutes a “fraud on the minority” where the wrongdoers are themselves in control of the company.
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Indemnification of Directors and Executive
Officers and Limitation of Liability
The Cayman Islands law does not limit the extent
to which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any
such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil
fraud or the consequences of committing a crime. Our articles provide to the extent permitted by law, we shall indemnify each existing
or former secretary, director (including alternate director), and any of our other officers (including an investment adviser or an administrator
or liquidator) and their personal representatives against:
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all actions, proceedings, costs, charges, expenses, losses, damages, or liabilities incurred or sustained by the existing or former director (including alternate director), secretary, or officer in or about the conduct of our business or affairs or in the execution or discharge of the existing or former director (including alternate director), secretary’s or officer’s duties, powers, authorities, or discretions; and
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without limitation to paragraph (a) above, all costs, expenses, losses, or liabilities incurred by the existing or former director (including alternate director), secretary, or officer in defending (whether successfully or otherwise) any civil, criminal, administrative, or investigative proceedings (whether threatened, pending or completed) concerning us or our affairs in any court or tribunal, whether in the Cayman Islands or elsewhere.
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No such existing or former director (including
alternate director), secretary, or officer, however, shall be indemnified in respect of any matter arising out of his own dishonesty.
To the extent permitted by law, we may make a
payment, or agree to make a payment, whether by way of advance, loan, or otherwise, for any legal costs incurred by an existing or former
director (including alternate director), secretary, or any of our officers in respect of any matter identified in above on condition that
the director (including alternate director), secretary, or officer must repay the amount paid by us to the extent that it is ultimately
found not liable to indemnify the director (including alternate director), the secretary, or that officer for those legal costs.
This standard of conduct is generally the same
as permitted under the Delaware General Corporation Law for a Delaware corporation. In addition, we intend to enter into indemnification
agreements with our directors and executive officers that will provide such persons with additional indemnification beyond that provided
in our articles.
Anti-Takeover Provisions in Our Articles
Some provisions of our articles may discourage,
delay, or prevent a change in control of our company or management that shareholders may consider favorable, including provisions that
authorize our board of directors to issue shares at such times and on such terms and conditions as the board of directors may decide without
any further vote or action by our shareholders.
Under the Cayman Companies Law, our directors
may only exercise the rights and powers granted to them under our articles for what they believe in good faith to be in the best interests
of our company and for a proper purpose.
Directors’ Fiduciary Duties
Under Delaware corporate law, a director of a
Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and
the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would
exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information
reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he or she reasonably
believes to be in the best interests of the corporation. He or she must not use his or her corporate position for personal gain or advantage.
This duty prohibits self-dealing by a director and mandates that the best interests of the corporation and its shareholders take precedence
over any interest possessed by a director, officer, or controlling shareholder and not shared by the shareholders generally. In general,
actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken
was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary
duties. Should such evidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the
transaction, and that the transaction was of fair value to the corporation.
As a matter of Cayman Islands law, a director
owes three types of duties to the company: (i) statutory duties, (ii) fiduciary duties, and (iii) common law duties. The
Cayman Companies Law imposes a number of statutory duties on a director. A Cayman Islands director’s fiduciary duties are not codified,
however the courts of the Cayman Islands have held that a director owes the following fiduciary duties (a) a duty to act in what
the director bona fide considers to be in the best interests of the company, (b) a duty to exercise their powers for the purposes
they were conferred, (c) a duty to avoid fettering his or her discretion in the future, and (d) a duty to avoid conflicts of
interest and of duty. The common law duties owed by a director are those to act with skill, care, and diligence that may reasonably be
expected of a person carrying out the same functions as are carried out by that director in relation to the company and, also, to act
with the skill, care, and diligence in keeping with a standard of care commensurate with any particular skill they have which enables
them to meet a higher standard than a director without those skills. In fulfilling their duty of care to us, our directors must ensure
compliance with our articles, as amended and restated from time to time. We have the right to seek damages if a duty owed by any of our
directors is breached.
Shareholder Proposals
Under the Delaware General Corporation Law, a
shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions
in the governing documents. The Delaware General Corporation Law does not provide shareholders an express right to put any proposal before
the annual meeting of shareholders, but in keeping with common law, Delaware corporations generally afford shareholders an opportunity
to make proposals and nominations provided that they comply with the notice provisions in the certificate of incorporation or bylaws.
A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders
may be precluded from calling special meetings.
The Cayman Companies Law provides shareholders
with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before
a general meeting. However, these rights may be provided in a company’s articles of association. Our articles provide that general
meetings shall be convened on the written requisition of one or more of the shareholders entitled to attend and vote at our general meetings
who (together) hold not less than 10 percent of the rights to vote at such general meeting in accordance with the notice provisions in
the articles of association, specifying the purpose of the meeting and signed by each of the shareholders making the requisition. If the
directors do not convene such meeting for a date not later than 21 clear days’ after the date of receipt of the written requisition,
those shareholders who requested the meeting may convene the general meeting themselves within three months after the end of such period
of 21 clear days in which case reasonable expenses incurred by them as a result of the directors failing to convene a meeting shall be
reimbursed by us. Our articles provide no other right to put any proposals before annual general meetings or extraordinary general meetings.
As a Cayman Islands exempted company, we are not obligated by law to call shareholders’ annual general meetings. However, our corporate
governance guidelines require us to call such meetings every year.
Cumulative Voting
Under the Delaware General Corporation Law, cumulative
voting for elections of directors is not permitted unless the corporation’s certificate of incorporation specifically provides for
it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the
minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s
voting power with respect to electing such director. As permitted under the Cayman Companies Law, our articles do not provide for cumulative
voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.
Removal of Directors
Under the Delaware General Corporation Law, a
director of a corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares
entitled to vote, unless the certificate of incorporation provides otherwise. Subject to the provisions of our articles (which include
the removal of a director by ordinary resolution), the office of a director may be terminated forthwith if (a) he is prohibited by
the laws of the Cayman Islands from acting as a director, (b) he is made bankrupt or makes an arrangement or composition with his
creditors generally, (c) he resigns his office by notice to us, (d) he only held office as a director for a fixed term and such
term expires, (e) in the opinion of a registered medical practitioner by whom he is being treated he becomes physically or mentally
incapable of acting as a director, (f) he is given notice by the majority of the other directors (not being less than two in number)
to vacate office (without prejudice to any claim for damages for breach of any agreement relating to the provision of the services of
such director), (g) he is made subject to any law relating to mental health or incompetence, whether by court order or otherwise,
or (h) without the consent of the other directors, he is absent from meetings of directors for continuous period of six months.
Transactions with Interested Shareholders
The Delaware General Corporation Law contains
a business combination statute applicable to Delaware public corporations whereby, unless the corporation has specifically elected not
to be governed by such statute by amendment to its certificate of incorporation or bylaws that is approved by its shareholders, it is
prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date
that such person becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned
15% or more of the target’s outstanding voting stock or who or which is an affiliate or associate of the corporation and owned 15%
or more of the corporation’s outstanding voting stock within the past three years. This has the effect of limiting the ability of
a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does
not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors
approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages
any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with the target’s board of
directors.
The Cayman Companies Law has no comparable statute.
As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However, although
the Cayman Companies Law does not regulate transactions between a company and its significant shareholders, under Cayman Islands law such
transactions must be entered into bona fide in the best interests of the company and for a proper corporate purpose and not with the effect
of constituting a fraud on the minority shareholders.
Dissolution; Winding Up
Under the Delaware General Corporation Law, unless
the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting
power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the
corporation’s outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority
voting requirement in connection with dissolutions initiated by the board of directors.
Under the Cayman Companies Law and our articles,
the Company may be wound up by a special resolution of our shareholders, or if the winding up is initiated by our board of directors,
by either a special resolution of our members or, if our company is unable to pay its debts as they fall due, by an ordinary resolution
of our members. In addition, a company may be wound up by an order of the courts of the Cayman Islands. The court has authority to order
winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so.
Variation of Rights of Shares
Under the Delaware General Corporation Law, a
corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the
certificate of incorporation provides otherwise. Under the Cayman Companies Law and our articles, if our share capital is divided into
more than one class of shares, the rights attaching to any class of share (unless otherwise provided by the terms of issue of the shares
of that class) may be varied either with the consent in writing of the holders of not less than two-thirds of the issued shares of that
class, or with the sanction of a resolution passed by a majority of not less than two-thirds of the holders of shares of the class present
in person or by proxy at a separate general meeting of the holders of shares of that class.
Amendment of Governing Documents
Under the Delaware General Corporation Law, a
corporation’s certificate of incorporation may be amended only if adopted and declared advisable by the board of directors and approved
by a majority of the outstanding shares entitled to vote, and the bylaws may be amended with the approval of a majority of the outstanding
shares entitled to vote and may, if so provided in the certificate of incorporation, also be amended by the board of directors. Under
the Cayman Companies Law, our articles may only be amended by special resolution of our shareholders.
Anti-money Laundering—Cayman Islands
In order to comply with legislation or regulations
aimed at the prevention of money laundering, we may be required to adopt and maintain anti-money laundering procedures and may require
subscribers to provide evidence to verify their identity. Where permitted, and subject to certain conditions, we may also delegate the
maintenance of our anti-money laundering procedures (including the acquisition of due diligence information) to a suitable person.
We reserve the right to request such information
as is necessary to verify the identity of a subscriber. In the event of delay or failure on the part of the subscriber in producing any
information required for verification purposes, we may refuse to accept the application, in which case any funds received will be returned
without interest to the account from which they were originally debited.
We also reserve the right to refuse to make any
redemption payment to a shareholder if our directors or officers suspect or are advised that the payment of redemption proceeds to such
shareholder might result in a breach of applicable anti-money laundering or other laws or regulations by any person in any relevant jurisdiction,
or if such refusal is considered necessary or appropriate to ensure our compliance with any such laws or regulations in any applicable
jurisdiction.
If any person resident in the Cayman Islands knows
or suspects or has reason for knowing or suspecting that another person is engaged in criminal conduct or is involved with terrorism or
terrorist property and the information for that knowledge or suspicion came to their attention in the course of their business in the
regulated sector, or other trade, profession, business or employment, the person will be required to report such knowledge or suspicion
to (i) a nominated officer (appointed in accordance with the Proceeds of Crime Act (Revised) of the Cayman Islands) or the Financial
Reporting Authority of the Cayman Islands, pursuant to the Proceeds of Crime Act (Revised), if the disclosure relates to criminal conduct
or money laundering or (ii) to a police constable or a nominated officer (pursuant to the Terrorism Act (Revised) of the Cayman Islands)
or the Financial Reporting Authority, pursuant to the Terrorism Act (Revised), if the disclosure relates to involvement with terrorism
or terrorist financing and terrorist property. Such a report shall not be treated as a breach of confidence or of any restriction upon
the disclosure of information imposed by any enactment or otherwise.
Data Protection in the Cayman Islands –
Privacy Notice
This privacy notice explains the manner in which
we collect, process, and maintain personal data about investors of the Company pursuant to the Data Protection Act, 2021 of the Cayman
Islands, as amended from time to time and any regulations, codes of practice, or orders promulgated pursuant thereto (the “DPA”).
We are committed to processing personal data in
accordance with the DPA. In our use of personal data, we will be characterized under the DPA as a “data controller,” whilst
certain of our service providers, affiliates, and delegates may act as “data processors” under the DPA. These service providers
may process personal information for their own lawful purposes in connection with services provided to us.
By virtue of your investment in the Company, we
and certain of our service providers may collect, record, store, transfer, and otherwise process personal data by which individuals may
be directly or indirectly identified.
Your personal data will be processed fairly and
for lawful purposes, including (a) where the processing is necessary for us to perform a contract to which you are a party or for
taking pre-contractual steps at your request, (b) where the processing is necessary for compliance with any legal, tax, or regulatory
obligation to which we are subject, or (c) where the processing is for the purposes of legitimate interests pursued by us or by a
service provider to whom the data are disclosed. As a data controller, we will only use your personal data for the purposes for which
we collected it. If we need to use your personal data for an unrelated purpose, we will contact you.
We anticipate that we will share your personal
data with our service providers for the purposes set out in this privacy notice. We may also share relevant personal data where it is
lawful to do so and necessary to comply with our contractual obligations or your instructions or where it is necessary or desirable to
do so in connection with any regulatory reporting obligations. In exceptional circumstances, we will share your personal data with regulatory,
prosecuting, and other governmental agencies or departments, and parties to litigation (whether pending or threatened), in any country
or territory including to any other person where we have a public or legal duty to do so (e.g. to assist with detecting and preventing
fraud, tax evasion, and financial crime or compliance with a court order).
Your personal data shall not be held by the Company
for longer than necessary with regard to the purposes of the data processing.
We will not sell your personal data. Any transfer
of personal data outside of the Cayman Islands shall be in accordance with the requirements of the DPA. Where necessary, we will ensure
that separate and appropriate legal agreements are put in place with the recipient of that data.
We will only transfer personal data in accordance
with the requirements of the DPA, and will apply appropriate technical and organizational information security measures designed to protect
against unauthorized or unlawful processing of the personal data and against the accidental loss, destruction, or damage to the personal
data.
If you are a natural person, this will affect
you directly. If you are a corporate investor (including, for these purposes, legal arrangements such as trusts or exempted limited partnerships)
that provides us with personal data on individuals connected to you for any reason in relation to your investment into the Company, this
will be relevant for those individuals and you should inform such individuals of the content.
You have certain rights under the DPA, including
(a) the right to be informed as to how we collect and use your personal data (and this privacy notice fulfils our obligation in this
respect), (b) the right to obtain a copy of your personal data, (c) the right to require us to stop direct marketing, (d) the
right to have inaccurate or incomplete personal data corrected, (e) the right to withdraw your consent and require us to stop processing
or restrict the processing, or not begin the processing of your personal data, (f) the right to be notified of a data breach (unless
the breach is unlikely to be prejudicial), (g) the right to obtain information as to any countries or territories outside the Cayman
Islands to which we, whether directly or indirectly, transfer, intend to transfer, or wish to transfer your personal data, general measures
we take to ensure the security of personal data, and any information available to us as to the source of your personal data, (h) the
right to complain to the Office of the Ombudsman of the Cayman Islands, and (i) the right to require us to delete your personal data
in some limited circumstances.
If you consider that your personal data has not
been handled correctly, or you are not satisfied with our responses to any requests you have made regarding the use of your personal data,
you have the right to complain to the Cayman Islands’ Ombudsman. The Ombudsman can be contacted by calling +1 (345) 946-6283 or
by email at info@ombudsman.ky.
History of Share Capital
The following is a summary of our share capital
for the three years preceding the date of this prospectus.
On December 26, 2018, we completed the first
closing of our initial public offering and issued an aggregate of 1,241,459 Ordinary Shares at a price of $5 per share.
On January 4, 2019, we completed the second
closing of our initial public offering and issued 19,361 additional Ordinary Shares at a price of $5 per share.
On August 20, 2020, we offered and sold an
aggregate of 34,396 Ordinary Shares at $3.3 per share, in reliance on the exemption under Rule 902 of Regulation S promulgated under
the Securities Act.
DESCRIPTION OF DEBT SECURITIES
General
As used in this prospectus, the term “debt
securities” means the debentures, notes, bonds and other evidences of indebtedness that we may issue from time to time. The debt
securities will either be senior debt securities or subordinated debt securities. Debt securities will be issued under an indenture between
us and a trustee to be named therein. We have filed the forms of indentures as exhibits to the registration statement of which this prospectus
is a part. We may issue debt securities which may or may not be converted into our Ordinary Shares or preferred shares. It is likely
that convertible debt securities will not be issued under an indenture. We may issue the debt securities independently or together with
any underlying securities, and debt securities may be attached or separate from the underlying securities.
The following description is a summary of selected
provisions relating to the debt securities that we may issue. The summary is not complete. When debt securities are offered in the future,
a prospectus supplement, information incorporated by reference, or a free writing prospectus, as applicable, will explain the particular
terms of those securities and the extent to which these general provisions may apply. The specific terms of the debt securities as described
in a prospectus supplement, information incorporated by reference, or free writing prospectus will supplement and, if applicable, may
modify or replace the general terms described in this section.
This summary and any description of debt securities
in the applicable prospectus supplement, information incorporated by reference, or free writing prospectus is subject to and is qualified
in its entirety by reference to all the provisions of any specific debt securities document or agreement. We will file each of these
documents, as applicable, with the SEC and incorporate them by reference as an exhibit to the registration statement of which this prospectus
is a part on or before the time we issue a series of debt securities. See “Where You Can Find Additional Information” and
“Incorporation of Documents by Reference” below for information on how to obtain a copy of a debt securities document when
it is filed.
When we refer to a series of debt securities,
we mean all debt securities issued as part of the same series under the applicable indenture.
Terms
The applicable prospectus supplement, information
incorporated by reference, or free writing prospectus, may describe the terms of any debt securities that we may offer, including, but
not limited to, the following:
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the title of the debt securities;
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the total amount of the debt securities;
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the amount or amounts of the debt securities will be issued and interest rate;
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the conversion price at which the debt securities may be converted;
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the date on which the right to convert the debt securities will commence and the date on which the right will expire;
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if applicable, the minimum or maximum amount of debt securities that may be converted at any one time;
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if applicable, a discussion of material federal income tax consideration;
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if applicable, the terms of the payoff of the debt securities;
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the identity of the indenture agent, if any;
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the procedures and conditions relating to the conversion of the debt securities; and
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any other terms of the debt securities, including terms, procedure and limitation relating to the exchange or conversion of the debt securities.
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Form, Exchange, and Transfer
We may issue the debt securities in registered
form or bearer form. Debt securities issued in registered form, i.e., book-entry form, will be represented by a global security registered
in the name of a depository, which will be the holder of all the debt securities represented by the global security. Those investors who
own beneficial interests in global debt securities will do so through participants in the depository’s system, and the rights of
these indirect owners will be governed solely by the applicable procedures of the depository and its participants. In addition, we may
issue debt securities in non-global form, i.e., bearer form. If any debt securities are issued in non-global form, debt securities certificates
may be exchanged for new debt securities certificates of different denominations, and holders may exchange, transfer, or convert their
debt securities at the debt securities agent’s office or any other office indicated in the applicable prospectus supplement, information
incorporated by reference or free writing prospectus.
Prior to the conversion of their debt securities,
holders of debt securities convertible for Ordinary Shares or preferred shares will not have any rights of holders of Ordinary Shares
or preferred shares, and will not be entitled to dividend payments, if any, or voting rights of the Ordinary Shares or preferred shares.
Conversion of Debt Securities
A debt security may entitle the holder to purchase,
in exchange for the extinguishment of debt, an amount of securities at a conversion price that will be stated in the debt security. Debt
securities may be converted at any time up to the close of business on the expiration date set forth in the terms of such debt security.
After the close of business on the expiration date, debt securities not exercised will be paid in accordance with their terms.
Debt securities may be converted as set forth
in the applicable offering material. Upon receipt of a notice of conversion properly completed and duly executed at the corporate trust
office of the indenture agent, if any, or to us, we will forward, as soon as practicable, the securities purchasable upon such exercise.
If less than all of the debt security represented by such security is converted, a new debt security will be issued for the remaining
debt security.
DESCRIPTION OF WARRANTS
General
We may issue warrants to purchase our securities.
We may issue the warrants independently or together with any underlying securities, and the warrants may be attached or separate from
the underlying securities. We may also issue a series of warrants under a separate warrant agreement to be entered into between us and
a warrant agent. The warrant agent will act solely as our agent in connection with the warrants of such series and will not assume any
obligation or relationship of agency for or with holders or beneficial owners of warrants.
The following description is a summary of selected
provisions relating to the warrants that we may issue. The summary is not complete. When warrants are offered in the future, a prospectus
supplement, information incorporated by reference, or a free writing prospectus, as applicable, will explain the particular terms of those
securities and the extent to which these general provisions may apply. The specific terms of the warrants as described in a prospectus
supplement, information incorporated by reference, or free writing prospectus will supplement and, if applicable, may modify or replace
the general terms described in this section.
This summary and any description of warrants in
the applicable prospectus supplement, information incorporated by reference, or free writing prospectus is subject to and is qualified
in its entirety by reference to all the provisions of any specific warrant document or agreement, if applicable. We will file each of
these documents, as applicable, with the SEC and incorporate them by reference as an exhibit to the registration statement of which this
prospectus is a part on or before the time we issue a series of warrants. See “Where You Can Find Additional Information”
and “Incorporation of Documents by Reference” below for information on how to obtain a copy of a warrant document when it
is filed.
When we refer to a series of warrants, we mean
all warrants issued as part of the same series under the applicable warrant agreement.
Terms
The applicable prospectus supplement, information
incorporated by reference, or free writing prospectus, may describe the terms of any warrants that we may offer, including, but not limited
to, the following:
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the title of the warrants;
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the total number of warrants;
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the price or prices at which the warrants will be issued;
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the price or prices at which the warrants may be exercised;
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the currency or currencies that investors may use to pay for the warrants;
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the date on which the right to exercise the warrants will commence and the date on which the right will expire;
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whether the warrants will be issued in registered form or bearer form;
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information with respect to book-entry procedures, if any;
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if applicable, the minimum or maximum amount of warrants that may be exercised at any one time;
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if applicable, the designation and terms of the underlying securities with which the warrants are issued and the number of warrants issued with each underlying security;
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if applicable, the date on and after which the warrants and the related underlying securities will be separately transferable;
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if applicable, a discussion of material federal income tax considerations;
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if applicable, the terms of redemption of the warrants;
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the identity of the warrant agent, if any;
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the procedures and conditions relating to the exercise of the warrants; and
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any other terms of the warrants, including terms, procedures, and limitations relating to the exchange and exercise of the warrants.
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Warrant Agreement
We may issue the warrants in one or more series
under one or more warrant agreements, each to be entered into between us and a bank, trust company, or other financial institution as
warrant agent. We may add, replace, or terminate warrant agents from time to time. We may also choose to act as our own warrant agent
or may choose one of our subsidiaries to do so.
The warrant agent under a warrant agreement will
act solely as our agent in connection with the warrants issued under that agreement. Any holder of warrants may, without the consent of
any other person, enforce by appropriate legal action, on its own behalf, its right to exercise those warrants in accordance with their
terms.
Form, Exchange, and Transfer
We may issue the warrants in registered form or
bearer form. Warrants issued in registered form, i.e., book-entry form, will be represented by a global security registered in the name
of a depository, which will be the holder of all the warrants represented by the global security. Those investors who own beneficial interests
in a global warrant will do so through participants in the depository’s system, and the rights of these indirect owners will be
governed solely by the applicable procedures of the depository and its participants. In addition, we may issue warrants in non-global
form, i.e., bearer form. If any warrants are issued in non-global form, warrant certificates may be exchanged for new warrant certificates
of different denominations, and holders may exchange, transfer, or exercise their warrants at the warrant agent’s office or any
other office indicated in the applicable prospectus supplement, information incorporated by reference, or free writing prospectus.
Prior to the exercise of their warrants, holders
of warrants exercisable for Ordinary Shares or preferred shares will not have any rights of holders of Ordinary Shares or preferred shares
and will not be entitled to dividend payments, if any, or voting rights of the Ordinary Shares or preferred shares.
Exercise of Warrants
A warrant will entitle the holder to purchase
for cash an amount of securities at an exercise price that will be stated in, or that will be determinable as described in, the applicable
prospectus supplement, information incorporated by reference, or free writing prospectus. Warrants may be exercised at any time up to
the close of business on the expiration date set forth in the applicable offering material. After the close of business on the expiration
date, unexercised warrants will become void. Warrants may be redeemed as set forth in the applicable offering material.
Warrants may be exercised as set forth in the
applicable offering material. Upon receipt of payment and the warrant certificate properly completed and duly executed at the corporate
trust office of the warrant agent or any other office indicated in the applicable offering material, we will forward, as soon as practicable,
the securities purchasable upon such exercise. If less than all of the warrants represented by such warrant certificate are exercised,
a new warrant certificate will be issued for the remaining warrants.
DESCRIPTION OF RIGHTS
We may issue rights to purchase our securities.
The rights may or may not be transferable by the persons purchasing or receiving the rights. In connection with any rights offering, we
may enter into a standby underwriting or other arrangement with one or more underwriters or other persons pursuant to which such underwriters
or other persons would purchase any offered securities remaining unsubscribed for after such rights offering. Each series of rights will
be issued under a separate rights agent agreement to be entered into between us and one or more banks, trust companies, or other financial
institutions, as rights agent, that we will name in the applicable prospectus supplement. The rights agent will act solely as our agent
in connection with the rights and will not assume any obligation or relationship of agency or trust for or with any holders of rights
certificates or beneficial owners of rights.
The prospectus supplement relating to any rights
that we offer will include specific terms relating to the offering, including, among other matters:
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the date of determining the security holders entitled to the rights distribution;
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the aggregate number of rights issued and the aggregate amount of securities purchasable upon exercise of the rights;
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the exercise price;
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the conditions to completion of the rights offering;
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the date on which the right to exercise the rights will commence and the date on which the rights will expire; and
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any applicable federal income tax considerations.
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Each right would entitle the holder of the rights
to purchase for cash the principal amount of securities at the exercise price set forth in the applicable prospectus supplement. Rights
may be exercised at any time up to the close of business on the expiration date for the rights provided in the applicable prospectus supplement.
After the close of business on the expiration date, all unexercised rights will become void.
If less than all of the rights issued in any rights
offering are exercised, we may offer any unsubscribed securities directly to persons other than our security holders, to or through agents,
underwriters, or dealers, or through a combination of such methods, including pursuant to standby arrangements, as described in the applicable
prospectus supplement.
DESCRIPTION OF UNITS
We may issue units composed of any combination
of our securities. We will issue each unit so that the holder of the unit is also the holder of each security included in the unit. As
a result, the holder of a unit will have the rights and obligations of a holder of each included security. The unit agreement under which
a unit is issued may provide that the securities included in the unit may not be held or transferred separately, at any time or at any
time before a specified date.
The following description is a summary of selected
provisions relating to units that we may offer. The summary is not complete. When units are offered in the future, a prospectus supplement,
information incorporated by reference, or a free writing prospectus, as applicable, will explain the particular terms of those securities
and the extent to which these general provisions may apply. The specific terms of the units as described in a prospectus supplement, information
incorporated by reference, or free writing prospectus will supplement and, if applicable, may modify or replace the general terms described
in this section.
This summary and any description of units in the
applicable prospectus supplement, information incorporated by reference, or free writing prospectus is subject to and is qualified in
its entirety by reference to the unit agreement, collateral arrangements, and depositary arrangements, if applicable. We will file each
of these documents, as applicable, with the SEC and incorporate them by reference as an exhibit to the registration statement of which
this prospectus is a part on or before the time we issue a series of units. See “Where You Can Find Additional Information”
and “Incorporation of Documents by Reference” below for information on how to obtain a copy of a document when it is filed.
The applicable prospectus supplement, information
incorporated by reference, or free writing prospectus may describe:
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The designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately;
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Any provisions for the issuance, payment, settlement, transfer, or exchange of the units or of the securities composing the units;
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Whether the units will be issued in fully registered or global form; and
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Any other terms of the units.
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The applicable provisions described in this section,
as well as those described under “Description of Share Capital,” “Description of Debt Securities,” “Description
of Warrants,” and “Description of Rights” above, will apply to each unit and to each security included in each unit,
respectively.
PLAN OF DISTRIBUTION
We may sell the securities offered by this prospectus
from time to time in one or more transactions, including, without limitation:
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through agents;
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to or through underwriters;
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through broker-dealers (acting as agent or principal);
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directly by us to purchasers (including our affiliates and shareholders), through a specific bidding or auction process, a rights offering, or other method;
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through a combination of any such methods of sale; or
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through any other methods described in a prospectus supplement.
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The distribution of securities may be effected,
from time to time, in one or more transactions, including:
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block transactions (which may involve crosses) and transactions on Nasdaq or any other organized market where the securities may be traded;
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purchases by a broker-dealer as principal and resale by the broker-dealer for its own account pursuant to a prospectus supplement;
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ordinary brokerage transactions and transactions in which a broker-dealer solicits purchasers;
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sales “at the market” to or through a market maker or into an existing trading market, on an exchange or otherwise; and
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sales in other ways not involving market makers or established trading markets, including direct sales to purchasers.
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The securities may be sold at a fixed price or
prices, which may be changed, or at market prices prevailing at the time of sale, at prices relating to the prevailing market prices or
at negotiated prices. The consideration may be cash, extinguishment of debt, or another form negotiated by the parties. Agents, underwriters,
or broker-dealers may be paid compensation for offering and selling the securities. That compensation may be in the form of discounts,
concessions, or commissions to be received from us or from the purchasers of the securities. Dealers and agents participating in the distribution
of the securities may be deemed to be underwriters, and compensation received by them on resale of the securities may be deemed to be
underwriting discounts and commissions under the Securities Act. If such dealers or agents were deemed to be underwriters, they may be
subject to statutory liabilities under the Securities Act.
We may also make direct sales through subscription
rights distributed to our existing shareholders on a pro rata basis, which may or may not be transferable. In any distribution of subscription
rights to our shareholders, if all of the underlying securities are not subscribed for, we may then sell the unsubscribed securities directly
to third parties or may engage the services of one or more underwriters, dealers, or agents, including standby underwriters, to sell the
unsubscribed securities to third parties.
Some or all of the securities that we offer through
this prospectus may be new issues of securities with no established trading market. Any underwriters to whom we sell our securities for
public offering and sale may make a market in those securities, but they will not be obligated to do so and they may discontinue any market
making at any time without notice. Accordingly, we cannot assure you of the liquidity of, or continued trading markets for, any securities
that we offer.
Agents may, from time to time, solicit offers
to purchase the securities. If required, we will name in the applicable prospectus supplement, document incorporated by reference, or
free writing prospectus, as applicable, any agent involved in the offer or sale of the securities and set forth any compensation payable
to the agent. Unless otherwise indicated, any agent will be acting on a best efforts basis for the period of its appointment. Any agent
selling the securities covered by this prospectus may be deemed to be an underwriter of the securities.
If underwriters are used in an offering, securities
will be acquired by the underwriters for their own account and may be resold, from time to time, in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale, or under delayed delivery
contracts or other contractual commitments. Securities may be offered to the public either through underwriting syndicates represented
by one or more managing underwriters or directly by one or more firms acting as underwriters. If an underwriter or underwriters are used
in the sale of securities, an underwriting agreement will be executed with the underwriter or underwriters at the time an agreement for
the sale is reached. The applicable prospectus supplement will set forth the managing underwriter or underwriters, as well as any other
underwriter or underwriters, with respect to a particular underwritten offering of securities, and will set forth the terms of the transactions,
including compensation of the underwriters and dealers and the public offering price, if applicable. This prospectus, the applicable prospectus
supplement and any applicable free writing prospectus will be used by the underwriters to resell the securities.
If a dealer is used in the sale of the securities,
we, or an underwriter, will sell the securities to the dealer, as principal. The dealer may then resell the securities to the public at
varying prices to be determined by the dealer at the time of resale. To the extent required, we will set forth in the prospectus supplement,
document incorporated by reference, or free writing prospectus, as applicable, the name of the dealer and the terms of the transactions.
We may directly solicit offers to purchase the
securities and may make sales of securities directly to institutional investors or others. These persons may be deemed to be underwriters
with respect to any resale of the securities. To the extent required, the prospectus supplement, document incorporated by reference, or
free writing prospectus, as applicable, will describe the terms of any such sales, including the terms of any bidding or auction process,
if used.
Agents, underwriters, and dealers may be entitled
under agreements which may be entered into with us to indemnification by us against specified liabilities, including liabilities incurred
under the Securities Act, or to contribution by us to payments they may be required to make in respect of such liabilities. If required,
the prospectus supplement, document incorporated by reference, or free writing prospectus, as applicable, will describe the terms and
conditions of such indemnification or contribution. Some of the agents, underwriters, or dealers, or their affiliates may be customers
of, engage in transactions with or perform services for us or our subsidiaries or affiliates in the ordinary course of business.
Under the securities laws of some states, the
securities offered by this prospectus may be sold in those states only through registered or licensed brokers or dealers.
Any person participating in the distribution of
securities registered under the registration statement that includes this prospectus will be subject to applicable provisions of the Exchange
Act, and the applicable SEC rules and regulations, including, among others, Regulation M, which may limit the timing of purchases
and sales of any of our securities by any such person. Furthermore, Regulation M may restrict the ability of any person engaged in the
distribution of our securities to engage in market-making activities with respect to our securities.
These restrictions may affect the marketability
of our securities and the ability of any person or entity to engage in market-making activities with respect to our securities.
Certain persons participating in an offering may
engage in over-allotment, stabilizing transactions, short-covering transactions, and penalty bids in accordance with Regulation M under
the Exchange Act that stabilize, maintain, or otherwise affect the price of the offered securities. If any such activities will occur,
they will be described in the applicable prospectus supplement.
To the extent required, this prospectus may be
amended or supplemented from time to time to describe a specific plan of distribution.
TAXATION
Material income tax consequences relating to the
purchase, ownership, and disposition of the securities offered by this prospectus are set forth in “Item 10. Additional Information—E.
Taxation” in our annual report on Form 20-F for the year ended December 31, 2020, which is incorporated herein by reference,
as updated by our subsequent filings under the Exchange Act that are incorporated by reference and, if applicable, in any accompanying
prospectus supplement or relevant free writing prospectus.
EXPENSES
The following table sets forth the aggregate expenses
in connection with this offering, all of which will be paid by us. All amounts shown are estimates, except for the SEC registration fee.
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SEC registration fee
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$
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6,489
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FINRA fees
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$
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11,000
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Legal fees and expenses
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$
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*
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Accounting fees and expenses
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$
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*
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Printing and postage expenses
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$
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*
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Miscellaneous expenses
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$
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*
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Total
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$
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To be provided by a prospectus supplement or as an exhibit to a report of foreign private issuer on Form 6-K that is incorporated by reference into this registration statement. Estimated solely for this item. Actual expenses may vary.
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MATERIAL CONTRACTS
Our material contracts are described in the documents
incorporated by reference into this prospectus. See “Incorporation of Documents by Reference” below.
MATERIAL CHANGES
Except as otherwise described in our annual report
on Form 20-F for the fiscal year ended December 31, 2020, in our reports of foreign issuer on Form 6-K filed or submitted
under the Exchange Act and incorporated by reference herein, and as disclosed in this prospectus or the applicable prospectus supplement,
no reportable material changes have occurred since December 31, 2020.
LEGAL MATTERS
We are being represented by Hunter Taubman Fischer &
Li LLC with respect to certain legal matters of U.S. federal securities and New York State law. The validity of the securities offered
in this offering and certain other legal matters as to Cayman Islands law will be passed upon for us by BGA Law (Cayman) Limited, our
counsel as to Cayman Islands law. Legal matters as to PRC law will be passed upon for us by Tianjin Shanchuan Law Firm. If legal matters
in connection with offerings made pursuant to this prospectus are passed upon by counsel to underwriters, dealers, or agents, such counsel
will be named in the applicable prospectus supplement relating to any such offering.
EXPERTS
The consolidated financial statements of MDJM LTD and Subsidiaries
appearing in our Annual Report on Form 20-F for the year ended December 31, 2020 have been audited by RBSM LLP, an independent
registered public accounting firm, as set forth in their report thereon, and as incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting
and auditing. The office of RBSM LLP is located at 805 Third Avenue, Suite 1430, New York, NY 10022.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to “incorporate by reference”
into this prospectus certain information we file with the SEC. This means that we can disclose important information to you by referring
you to those documents. Any statement contained in a document incorporated by reference in this prospectus shall be deemed to be modified
or superseded for purposes of this prospectus to the extent that a statement contained herein, or in any subsequently filed document,
which also is incorporated by reference herein, modifies or supersedes such earlier statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
We hereby incorporate by reference into this prospectus
the following documents:
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our annual report on Form 20-F for the fiscal year ended December 31, 2020, filed with the SEC on April 16, 2021;
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our unaudited consolidated interim financial statements for the six months ended June 30, 2021 on Form 6-K, filed with the SEC on October 15, 2021;
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our reports of foreign private issuer on Form 6-K, filed with the SEC on April 26, 2021, August 11, 2021, September 13, 2021, October 15, 2021, and October 18, 2021;
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the description of our Ordinary Shares contained in our registration statement on Form 8-A, filed with the SEC on December 18, 2018, and any amendment or report filed for the purpose of updating such description;
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any future annual reports on Form 20-F filed with the SEC after the date of this prospectus and prior to the termination of the offering of the securities offered by this prospectus; and
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any future reports of foreign private issuer on Form 6-K that we furnish to the SEC after the date of this prospectus that are identified in such reports as being incorporated by reference into the registration statement of which this prospectus forms a part.
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Our annual report on Form 20-F for the fiscal
year ended December 31, 2020 filed with the SEC on April 16, 2021 contains a description of our business and audited consolidated
financial statements with a report by our independent auditors. These statements were prepared in accordance with U.S. GAAP.
Unless expressly incorporated by reference, nothing
in this prospectus shall be deemed to incorporate by reference information furnished to, but not filed with, the SEC. Copies of all documents
incorporated by reference in this prospectus, other than exhibits to those document unless such exhibits are specially incorporated by
reference in this prospectus, will be provided at no cost to each person, including any beneficial owner, who receives a copy of this
prospectus on the written or oral request of that person made to:
MDJM LTD
Suite C-1505, Saidun Center
Xikang Road, Heping District, Tianjin
People’s Republic of China
+ 86-2283520851
You should rely only on the information that we
incorporate by reference or provide in this prospectus. We have not authorized anyone to provide you with different information. We are
not making any offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that
the information contained or incorporated in this prospectus by reference is accurate as of any date other than the date of the document
containing the information.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
As permitted by SEC rules, this prospectus omits
certain information and exhibits that are included in the registration statement of which this prospectus forms a part. Since this prospectus
may not contain all of the information that you may find important, you should review the full text of these documents. If we have filed
a contract, agreement, or other document as an exhibit to the registration statement of which this prospectus forms a part, you should
read the exhibit for a more complete understanding of the document or matter involved. Each statement in this prospectus, including statements
incorporated by reference as discussed above, regarding a contract, agreement, or other document is qualified in its entirety by reference
to the actual document.
We are subject to periodic reporting and other
informational requirements of the Exchange Act as applicable to foreign private issuers. Accordingly, we are required to file reports,
including annual reports on Form 20-F, and other information with the SEC. All information filed with the SEC can be inspected over
the Internet at the SEC’s website at www.sec.gov and copied at the public reference facilities maintained by the SEC at 100 F Street,
N.E., Washington, D.C. 20549. You can request copies of these documents, upon payment of a duplicating fee, by writing to the SEC.
As a foreign private issuer, we are exempt under
the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our executive
officers, directors, and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in
Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file periodic or current reports and
financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.
ENFORCEABILITY OF CIVIL LIABILITIES
We are incorporated under the laws of the Cayman
Islands as an exempted company with limited liability. We incorporated in the Cayman Islands because of certain benefits associated with
being a Cayman Islands exempted company, such as political and economic stability, an effective judicial system, a favorable tax system,
the absence of foreign exchange control or currency restrictions and the availability of professional and support services. However, the
Cayman Islands have a less developed body of securities laws that provide significantly less protection to investors as compared to the
securities laws of the United States. In addition, Cayman Islands companies may not have standing to sue before the federal courts of
the United States.
Substantially all of our assets are located in
China. In addition, all of our directors and officers are residents of jurisdictions other than the United States and all or a substantial
portion of their assets are located outside the United States. As a result, it may be difficult for investors to effect service of process
within the United States upon us or our directors and officers, or to enforce against us or them judgments obtained in United States courts,
including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United
States.
We have appointed Cogency Global Inc. as our agent
to receive service of process with respect to any action brought against us in the United States District Court for the Southern District
of New York under the federal securities laws of the United States or of any state in the United States or any action brought against
us in the Supreme Court of the State of New York in the County of New York under the securities laws of the State of New York.
Our counsel with respect to the laws of the Cayman
Islands has advised us that there is uncertainty as to whether the courts of the Cayman Islands would (i) recognize or enforce judgments
of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities
laws of the United States or any state in the United States or (ii) entertain original actions brought in the Cayman Islands against
us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.
Our counsel with respect to the laws of the Cayman
Islands has further advised us that there is currently no statutory enforcement or treaty between the United States and the Cayman Islands
providing for enforcement of judgments. A judgment obtained in the United States, however, may be recognized and enforced in the courts
of the Cayman Islands at common law, without any re-examination on the merits of the underlying dispute, by an action commenced on the
foreign judgment debt in the Grand Court of the Cayman Islands, provided such judgment: (i) is given by a foreign court of competent
jurisdiction; (ii) is final; (iii) is not in respect of taxes, a fine or a penalty; and (iv) was not obtained in a manner
and is not of a kind the enforcement of which is contrary to natural justice or public policy of the Cayman Islands. Furthermore, it is
uncertain that Cayman Islands courts would enforce: (1) judgments of U.S. courts obtained in actions against us or other persons
that are predicated upon the civil liability provisions of the U.S. federal securities laws; or (2) original actions brought against
us or other persons predicated upon the Securities Act. Our counsel with respect to the laws of the Cayman Islands has informed us that
there is uncertainty with regard to Cayman Islands law relating to whether a judgment obtained from the U.S. courts under civil liability
provisions of the securities laws will be determined by the courts of the Cayman Islands as penal or punitive in nature.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 8. Indemnification of Directors and Officers
The Cayman Islands law does not limit the extent
to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to
the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification
against civil fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association provide
that, to the extent permitted by law, we shall indemnify each existing or former secretary, director (including alternate director), and
any of our other officers (including an investment adviser or an administrator or liquidator) and their personal representatives against:
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(a)
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all actions, proceedings, costs, charges, expenses, losses, damages, or liabilities incurred or sustained by the existing or former director (including alternate director), secretary, or officer in or about the conduct of our business or affairs or in the execution or discharge of the existing or former director (including alternate director)’s, secretary’s, or officer’s duties, powers, authorities or discretions; and
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(b)
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without limitation to paragraph (a) above, all costs, expenses, losses, or liabilities incurred by the existing or former director (including alternate director), secretary, or officer in defending (whether successfully or otherwise) any civil, criminal, administrative or investigative proceedings (whether threatened, pending or completed) concerning us or our affairs in any court or tribunal, whether in the Cayman Islands or elsewhere.
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No such existing or former director (including
alternate director), secretary, or officer, however, shall be indemnified in respect of any matter arising out of his or her own dishonesty.
To the extent permitted by law, we may make a
payment, or agree to make a payment, whether by way of advance, loan or otherwise, for any legal costs incurred by an existing secretary,
or any of our officers in respect of any matter identified in above on condition that the secretary, or officer must repay the amount
paid by us to the extent that it is ultimately found not liable to indemnify the secretary or that officer for those legal costs.
Item 9. Exhibits
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*
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To be filed, if applicable, by amendment or as an exhibit to a report filed pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and incorporated herein by reference.
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**
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Filed herewith.
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***
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Previously filed.
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****
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To be filed, if necessary, on electronic Form 305b2 pursuant to
Section 305(b)(2) of the Trust Indenture Act of 1939.
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Item 10 Undertakings
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(a)
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The undersigned registrant hereby undertakes:
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(1)
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To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
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(i)
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To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
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(ii)
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To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.
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(iii)
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To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
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provided,
however, that paragraphs (a)(1)(i), (a)(1)(ii), and (a)(1)(iii) of this section do not apply if the information required
to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Securities and
Exchange Commission by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b).
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(2)
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That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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(3)
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To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
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(4)
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To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Securities Act of 1933 need not be furnished, provided, that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Securities Act of 1933 or Rule 3-19 of Regulation S-K if such financial statements and information are contained in periodic reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement.
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(5)
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That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
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(i)
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Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
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(ii)
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Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
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(6)
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That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
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(i)
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Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
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(ii)
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Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
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(iii)
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The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
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(iv)
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Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
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(b)
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That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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(c)
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Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3
and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Tianjin, China, on January 28, 2022.
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MDJM LTD
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By:
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/s/ Siping Xu
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Name:
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Siping Xu
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Title:
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Chief Executive Officer, Chairman of the Board of Directors, and Director
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Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
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Name
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Title
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Date
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/s/ Siping Xu
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Chief Executive Officer, Chairman of the Board of Directors, and
Director
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January 28, 2022
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Siping Xu
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(Principal Executive Officer)
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/s/ Mengnan Wang
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Chief Financial Officer
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January 28, 2022
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Mengnan Wang
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(Principal Accounting and Financial Officer)
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*
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Director
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January 28, 2022
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Yang Li
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*
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Director
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January 28, 2022
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Zhenlei Hu
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*
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Director
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January 28, 2022
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Liding Sun
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*
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Director
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January 28, 2022
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Wei Guan
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*By:
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/s/ Siping Xu
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Name: Siping Xu
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Attorney-in-fact
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SIGNATURE OF AUTHORIZED REPRESENTATIVE IN THE
UNITED STATES
Pursuant to the Securities Act of 1933, as
amended, the undersigned, the duly authorized representative in the United States of America of MDJM LTD, has signed this registration
statement thereto in New York, NY on January 28, 2022.
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Cogency Global Inc.
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Authorized U.S. Representative
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By:
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/s/ Colleen A. De Vries
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Name: Colleen A. De Vries
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Title: Senior Vice President on behalf of Cogency Global Inc.
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Exhibit 4.6
MDJM LTD
(the “Issuer”)
AND
[TRUSTEE]
(the “Trustee”)
INDENTURE
Dated as of [●], 20[●]
Senior Debt Securities
TABLE
OF CONTENTS
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Page
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ARTICLE 1 DEFINITIONS
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1
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Section 1.01
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Definitions of Terms
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1
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ARTICLE 2 ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES
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5
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Section 2.01
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Designation and Terms of Securities
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5
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Section 2.02
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Form of Securities and Trustee’s Certificate
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7
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Section 2.03
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Denominations: Provisions for Payment
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7
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Section 2.04
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Execution and Authentication
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9
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Section 2.05
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Registration of Transfer and Exchange
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10
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Section 2.06
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Temporary Securities
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11
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Section 2.07
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Mutilated, Destroyed, Lost or Stolen Securities
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11
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Section 2.08
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Cancellation
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12
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Section 2.09
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Benefits of Indenture
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12
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Section 2.10
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Authenticating Agent
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12
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Section 2.11
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Global Securities
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13
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ARTICLE 3 REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS
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14
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Section 3.01
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Redemption
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14
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Section 3.02
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Notice of Redemption
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14
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Section 3.03
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Payment Upon Redemption
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15
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Section 3.04
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Sinking Fund
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16
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Section 3.05
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Satisfaction of Sinking Fund Payments with Securities
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16
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Section 3.06
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Redemption of Securities for Sinking Fund
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16
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ARTICLE 4 COVENANTS
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17
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Section 4.01
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Payment of Principal, Premium and Interest
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17
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TABLE OF
CONTENTS
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Page
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Section 4.02
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Maintenance of Office or Agency
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17
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Section 4.03
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Paying Agents
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17
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Section 4.04
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Appointment to Fill Vacancy in Office of Trustee
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19
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Section 4.05
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Compliance with Consolidation Provisions
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19
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ARTICLE 5 SECURITYHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
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19
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Section 5.01
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Company to Furnish Trustee Names and Addresses of Securityholders
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19
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Section 5.02
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Preservation Of Information; Communications With Securityholders
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19
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Section 5.03
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Reports by the Company
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20
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Section 5.04
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Reports by the Trustee
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20
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ARTICLE 6 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
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20
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Section 6.01
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Events of Default
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20
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Section 6.02
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Collection of Indebtedness and Suits for Enforcement by Trustee
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22
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Section 6.03
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Application of Moneys or Property Collected
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24
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Section 6.04
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Limitation on Suits
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24
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Section 6.05
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Rights and Remedies Cumulative; Delay or Omission Not Waiver
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25
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Section 6.06
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Control by Securityholders
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25
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Section 6.07
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Undertaking to Pay Costs
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26
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ARTICLE 7 CONCERNING THE TRUSTEE
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26
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Section 7.01
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Certain Duties and Responsibilities of Trustee
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26
|
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Section 7.02
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Certain Rights of Trustee
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27
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Section 7.03
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Trustee Not Responsible for Recitals or Issuance or Securities
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|
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29
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|
TABLE OF
CONTENTS
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Page
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Section 7.04
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May Hold Securities
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29
|
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Section 7.05
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Moneys Held in Trust
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29
|
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|
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Section 7.06
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Compensation and Reimbursement
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29
|
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|
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Section 7.07
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|
Reliance on Officers’ Certificate
|
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|
30
|
|
|
|
|
|
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Section 7.08
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|
Disqualification; Conflicting Interests
|
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|
30
|
|
|
|
|
|
|
|
|
|
|
Section 7.09
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|
Corporate Trustee Required; Eligibility
|
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|
30
|
|
|
|
|
|
|
|
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|
Section 7.10
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|
Resignation and Removal; Appointment of Successor
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31
|
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|
|
|
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|
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Section 7.11
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|
Acceptance of Appointment By Successor
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32
|
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|
|
|
|
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Section 7.12
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|
Merger, Conversion, Consolidation or Succession to Business
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33
|
|
|
|
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|
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Section 7.13
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|
Preferential Collection of Claims Against the Company
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|
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34
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|
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Section 7.14
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|
Notice of Default
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34
|
|
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|
ARTICLE 8 CONCERNING THE SECURITYHOLDERS
|
|
34
|
|
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|
|
|
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Section 8.01
|
|
Evidence of Action by Securityholders
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34
|
|
|
|
|
|
|
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Section 8.02
|
|
Proof of Execution by Securityholders
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35
|
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|
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Section 8.03
|
|
Who May be Deemed Owners
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35
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Section 8.04
|
|
Certain Securities Owned by Company Disregarded
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35
|
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|
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|
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Section 8.05
|
|
Actions Binding on Future Securityholders
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|
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36
|
|
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|
|
|
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|
ARTICLE 9 SUPPLEMENTAL INDENTURES
|
|
36
|
|
|
|
|
|
|
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|
|
|
Section 9.01
|
|
Supplemental Indentures Without the Consent of Securityholders
|
|
|
36
|
|
|
|
|
|
|
|
|
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|
Section 9.02
|
|
Supplemental Indentures With Consent of Securityholders
|
|
|
38
|
|
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|
|
|
|
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|
Section 9.03
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Effect of Supplemental Indentures
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38
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Section 9.04
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Securities Affected by Supplemental Indentures
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38
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Section 9.05
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Execution of Supplemental Indentures
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39
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TABLE OF
CONTENTS
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Page
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ARTICLE 10 SUCCESSOR ENTITY
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39
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Section 10.01
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Company May Consolidate, Etc.
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39
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Section 10.02
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Successor Entity Substituted
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40
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Section 10.03
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Evidence of Consolidation, Etc. to Trustee
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40
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ARTICLE 11 SATISFACTION AND DISCHARGE
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40
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Section 11.01
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Satisfaction and Discharge of Indenture
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40
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Section 11.02
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Discharge of Obligations
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41
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Section 11.03
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Deposited Moneys to be Held in Trust
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41
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Section 11.04
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Payment of Moneys Held by Paying Agents
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41
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Section 11.05
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Repayment to Company
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42
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ARTICLE 12 IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS
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42
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Section 12.01
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No Recourse
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42
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ARTICLE 13 MISCELLANEOUS PROVISIONS
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43
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Section 13.01
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Effect on Successors and Assigns
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43
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Section 13.02
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Actions by Successor
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43
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Section 13.03
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Surrender of Company Powers
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43
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Section 13.04
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Notices
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43
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Section 13.05
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Governing Law
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43
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Section 13.06
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Treatment of Securities as Debt
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44
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Section 13.07
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Certificates and Opinions as to Conditions Precedent
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44
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Section 13.08
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Payments on Business Days
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44
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Section 13.09
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Conflict with Trust Indenture Act
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44
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Section 13.10
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Indenture and Securities Solely Corporate Obligations
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45
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Section 13.11
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Counterparts
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45
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Section 13.12
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Separability
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45
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Section 13.13
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Compliance Certificates
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45
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(1)
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This Table of Contents does not constitute part of the Indenture and shall not have any bearing on the interpretation of any of its terms or provisions.
|
INDENTURE
INDENTURE,
dated as of [●], 20[●], among MDJM Ltd, a Cayman Islands company (the “Company”), and [TRUSTEE], as trustee (the
“Trustee”).
WHEREAS,
for its lawful corporate purposes, the Company has duly authorized the execution and delivery of this Indenture to provide for the issuance
of debt securities (hereinafter referred to as the “Securities”), in an unlimited aggregate principal amount to be issued
from time to time in one or more series as in this Indenture provided, as registered Securities without coupons, to be authenticated by
the certificate of the Trustee;
WHEREAS,
to provide the terms and conditions upon which the Securities are to be authenticated, issued and delivered, the Company has duly authorized
the execution of this Indenture; and
WHEREAS,
all things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done.
NOW,
THEREFORE, in consideration of the premises and the purchase of the Securities by the holders thereof, it is mutually covenanted
and agreed as follows for the equal and ratable benefit of the holders of Securities:
ARTICLE 1
DEFINITIONS
Section 1.01 Definitions of Terms.
The terms defined in this Section (except as in this Indenture
or any indenture supplemental hereto otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture
and of any indenture supplemental hereto shall have the respective meanings specified in this Section and shall include the plural
as well as the singular. All other terms used in this Indenture that are defined in the Trust Indenture Act of 1939, as amended, or that
are by reference in such Act defined in the Securities Act of 1933, as amended (except as herein or any indenture supplemental hereto
otherwise expressly provided or unless the context otherwise requires), shall have the meanings assigned to such terms in said Trust Indenture
Act and in said Securities Act as in force at the date of the execution of this instrument.
“Authenticating Agent” means an authenticating
agent with respect to all or any of the series of Securities appointed by the Trustee pursuant to Section 2.10.
“Bankruptcy Law” means Title 11, U.S. Code,
or any similar federal or state law for the relief of debtors.
“Board of Directors” means the Board of Directors
of the Company or any duly authorized committee of such Board.
“Board Resolution” means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification.
“Business Day” means, with respect to any
series of Securities, any day other than a day on which federal or state banking institutions in the Borough of Manhattan, the City of
New York, or in the city of the Corporate Trust Office of the Trustee, are authorized or obligated by law, executive order or regulation
to close.
“Certificate” means a certificate signed
by any Officer. The Certificate need not comply with the provisions of Section 13.07.
“Company” means MDJM Ltd, a Cayman Islands
company, and, subject to the provisions of Article Ten, shall also include its successors and assigns.
“Corporate Trust Office” means the office
of the Trustee at which, at any particular time, its corporate trust business shall be principally administered, which office at the date
hereof is located at [ ].
“Custodian” means any receiver, trustee,
assignee, liquidator or similar official under any Bankruptcy Law.
“Default” means any event, act or condition
that with notice or lapse of time, or both, would constitute an Event of Default.
“Depositary” means, with respect to Securities
of any series for which the Company shall determine that such Securities will be issued as a Global Security, The Depository Trust Company,
New York, New York, another clearing agency, or any successor registered as a clearing agency under the Securities and Exchange Act of
1934, as amended (the “Exchange Act”), or other applicable statute or regulation, which, in each case, shall be designated
by the Company pursuant to either Section 2.01 or 2.11.
“Event of Default” means, with respect to
Securities of a particular series, any event specified in Section 6.01, continued for the period of time, if any, therein designated.
“Global Security” means, with respect to
any series of Securities, a Security executed by the Company and delivered by the Trustee to the Depositary or pursuant to the Depositary’s
instruction, all in accordance with the Indenture, which shall be registered in the name of the Depositary or its nominee.
“Governmental Obligations” means securities
that are (a) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or
(b) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America,
the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America that, in either
case, are not callable or redeemable at the option of the issuer thereof at any time prior to the stated maturity of the Securities, and
shall also include a depositary receipt issued by a bank or trust company as custodian with respect to any such Governmental Obligation
or a specific payment of principal of or interest on any such Governmental Obligation held by such custodian for the account of the holder
of such depositary receipt; provided, however, that (except as required by law) such custodian is not authorized to make any deduction
from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the Governmental
Obligation or the specific payment of principal of or interest on the Governmental Obligation evidenced by such depositary receipt.
“herein”, “hereof” and
“hereunder”, and other words of similar import, refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
“Indenture” means this instrument as originally
executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into in accordance
with the terms hereof.
“Interest Payment Date”, when used with respect
to any installment of interest on a Security of a particular series, means the date specified in such Security or in a Board Resolution
or in an indenture supplemental hereto with respect to such series as the fixed date on which an installment of interest with respect
to Securities of that series is due and payable.
“Officer” means, with respect to the Company,
the chairman of the Board of Directors, a chief executive officer, a president, a chief financial officer, chief operating officer, any
executive vice president, any senior vice president, any vice president, the treasurer or any assistant treasurer, the controller or any
assistant controller or the secretary or any assistant secretary.
“Officers’ Certificate” means a certificate
signed by any two Officers. Each such certificate shall include the statements provided for in Section 13.07, if and to the extent
required by the provisions thereof.
“Opinion of Counsel” means an opinion in
writing subject to customary exceptions of legal counsel, who may be an employee of or counsel for the Company, that is delivered to the
Trustee in accordance with the terms hereof. Each such opinion shall include the statements provided for in Section 13.07, if and
to the extent required by the provisions thereof.
“Outstanding”, when used with reference to
Securities of any series, means, subject to the provisions of Section 8.04, as of any particular time, all Securities of that series
theretofore authenticated and delivered by the Trustee under this Indenture, except (a) Securities theretofore canceled by the Trustee
or any paying agent, or delivered to the Trustee or any paying agent for cancellation or that have previously been canceled; (b) Securities
or portions thereof for the payment or redemption of which moneys or Governmental Obligations in the necessary amount shall have been
deposited in trust with the Trustee or with any paying agent (other than the Company) or shall have been set aside and segregated in trust
by the Company (if the Company shall act as its own paying agent); provided, however, that if such Securities or portions of such Securities
are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in Article Three provided, or
provision satisfactory to the Trustee shall have been made for giving such notice; and (c) Securities in lieu of or in substitution
for which other Securities shall have been authenticated and delivered pursuant to the terms of Section 2.07.
“Person” means any individual, corporation,
partnership, joint venture, joint-stock company, limited liability company, association, trust, unincorporated organization, any other
entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
“Predecessor Security” of any particular
Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and,
for the purposes of this definition, any Security authenticated and delivered under Section 2.07 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed or stolen Security.
“Responsible Officer” when used with respect
to the Trustee means the chairman of its board of directors, the chief executive officer, the president, any vice president, the secretary,
the treasurer, any trust officer, any corporate trust officer or any other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of his or her knowledge of and familiarity with the particular subject.
“Securities” means the debt Securities authenticated
and delivered under this Indenture.
“Securityholder”, “holder of Securities”,
“registered holder”, or other similar term, means the Person or Persons in whose name or names a particular Security shall
be registered on the books of the Company kept for that purpose in accordance with the terms of this Indenture.
“Security Register” and “Security
Registrar” shall have the meanings as set forth in Section 2.05.
“Subsidiary” means, with respect to any Person,
(i) any corporation at least a majority of whose outstanding Voting Stock shall at the time be owned, directly or indirectly, by
such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, (ii) any general partnership,
joint venture or similar entity, at least a majority of whose outstanding partnership or similar interests shall at the time be owned
by such Person, or by one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries and (iii) any limited
partnership of which such Person or any of its Subsidiaries is a general partner.
“Trustee” means , and, subject to the provisions
of Article Seven, shall also include its successors and assigns, and, if at any time there is more than one Person acting in such
capacity hereunder, “Trustee” shall mean each such Person. The term “Trustee” as used with respect to a particular
series of the Securities shall mean the trustee with respect to that series.
“Trust Indenture Act” means the Trust Indenture
Act of 1939, as amended.
“Voting Stock”, as applied to stock of any
Person, means shares, interests, participations or other equivalents in the equity interest (however designated) in such Person having
ordinary voting power for the election of a majority of the directors (or the equivalent) of such Person, other than shares, interests,
participations or other equivalents having such power only by reason of the occurrence of a contingency.
ARTICLE 2
ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION
AND EXCHANGE OF SECURITIES
Section 2.01 Designation and Terms of Securities.
(a) The
aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited. The Securities may
be issued in one or more series up to the aggregate principal amount of Securities of that series from time to time authorized by or pursuant
to a Board Resolution or pursuant to one or more indentures supplemental hereto. Prior to the initial issuance of Securities of any series,
there shall be established in or pursuant to a Board Resolution, and set forth in an Officers’ Certificate, or established in one
or more indentures supplemental hereto:
(1) the
title of the Securities of the series (which shall distinguish the Securities of that series from all other Securities);
(2) any
limit upon the aggregate principal amount of the Securities of that series that may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities
of that series);
(3) the
date or dates on which the principal of the Securities of the series is payable, any original issue discount that may apply to the Securities
of that series upon their issuance, the principal amount due at maturity, and the place(s) of payment;
(4) the
rate or rates at which the Securities of the series shall bear interest or the manner of calculation of such rate or rates, if any;
(5) the
date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest will be payable or the manner of
determination of such Interest Payment Dates, the place(s) of payment, and the record date for the determination of holders to whom
interest is payable on any such Interest Payment Dates or the manner of determination of such record dates;
(6) the
right, if any, to extend the interest payment periods and the duration of such extension;
(7) the
period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the series may be redeemed,
in whole or in part, at the option of the Company;
(8) the
obligation, if any, of the Company to redeem or purchase Securities of the series pursuant to any sinking fund, mandatory redemption,
or analogous provisions (including payments made in cash in satisfaction of future sinking fund obligations) or at the option of a holder
thereof and the period or periods within which, the price or prices at which, and the terms and conditions upon which, Securities of the
series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;
(9) the
form of the Securities of the series including the form of the Certificate of Authentication for such series;
(10) if
other than denominations of one thousand U.S. dollars ($1,000) or any integral multiple thereof, the denominations in which the Securities
of the series shall be issuable;
(11) any
and all other terms (including terms, to the extent applicable, relating to any auction or remarketing of the Securities of that series
and any security for the obligations of the Company with respect to such Securities) with respect to such series (which terms shall not
be inconsistent with the terms of this Indenture, as amended by any supplemental indenture) including any terms which may be required
by or advisable under United States laws or regulations or advisable in connection with the marketing of Securities of that series;
(12) whether
the Securities are issuable as a Global Security and, in such case, the terms and the identity of the Depositary for such series;
(13) whether
the Securities will be convertible into or exchangeable for ordinary shares or other securities of the Company or any other Person and,
if so, the terms and conditions upon which such Securities will be so convertible or exchangeable, including the conversion or exchange
price, as applicable, or how it will be calculated and may be adjusted, any mandatory or optional (at the Company’s option or the
holders’ option) conversion or exchange features, and the applicable conversion or exchange period;
(14) if
other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration
of acceleration of the maturity thereof pursuant to Section 6.01;
(15) any
additional or different Events of Default or restrictive covenants (which may include, among other restrictions, restrictions on the Company’s
ability or the ability of the Company’s Subsidiaries to: incur additional indebtedness; issue additional securities; create liens;
pay dividends or make distributions in respect of their capital stock; redeem capital stock; place restrictions on such Subsidiaries placing
restrictions on their ability to pay dividends, make distributions or transfer assets; make investments or other restricted payments;
sell or otherwise dispose of assets; enter into sale-leaseback transactions; engage in transactions with shareholders and affiliates;
issue or sell shares of their Subsidiaries; or effect a consolidation or merger) or financial covenants (which may include, among other
financial covenants, financial covenants that require the Company and its Subsidiaries to maintain specified interest coverage, fixed
charge, cash flow-based or asset-based ratios) provided for with respect to the Securities of the series;
(16) if
other than dollars, the coin or currency in which the Securities of the series are denominated (including, but not limited to, foreign
currency);
(17) the
terms and conditions, if any, upon which the Company shall pay amounts in addition to the stated interest, premium, if any and principal
amounts of the Securities of the series to any Securityholder that is not a “United States person” for federal tax purposes;
and
(18) any
restrictions on transfer, sale or assignment of the Securities of the 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 any such Board Resolution or in any indentures supplemental
hereto.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution of the Company, a copy of an appropriate record of such action shall be certified by the secretary or an assistant
secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers’ Certificate of the Company setting
forth the terms of the series.
Securities of any particular series may be issued at various times,
with different dates on which the principal or any installment of principal is payable, with different rates of interest, if any, or different
methods by which rates of interest may be determined, with different dates on which such interest may be payable and with different redemption
dates.
Section 2.02 Form of Securities and Trustee’s Certificate.
The Securities of any series and the Trustee’s certificate of
authentication to be borne by such Securities shall be substantially of the tenor and purport as set forth in one or more indentures
supplemental hereto or as provided in a Board Resolution, and set forth in an Officers’ Certificate, and they may have such letters,
numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as
the Company may deem appropriate and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with
any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange on which
Securities of that series may be listed, or to conform to usage.
Section 2.03 Denominations: Provisions for Payment.
The Securities shall be issuable as registered Securities and in the
denominations of one thousand U.S. dollars ($1,000) or any integral multiple thereof, subject to Section 2.01(a)(10). The Securities
of a particular series shall bear interest payable on the dates and at the rate specified with respect to that series. Subject to Section 2.01(a)(16),
the principal of and the interest on the Securities of any series, as well as any premium thereon in case of redemption thereof prior
to maturity, shall be payable in the coin or currency of the United States of America that at the time is legal tender for public and
private debt, at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, the City and State of New
York. Each Security shall be dated the date of its authentication. Interest on the Securities shall be computed on the basis of a 360-day
year composed of twelve 30-day months.
The interest installment on any Security that is payable, and is punctually
paid or duly provided for, on any Interest Payment Date for Securities of that series shall be paid to the Person in whose name said Security
(or one or more Predecessor Securities) is registered at the close of business on the regular record date for such interest installment.
In the event that any Security of a particular series or portion thereof is called for redemption and the redemption date is subsequent
to a regular record date with respect to any Interest Payment Date and prior to such Interest Payment Date, interest on such Security
will be paid upon presentation and surrender of such Security as provided in Section 3.03.
Any interest on any Security that is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date for Securities of the same series (herein called “Defaulted Interest”)
shall forthwith cease to be payable to the registered holder on the relevant regular record date by virtue of having been such holder;
and such Defaulted Interest shall be paid by the Company, at its election, as provided in clause (1) or clause (2) below:
(1) The
Company may make payment of any Defaulted Interest on Securities to the Persons in whose names such Securities (or their respective Predecessor
Securities) are registered at the close of business on a special record date for the payment of such Defaulted Interest, which shall be
fixed in the following manner: the Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each such Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount
of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory
to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit
of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a special record date for
the payment of such Defaulted Interest which shall not be more than 15 nor less than 10 days prior to the date of the proposed payment
and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the
Company of such special record date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the special record date therefor to be mailed, first class postage prepaid, to each Securityholder at his
or her address as it appears in the Security Register (as hereinafter defined), 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 mailed as aforesaid, such Defaulted
Interest shall be paid to the Persons in whose names such Securities (or their respective Predecessor Securities) are registered on such
special record date.
(2) The
Company may make payment of any Defaulted Interest on any Securities in any other lawful manner not inconsistent with the requirements
of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable
by the Trustee.
Unless otherwise set forth in a Board Resolution or one or more indentures
supplemental hereto establishing the terms of any series of Securities pursuant to Section 2.01 hereof, the term “regular record
date” as used in this Section with respect to a series of Securities and any Interest Payment Date for such series shall mean
either the fifteenth day of the month immediately preceding the month in which an Interest Payment Date established for such series pursuant
to Section 2.01 hereof shall occur, if such Interest Payment Date is the first day of a month, or the first day of the month in which
an Interest Payment Date established for such series pursuant to Section 2.01 hereof shall occur, if such Interest Payment Date is
the fifteenth day of a month, whether or not such date is a Business Day.
Subject to the foregoing provisions of this Section, each Security
of a series delivered under this Indenture upon transfer of or in exchange for or in lieu of any other Security of such series shall carry
the rights to interest accrued and unpaid, and to accrue, that were carried by such other Security.
Section 2.04 Execution and Authentication.
The Securities shall be signed on behalf of the Company by one of its
Officers. Signatures may be in the form of a manual or facsimile signature.
The Company may use the facsimile signature of any Person who shall
have been an Officer, notwithstanding the fact that at the time the Securities shall be authenticated and delivered or disposed of such
Person shall have ceased to be such an officer of the Company. The Securities may contain such notations, legends or endorsements required
by law, stock exchange rule or usage. Each Security shall be dated the date of its authentication by the Trustee.
A Security shall not be valid until authenticated manually by an authorized
signatory of the Trustee, or by an Authenticating Agent. Such signature shall be conclusive evidence that the Security so authenticated
has been duly authenticated and delivered hereunder and that the holder is entitled to the benefits of this Indenture. At any time and
from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a written order of the Company for the authentication and delivery of such Securities,
signed by an Officer, and the Trustee in accordance with such written order shall authenticate and deliver such Securities.
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 7.01) shall
be fully protected in relying upon, an Opinion of Counsel stating that the form and terms thereof have been established in conformity
with the provisions of this Indenture.
The Trustee shall not be required to authenticate such Securities if
the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities
and this Indenture or otherwise in a manner that is not reasonably acceptable to the Trustee.
Section 2.05 Registration of Transfer and Exchange.
(a) Securities
of any series may be exchanged upon presentation thereof at the office or agency of the Company designated for such purpose in the Borough
of Manhattan, the City and State of New York, for other Securities of such series of authorized denominations, and for a like aggregate
principal amount, upon payment of a sum sufficient to cover any tax or other governmental charge in relation thereto, all as provided
in this Section. In respect of any Securities so surrendered for exchange, the Company shall execute, the Trustee shall authenticate and
such office or agency shall deliver in exchange therefor the Security or Securities of the same series that the Securityholder making
the exchange shall be entitled to receive, bearing numbers not contemporaneously outstanding.
(b) The
Company shall keep, or cause to be kept, at its office or agency designated for such purpose in the Borough of Manhattan, the City and
State of New York, or such other location designated by the Company, a register or registers (herein referred to as the “Security
Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall register the Securities and the
transfers of Securities as in this Article provided and which at all reasonable times shall be open for inspection by the Trustee.
The registrar for the purpose of registering Securities and transfer of Securities as herein provided shall be appointed as authorized
by Board Resolution (the “Security Registrar”).
Upon surrender for transfer of any Security at the office or agency
of the Company designated for such purpose, the Company shall execute, the Trustee shall authenticate and such office or agency shall
deliver in the name of the transferee or transferees a new Security or Securities of the same series as the Security presented for a like
aggregate principal amount.
All Securities presented or surrendered for exchange or registration
of transfer, as provided in this Section, shall be accompanied (if so required by the Company or the Security Registrar) by a written
instrument or instruments of transfer, in form satisfactory to the Company or the Security Registrar, duly executed by the registered
holder or by such holder’s duly authorized attorney in writing.
(c) Except
as provided pursuant to Section 2.01 pursuant to a Board Resolution, and set forth in an Officers’ Certificate, or established
in one or more indentures supplemental to this Indenture, no service charge shall be made for any exchange or registration of transfer
of Securities, or issue of new Securities in case of partial redemption of any series, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge in relation thereto, other than exchanges pursuant to Section 2.06, Section 3.03(b) and
Section 9.04 not involving any transfer.
(d) The
Company shall not be required (i) to issue, exchange or register the transfer of any Securities during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of redemption of less than all the Outstanding Securities of the
same series and ending at the close of business on the day of such mailing, nor (ii) to register the transfer of or exchange any
Securities of any series or portions thereof called for redemption, other than the unredeemed portion of any such Securities being redeemed
in part. The provisions of this Section 2.05 are, with respect to any Global Security, subject to Section 2.11 hereof.
Section 2.06 Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and the Trustee shall authenticate and deliver, temporary Securities (printed, lithographed or typewritten) of any
authorized denomination. Such temporary Securities shall be substantially in the form of the definitive Securities in lieu of which they
are issued, but with such omissions, insertions and variations as may be appropriate for temporary Securities, all as may be determined
by the Company. Every temporary Security of any series shall be executed by the Company and be authenticated by the Trustee upon the same
conditions and in substantially the same manner, and with like effect, as the definitive Securities of such series. Without unnecessary
delay the Company will execute and will furnish definitive Securities of such series and thereupon any or all temporary Securities of
such series may be surrendered in exchange therefor (without charge to the holders), at the office or agency of the Company designated
for the purpose in the Borough of Manhattan, the City and State of New York, and the Trustee shall authenticate and such office or agency
shall deliver in exchange for such temporary Securities an equal aggregate principal amount of definitive Securities of such series, unless
the Company advises the Trustee to the effect that definitive Securities need not be executed and furnished until further notice from
the Company. Until so exchanged, the temporary Securities of such series shall be entitled to the same benefits under this Indenture as
definitive Securities of such series authenticated and delivered hereunder.
Section 2.07 Mutilated, Destroyed, Lost or Stolen Securities.
In case any temporary or definitive Security shall become mutilated
or be destroyed, lost or stolen, the Company (subject to the next succeeding sentence) shall execute, and upon the Company’s request
the Trustee (subject as aforesaid) shall authenticate and deliver, a new Security of the same series, bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Security, or in lieu of and in substitution for the Security so destroyed,
lost or stolen. In every case the applicant for a substituted Security shall furnish to the Company and the Trustee such security or indemnity
as may be required by them to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish
to the Company and the Trustee evidence to their satisfaction of the destruction, loss or theft of the applicant’s Security and
of the ownership thereof. The Trustee may authenticate any such substituted Security and deliver the same upon the written request or
authorization of any officer of the Company. Upon the issuance of any substituted Security, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee) connected therewith.
In case any Security that has matured or is about to mature shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substitute Security, pay or authorize the payment of
the same (without surrender thereof except in the case of a mutilated Security) if the applicant for such payment shall furnish to the
Company and the Trustee such security or indemnity as they may require to save them harmless, and, in case of destruction, loss or theft,
evidence to the satisfaction of the Company and the Trustee of the destruction, loss or theft of such Security and of the ownership thereof.
Every replacement Security issued pursuant to the provisions of this
Section shall constitute an additional contractual obligation of the Company whether or not the mutilated, destroyed, lost or stolen
Security shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities of the same series duly issued hereunder. All Securities shall be held and owned
upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities, and shall preclude (to the extent lawful) any and all other rights or remedies, notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities
without their surrender.
Section 2.08 Cancellation.
All Securities surrendered for the purpose of payment, redemption,
exchange or registration of transfer shall, if surrendered to the Company or any paying agent, be delivered to the Trustee for cancellation,
or, if surrendered to the Trustee, shall be cancelled by it, and no Securities shall be issued in lieu thereof except as expressly required
or permitted by any of the provisions of this Indenture. In the absence of such request the Trustee may dispose of canceled Securities
in accordance with its standard procedures and deliver a certificate of disposition to the Company. If the Company shall otherwise acquire
any of the Securities, however, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by
such Securities unless and until the same are delivered to the Trustee for cancellation.
Section 2.09 Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give or be construed to give to any Person, other than the parties hereto and the holders of the Securities any legal or equitable
right, remedy or claim under or in respect of this Indenture, or under any covenant, condition or provision herein contained; all such
covenants, conditions and provisions being for the sole benefit of the parties hereto and of the holders of the Securities.
Section 2.10 Authenticating Agent.
So long as any of the Securities of any series remain Outstanding there
may be an Authenticating Agent for any or all such series of Securities which the Trustee shall have the right to appoint. Said Authenticating
Agent shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon exchange, transfer or
partial redemption thereof, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder. All references in this Indenture to the authentication of Securities
by the Trustee shall be deemed to include authentication by an Authenticating Agent for such series. Each Authenticating Agent shall be
acceptable to the Company and shall be a corporation that has a combined capital and surplus, as most recently reported or determined
by it, sufficient under the laws of any jurisdiction under which it is organized or in which it is doing business to conduct a trust business,
and that is otherwise authorized under such laws to conduct such business and is subject to supervision or examination by federal or state
authorities. If at any time any Authenticating Agent shall cease to be eligible in accordance with these provisions, it shall resign immediately.
Any Authenticating Agent may at any time resign by giving written notice
of resignation to the Trustee and to the Company. The Trustee may at any time (and upon request by the Company shall) terminate the agency
of any Authenticating Agent by giving written notice of termination to such Authenticating Agent and to the Company. Upon resignation,
termination or cessation of eligibility of any Authenticating Agent, the Trustee may appoint an eligible successor Authenticating Agent
acceptable to the Company. Any successor Authenticating Agent, upon acceptance of its appointment hereunder, shall become vested with
all the rights, powers and duties of its predecessor hereunder as if originally named as an Authenticating Agent pursuant hereto.
Section 2.11 Global Securities.
(a) If
the Company shall establish pursuant to Section 2.01 that the Securities of a particular series are to be issued as a Global Security,
then the Company shall execute and the Trustee shall, in accordance with Section 2.04, authenticate and deliver, a Global Security
that (i) shall represent, and shall be denominated in an amount equal to the aggregate principal amount of, all of the Outstanding
Securities of such series, (ii) shall be registered in the name of the Depositary or its nominee, (iii) shall be delivered by
the Trustee to the Depositary or pursuant to the Depositary’s instruction and (iv) shall bear a legend substantially to the
following effect: “Except as otherwise provided in Section 2.11 of the Indenture, this Security may be transferred, in whole
but not in part, only to another nominee of the Depositary or to a successor Depositary or to a nominee of such successor Depositary.”
(b) Notwithstanding
the provisions of Section 2.05, the Global Security of a series may be transferred, in whole but not in part and in the manner provided
in Section 2.05, only to another nominee of the Depositary for such series, or to a successor Depositary for such series selected
or approved by the Company or to a nominee of such successor Depositary.
(c) If
at any time the Depositary for a series of the Securities notifies the Company that it is unwilling or unable to continue as Depositary
for such series or if at any time the Depositary for such series shall no longer be registered or in good standing under the Exchange
Act, or other applicable statute or regulation, and a successor Depositary for such series is not appointed by the Company within 90 days
after the Company receives such notice or becomes aware of such condition, as the case may be, or if an Event of Default has occurred
and is continuing and the Company has received a request from the Depositary, this Section 2.11 shall no longer be applicable to
the Securities of such series and the Company will execute, and subject to Section 2.04, the Trustee will authenticate and deliver
the Securities of such series in definitive registered form without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Security of such series in exchange for such Global Security. In addition, the Company
may at any time determine that the Securities of any series shall no longer be represented by a Global Security and that the provisions
of this Section 2.11 shall no longer apply to the Securities of such series. In such event the Company will execute and, subject
to Section 2.04, the Trustee, upon receipt of an Officers’ Certificate evidencing such determination by the Company, will authenticate
and deliver the Securities of such series in definitive registered form without coupons, in authorized denominations, and in an aggregate
principal amount equal to the principal amount of the Global Security of such series in exchange for such Global Security. Upon the exchange
of the Global Security for such Securities in definitive registered form without coupons, in authorized denominations, the Global Security
shall be canceled by the Trustee. Such Securities in definitive registered form issued in exchange for the Global Security pursuant to
this Section 2.11(c) shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities to the Depositary
for delivery to the Persons in whose names such Securities are so registered.
ARTICLE 3
REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS
Section 3.01 Redemption.
The Company may redeem the Securities of any series issued hereunder
on and after the dates and in accordance with the terms established for such series pursuant to Section 2.01 hereof.
Section 3.02 Notice of Redemption.
(a) In
case the Company shall desire to exercise such right to redeem all or, as the case may be, a portion of the Securities of any series in
accordance with any right the Company reserved for itself to do so pursuant to Section 2.01 hereof, the Company shall, or shall cause
the Trustee to, give notice of such redemption to holders of the Securities of such series to be redeemed by mailing, first class postage
prepaid, a notice of such redemption not less than 30 days and not more than 90 days before the date fixed for redemption of that series
to such holders at their last addresses as they shall appear upon the Security Register, unless a shorter period is specified in the Securities
to be redeemed. Any notice that is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether
or not the registered holder receives the notice. In any case, failure duly to give such notice to the holder of any Security of any series
designated for redemption in whole or in part, or any defect in the notice, shall not affect the validity of the proceedings for the redemption
of any other Securities of such series or any other series. In the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers’ Certificate evidencing compliance with any such restriction.
Each such notice of redemption shall specify the date fixed for redemption
and the redemption price at which Securities of that series are to be redeemed, and shall state that payment of the redemption price of
such Securities to be redeemed will be made at the office or agency of the Company in the Borough of Manhattan, the City and State of
New York, upon presentation and surrender of such Securities, that interest accrued to the date fixed for redemption will be paid as specified
in said notice, that from and after said date interest will cease to accrue and that the redemption is for a sinking fund, if such is
the case. If less than all the Securities of a series are to be redeemed, the notice to the holders of Securities of that series to be
redeemed in part shall specify the particular Securities to be so redeemed.
In case any Security is to be redeemed in part only, the notice that
relates to such Security shall state the portion of the principal amount thereof to be redeemed, and shall state that on and after the
redemption date, upon surrender of such Security, a new Security or Securities of such series in principal amount equal to the unredeemed
portion thereof will be issued.
(b) If
less than all the Securities of a series are to be redeemed, the Company shall give the Trustee at least 45 days’ notice (unless
a shorter notice shall be satisfactory to the Trustee) in advance of the date fixed for redemption as to the aggregate principal amount
of Securities of the series to be redeemed, and thereupon the Trustee shall select, by lot or in such other manner as it shall deem appropriate
and fair in its discretion and that may provide for the selection of a portion or portions (equal to one thousand U.S. dollars ($1,000)
or any integral multiple thereof) of the principal amount of such Securities of a denomination larger than $1,000, the Securities to be
redeemed and shall thereafter promptly notify the Company in writing of the numbers of the Securities to be redeemed, in whole or in part.
The Company may, if and whenever it shall so elect, by delivery of instructions signed on its behalf by an Officer, instruct the Trustee
or any paying agent to call all or any part of the Securities of a particular series for redemption and to give notice of redemption in
the manner set forth in this Section, such notice to be in the name of the Company or its own name as the Trustee or such paying agent
may deem advisable. In any case in which notice of redemption is to be given by the Trustee or any such paying agent, the Company shall
deliver or cause to be delivered to, or permit to remain with, the Trustee or such paying agent, as the case may be, such Security Register,
transfer books or other records, or suitable copies or extracts therefrom, sufficient to enable the Trustee or such paying agent to give
any notice by mail that may be required under the provisions of this Section.
Section 3.03 Payment Upon Redemption.
(a) If
the giving of notice of redemption shall have been completed as above provided, the Securities or portions of Securities of the series
to be redeemed specified in such notice shall become due and payable on the date and at the place stated in such notice at the applicable
redemption price, together with interest accrued to the date fixed for redemption and interest on such Securities or portions of Securities
shall cease to accrue on and after the date fixed for redemption, unless the Company shall default in the payment of such redemption price
and accrued interest with respect to any such Security or portion thereof. On presentation and surrender of such Securities on or after
the date fixed for redemption at the place of payment specified in the notice, said Securities shall be paid and redeemed at the applicable
redemption price for such series, together with interest accrued thereon to the date fixed for redemption (but if the date fixed for redemption
is an interest payment date, the interest installment payable on such date shall be payable to the registered holder at the close of business
on the applicable record date pursuant to Section 2.03).
(b) Upon
presentation of any Security of such series that is to be redeemed in part only, the Company shall execute and the Trustee shall authenticate
and the office or agency where the Security is presented shall deliver to the holder thereof, at the expense of the Company, a new Security
of the same series of authorized denominations in principal amount equal to the unredeemed portion of the Security so presented.
Section 3.04 Sinking Fund.
The provisions of Sections 3.04, 3.05 and 3.06 shall be applicable
to any sinking fund for the retirement of Securities of a series, except as otherwise specified as contemplated by Section 2.01 for
Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a “mandatory sinking fund payment,” and any payment in excess of
such minimum amount provided for by the terms of Securities of any series is herein referred to as an “optional sinking fund payment”.
If provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided
in Section 3.05. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
Section 3.05 Satisfaction of Sinking Fund Payments with Securities.
The Company (i) may deliver Outstanding Securities of a series
and (ii) may apply as a credit Securities of a series that have been redeemed either at the election of the Company pursuant to the
terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities,
in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to
be made pursuant to the terms of such Securities as provided for by the terms of such series, provided that such Securities have not been
previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the redemption price specified
in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.
Section 3.06 Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date for any
series of Securities (unless a shorter period shall be satisfactory to the Trustee), the Company will deliver to the Trustee an Officers’
Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of the series, the portion
thereof, if any, that is to be satisfied by delivering and crediting Securities of that series pursuant to Section 3.05 and the basis
for such credit and will, together with such Officers’ Certificate, deliver to the Trustee any Securities to be so delivered. Not
less than 30 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 3.02 and cause notice of the redemption thereof to be given in the name of and
at the expense of the Company in the manner provided in Section 3.02. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Section 3.03.
ARTICLE 4
COVENANTS
Section 4.01 Payment of Principal, Premium and Interest.
The Company will duly and punctually pay or cause to be paid the principal
of (and premium, if any) and interest on the Securities of that series at the time and place and in the manner provided herein and established
with respect to such Securities.
Section 4.02 Maintenance of Office or Agency.
So long as any series of the Securities remain Outstanding, the Company
agrees to maintain an office or agency in the Borough of Manhattan, the City and State of New York, with respect to each such series and
at such other location or locations as may be designated as provided in this Section 4.02, where (i) Securities of that series
may be presented for payment, (ii) Securities of that series may be presented as herein above authorized for registration of transfer
and exchange, and (iii) notices and demands to or upon the Company in respect of the Securities of that series and this Indenture
may be given or served, such designation to continue with respect to such office or agency until the Company shall, by written notice
signed by any officer authorized to sign an Officers’ Certificate and delivered to the Trustee, designate some other office or agency
for such purposes or any of them. If at any time the Company shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, notices and demands may be made or served at the Corporate Trust Office
of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, notices and demands. The Company
initially appoints the Corporate Trust Office of the Trustee located in the Borough of Manhattan, the City of New York as its paying agent
with respect to the Securities.
Section 4.03 Paying Agents.
(a) If
the Company shall appoint one or more paying agents for all or any series of the Securities, other than the Trustee, the Company will
cause each such paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject
to the provisions of this Section:
(1) that
it will hold all sums held by it as such agent for the payment of the principal of (and premium, if any) or interest on the Securities
of that series (whether such sums have been paid to it by the Company or by any other obligor of such Securities) in trust for the benefit
of the Persons entitled thereto;
(2) that
it will give the Trustee notice of any failure by the Company (or by any other obligor of such Securities) to make any payment of the
principal of (and premium, if any) or interest on the Securities of that series when the same shall be due and payable;
(3) that
it will, at any time during the continuance of any failure referred to in the preceding paragraph (a)(2) above, upon the written
request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such paying agent; and
(4) that
it will perform all other duties of paying agent as set forth in this Indenture.
(b) If
the Company shall act as its own paying agent with respect to any series of the Securities, it will on or before each due date of the
principal of (and premium, if any) or interest on Securities of that series, set aside, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay such principal (and premium, if any) or interest so becoming due on Securities of
that series until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee
of such action, or any failure (by it or any other obligor on such Securities) to take such action. Whenever the Company shall have one
or more paying agents for any series of Securities, it will, prior to each due date of the principal of (and premium, if any) or interest
on any Securities of that series, deposit with the paying agent a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless
such paying agent is the Trustee) the Company will promptly notify the Trustee of this action or failure so to act.
(c) Notwithstanding
anything in this Section to the contrary, (i) the agreement to hold sums in trust as provided in this Section is subject
to the provisions of Section 11.05, and (ii) the Company may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, pay, or direct any paying agent to pay, to the Trustee all sums held in trust by
the Company or such paying agent, such sums to be held by the Trustee upon the same terms and conditions as those upon which such sums
were held by the Company or such paying agent; and, upon such payment by the Company or any paying agent to the Trustee, the Company or
such paying agent shall be released from all further liability with respect to such money.
Section 4.04 Appointment to Fill Vacancy in Office of Trustee.
The Company, whenever necessary to avoid or fill a vacancy in the office
of Trustee, will appoint, in the manner provided in Section 7.10, a Trustee, so that there shall at all times be a Trustee hereunder.
Section 4.05 Compliance with Consolidation Provisions.
The Company will not, while any of the Securities remain Outstanding,
consolidate with or merge into any other Person, in either case where the Company is not the survivor of such transaction, or sell or
convey all or substantially all of its property to any other Person unless the provisions of Article Ten hereof are complied with.
ARTICLE 5
SECURITYHOLDERS’ LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE
Section 5.01 Company to Furnish Trustee Names and Addresses
of Securityholders.
The Company will furnish or cause to be furnished to the Trustee (a) within
15 days after each regular record date (as defined in Section 2.03) a list, in such form as the Trustee may reasonably require, of
the names and addresses of the holders of each series of Securities as of such regular record date, provided that the Company shall not
be obligated to furnish or cause to furnish such list at any time that the list shall not differ in any respect from the most recent list
furnished to the Trustee by the Company and (b) at such other times as the Trustee may request in writing within 30 days after the
receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such
list is furnished; provided, however, that, in either case, no such list need be furnished for any series for which the Trustee shall
be the Security Registrar.
Section 5.02 Preservation Of Information; Communications With
Securityholders.
(a) The
Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the holders
of Securities contained in the most recent list furnished to it as provided in Section 5.01 and as to the names and addresses of
holders of Securities received by the Trustee in its capacity as Security Registrar (if acting in such capacity).
(b) The
Trustee may destroy any list furnished to it as provided in Section 5.01 upon receipt of a new list so furnished.
(c) Securityholders
may communicate as provided in Section 312(b) of the Trust Indenture Act with other Securityholders with respect to their rights
under this Indenture or under the Securities, and, in connection with any such communications, the Trustee shall satisfy its obligations
under Section 312(b) of the Trust Indenture Act in accordance with the provisions of Section 312(b) of the Trust Indenture
Act.
Section 5.03 Reports by the Company.
The Company covenants and agrees to provide a copy to the Trustee,
after the Company files the same with the Securities and Exchange Commission, copies of the annual reports and of the information, documents
and other reports (or copies of such portions of any of the foregoing as the Securities and Exchange Commission may from time to time
by rules and regulations prescribe) that the Company files with the Securities and Exchange Commission pursuant to Section 13
or Section 15(d) of the Exchange Act; provided, however, the Company shall not be required to deliver to the Trustee any materials
for which the Company has sought and received confidential treatment by the SEC. The Company shall also comply with the requirements of
Section 314 of the Trust Indenture Act, but only to the extent then applicable to the Company.
Section 5.04 Reports by the Trustee.
(a) On
or before July 1 in each year in which any of the Securities are Outstanding, the Trustee shall transmit by mail, first class postage
prepaid, to the Securityholders, as their names and addresses appear upon the Security Register, a brief report dated as of the preceding
May 1, if and to the extent required under Section 313(a) of the Trust Indenture Act.
(b) The
Trustee shall comply with Section 313(b) and 313(c) of the Trust Indenture Act.
(c) A
copy of each such report shall, at the time of such transmission to Securityholders, be filed by the Trustee with the Company, with each
securities exchange upon which any Securities are listed (if so listed) and also with the Securities and Exchange Commission. The Company
agrees to notify the Trustee when any Securities become listed on any securities exchange.
ARTICLE 6
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
Section 6.01 Events of Default.
(a) Whenever
used herein with respect to Securities of a particular series, “Event of Default” means any one or more of the following events
that has occurred and is continuing:
(1) the
Company defaults in the payment of any installment of interest upon any of the Securities of that series, as and when the same shall become
due and payable, and such default continues for a period of 90 days; provided, however, that a valid extension of an interest payment
period by the Company in accordance with the terms of any indenture supplemental hereto shall not constitute a default in the payment
of interest for this purpose;
(2) the
Company defaults in the payment of the principal of (or premium, if any, on) any of the Securities of that series as and when the same
shall become due and payable whether at maturity, upon redemption, by declaration or otherwise, or in any payment required by any sinking
or analogous fund established with respect to that series; provided, however, that a valid extension of the maturity of such Securities
in accordance with the terms of any indenture supplemental hereto shall not constitute a default in the payment of principal or premium,
if any;
(3) the
Company fails to observe or perform any other of its covenants or agreements with respect to that series contained in this Indenture or
otherwise established with respect to that series of Securities pursuant to Section 2.01 hereof (other than a covenant or agreement
that has been expressly included in this Indenture solely for the benefit of one or more series of Securities other than such series)
for a period of 90 days after the date on which written notice of such failure, requiring the same to be remedied and stating that such
notice is a “Notice of Default” hereunder, shall have been given to the Company by the Trustee, by registered or certified
mail, or to the Company and the Trustee by the holders of at least 25% in principal amount of the Securities of that series at the time
Outstanding;
(4) the
Company pursuant to or within the meaning of any Bankruptcy Law (i) commences a voluntary case, (ii) consents to the entry of
an order for relief against it in an involuntary case, (iii) consents to the appointment of a Custodian of it or for all or substantially
all of its property or (iv) makes a general assignment for the benefit of its creditors; or
(5) a
court of competent jurisdiction enters an order under any Bankruptcy Law that (i) is for relief against the Company in an involuntary
case, (ii) appoints a Custodian of the Company for all or substantially all of its property or (iii) orders the liquidation
of the Company, and the order or decree remains unstayed and in effect for 90 days.
(b) In
each and every such case (other than an Event of Default specified in clause (4) or clause (5) above), unless the principal
of all the Securities of that series shall have already become due and payable, either the Trustee or the holders of not less than 25%
in aggregate principal amount of the Securities of that series then Outstanding hereunder, by notice in writing to the Company (and to
the Trustee if given by such Securityholders), may declare the principal of (and premium, if any, on) and accrued and unpaid interest
on all the Securities of that series to be due and payable immediately, and upon any such declaration the same shall become and shall
be immediately due and payable. If an Event of Default specified in clause (4) or clause (5) above occurs, the principal of
and accrued and unpaid interest on all the Securities of that series shall automatically be immediately due and payable without any declaration
or other act on the part of the Trustee or the holders of the Securities.
(c) At
any time after the principal of (and premium, if any, on) and accrued and unpaid interest on the Securities of that series shall have
been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered
as hereinafter provided, the holders of a majority in aggregate principal amount of the Securities of that series then Outstanding hereunder,
by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if: (i) the Company
has paid or deposited with the Trustee a sum sufficient to pay all matured installments of interest upon all the Securities of that series
and the principal of (and premium, if any, on) any and all Securities of that series that shall have become due otherwise than by acceleration
(with interest upon such principal and premium, if any, and, to the extent that such payment is enforceable under applicable law, upon
overdue installments of interest, at the rate per annum expressed in the Securities of that series to the date of such payment or deposit)
and the amount payable to the Trustee under Section 7.06, and (ii) any and all Events of Default under the Indenture with respect
to such series, other than the nonpayment of principal on (and premium, if any, on) and accrued and unpaid interest on Securities of that
series that shall not have become due by their terms, shall have been remedied or waived as provided in Section 6.06.
No such rescission and annulment shall extend to or shall affect any
subsequent default or impair any right consequent thereon.
(d) In
case the Trustee shall have proceeded to enforce any right with respect to Securities of that series under this Indenture and such proceedings
shall have been discontinued or abandoned because of such rescission or annulment or for any other reason or shall have been determined
adversely to the Trustee, then and in every such case, subject to any determination in such proceedings, the Company and the Trustee shall
be restored respectively to their former positions and rights hereunder, and all rights, remedies and powers of the Company and the Trustee
shall continue as though no such proceedings had been taken.
Section 6.02 Collection of Indebtedness and Suits for Enforcement
by Trustee.
(a) The
Company covenants that (i) in case it shall default in the payment of any installment of interest on any of the Securities of a series,
or in any payment required by any sinking or analogous fund established with respect to that series as and when the same shall have become
due and payable, and such default shall have continued for a period of 90 Business Days, or (ii) in case it shall default in the
payment of the principal of (or premium, if any, on) any of the Securities of a series when the same shall have become due and payable,
whether upon maturity of the Securities of a series or upon redemption or upon declaration or otherwise then, upon demand of the Trustee,
the Company will pay to the Trustee, for the benefit of the holders of the Securities of that series, the whole amount that then shall
have been become due and payable on all such Securities for principal (and premium, if any) or interest, or both, as the case may be,
with interest upon the overdue principal (and premium, if any) and (to the extent that payment of such interest is enforceable under applicable
law) upon overdue installments of interest at the rate per annum expressed in the Securities of that series; and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of collection, and the amount payable to the Trustee under
Section 7.06.
(b) If
the Company shall fail to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any action or proceedings at law or in equity for the collection of the sums so due and unpaid,
and may prosecute any such action or proceeding to judgment or final decree, and may enforce any such judgment or final decree against
the Company or other obligor upon the Securities of that series and collect the moneys adjudged or decreed to be payable in the manner
provided by law or equity out of the property of the Company or other obligor upon the Securities of that series, wherever situated.
(c) In
case of any receivership, insolvency, liquidation, bankruptcy, reorganization, readjustment, arrangement, composition or judicial proceedings
affecting the Company, or its creditors or property, the Trustee shall have power to intervene in such proceedings and take any action
therein that may be permitted by the court and shall (except as may be otherwise provided by law) be entitled to file such proofs of claim
and other papers and documents as may be necessary or advisable in order to have the claims of the Trustee and of the holders of Securities
of such series allowed for the entire amount due and payable by the Company under the Indenture at the date of institution of such proceedings
and for any additional amount that may become due and payable by the Company after such date, and to collect and receive any moneys or
other property payable or deliverable on any such claim, and to distribute the same after the deduction of the amount payable to the Trustee
under Section 7.06; and any receiver, assignee or trustee in bankruptcy or reorganization is hereby authorized by each of the holders
of Securities of such series to make such payments to the Trustee, and, in the event that the Trustee shall consent to the making of such
payments directly to such Securityholders, to pay to the Trustee any amount due it under Section 7.06.
(d) All
rights of action and of asserting claims under this Indenture, or under any of the terms established with respect to Securities of that
series, may be enforced by the Trustee without the possession of any of such Securities, or the production thereof at any trial or other
proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of
an express trust, and any recovery of judgment shall, after provision for payment to the Trustee of any amounts due under Section 7.06,
be for the ratable benefit of the holders of the Securities of such series.
In case of an Event of Default hereunder, the Trustee may in its discretion
proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any of such rights, either at law or in equity or in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement contained in the Indenture or in aid of the exercise of any power granted in this Indenture,
or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.
Nothing contained herein shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities of that series or the rights of any holder thereof or to authorize the Trustee to vote in respect of the claim
of any Securityholder in any such proceeding.
Section 6.03 Application of Moneys or Property Collected.
Any moneys or property collected by the Trustee pursuant to this Article with
respect to a particular series of Securities shall be applied in the following order, at the date or dates fixed by the Trustee and, in
case of the distribution of such moneys or property on account of principal (or premium, if any) or interest, upon presentation of the
Securities of that series, and notation thereon of the payment, if only partially paid, and upon surrender thereof if fully paid:
FIRST: To the payment of reasonable costs and expenses of collection
and of all amounts payable to the Trustee under Section 7.06;
SECOND: To the payment of the amounts then due and unpaid upon Securities
of such series for principal (and premium, if any) and interest, in respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal (and premium,
if any) and interest, respectively; and
THIRD: To the payment of the remainder, if any, to the Company or any
other Person lawfully entitled thereto as requested by the Company.
Section 6.04 Limitation on Suits.
No holder of any Security of any series shall have any right by virtue
or by availing of any provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or under or with
respect to this Indenture or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (i) such holder
previously shall have given to the Trustee written notice of an Event of Default and of the continuance thereof with respect to the Securities
of such series specifying such Event of Default, as hereinbefore provided; (ii) the holders of not less than 25% in aggregate principal
amount of the Securities of such series then Outstanding shall have made written request upon the Trustee to institute such action, suit
or proceeding in its own name as Trustee hereunder; (iii) such holder or holders shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby; (iv) the Trustee for 90
days after its receipt of such notice, request and offer of indemnity, shall have failed to institute any such action, suit or proceeding
and (v) during such 90 day period, the holders of a majority in principal amount of the Securities of that series do not give the
Trustee a direction inconsistent with the request.
Notwithstanding anything contained herein to the contrary or any other
provisions of this Indenture, the right of any holder of any Security to receive payment of the principal of (and premium, if any) and
interest on such Security, as therein provided, on or after the respective due dates expressed in such Security (or in the case of redemption,
on the redemption date), or to institute suit for the enforcement of any such payment on or after such respective dates or redemption
date, shall not be impaired or affected without the consent of such holder and by accepting a Security hereunder it is expressly understood,
intended and covenanted by the taker and holder of every Security of such series with every other such taker and holder and the Trustee,
that no one or more holders of Securities of such series shall have any right in any manner whatsoever by virtue or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of the holders of any other of such Securities, or to obtain or
seek to obtain priority over or preference to any other such holder, or to enforce any right under this Indenture, except in the manner
herein provided and for the equal, ratable and common benefit of all holders of Securities of such series. For the protection and enforcement
of the provisions of this Section, each and every Securityholder and the Trustee shall be entitled to such relief as can be given either
at law or in equity.
Section 6.05 Rights and Remedies Cumulative; Delay or Omission
Not Waiver.
(a) Except
as otherwise provided in Section 2.07, all powers and remedies given by this Article to the Trustee or to the Securityholders
shall, to the extent permitted by law, be deemed cumulative and not exclusive of any other powers and remedies available to the Trustee
or the holders of the Securities, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture or otherwise established with respect to such Securities.
(b) No
delay or omission of the Trustee or of any holder of any of the Securities to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power, or shall be construed to be a waiver of any such default or
an acquiescence therein; and, subject to the provisions of Section 6.04, every power and remedy given by this Article or by
law to the Trustee or the Securityholders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee
or by the Securityholders.
Section 6.06 Control by Securityholders.
The holders of a majority in aggregate principal amount of the Securities
of any series at the time Outstanding, determined in accordance with Section 8.04, shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee
with respect to such series; provided, however, that such direction shall not be in conflict with any rule of law or with this Indenture.
Subject to the provisions of Section 7.01, the Trustee shall have the right to decline to follow any such direction if the Trustee
in good faith shall, by a Responsible Officer or officers of the Trustee, determine that the proceeding so directed, subject to the Trustee’s
duties under the Trust Indenture Act, would involve the Trustee in personal liability or might be unduly prejudicial to the Securityholders
not involved in the proceeding. The holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding
affected thereby, determined in accordance with Section 8.04, may on behalf of the holders of all of the Securities of such series
waive any past default in the performance of any of the covenants contained herein or established pursuant to Section 2.01 with respect
to such series and its consequences, except a default in the payment of the principal of, or premium, if any, or interest on, any of the
Securities of that series as and when the same shall become due by the terms of such Securities otherwise than by acceleration (unless
such default has been cured and a sum sufficient to pay all matured installments of interest and principal and any premium has been deposited
with the Trustee (in accordance with Section 6.01(c)). Upon any such waiver, the default covered thereby shall be deemed to be cured
for all purposes of this Indenture and the Company, the Trustee and the holders of the Securities of such series shall be restored to
their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other default or impair
any right consequent thereon.
Section 6.07 Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of any Securities
by such holder’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it
as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall
not apply to any suit instituted by the Trustee, to any suit instituted by any Securityholder, or group of Securityholders, holding more
than 10% in aggregate principal amount of the Outstanding Securities of any series, or to any suit instituted by any Securityholder for
the enforcement of the payment of the principal of (or premium, if any) or interest on any Security of such series, on or after the respective
due dates expressed in such Security or established pursuant to this Indenture.
ARTICLE 7
CONCERNING THE TRUSTEE
Section 7.01 Certain Duties and Responsibilities of Trustee.
(a) The
Trustee, prior to the occurrence of an Event of Default with respect to the Securities of a series and after the curing of all Events
of Default with respect to the Securities of that series that may have occurred, shall undertake to perform with respect to the Securities
of such series such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants shall be read
into this Indenture against the Trustee. In case an Event of Default with respect to the Securities of a series has occurred (that has
not been cured or waived), the Trustee shall exercise with respect to Securities of that series such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs.
(b) No
provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(i) prior
to the occurrence of an Event of Default with respect to the Securities of a series and after the curing or waiving of all such Events
of Default with respect to that series that may have occurred:
(A) the
duties and obligations of the Trustee shall with respect to the Securities of such series be determined solely by the express provisions
of this Indenture, and the Trustee shall not be liable with respect to the Securities of such series except for the performance of such
duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(B) in
the absence of bad faith on the part of the Trustee, the Trustee may with respect to the Securities of such series conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirement of this Indenture;
(ii) the
Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts;
(iii) the
Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction
of the holders of not less than a majority in principal amount of the Securities of any series at the time Outstanding relating to the
time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee under this Indenture with respect to the Securities of that series; and
(iv) None
of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of its rights or powers if there is reasonable ground for
believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Indenture or adequate
indemnity against such risk is not reasonably assured to it.
Section 7.02 Certain Rights of Trustee.
Except as otherwise provided in Section 7.01:
(a) The
Trustee may rely conclusively and shall be protected in acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond, security or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties;
(b) Any
request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by a Board Resolution or an instrument
signed in the name of the Company by any authorized officer of the Company (unless other evidence in respect thereof is specifically prescribed
herein);
(c) The
Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted hereunder in good faith and in reliance thereon;
(d) The
Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction
of any of the Securityholders pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities that may be incurred therein or thereby; nothing contained
herein shall, however, relieve the Trustee of the obligation, upon the occurrence of an Event of Default with respect to a series of the
Securities (that has not been cured or waived), to exercise with respect to Securities of that series such of the rights and powers vested
in it by this Indenture, and to use the same degree of care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs;
(e) The
Trustee shall not be liable for any action taken or omitted to be taken by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture;
(f) The
Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, security, or other papers or documents, unless requested in writing
so to do by the holders of not less than a majority in principal amount of the Outstanding Securities of the particular series affected
thereby (determined as provided in Section 8.04); provided, however, that if the payment within a reasonable time to the Trustee
of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee,
not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable
indemnity against such costs, expenses or liabilities as a condition to so proceeding. The reasonable expense of every such examination
shall be paid by the Company or, if paid by the Trustee, shall be repaid by the Company upon demand; and
(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.
In addition, the Trustee shall not be deemed to have knowledge of any
Default or Event of Default except (1) any Event of Default occurring pursuant to Sections 6.01(a)(1), 6.01(a)(2) and 4.01 hereof
or (2) any Default or Event of Default of which the Trustee shall have received written notification in the manner set forth in this
Indenture or a Responsible Officer of the Trustee shall have obtained actual knowledge. Delivery of reports, information and documents
to the Trustee under Section 5.03 is for informational purposes only and the information and the Trustee’s receipt of the foregoing
shall not constitute constructive notice of any information contained therein, or determinable from information contained therein including
the Company’s compliance with any of their covenants thereunder (as to which the Trustee is entitled to rely conclusively on an
Officers’ Certificate).
Section 7.03 Trustee Not Responsible for Recitals or Issuance
or Securities.
(a) The
recitals contained herein and in the Securities shall be taken as the statements of the Company, and the Trustee assumes no responsibility
for the correctness of the same.
(b) The
Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities.
(c) The
Trustee shall not be accountable for the use or application by the Company of any of the Securities or of the proceeds of such Securities,
or for the use or application of any moneys paid over by the Trustee in accordance with any provision of this Indenture or established
pursuant to Section 2.01, or for the use or application of any moneys received by any paying agent other than the Trustee.
Section 7.04 May Hold Securities.
The Trustee or any paying agent or Security Registrar, in its individual
or any other capacity, may become the owner or pledgee of Securities with the same rights it would have if it were not Trustee, paying
agent or Security Registrar.
Section 7.05 Moneys Held in Trust.
Subject to the provisions of Section 11.05, all moneys received
by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need
not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any moneys
received by it hereunder except such as it may agree with the Company to pay thereon.
Section 7.06 Compensation and Reimbursement.
(a) The
Company covenants and agrees to pay to the Trustee, and the Trustee shall be entitled to, such reasonable compensation (which shall not
be limited by any provision of law in regard to the compensation of a trustee of an express trust) as the Company and the Trustee may
from time to time agree in writing, for all services rendered by it in the execution of the trusts hereby created and in the exercise
and performance of any of the powers and duties hereunder of the Trustee, and, except as otherwise expressly provided herein, the Company
will pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of
its counsel and of all Persons not regularly in its employ), except any such expense, disbursement or advance as may arise from its negligence
or bad faith and except as the Company and Trustee may from time to time agree in writing. The Company also covenants to indemnify the
Trustee (and its officers, agents, directors and employees) for, and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on the part of the Trustee and arising out of or in connection with the acceptance or administration of
this trust, including the reasonable costs and expenses of defending itself against any claim of liability in the premises.
(b) The
obligations of the Company under this Section to compensate and indemnify the Trustee and to pay or reimburse the Trustee for reasonable
expenses, disbursements and advances shall constitute additional indebtedness hereunder. Such additional indebtedness shall be secured
by a lien prior to that of the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust
for the benefit of the holders of particular Securities.
Section 7.07 Reliance on Officers’ Certificate.
Except as otherwise provided in Section 7.01, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it reasonably necessary or desirable that a matter be proved
or established prior to taking or suffering or omitting to take any action hereunder, such matter (unless other evidence in respect thereof
be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively
proved and established by an Officers’ Certificate delivered to the Trustee and such certificate, in the absence of negligence or
bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted to be taken by it
under the provisions of this Indenture upon the faith thereof.
Section 7.08 Disqualification; Conflicting Interests.
If the Trustee has or shall acquire any “conflicting interest”
within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the Company shall in all respects comply with
the provisions of Section 310(b) of the Trust Indenture Act.
Section 7.09 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee with respect to the Securities
issued hereunder which shall at all times be a corporation organized and doing business under the laws of the United States of America
or any state or territory thereof or of the District of Columbia, or a corporation or other Person permitted to act as trustee by the
Securities and Exchange Commission, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus
of at least fifty million U.S. dollars ($50,000,000), and subject to supervision or examination by federal, state, territorial, or District
of Columbia authority.
If such corporation or other Person publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of
this Section, the combined capital and surplus of such corporation or other Person shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published. The Company may not, nor may any Person directly or indirectly controlling,
controlled by, or under common control with the Company, serve as Trustee. In case at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, the Trustee shall resign immediately in the manner and with the effect specified in
Section 7.10.
Section 7.10 Resignation and Removal; Appointment of Successor.
(a) The
Trustee or any successor hereafter appointed may at any time resign with respect to the Securities of one or more series by giving written
notice thereof to the Company and by transmitting notice of resignation by mail, first class postage prepaid, to the Securityholders of
such series, as their names and addresses appear upon the Security Register.
Upon receiving such notice of resignation, the Company shall promptly
appoint a successor trustee with respect to Securities of such series by written instrument, in duplicate, executed by order of the Board
of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor
trustee shall have been so appointed and have accepted appointment within 30 days after the mailing of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor trustee with respect to Securities
of such series, or any Securityholder of that series who has been a bona fide holder of a Security or Securities for at least six months
may on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court
may thereupon after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.
(b) In
case at any time any one of the following shall occur:
(i) the
Trustee shall fail to comply with the provisions of Section 7.08 after written request therefor by the Company or by any Securityholder
who has been a bona fide holder of a Security or Securities for at least six months; or
(ii) the
Trustee shall cease to be eligible in accordance with the provisions of Section 7.09 and shall fail to resign after written request
therefor by the Company or by any such Securityholder; or
(iii) the
Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or commence a voluntary bankruptcy proceeding,
or a receiver of the Trustee or of its property shall be appointed or consented to, or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation; then, in any such case, the
Company may remove the Trustee with respect to all Securities and appoint a successor trustee by written instrument, in duplicate, executed
by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor
trustee, or any Securityholder who has been a bona fide holder of a Security or Securities for at least six months may, on behalf of that
holder and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment
of a successor trustee. Such court may thereupon after such notice, if any, as it may deem proper and prescribe, remove the Trustee and
appoint a successor trustee.
(c) The
holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding may at any time remove the
Trustee with respect to such series by so notifying the Trustee and the Company and may appoint a successor Trustee for such series with
the consent of the Company.
(d) Any
resignation or removal of the Trustee and appointment of a successor trustee with respect to the Securities of a series pursuant to any
of the provisions of this Section shall become effective upon acceptance of appointment by the successor trustee as provided in Section 7.11.
(e) Any
successor trustee appointed pursuant to this Section may be appointed with respect to the Securities of one or more series or all
of such series, and at any time there shall be only one Trustee with respect to the Securities of any particular series.
Section 7.11 Acceptance of Appointment By Successor.
(a) In
case of the appointment hereunder of a successor trustee with respect to all Securities, every such successor trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such successor trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the
successor trustee, such retiring Trustee shall, upon payment of 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.
(b) In
case of the appointment hereunder of a successor trustee with respect to the Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor trustee with respect to the Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor trustee shall accept such appointment and which (i) shall contain such provisions as shall
be necessary or desirable to transfer and confirm to, and to vest in, each successor trustee all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor trustee relates,
(ii) shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall
continue to be vested in the retiring Trustee, and (iii) shall add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust, that each such Trustee
shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee
and that no Trustee shall be responsible for any act or failure to act on the part of any other Trustee hereunder; and upon the execution
and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided
therein, such retiring Trustee shall with respect to the Securities of that or those series to which the appointment of such successor
trustee relates have no further responsibility for the exercise of rights and powers or for the performance of the duties and obligations
vested in the Trustee under this Indenture, and each such successor trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to
which the appointment of such successor trustee relates; but, on request of the Company or any successor trustee, such retiring Trustee
shall duly assign, transfer and deliver to such successor trustee, to the extent contemplated by such supplemental indenture, the property
and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such
successor trustee relates.
(c) Upon
request of any such successor trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming
to such successor trustee all such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case
may be.
(d) No
successor trustee shall accept its appointment unless at the time of such acceptance such successor trustee shall be qualified and eligible
under this Article.
(e) Upon
acceptance of appointment by a successor trustee as provided in this Section, the Company shall transmit notice of the succession of such
trustee hereunder by mail, first class postage prepaid, to the Securityholders, as their names and addresses appear upon the Security
Register. If the Company fails to transmit such notice within ten days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be transmitted at the expense of the Company.
Section 7.12 Merger, Conversion, Consolidation or Succession
to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall
be a party, or any corporation succeeding to the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be qualified under the provisions of Section 7.08 and eligible under the provisions of Section 7.09,
without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated
with the same effect as if such successor Trustee had itself authenticated such Securities.
Section 7.13 Preferential Collection of Claims Against the
Company.
The Trustee shall comply with Section 311(a) of the Trust
Indenture Act, excluding any creditor relationship described in Section 311(b) of the Trust Indenture Act. A Trustee who has
resigned or been removed shall be subject to Section 311(a) of the Trust Indenture Act to the extent included therein.
Section 7.14 Notice of Default
If any Default or any Event of Default occurs and is continuing and
if such Default or Event of Default is known to a Responsible Officer of the Trustee, the Trustee shall mail to each Securityholder in
the manner and to the extent provided in Section 313(c) of the Trust Indenture Act notice of the Default or Event of Default
within 45 days after it occurs and becomes known to the Trustee, unless such Default or Event of Default has been cured; provided,
however, that, except in the case of a default in the payment of the principal of (or premium, if any) or interest on any Security,
the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the
interest of the Securityholders.
ARTICLE 8
CONCERNING THE SECURITYHOLDERS
Section 8.01 Evidence of Action by Securityholders.
Whenever in this Indenture it is provided that the holders of a majority
or specified percentage in aggregate principal amount of the Securities of a particular series may take any action (including the making
of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of
taking any such action the holders of such majority or specified percentage of that series have joined therein may be evidenced by any
instrument or any number of instruments of similar tenor executed by such holders of Securities of that series in person or by agent or
proxy appointed in writing.
If the Company shall solicit from the Securityholders of any series
any request, demand, authorization, direction, notice, consent, waiver or other action, the Company may, at its option, as evidenced by
an Officers’ Certificate, fix in advance a record date for such series for the determination of Securityholders entitled to give
such request, demand, authorization, direction, notice, consent, waiver or other action, but the Company shall have no obligation to do
so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Securityholders of record at the close of business on the record date shall be deemed to
be Securityholders for the purposes of determining whether Securityholders of the requisite proportion of Outstanding Securities of that
series have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other action,
and for that purpose the Outstanding Securities of that series shall be computed as of the record date; provided, however, that no such
authorization, agreement or consent by such Securityholders on the record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the record date.
Section 8.02 Proof of Execution by Securityholders.
Subject to the provisions of Section 7.01, proof of the execution
of any instrument by a Securityholder (such proof will not require notarization) or his agent or proxy and proof of the holding by any
Person of any of the Securities shall be sufficient if made in the following manner:
(a) The
fact and date of the execution by any such Person of any instrument may be proved in any reasonable manner acceptable to the Trustee.
(b) The
ownership of Securities shall be proved by the Security Register of such Securities or by a certificate of the Security Registrar thereof.
The Trustee may require such additional proof of any matter referred
to in this Section as it shall deem necessary.
Section 8.03 Who May be Deemed Owners.
Prior to the due presentment for registration of transfer of any Security,
the Company, the Trustee, any paying agent and any Security Registrar may deem and treat the Person in whose name such Security shall
be registered upon the books of the Company as the absolute owner of such Security (whether or not such Security shall be overdue and
notwithstanding any notice of ownership or writing thereon made by anyone other than the Security Registrar) for the purpose of receiving
payment of or on account of the principal of, premium, if any, and (subject to Section 2.03) interest on such Security and for all
other purposes; and neither the Company nor the Trustee nor any paying agent nor any Security Registrar shall be affected by any notice
to the contrary.
Section 8.04 Certain Securities Owned by Company Disregarded.
In determining whether the holders of the requisite aggregate principal
amount of Securities of a particular series have concurred in any direction, consent or waiver under this Indenture, the Securities of
that series that are owned by the Company or any other obligor on the Securities of that series or by any Person directly or indirectly
controlling or controlled by or under common control with the Company or any other obligor on the Securities of that series shall be disregarded
and deemed not to be Outstanding for the purpose of any such determination, except that for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, consent or waiver, only Securities of such series that the Trustee actually knows
are so owned shall be so disregarded. The Securities so owned that have been pledged in good faith may be regarded as Outstanding for
the purposes of this Section, if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right so to act with
respect to such Securities and that the pledgee is not a Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company or any such other obligor. In case of a dispute as to such right, any decision by the Trustee
taken upon the advice of counsel shall be full protection to the Trustee.
Section 8.05 Actions Binding on Future Securityholders.
At any time prior to (but not after) the evidencing to the Trustee,
as provided in Section 8.01, of the taking of any action by the holders of the majority or percentage in aggregate principal amount
of the Securities of a particular series specified in this Indenture in connection with such action, any holder of a Security of that
series that is shown by the evidence to be included in the Securities the holders of which have consented to such action may, by filing
written notice with the Trustee, and upon proof of holding as provided in Section 8.02, revoke such action so far as concerns such
Security. Except as aforesaid any such action taken by the holder of any Security shall be conclusive and binding upon such holder and
upon all future holders and owners of such Security, and of any Security issued in exchange therefor, on registration of transfer thereof
or in place thereof, irrespective of whether or not any notation in regard thereto is made upon such Security. Any action taken by the
holders of the majority or percentage in aggregate principal amount of the Securities of a particular series specified in this
Indenture in connection with such action shall be conclusively binding
upon the Company, the Trustee and the holders of all the Securities of that series.
ARTICLE 9
SUPPLEMENTAL INDENTURES
Section 9.01 Supplemental Indentures Without the Consent of
Securityholders.
In addition to any supplemental indenture otherwise authorized by this
Indenture, the Company and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto
(which shall conform to the provisions of the Trust Indenture Act as then in effect), without the consent of the Securityholders, for
one or more of the following purposes:
(a) to
cure any ambiguity, defect, or inconsistency herein or in the Securities of any series;
(b) to
comply with Article Ten;
(c) to
provide for uncertificated Securities in addition to or in place of certificated Securities and to make all appropriate changes for such
purpose;
(d) to
add to the covenants, restrictions, conditions or provisions relating to the Company for the benefit of the holders of all or any series
of Securities (and if such covenants, restrictions, conditions or provisions are to be for the benefit of less than all series of Securities,
stating that such covenants, restrictions, conditions or provisions are expressly being included solely for the benefit of such series),
to make the occurrence, or the occurrence and the continuance, of a default in any such additional covenants, restrictions, conditions
or provisions an Event of Default, or to surrender any right or power herein conferred upon the Company;
(e) to
add to, delete from, or revise the conditions, limitations, and restrictions on the authorized amount, terms, or purposes of issue, authentication,
and delivery of Securities, as herein set forth;
(f) to
make any change that does not adversely affect the rights of any Securityholder in any material respect;
(g) to
provide for the issuance of and establish the form and terms and conditions of the Securities of any series as provided in Section 2.01,
to establish the form of any certifications required to be furnished pursuant to the terms of this Indenture or any series of Securities,
or to add to the rights of the holders of any series of Securities;
(h) to
evidence and provide for the acceptance of appointment hereunder by a successor trustee; or
(i) to
comply with any requirements of the Securities and Exchange Commission or any successor in connection with the qualification of this Indenture
under the Trust Indenture Act.
The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture, and to make any further appropriate agreements and stipulations that may be therein contained, but
the Trustee shall not be obligated to enter into any such supplemental indenture that affects the Trustee’s own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section may
be executed by the Company and the Trustee without the consent of the holders of any of the Securities at the time Outstanding, notwithstanding
any of the provisions of Section 9.02.
Section 9.02 Supplemental Indentures With Consent of Securityholders.
With the consent (evidenced as provided in Section 8.01) of the
holders of not less than a majority in aggregate principal amount of the Securities of each series affected by such supplemental indenture
or indentures at the time Outstanding, the Company, when authorized by a Board Resolution, and the Trustee may from time to time and at
any time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as
then in effect) for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture
or of any supplemental indenture or of modifying in any manner not covered by Section 9.01 the rights of the holders of the Securities
of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the holders
of each Security then Outstanding and affected thereby, (a) extend the fixed maturity of any Securities of any series, or reduce
the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable upon
the redemption thereof or (b) reduce the aforesaid percentage of Securities, the holders of which are required to consent to any
such supplemental indenture.
It shall not be necessary for the consent of the Securityholders of
any series affected thereby under this Section to approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such consent shall approve the substance thereof.
Section 9.03 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture pursuant to the provisions
of this Article or of Section 10.01, this Indenture shall, with respect to such series, be and be deemed to be modified and
amended in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture
of the Trustee, the Company and the holders of Securities of the series affected thereby shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.
Section 9.04 Securities Affected by Supplemental Indentures.
Securities of any series affected by a supplemental indenture, authenticated
and delivered after the execution of such supplemental indenture pursuant to the provisions of this Article or of Section 10.01,
may bear a notation in form approved by the Company, provided such form meets the requirements of any securities exchange upon which such
series may be listed, as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities
of that series so modified as to conform, in the opinion of the Board of Directors, to any modification of this Indenture contained in
any such supplemental indenture may be prepared by the Company, authenticated by the Trustee and delivered in exchange for the Securities
of that series then Outstanding.
Section 9.05 Execution of Supplemental Indentures.
Upon the request of the Company, accompanied by its Board Resolutions
authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Securityholders
required to consent thereto as aforesaid, the Trustee shall join with the Company in the execution of such supplemental indenture unless
such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion but shall not be obligated to enter into such supplemental indenture. The Trustee, subject to the provisions
of Section 7.01, will be entitled to receive and will be fully protected in relying upon an Officers’ Certificate and an Opinion
of Counsel stating that any supplemental indenture executed pursuant to this Article is authorized or permitted by, and conforms
to, the terms of this Article and that it is proper for the Trustee under the provisions of this Article to join in the execution
thereof; provided, however, that such Officers’ Certificate or Opinion of Counsel need not be provided in connection with the execution
of a supplemental indenture that establishes the terms of a series of Securities pursuant to Section 2.01 hereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee shall transmit by mail, first class postage prepaid, a
notice, setting forth in general terms the substance of such supplemental indenture, to the Securityholders of all series affected thereby
as their names and addresses appear upon the Security Register. Any failure of the Trustee to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such supplemental indenture.
ARTICLE 10
SUCCESSOR ENTITY
Section 10.01 Company May Consolidate, Etc.
Except as provided pursuant to Section 2.01 pursuant to a Board
Resolution, and set forth in an Officers’ Certificate, or established in one or more indentures supplemental to this Indenture,
nothing contained in this Indenture shall prevent any consolidation or merger of the Company with or into any other Person (whether or
not affiliated with the Company) or successive consolidations or mergers in which the Company or its successor or successors shall be
a party or parties, or shall prevent any sale, conveyance, transfer or other disposition of the property of the Company or its successor
or successors as an entirety, or substantially as an entirety, to any other corporation (whether or not affiliated with the Company or
its successor or successors) authorized to acquire and operate the same; provided, however, the Company hereby covenants and agrees that,
upon any such consolidation or merger (in each case, if the Company is not the survivor of such transaction), sale, conveyance, transfer
or other disposition, the due and punctual payment of the principal of (premium, if any) and interest on all of the Securities of all
series in accordance with the terms of each series, according to their tenor, and the due and punctual performance and observance of all
the covenants and conditions of this Indenture with respect to each series or established with respect to such series pursuant to Section 2.01
to be kept or performed by the Company shall be expressly assumed, by supplemental indenture (which shall conform to the provisions of
the Trust Indenture Act, as then in effect) reasonably satisfactory in form to the Trustee executed and delivered to the Trustee by the
entity formed by such consolidation, or into which the Company shall have been merged, or by the entity which shall have acquired such
property.
Section 10.02 Successor Entity Substituted.
(a) In
case of any such consolidation, merger, sale, conveyance, transfer or other disposition and upon the assumption by the successor entity
by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the obligations set forth
under Section 10.01 on all of the Securities of all series Outstanding, such successor entity shall succeed to and be substituted
for the Company with the same effect as if it had been named as the Company herein, and thereupon the predecessor corporation shall be
relieved of all obligations and covenants under this Indenture and the Securities.
(b) In
case of any such consolidation, merger, sale, conveyance, transfer or other disposition, such changes in phraseology and form (but not
in substance) may be made in the Securities thereafter to be issued as may be appropriate.
(c) Nothing
contained in this Article shall require any action by the Company in the case of a consolidation or merger of any Person into the
Company where the Company is the survivor of such transaction, or the acquisition by the Company, by purchase or otherwise, of all or
any part of the property of any other Person (whether or not affiliated with the Company).
Section 10.03 Evidence of Consolidation, Etc. to Trustee.
The Trustee, subject to the provisions of Section 7.01, may receive
an Officers’ Certificate or an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale, conveyance,
transfer or other disposition, and any such assumption, comply with the provisions of this Article.
ARTICLE 11
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge of Indenture.
If at any time: (a) the Company shall have delivered to the Trustee
for cancellation all Securities of a series theretofore authenticated and not delivered to the Trustee for cancellation (other than any
Securities that shall have been destroyed, lost or stolen and that shall have been replaced or paid as provided in Section 2.07 and
Securities for whose payment money or Governmental Obligations have theretofore been deposited in trust or segregated and held in trust
by the Company and thereupon repaid to the Company or discharged from such trust, as provided in Section 11.05); or (b) all
such Securities of a particular series not theretofore delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory
to the Trustee for the giving of notice of redemption, and the Company shall deposit or cause to be deposited with the Trustee as trust
funds the entire amount in moneys or Governmental Obligations or a combination thereof, sufficient in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay at maturity or upon
redemption all Securities of that series not theretofore delivered to the Trustee for cancellation, including principal (and premium,
if any) and interest due or to become due to such date of maturity or date fixed for redemption, as the case may be, and if the Company
shall also pay or cause to be paid all other sums payable hereunder with respect to such series by the Company then this Indenture shall
thereupon cease to be of further effect with respect to such series except for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02,
4.03 and 7.10, that shall survive until the date of maturity or redemption date, as the case may be, and Sections 7.06 and 11.05, that
shall survive to such date and thereafter, and the Trustee, on demand of the Company and at the cost and expense of the Company shall
execute proper instruments acknowledging satisfaction of and discharging this Indenture with respect to such series.
Section 11.02 Discharge of Obligations.
If at any time all such Securities of a particular series not heretofore
delivered to the Trustee for cancellation or that have not become due and payable as described in Section 11.01 shall have been paid
by the Company by depositing irrevocably with the Trustee as trust funds moneys or an amount of Governmental Obligations sufficient to
pay at maturity or upon redemption all such Securities of that series not theretofore delivered to the Trustee for cancellation, including
principal (and premium, if any) and interest due or to become due to such date of maturity or date fixed for redemption, as the case may
be, and if the Company shall also pay or cause to be paid all other sums payable hereunder by the Company with respect to such series,
then after the date such moneys or Governmental Obligations, as the case may be, are deposited with the Trustee the obligations of the
Company under this Indenture with respect to such series shall cease to be of further effect except for the provisions of Sections 2.03,
2.05, 2.07, 4,01, 4.02, 4,03, 7.05, 7.10 and 11.05 hereof that shall survive until such Securities shall mature and be paid.
Thereafter, Sections 7.06 and 11.05 shall survive.
Section 11.03 Deposited Moneys to be Held in Trust.
All moneys or Governmental Obligations deposited with the Trustee pursuant
to Sections 11.01 or 11.02 shall be held in trust and shall be available for payment as due, either directly or through any paying agent
(including the Company acting as its own paying agent), to the holders of the particular series of Securities for the payment or redemption
of which such moneys or Governmental Obligations have been deposited with the Trustee.
Section 11.04 Payment of Moneys Held by Paying Agents.
In connection with the satisfaction and discharge of this Indenture
all moneys or Governmental Obligations then held by any paying agent under the provisions of this Indenture shall, upon demand of the
Company, be paid to the Trustee and thereupon such paying agent shall be released from all further liability with respect to such moneys
or Governmental Obligations.
Section 11.05 Repayment to Company.
Any moneys or Governmental Obligations deposited with any paying agent
or the Trustee, or then held by the Company, in trust for payment of principal of or premium, if any, or interest on the Securities of
a particular series that are not applied but remain unclaimed by the holders of such Securities for at least two years after the date
upon which the principal of (and premium, if any) or interest on such Securities shall have respectively become due and payable, or such
other shorter period set forth in applicable escheat or abandoned or unclaimed property law, shall be repaid to the Company on May 31
of each year or upon the Company’s request or (if then held by the Company) shall be discharged from such trust; and thereupon the
paying agent and the Trustee shall be released from all further liability with respect to such moneys or Governmental Obligations, and
the holder of any of the Securities entitled to receive such payment shall thereafter, as a general creditor, look only to the Company
for the payment thereof.
ARTICLE 12
IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS
AND DIRECTORS
Section 12.01 No Recourse.
No recourse under or upon any obligation, covenant or agreement of
this Indenture, or of any Security, or for any claim based thereon or otherwise in respect thereof, shall be had against any incorporator,
shareholder, officer or director, past, present or future as such, of the Company or of any predecessor or successor corporation, either
directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that this Indenture and the obligations
issued hereunder are solely corporate obligations, and that no such personal liability whatever shall attach to, or is or shall be incurred
by, the incorporators, shareholders, officers or directors as such, of the Company or of any predecessor or successor corporation, or
any of them, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Securities or implied therefrom; and that any and all such personal liability of every name
and nature, either at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every
such incorporator, shareholder, officer or director as such, because of the creation of the indebtedness hereby authorized, or under or
by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom, are
hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issuance of
such Securities.
ARTICLE 13
MISCELLANEOUS PROVISIONS
Section 13.01 Effect on Successors and Assigns.
All the covenants, stipulations, promises and agreements in this Indenture
made by or on behalf of the Company shall bind its successors and assigns, whether so expressed or not.
Section 13.02 Actions by Successor.
Any act or proceeding by any provision of this Indenture authorized
or required to be done or performed by any board, committee or officer of the Company shall and may be done and performed with like force
and effect by the corresponding board, committee or officer of any corporation that shall at the time be the lawful successor of the Company.
Section 13.03 Surrender of Company Powers.
The Company by instrument in writing executed by authority of its Board
of Directors and delivered to the Trustee may surrender any of the powers reserved to the Company, and thereupon such power so surrendered
shall terminate both as to the Company and as to any successor corporation.
Section 13.04 Notices.
Except as otherwise expressly provided herein, any notice, request
or demand that by any provision of this Indenture is required or permitted to be given, made or served by the Trustee or by the holders
of Securities or by any other Person pursuant to this Indenture to or on the Company may be given or served by being deposited in first
class mail, postage prepaid, addressed (until another address is filed in writing by the Company with the Trustee), as follows: 9 North
West Fourth Ring Road, Yingu Mansion Ste 1708, Haidian District, Beijing F4 100190, with a copy to Hunter Taubman Fischer & Li
LLC, 1450 Broadway, 26th Floor, New York, NY 10018, Attn: Joan Wu, Esq. Any notice, election, request or demand by the
Company or any Securityholder or by any other Person pursuant to this Indenture to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or made in writing at the Corporate Trust Office of the Trustee.
Section 13.05 Governing Law.
This Indenture and each Security shall be deemed to be a contract made
under the internal laws of the State of New York, and for all purposes shall be construed in accordance with the laws of said State, except
to the extent that the Trust Indenture Act is applicable.
Section 13.06 Treatment of Securities as Debt.
It is intended that the Securities will be treated as indebtedness
and not as equity for federal income tax purposes. The provisions of this Indenture shall be interpreted to further this intention.
Section 13.07 Certificates and Opinions as to Conditions Precedent.
(a) Upon
any application or demand by the Company to the Trustee to take any action under any of the provisions of this Indenture, the Company
shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent provided for in this Indenture (other
than the certificate to be delivered pursuant to Section 13.13) relating to the proposed action have been complied with and an Opinion
of Counsel stating that in the opinion of such counsel all such conditions precedent have been complied with, except that in the case
of any such application or demand as to which the furnishing of such documents is specifically required by any provision of this Indenture
relating to such particular application or demand, no additional certificate or opinion need be furnished.
(b) Each
certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant
in this Indenture shall include (i) a statement that the Person making such certificate or opinion has read such covenant or condition;
(ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained
in such certificate or opinion are based; (iii) a statement that, in the opinion of such Person, he has made such examination or
investigation as is reasonably necessary to enable him to express an informed opinion as to whether or not such covenant or condition
has been complied with; and (iv) a statement as to whether or not, in the opinion of such Person, such condition or covenant has
been complied with.
Section 13.08 Payments on Business Days.
Except as provided pursuant to Section 2.01 pursuant to a Board
Resolution, and set forth in an Officers’ Certificate, or established in one or more indentures supplemental to this Indenture,
in any case where the date of maturity of interest or principal of any Security or the date of redemption of any Security shall not be
a Business Day, then payment of interest or principal (and premium, if any) may be made on the next succeeding Business Day with the same
force and effect as if made on the nominal date of maturity or redemption, and no interest shall accrue for the period after such nominal
date.
Section 13.09 Conflict with Trust Indenture Act.
If and to the extent that any provision of this Indenture limits, qualifies
or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control.
Section 13.10 Indenture and Securities Solely Corporate Obligations.
No recourse for the payment of the principal of, premium, if any, or
interest on any Securities, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation,
covenant or agreement of the Company in this Indenture or in any supplemental indenture or in any Security, or because of the creation
of any indebtedness represented thereby, shall be had against any incorporator, shareholder, employee, agent, officer, director or subsidiary,
as such, past, present or future, of the Company or of any successor entity, either directly or through the Company or any successor entity,
whether by virtue of any constitution, statute, or rule of law, or by the enforcement of any assessment or penalty or otherwise;
it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration
for, the execution of this Indenture and the issuance of the Securities.
Section 13.11 Counterparts.
This Indenture may be executed in any number of counterparts, each
of which shall be an original, but such counterparts shall together constitute but one and the same instrument.
Section 13.12 Separability.
In case any one or more of the provisions contained in this Indenture
or in the Securities of any series shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this Indenture or of such Securities, but this Indenture and such
Securities shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein.
Section 13.13 Compliance Certificates.
The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year during which any Securities of any series were outstanding, a compliance certificate stating whether or not the
signer knows of any Default or Event of Default that occurred during such fiscal year. Such certificate shall contain a certification
from the principal executive officer, principal financial officer or principal accounting officer of the Company that a review has been
conducted of the activities of the Company and the Company’s performance under this Indenture and that the Company has complied
with all conditions and covenants under this Indenture. For purposes of this Section 13.13, such compliance shall be determined without
regard to any period of grace or requirement of notice provided under this Indenture. If the officer of the Company signing such certificate
has knowledge of such a Default or Event of Default, the certificate shall describe any such Default or Event of Default and its status.
IN
WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed all as of the day and year first above written.
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MDJM LTD
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By:
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Name:
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Title:
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[TRUSTEE], as Trustee
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By:
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Name:
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Title:
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CROSS-REFERENCE TABLE (1)
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Section of Trust Indenture Act of 1939, as Amended
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Section of Indenture
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310(a)
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7.09
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310(b)
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7.08
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7.10
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310(c)
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Inapplicable
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311(a)
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7.13
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311(b)
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7.13
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311(c)
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Inapplicable
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312(a)
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5.01
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5.02(a)
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312(b)
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5.02(c)
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312(c)
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5.02(c)
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313(a)
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5.04(a)
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313(b)
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5.04(b)
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313(c)
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5.04(a)
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5.04(b)
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313(d)
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5.04(c)
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314(a)
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5.03
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13.12
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314(b)
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Inapplicable
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314(c)
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13.07(a)
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314(d)
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Inapplicable
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314(e)
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13.07(b)
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314(f)
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Inapplicable
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315(a)
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7.01(a)
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7.01(b)
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315(b)
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7.14
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315(c)
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7.01
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315(d)
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7.01(b)
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315(e)
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6.07
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316(a)
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6.06
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8.04
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316(b)
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6.04
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316(c)
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8.01
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317(a)
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6.02
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317(b)
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4.03
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318(a)
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13.09
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(1)
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This Cross-Reference Table does not constitute part of the Indenture and shall not have any bearing on the interpretation of any of its terms or provisions.
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Exhibit 4.7
MDJM LTD
(the “Issuer”)
AND
[TRUSTEE]
(the “Trustee”)
INDENTURE
Dated as of [●], 20[●]
Subordinated Debt Securities
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ARTICLE 1 DEFINITIONS
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1
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Section 1.01
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Definitions of Terms
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1
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ARTICLE 2 ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES
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4
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Section 2.01
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Designation and Terms of Securities
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4
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Section 2.02
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Form of Securities and Trustee’s Certificate
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6
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Section 2.03
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Denominations: Provisions for Payment
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6
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Section 2.04
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Execution and Authentication
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8
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Section 2.05
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Registration of Transfer and Exchange
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8
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Section 2.06
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Temporary Securities
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9
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Section 2.07
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Mutilated, Destroyed, Lost or Stolen Securities
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10
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Section 2.08
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Cancellation
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10
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Section 2.09
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Benefits of Indenture
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10
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Section 2.10
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Authenticating Agent
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11
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Section 2.11
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Global Securities
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11
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ARTICLE 3 REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS
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12
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Section 3.01
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Redemption
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12
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Section 3.02
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Notice of Redemption
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12
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Section 3.03
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Payment Upon Redemption
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13
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Section 3.04
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Sinking Fund
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14
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Section 3.05
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Satisfaction of Sinking Fund Payments with Securities
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14
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Section 3.06
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Redemption of Securities for Sinking Fund
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14
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ARTICLE 4 COVENANTS
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14
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Section 4.01
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Payment of Principal, Premium and Interest
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14
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Section 4.02
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Maintenance of Office or Agency
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15
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Section 4.03
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Paying Agents
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15
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Section 4.04
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Appointment to Fill Vacancy in Office of Trustee
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16
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Section 4.05
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Compliance with Consolidation Provisions
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16
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ARTICLE 5 SECURITYHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
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16
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Section 5.01
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Company to Furnish Trustee Names and Addresses of Securityholders
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16
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Section 5.02
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Preservation Of Information; Communications With Securityholders
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16
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Section 5.03
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Reports by the Company
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17
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Section 5.04
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Reports by the Trustee
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17
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ARTICLE 6 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
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17
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Section 6.01
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Events of Default
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17
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Section 6.02
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Collection of Indebtedness and Suits for Enforcement by Trustee
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19
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Section 6.03
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Application of Moneys or Property Collected
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20
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Section 6.04
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Limitation on Suits
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20
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Section 6.05
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Rights and Remedies Cumulative; Delay or Omission Not Waiver
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21
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Section 6.06
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Control by Securityholders
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21
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Section 6.07
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Undertaking to Pay Costs
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22
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ARTICLE 7 CONCERNING THE TRUSTEE
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22
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Section 7.01
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Certain Duties and Responsibilities of Trustee
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22
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Section 7.02
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Certain Rights of Trustee
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23
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Section 7.03
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Trustee Not Responsible for Recitals or Issuance or Securities
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24
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Section 7.04
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May Hold Securities
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24
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Section 7.05
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Moneys Held in Trust
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25
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Section 7.06
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Compensation and Reimbursement
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25
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Section 7.07
|
|
Reliance on Officers’ Certificate
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25
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Section 7.08
|
|
Disqualification; Conflicting Interests
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25
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Section 7.09
|
|
Corporate Trustee Required; Eligibility
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26
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Section 7.10
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|
Resignation and Removal; Appointment of Successor
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26
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Section 7.11
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|
Acceptance of Appointment By Successor
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27
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Section 7.12
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|
Merger, Conversion, Consolidation or Succession to Business
|
28
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Section 7.13
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Preferential Collection of Claims Against the Company
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28
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Section 7.14
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Notice of Default
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28
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ARTICLE 8 CONCERNING THE SECURITYHOLDERS
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29
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Section 8.01
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Evidence of Action by Securityholders
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29
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Section 8.02
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Proof of Execution by Securityholders
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29
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Section 8.03
|
|
Who May be Deemed Owners
|
29
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Section 8.04
|
|
Certain Securities Owned by Company Disregarded
|
30
|
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|
|
Section 8.05
|
|
Actions Binding on Future Securityholders
|
30
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|
ARTICLE 9 SUPPLEMENTAL INDENTURES
|
30
|
|
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|
|
Section 9.01
|
|
Supplemental Indentures Without the Consent of Securityholders
|
30
|
|
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|
|
|
Section 9.02
|
|
Supplemental Indentures With Consent of Securityholders
|
31
|
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|
|
Section 9.03
|
|
Effect of Supplemental Indentures
|
32
|
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|
|
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|
Section 9.04
|
|
Securities Affected by Supplemental Indentures
|
32
|
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|
|
|
|
Section 9.05
|
|
Execution of Supplemental Indentures
|
32
|
|
|
|
|
|
|
ARTICLE 10 SUCCESSOR ENTITY
|
33
|
|
|
|
|
Section 10.01
|
|
Company May Consolidate, Etc
|
33
|
|
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|
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|
|
Section 10.02
|
|
Successor Entity Substituted
|
33
|
|
|
|
|
|
|
Section 10.03
|
|
Evidence of Consolidation, Etc. to Trustee
|
33
|
|
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|
|
|
|
|
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|
ARTICLE 11 SATISFACTION AND DISCHARGE
|
34
|
|
|
|
|
Section 11.01
|
|
Satisfaction and Discharge of Indenture
|
34
|
|
|
|
|
|
|
Section 11.02
|
|
Discharge of Obligations
|
34
|
|
|
|
|
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Section 11.03
|
|
Deposited Moneys to be Held in Trust
|
34
|
|
|
|
|
|
|
Section 11.04
|
|
Payment of Moneys Held by Paying Agents
|
35
|
|
|
|
|
|
|
Section 11.05
|
|
Repayment to Company
|
35
|
|
ARTICLE 12 IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS
|
35
|
|
|
|
|
Section 12.01
|
|
No Recourse
|
35
|
|
|
|
|
|
|
ARTICLE 13 MISCELLANEOUS PROVISIONS
|
36
|
|
|
|
|
Section 13.01
|
|
Effect on Successors and Assigns
|
36
|
|
|
|
|
|
|
Section 13.02
|
|
Actions by Successor
|
36
|
|
|
|
|
|
|
Section 13.03
|
|
Surrender of Company Powers
|
36
|
|
|
|
|
|
|
Section 13.04
|
|
Notices
|
36
|
|
|
|
|
|
|
Section 13.05
|
|
Governing Law
|
36
|
|
|
|
|
|
|
Section 13.06
|
|
Treatment of Securities as Debt
|
36
|
|
|
|
|
|
|
Section 13.07
|
|
Certificates and Opinions as to Conditions Precedent
|
36
|
|
|
|
|
|
|
Section 13.08
|
|
Payments on Business Days
|
37
|
|
|
|
|
|
|
Section 13.09
|
|
Conflict with Trust Indenture Act
|
37
|
|
|
|
|
|
|
Section 13.10
|
|
Indenture and Securities Solely Corporate Obligations
|
37
|
|
|
|
|
|
|
Section 13.11
|
|
Counterparts
|
37
|
|
|
|
|
|
|
Section 13.12
|
|
Separability
|
38
|
|
|
|
|
|
|
Section 13.13
|
|
Compliance Certificates
|
38
|
|
|
|
|
|
|
ARTICLE 14 SUBORDINATION OF SECURITIES
|
38
|
|
|
|
|
Section 14.01
|
|
Subordination Terms
|
38
|
|
(1)
|
This Table of Contents does not constitute part of the Indenture and shall not have any bearing on the interpretation of any of its terms or provisions.
|
INDENTURE
INDENTURE, dated as of [●], 20[●],
among MDJM Ltd, a Cayman Islands company (the “Company”), and [TRUSTEE], as trustee (the “Trustee”).
WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the execution and delivery of this Indenture to provide for the issuance of subordinated debt securities (hereinafter
referred to as the “Securities”), in an unlimited aggregate principal amount to be issued from time to time in one or more
series as in this Indenture provided, as registered Securities without coupons, to be authenticated by the certificate of the Trustee;
WHEREAS, to provide the terms and conditions upon which the
Securities are to be authenticated, issued and delivered, the Company has duly authorized the execution of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid
agreement of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, in consideration of the premises and the purchase
of the Securities by the holders thereof, it is mutually covenanted and agreed as follows for the equal and ratable benefit of the holders
of Securities:
ARTICLE 1
DEFINITIONS
Section 1.01 Definitions of Terms.
The terms defined in this Section (except as in this Indenture
or any indenture supplemental hereto otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture
and of any indenture supplemental hereto shall have the respective meanings specified in this Section and shall include the plural
as well as the singular. All other terms used in this Indenture that are defined in the Trust Indenture Act of 1939, as amended, or that
are by reference in such Act defined in the Securities Act of 1933, as amended (except as herein or any indenture supplemental hereto
otherwise expressly provided or unless the context otherwise requires), shall have the meanings assigned to such terms in said Trust Indenture
Act and in said Securities Act as in force at the date of the execution of this instrument.
“Authenticating Agent” means an authenticating
agent with respect to all or any of the series of Securities appointed by the Trustee pursuant to Section 2.10.
“Bankruptcy Law” means Title 11, U.S. Code,
or any similar federal or state law for the relief of debtors.
“Board of Directors” means the Board of Directors
of the Company or any duly authorized committee of such Board.
“Board Resolution” means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification.
“Business Day” means, with respect to any
series of Securities, any day other than a day on which federal or state banking institutions in the Borough of Manhattan, the City of
New York, or in the city of the Corporate Trust Office of the Trustee, are authorized or obligated by law, executive order or regulation
to close.
“Certificate” means a certificate signed
by any Officer. The Certificate need not comply with the provisions of Section 13.07.
“Company” means MDJM Ltd, a Cayman Islands
company, and, subject to the provisions of Article Ten, shall also include its successors and assigns.
“Corporate Trust Office” means the office
of the Trustee at which, at any particular time, its corporate trust business shall be principally administered, which office at the date
hereof is located at [ ].
“Custodian” means any receiver, trustee,
assignee, liquidator or similar official under any Bankruptcy Law.
“Default” means any event, act or condition
that with notice or lapse of time, or both, would constitute an Event of Default.
“Depositary” means, with respect to Securities
of any series for which the Company shall determine that such Securities will be issued as a Global Security, The Depository Trust Company,
New York, New York, another clearing agency, or any successor registered as a clearing agency under the Securities and Exchange Act of
1934, as amended (the “Exchange Act”), or other applicable statute or regulation, which, in each case, shall be designated
by the Company pursuant to either Section 2.01 or 2.11.
“Event of Default” means, with respect to
Securities of a particular series, any event specified in Section 6.01, continued for the period of time, if any, therein designated.
“Global Security” means, with respect to
any series of Securities, a Security executed by the Company and delivered by the Trustee to the Depositary or pursuant to the Depositary’s
instruction, all in accordance with the Indenture, which shall be registered in the name of the Depositary or its nominee.
“Governmental Obligations” means securities
that are (a) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or
(b) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America,
the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America that, in either
case, are not callable or redeemable at the option of the issuer thereof at any time prior to the stated maturity of the Securities, and
shall also include a depositary receipt issued by a bank or trust company as custodian with respect to any such Governmental Obligation
or a specific payment of principal of or interest on any such Governmental Obligation held by such custodian for the account of the holder
of such depositary receipt; provided, however, that (except as required by law) such custodian is not authorized to make any deduction
from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the Governmental
Obligation or the specific payment of principal of or interest on the Governmental Obligation evidenced by such depositary receipt.
“herein”, “hereof” and
“hereunder”, and other words of similar import, refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
“Indenture” means this instrument as originally
executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into in accordance
with the terms hereof.
“Interest Payment Date”, when used with respect
to any installment of interest on a Security of a particular series, means the date specified in such Security or in a Board Resolution
or in an indenture supplemental hereto with respect to such series as the fixed date on which an installment of interest with respect
to Securities of that series is due and payable.
“Officer” means, with respect to the Company,
the chairman of the Board of Directors, a chief executive officer, a president, a chief financial officer, chief operating officer, any
executive vice president, any senior vice president, any vice president, the treasurer or any assistant treasurer, the controller or any
assistant controller or the secretary or any assistant secretary.
“Officers’ Certificate” means a certificate
signed by any two Officers. Each such certificate shall include the statements provided for in Section 13.07, if and to the extent
required by the provisions thereof.
“Opinion of Counsel” means an opinion in
writing subject to customary exceptions of legal counsel, who may be an employee of or counsel for the Company, that is delivered to the
Trustee in accordance with the terms hereof. Each such opinion shall include the statements provided for in Section 13.07, if and
to the extent required by the provisions thereof.
“Outstanding”, when used with reference to
Securities of any series, means, subject to the provisions of Section 8.04, as of any particular time, all Securities of that series
theretofore authenticated and delivered by the Trustee under this Indenture, except (a) Securities theretofore canceled by the Trustee
or any paying agent, or delivered to the Trustee or any paying agent for cancellation or that have previously been canceled; (b) Securities
or portions thereof for the payment or redemption of which moneys or Governmental Obligations in the necessary amount shall have been
deposited in trust with the Trustee or with any paying agent (other than the Company) or shall have been set aside and segregated in trust
by the Company (if the Company shall act as its own paying agent); provided, however, that if such Securities or portions of such Securities
are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in Article Three provided, or
provision satisfactory to the Trustee shall have been made for giving such notice; and (c) Securities in lieu of or in substitution
for which other Securities shall have been authenticated and delivered pursuant to the terms of Section 2.07.
“Person” means any individual, corporation,
partnership, joint venture, joint-stock company, limited liability company, association, trust, unincorporated organization, any other
entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
“Predecessor Security” of any particular
Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and,
for the purposes of this definition, any Security authenticated and delivered under Section 2.07 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed or stolen Security.
“Responsible Officer” when used with respect
to the Trustee means the chairman of its board of directors, the chief executive officer, the president, any vice president, the secretary,
the treasurer, any trust officer, any corporate trust officer or any other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of his or her knowledge of and familiarity with the particular subject.
“Securities” means the debt Securities authenticated
and delivered under this Indenture.
“Securityholder”, “holder of Securities”,
“registered holder”, or other similar term, means the Person or Persons in whose name or names a particular Security shall
be registered on the books of the Company kept for that purpose in accordance with the terms of this Indenture.
“Security Register” and “Security
Registrar” shall have the meanings as set forth in Section 2.05.
“Subsidiary” means, with respect to any Person,
(i) any corporation at least a majority of whose outstanding Voting Stock shall at the time be owned, directly or indirectly, by
such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, (ii) any general partnership,
joint venture or similar entity, at least a majority of whose outstanding partnership or similar interests shall at the time be owned
by such Person, or by one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries and (iii) any limited
partnership of which such Person or any of its Subsidiaries is a general partner.
“Trustee” means, and, subject to the provisions
of Article Seven, shall also include its successors and assigns, and, if at any time there is more than one Person acting in such
capacity hereunder, “Trustee” shall mean each such Person. The term “Trustee” as used with respect to a particular
series of the Securities shall mean the trustee with respect to that series.
“Trust Indenture Act” means the Trust Indenture
Act of 1939, as amended.
“Voting Stock”, as applied to stock of any
Person, means shares, interests, participations or other equivalents in the equity interest (however designated) in such Person having
ordinary voting power for the election of a majority of the directors (or the equivalent) of such Person, other than shares, interests,
participations or other equivalents having such power only by reason of the occurrence of a contingency.
ARTICLE 2
ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION
AND
EXCHANGE OF SECURITIES
Section 2.01 Designation and Terms of Securities.
(a) The aggregate principal amount of Securities
that may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series up to the
aggregate principal amount of Securities of that series from time to time authorized by or pursuant to a Board Resolution or pursuant
to one or more indentures supplemental hereto. Prior to the initial issuance of Securities of any series, there shall be established in
or pursuant to a Board Resolution, and set forth in an Officers’ Certificate, or established in one or more indentures supplemental
hereto:
(1) the title of the Securities of the series
(which shall distinguish the Securities of that series from all other Securities);
(2) any limit upon the aggregate principal amount
of the Securities of that series that may be authenticated and delivered under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of that series);
(3) the date or dates on which the principal
of the Securities of the series is payable, any original issue discount that may apply to the Securities of that series upon their issuance,
the principal amount due at maturity, and the place(s) of payment;
(4) the rate or rates at which the Securities
of the series shall bear interest or the manner of calculation of such rate or rates, if any;
(5) the date or dates from which such interest
shall accrue, the Interest Payment Dates on which such interest will be payable or the manner of determination of such Interest Payment
Dates, the place(s) of payment, and the record date for the determination of holders to whom interest is payable on any such Interest
Payment Dates or the manner of determination of such record dates;
(6) the right, if any, to extend the interest
payment periods and the duration of such extension;
(7) the period or periods within which, the
price or prices at which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the
option of the Company;
(8) the obligation, if any, of the Company to
redeem or purchase Securities of the series pursuant to any sinking fund, mandatory redemption, or analogous provisions (including payments
made in cash in satisfaction of future sinking fund obligations) or at the option of a holder thereof and the period or periods within
which, the price or prices at which, and the terms and conditions upon which, Securities of the series shall be redeemed or purchased,
in whole or in part, pursuant to such obligation;
(9) the form of the Securities of the series
including the form of the Certificate of Authentication for such series;
(10) if other than denominations of one thousand
U.S. dollars ($1,000) or any integral multiple thereof, the denominations in which the Securities of the series shall be issuable;
(11) any and all other terms (including terms,
to the extent applicable, relating to any auction or remarketing of the Securities of that series and any security for the obligations
of the Company with respect to such Securities) with respect to such series (which terms shall not be inconsistent with the terms of this
Indenture, as amended by any supplemental indenture) including any terms which may be required by or advisable under United States laws
or regulations or advisable in connection with the marketing of Securities of that series;
(12) whether the Securities are issuable as
a Global Security and, in such case, the terms and the identity of the Depositary for such series;
(13) whether the Securities will be convertible
into or exchangeable for ordinary shares or other securities of the Company or any other Person and, if so, the terms and conditions upon
which such Securities will be so convertible or exchangeable, including the conversion or exchange price, as applicable, or how it will
be calculated and may be adjusted, any mandatory or optional (at the Company’s option or the holders’ option) conversion or
exchange features, and the applicable conversion or exchange period;
(14) if other than the principal amount thereof,
the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the maturity
thereof pursuant to Section 6.01;
(15) any additional or different Events of Default
or restrictive covenants (which may include, among other restrictions, restrictions on the Company’s ability or the ability of the
Company’s Subsidiaries to: incur additional indebtedness; issue additional securities; create liens; pay dividends or make distributions
in respect of their capital stock; redeem capital stock; place restrictions on such Subsidiaries placing restrictions on their ability
to pay dividends, make distributions or transfer assets; make investments or other restricted payments; sell or otherwise dispose of assets;
enter into sale-leaseback transactions; engage in transactions with shareholders and affiliates; issue or sell shares of their Subsidiaries;
or effect a consolidation or merger) or financial covenants (which may include, among other financial covenants, financial covenants that
require the Company and its Subsidiaries to maintain specified interest coverage, fixed charge, cash flow-based or asset-based ratios)
provided for with respect to the Securities of the series;
(16) if other than dollars, the coin or currency
in which the Securities of the series are denominated (including, but not limited to, foreign currency);
(17) the terms and conditions, if any, upon
which the Company shall pay amounts in addition to the stated interest, premium, if any and principal amounts of the Securities of the
series to any Securityholder that is not a “United States person” for federal tax purposes;
(18) any restrictions on transfer, sale or assignment
of the Securities of the series; and
(19) the subordination terms of the Securities
of the 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 any such Board Resolution or in any indentures supplemental
hereto.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution of the Company, a copy of an appropriate record of such action shall be certified by the secretary or an assistant
secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers’ Certificate of the Company setting
forth the terms of the series.
Securities of any particular series may be issued at various times,
with different dates on which the principal or any installment of principal is payable, with different rates of interest, if any, or different
methods by which rates of interest may be determined, with different dates on which such interest may be payable and with different redemption
dates.
Section 2.02 Form of Securities and Trustee’s
Certificate.
The Securities of any series and the Trustee’s certificate of
authentication to be borne by such Securities shall be substantially of the tenor and purport as set forth in one or more indentures supplemental
hereto or as provided in a Board Resolution, and set forth in an Officers’ Certificate, and they may have such letters, numbers
or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as the Company
may deem appropriate and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange on which Securities
of that series may be listed, or to conform to usage.
Section 2.03 Denominations: Provisions for Payment.
The Securities shall be issuable as registered Securities and in the
denominations of one thousand U.S. dollars ($1,000) or any integral multiple thereof, subject to Section 2.01(a)(10). The Securities
of a particular series shall bear interest payable on the dates and at the rate specified with respect to that series. Subject to Section 2.01(a)(16),
the principal of and the interest on the Securities of any series, as well as any premium thereon in case of redemption thereof prior
to maturity, shall be payable in the coin or currency of the United States of America that at the time is legal tender for public and
private debt, at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, the City and State of New
York. Each Security shall be dated the date of its authentication. Interest on the Securities shall be computed on the basis of a 360-day
year composed of twelve 30-day months.
The interest installment on any Security that is payable, and is punctually
paid or duly provided for, on any Interest Payment Date for Securities of that series shall be paid to the Person in whose name said
Security (or one or more Predecessor Securities) is registered at the close of business on the regular record date for such interest
installment. In the event that any Security of a particular series or portion thereof is called for redemption and the redemption date
is subsequent to a regular record date with respect to any Interest Payment Date and prior to such Interest Payment Date, interest on
such Security will be paid upon presentation and surrender of such Security as provided in Section 3.03.
Any interest on any Security that is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date for Securities of the same series (herein called “Defaulted Interest”)
shall forthwith cease to be payable to the registered holder on the relevant regular record date by virtue of having been such holder;
and such Defaulted Interest shall be paid by the Company, at its election, as provided in clause (1) or clause (2) below:
(1) The Company may make payment of any Defaulted
Interest on Securities to the Persons in whose names such Securities (or their respective Predecessor Securities) are registered at the
close of business on a special record date for the payment of such Defaulted Interest, which shall be fixed in the following manner: the
Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each such Security and the date
of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior
to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this clause provided. Thereupon the Trustee shall fix a special record date for the payment of such Defaulted Interest
which shall not be more than 15 nor less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt
by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such special record date and, in
the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the special record
date therefor to be mailed, first class postage prepaid, to each Securityholder at his or her address as it appears in the Security Register
(as hereinafter defined), 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 mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names
such Securities (or their respective Predecessor Securities) are registered on such special record date.
(2) The Company may make payment of any Defaulted
Interest on any Securities in any other lawful manner not inconsistent with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.
Unless otherwise set forth in a Board Resolution or one or more indentures
supplemental hereto establishing the terms of any series of Securities pursuant to Section 2.01 hereof, the term “regular record
date” as used in this Section with respect to a series of Securities and any Interest Payment Date for such series shall mean
either the fifteenth day of the month immediately preceding the month in which an Interest Payment Date established for such series pursuant
to Section 2.01 hereof shall occur, if such Interest Payment Date is the first day of a month, or the first day of the month in which
an Interest Payment Date established for such series pursuant to Section 2.01 hereof shall occur, if such Interest Payment Date is
the fifteenth day of a month, whether or not such date is a Business Day.
Subject to the foregoing provisions of this Section, each Security
of a series delivered under this Indenture upon transfer of or in exchange for or in lieu of any other Security of such series shall carry
the rights to interest accrued and unpaid, and to accrue, that were carried by such other Security.
Section 2.04 Execution and Authentication.
The Securities shall be signed on behalf of the Company by one of its
Officers. Signatures may be in the form of a manual or facsimile signature.
The Company may use the facsimile signature of any Person who shall
have been an Officer, notwithstanding the fact that at the time the Securities shall be authenticated and delivered or disposed of such
Person shall have ceased to be such an officer of the Company. The Securities may contain such notations, legends or endorsements required
by law, stock exchange rule or usage. Each Security shall be dated the date of its authentication by the Trustee.
A Security shall not be valid until authenticated manually by an authorized
signatory of the Trustee, or by an Authenticating Agent. Such signature shall be conclusive evidence that the Security so authenticated
has been duly authenticated and delivered hereunder and that the holder is entitled to the benefits of this Indenture. At any time and
from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a written order of the Company for the authentication and delivery of such Securities,
signed by an Officer, and the Trustee in accordance with such written order shall authenticate and deliver such Securities.
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 7.01) shall
be fully protected in relying upon, an Opinion of Counsel stating that the form and terms thereof have been established in conformity
with the provisions of this Indenture.
The Trustee shall not be required to authenticate such Securities if
the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities
and this Indenture or otherwise in a manner that is not reasonably acceptable to the Trustee.
Section 2.05 Registration of Transfer and Exchange.
(a) Securities of any series may be exchanged
upon presentation thereof at the office or agency of the Company designated for such purpose in the Borough of Manhattan, the City and
State of New York, for other Securities of such series of authorized denominations, and for a like aggregate principal amount, upon payment
of a sum sufficient to cover any tax or other governmental charge in relation thereto, all as provided in this Section. In respect of
any Securities so surrendered for exchange, the Company shall execute, the Trustee shall authenticate and such office or agency shall
deliver in exchange therefor the Security or Securities of the same series that the Securityholder making the exchange shall be entitled
to receive, bearing numbers not contemporaneously outstanding.
(b) The Company shall keep, or cause to be
kept, at its office or agency designated for such purpose in the Borough of Manhattan, the City and State of New York, or such other location
designated by the Company, a register or registers (herein referred to as the “Security Register”) in which, subject to such
reasonable regulations as it may prescribe, the Company shall register the Securities and the transfers of Securities as in this Article provided
and which at all reasonable times shall be open for inspection by the Trustee. The registrar for the purpose of registering Securities
and transfer of Securities as herein provided shall be appointed as authorized by Board Resolution (the “Security Registrar”).
Upon surrender for transfer of any Security at the office or agency
of the Company designated for such purpose, the Company shall execute, the Trustee shall authenticate and such office or agency shall
deliver in the name of the transferee or transferees a new Security or Securities of the same series as the Security presented for a like
aggregate principal amount.
All Securities presented or surrendered for exchange or registration
of transfer, as provided in this Section, shall be accompanied (if so required by the Company or the Security Registrar) by a written
instrument or instruments of transfer, in form satisfactory to the Company or the Security Registrar, duly executed by the registered
holder or by such holder’s duly authorized attorney in writing.
(c) Except as provided pursuant to Section 2.01
pursuant to a Board Resolution, and set forth in an Officers’ Certificate, or established in one or more indentures supplemental
to this Indenture, no service charge shall be made for any exchange or registration of transfer of Securities, or issue of new Securities
in case of partial redemption of any series, but the Company may require payment of a sum sufficient to cover any tax or other governmental
charge in relation thereto, other than exchanges pursuant to Section 2.06, Section 3.03(b) and Section 9.04 not involving
any transfer.
(d) The Company shall not be required (i) to
issue, exchange or register the transfer of any Securities during a period beginning at the opening of business 15 days before the day
of the mailing of a notice of redemption of less than all the Outstanding Securities of the same series and ending at the close of business
on the day of such mailing, nor (ii) to register the transfer of or exchange any Securities of any series or portions thereof called
for redemption, other than the unredeemed portion of any such Securities being redeemed in part. The provisions of this Section 2.05
are, with respect to any Global Security, subject to Section 2.11 hereof.
Section 2.06 Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and the Trustee shall authenticate and deliver, temporary Securities (printed, lithographed or typewritten) of any
authorized denomination. Such temporary Securities shall be substantially in the form of the definitive Securities in lieu of which they
are issued, but with such omissions, insertions and variations as may be appropriate for temporary Securities, all as may be determined
by the Company. Every temporary Security of any series shall be executed by the Company and be authenticated by the Trustee upon the same
conditions and in substantially the same manner, and with like effect, as the definitive Securities of such series. Without unnecessary
delay the Company will execute and will furnish definitive Securities of such series and thereupon any or all temporary Securities of
such series may be surrendered in exchange therefor (without charge to the holders), at the office or agency of the Company designated
for the purpose in the Borough of Manhattan, the City and State of New York, and the Trustee shall authenticate and such office or agency
shall deliver in exchange for such temporary Securities an equal aggregate principal amount of definitive Securities of such series, unless
the Company advises the Trustee to the effect that definitive Securities need not be executed and furnished until further notice from
the Company. Until so exchanged, the temporary Securities of such series shall be entitled to the same benefits under this Indenture as
definitive Securities of such series authenticated and delivered hereunder.
Section 2.07 Mutilated, Destroyed, Lost or Stolen Securities.
In case any temporary or definitive Security shall become mutilated
or be destroyed, lost or stolen, the Company (subject to the next succeeding sentence) shall execute, and upon the Company’s request
the Trustee (subject as aforesaid) shall authenticate and deliver, a new Security of the same series, bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Security, or in lieu of and in substitution for the Security so destroyed,
lost or stolen. In every case the applicant for a substituted Security shall furnish to the Company and the Trustee such security or indemnity
as may be required by them to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish
to the Company and the Trustee evidence to their satisfaction of the destruction, loss or theft of the applicant’s Security and
of the ownership thereof. The Trustee may authenticate any such substituted Security and deliver the same upon the written request or
authorization of any officer of the Company. Upon the issuance of any substituted Security, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee) connected therewith.
In case any Security that has matured or is about to mature shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substitute Security, pay or authorize the payment of
the same (without surrender thereof except in the case of a mutilated Security) if the applicant for such payment shall furnish to the
Company and the Trustee such security or indemnity as they may require to save them harmless, and, in case of destruction, loss or theft,
evidence to the satisfaction of the Company and the Trustee of the destruction, loss or theft of such Security and of the ownership thereof.
Every replacement Security issued pursuant to the provisions of this
Section shall constitute an additional contractual obligation of the Company whether or not the mutilated, destroyed, lost or stolen
Security shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities of the same series duly issued hereunder. All Securities shall be held and owned
upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities, and shall preclude (to the extent lawful) any and all other rights or remedies, notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities
without their surrender.
Section 2.08 Cancellation.
All Securities surrendered for the purpose of payment, redemption,
exchange or registration of transfer shall, if surrendered to the Company or any paying agent, be delivered to the Trustee for cancellation,
or, if surrendered to the Trustee, shall be cancelled by it, and no Securities shall be issued in lieu thereof except as expressly required
or permitted by any of the provisions of this Indenture. In the absence of such request the Trustee may dispose of canceled Securities
in accordance with its standard procedures and deliver a certificate of disposition to the Company. If the Company shall otherwise acquire
any of the Securities, however, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by
such Securities unless and until the same are delivered to the Trustee for cancellation.
Section 2.09 Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give or be construed to give to any Person, other than the parties hereto and the holders of the Securities (and, with respect to
the provisions of Article Fourteen, the holders of any indebtedness of the Company to which the Securities of any series are subordinated)
any legal or equitable right, remedy or claim under or in respect of this Indenture, or under any covenant, condition or provision herein
contained; all such covenants, conditions and provisions being for the sole benefit of the parties hereto and of the holders of the Securities
(and, with respect to the provisions of Article Fourteen, the holders of any indebtedness of the Company to which the Securities
of any series are subordinated).
Section 2.10 Authenticating Agent.
So long as any of the Securities of any series remain Outstanding there
may be an Authenticating Agent for any or all such series of Securities which the Trustee shall have the right to appoint. Said Authenticating
Agent shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon exchange, transfer or
partial redemption thereof, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder. All references in this Indenture to the authentication of Securities
by the Trustee shall be deemed to include authentication by an Authenticating Agent for such series. Each Authenticating Agent shall be
acceptable to the Company and shall be a corporation that has a combined capital and surplus, as most recently reported or determined
by it, sufficient under the laws of any jurisdiction under which it is organized or in which it is doing business to conduct a trust business,
and that is otherwise authorized under such laws to conduct such business and is subject to supervision or examination by federal or state
authorities. If at any time any Authenticating Agent shall cease to be eligible in accordance with these provisions, it shall resign immediately.
Any Authenticating Agent may at any time resign by giving written notice
of resignation to the Trustee and to the Company. The Trustee may at any time (and upon request by the Company shall) terminate the agency
of any Authenticating Agent by giving written notice of termination to such Authenticating Agent and to the Company. Upon resignation,
termination or cessation of eligibility of any Authenticating Agent, the Trustee may appoint an eligible successor Authenticating Agent
acceptable to the Company. Any successor Authenticating Agent, upon acceptance of its appointment hereunder, shall become vested with
all the rights, powers and duties of its predecessor hereunder as if originally named as an Authenticating Agent pursuant hereto.
Section 2.11 Global Securities.
(a) If the Company shall establish pursuant
to Section 2.01 that the Securities of a particular series are to be issued as a Global Security, then the Company shall execute
and the Trustee shall, in accordance with Section 2.04, authenticate and deliver, a Global Security that (i) shall represent,
and shall be denominated in an amount equal to the aggregate principal amount of, all of the Outstanding Securities of such series, (ii) shall
be registered in the name of the Depositary or its nominee, (iii) shall be delivered by the Trustee to the Depositary or pursuant
to the Depositary’s instruction and (iv) shall bear a legend substantially to the following effect: “Except as otherwise
provided in Section 2.11 of the Indenture, this Security may be transferred, in whole but not in part, only to another nominee of
the Depositary or to a successor Depositary or to a nominee of such successor Depositary.”
(b) Notwithstanding the provisions of Section 2.05,
the Global Security of a series may be transferred, in whole but not in part and in the manner provided in Section 2.05, only to
another nominee of the Depositary for such series, or to a successor Depositary for such series selected or approved by the Company or
to a nominee of such successor Depositary.
(c) If at any time the Depositary for a series
of the Securities notifies the Company that it is unwilling or unable to continue as Depositary for such series or if at any time the
Depositary for such series shall no longer be registered or in good standing under the Exchange Act, or other applicable statute or regulation,
and a successor Depositary for such series is not appointed by the Company within 90 days after the Company receives such notice or becomes
aware of such condition, as the case may be, or if an Event of Default has occurred and is continuing and the Company has received a request
from the Depositary, this Section 2.11 shall no longer be applicable to the Securities of such series and the Company will execute,
and subject to Section 2.04, the Trustee will authenticate and deliver the Securities of such series in definitive registered form
without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Security
of such series in exchange for such Global Security. In addition, the Company may at any time determine that the Securities of any series
shall no longer be represented by a Global Security and that the provisions of this Section 2.11 shall no longer apply to the Securities
of such series. In such event the Company will execute and, subject to Section 2.04, the Trustee, upon receipt of an Officers’
Certificate evidencing such determination by the Company, will authenticate and deliver the Securities of such series in definitive registered
form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Security
of such series in exchange for such Global Security. Upon the exchange of the Global Security for such Securities in definitive registered
form without coupons, in authorized denominations, the Global Security shall be canceled by the Trustee. Such Securities in definitive
registered form issued in exchange for the Global Security pursuant to this Section 2.11(c) shall be registered in such names
and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. The Trustee shall deliver such Securities to the Depositary for delivery to the Persons in whose names such
Securities are so registered.
ARTICLE 3
REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS
Section 3.01 Redemption.
The Company may redeem the Securities of any series issued hereunder
on and after the dates and in accordance with the terms established for such series pursuant to Section 2.01 hereof.
Section 3.02 Notice of Redemption.
(a) In case the Company shall desire to exercise
such right to redeem all or, as the case may be, a portion of the Securities of any series in accordance with any right the Company reserved
for itself to do so pursuant to Section 2.01 hereof, the Company shall, or shall cause the Trustee to, give notice of such redemption
to holders of the Securities of such series to be redeemed by mailing, first class postage prepaid, a notice of such redemption not less
than 30 days and not more than 90 days before the date fixed for redemption of that series to such holders at their last addresses as
they shall appear upon the Security Register, unless a shorter period is specified in the Securities to be redeemed. Any notice that is
mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the registered holder receives
the notice. In any case, failure duly to give such notice to the holder of any Security of any series designated for redemption in whole
or in part, or any defect in the notice, shall not affect the validity of the proceedings for the redemption of any other Securities of
such series or any other series. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers’
Certificate evidencing compliance with any such restriction.
Each such notice of redemption shall specify the date fixed for redemption
and the redemption price at which Securities of that series are to be redeemed, and shall state that payment of the redemption price of
such Securities to be redeemed will be made at the office or agency of the Company in the Borough of Manhattan, the City and State of
New York, upon presentation and surrender of such Securities, that interest accrued to the date fixed for redemption will be paid as specified
in said notice, that from and after said date interest will cease to accrue and that the redemption is for a sinking fund, if such is
the case. If less than all the Securities of a series are to be redeemed, the notice to the holders of Securities of that series to be
redeemed in part shall specify the particular Securities to be so redeemed.
In case any Security is to be redeemed in part only, the notice that
relates to such Security shall state the portion of the principal amount thereof to be redeemed, and shall state that on and after the
redemption date, upon surrender of such Security, a new Security or Securities of such series in principal amount equal to the unredeemed
portion thereof will be issued.
(b) If less than all the Securities of a series
are to be redeemed, the Company shall give the Trustee at least 45 days’ notice (unless a shorter notice shall be satisfactory to
the Trustee) in advance of the date fixed for redemption as to the aggregate principal amount of Securities of the series to be redeemed,
and thereupon the Trustee shall select, by lot or in such other manner as it shall deem appropriate and fair in its discretion and that
may provide for the selection of a portion or portions (equal to one thousand U.S. dollars ($1,000) or any integral multiple thereof)
of the principal amount of such Securities of a denomination larger than $1,000, the Securities to be redeemed and shall thereafter promptly
notify the Company in writing of the numbers of the Securities to be redeemed, in whole or in part. The Company may, if and whenever it
shall so elect, by delivery of instructions signed on its behalf by an Officer, instruct the Trustee or any paying agent to call all or
any part of the Securities of a particular series for redemption and to give notice of redemption in the manner set forth in this Section,
such notice to be in the name of the Company or its own name as the Trustee or such paying agent may deem advisable. In any case in which
notice of redemption is to be given by the Trustee or any such paying agent, the Company shall deliver or cause to be delivered to, or
permit to remain with, the Trustee or such paying agent, as the case may be, such Security Register, transfer books or other records,
or suitable copies or extracts therefrom, sufficient to enable the Trustee or such paying agent to give any notice by mail that may be
required under the provisions of this Section.
Section 3.03 Payment Upon Redemption.
(a) If the giving of notice of redemption
shall have been completed as above provided, the Securities or portions of Securities of the series to be redeemed specified in such notice
shall become due and payable on the date and at the place stated in such notice at the applicable redemption price, together with interest
accrued to the date fixed for redemption and interest on such Securities or portions of Securities shall cease to accrue on and after
the date fixed for redemption, unless the Company shall default in the payment of such redemption price and accrued interest with respect
to any such Security or portion thereof. On presentation and surrender of such Securities on or after the date fixed for redemption at
the place of payment specified in the notice, said Securities shall be paid and redeemed at the applicable redemption price for such series,
together with interest accrued thereon to the date fixed for redemption (but if the date fixed for redemption is an interest payment date,
the interest installment payable on such date shall be payable to the registered holder at the close of business on the applicable record
date pursuant to Section 2.03).
(b) Upon presentation of any Security of such
series that is to be redeemed in part only, the Company shall execute and the Trustee shall authenticate and the office or agency where
the Security is presented shall deliver to the holder thereof, at the expense of the Company, a new Security of the same series of authorized
denominations in principal amount equal to the unredeemed portion of the Security so presented.
Section 3.04 Sinking Fund.
The provisions of Sections 3.04, 3.05 and 3.06 shall be applicable
to any sinking fund for the retirement of Securities of a series, except as otherwise specified as contemplated by Section 2.01 for
Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a “mandatory sinking fund payment,” and any payment in excess of
such minimum amount provided for by the terms of Securities of any series is herein referred to as an “optional sinking fund payment”.
If provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided
in Section 3.05. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
Section 3.05 Satisfaction of Sinking Fund Payments with
Securities.
The Company (i) may deliver Outstanding Securities of a series
and (ii) may apply as a credit Securities of a series that have been redeemed either at the election of the Company pursuant to the
terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities,
in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to
be made pursuant to the terms of such Securities as provided for by the terms of such series, provided that such Securities have not been
previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the redemption price specified
in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.
Section 3.06 Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date for any
series of Securities (unless a shorter period shall be satisfactory to the Trustee), the Company will deliver to the Trustee an Officers’
Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of the series, the portion
thereof, if any, that is to be satisfied by delivering and crediting Securities of that series pursuant to Section 3.05 and the basis
for such credit and will, together with such Officers’ Certificate, deliver to the Trustee any Securities to be so delivered. Not
less than 30 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 3.02 and cause notice of the redemption thereof to be given in the name of and
at the expense of the Company in the manner provided in Section 3.02. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Section 3.03.
ARTICLE 4
COVENANTS
Section 4.01 Payment of Principal, Premium and Interest.
The Company will duly and punctually pay or cause to be paid the principal
of (and premium, if any) and interest on the Securities of that series at the time and place and in the manner provided herein and established
with respect to such Securities.
Section 4.02 Maintenance of Office or Agency.
So long as any series of the Securities remain Outstanding, the Company
agrees to maintain an office or agency in the Borough of Manhattan, the City and State of New York, with respect to each such series and
at such other location or locations as may be designated as provided in this Section 4.02, where (i) Securities of that series
may be presented for payment, (ii) Securities of that series may be presented as herein above authorized for registration of transfer
and exchange, and (iii) notices and demands to or upon the Company in respect of the Securities of that series and this Indenture
may be given or served, such designation to continue with respect to such office or agency until the Company shall, by written notice
signed by any officer authorized to sign an Officers’ Certificate and delivered to the Trustee, designate some other office or agency
for such purposes or any of them. If at any time the Company shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, notices and demands may be made or served at the Corporate Trust Office
of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, notices and demands. The Company
initially appoints the Corporate Trust Office of the Trustee located in the Borough of Manhattan, the City of New York as its paying agent
with respect to the Securities.
Section 4.03 Paying Agents.
(a) If the Company shall appoint one or more
paying agents for all or any series of the Securities, other than the Trustee, the Company will cause each such paying agent to execute
and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section:
(1) that it will hold all sums held by it as
such agent for the payment of the principal of (and premium, if any) or interest on the Securities of that series (whether such sums have
been paid to it by the Company or by any other obligor of such Securities) in trust for the benefit of the Persons entitled thereto;
(2) that it will give the Trustee notice of
any failure by the Company (or by any other obligor of such Securities) to make any payment of the principal of (and premium, if any)
or interest on the Securities of that series when the same shall be due and payable;
(3) that it will, at any time during the continuance
of any failure referred to in the preceding paragraph (a)(2) above, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such paying agent; and
(4) that it will perform all other duties of
paying agent as set forth in this Indenture.
(b) If the Company shall act as its own paying
agent with respect to any series of the Securities, it will on or before each due date of the principal of (and premium, if any) or interest
on Securities of that series, set aside, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient
to pay such principal (and premium, if any) or interest so becoming due on Securities of that series until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of such action, or any failure (by it or
any other obligor on such Securities) to take such action. Whenever the Company shall have one or more paying agents for any series of
Securities, it will, prior to each due date of the principal of (and premium, if any) or interest on any Securities of that series, deposit
with the paying agent a sum sufficient to pay the principal (and premium, if any) or interest so becoming due, such sum to be held in
trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such paying agent is the Trustee) the
Company will promptly notify the Trustee of this action or failure so to act.
(c) Notwithstanding anything in this Section to
the contrary, (i) the agreement to hold sums in trust as provided in this Section is subject to the provisions of Section 11.05,
and (ii) the Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other
purpose, pay, or direct any paying agent to pay, to the Trustee all sums held in trust by the Company or such paying agent, such sums
to be held by the Trustee upon the same terms and conditions as those upon which such sums were held by the Company or such paying agent;
and, upon such payment by the Company or any paying agent to the Trustee, the Company or such paying agent shall be released from all
further liability with respect to such money.
Section 4.04 Appointment to Fill Vacancy in Office of
Trustee.
The Company, whenever necessary to avoid or fill a vacancy in the office
of Trustee, will appoint, in the manner provided in Section 7.10, a Trustee, so that there shall at all times be a Trustee hereunder.
Section 4.05 Compliance with Consolidation Provisions.
The Company will not, while any of the Securities remain Outstanding,
consolidate with or merge into any other Person, in either case where the Company is not the survivor of such transaction, or sell or
convey all or substantially all of its property to any other Person unless the provisions of Article Ten hereof are complied with.
ARTICLE 5
SECURITYHOLDERS’ LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE
Section 5.01 Company to Furnish Trustee Names and Addresses
of Securityholders.
The Company will furnish or cause to be furnished to the Trustee (a) within
15 days after each regular record date (as defined in Section 2.03) a list, in such form as the Trustee may reasonably require, of
the names and addresses of the holders of each series of Securities as of such regular record date, provided that the Company shall not
be obligated to furnish or cause to furnish such list at any time that the list shall not differ in any respect from the most recent list
furnished to the Trustee by the Company and (b) at such other times as the Trustee may request in writing within 30 days after the
receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such
list is furnished; provided, however, that, in either case, no such list need be furnished for any series for which the Trustee shall
be the Security Registrar .
Section 5.02 Preservation Of Information; Communications
With Securityholders.
(a) The Trustee shall preserve, in as current
a form as is reasonably practicable, all information as to the names and addresses of the holders of Securities contained in the most
recent list furnished to it as provided in Section 5.01 and as to the names and addresses of holders of Securities received by the
Trustee in its capacity as Security Registrar (if acting in such capacity).
(b) The Trustee may destroy any list furnished
to it as provided in Section 5.01 upon receipt of a new list so furnished.
(c) Securityholders may communicate as provided
in Section 312(b) of the Trust Indenture Act with other Securityholders with respect to their rights under this Indenture or
under the Securities, and, in connection with any such communications, the Trustee shall satisfy its obligations under Section 312(b) of
the Trust Indenture Act in accordance with the provisions of Section 312(b) of the Trust Indenture Act.
Section 5.03 Reports by the Company.
The Company covenants and agrees to provide a copy to the Trustee,
after the Company files the same with the Securities and Exchange Commission, copies of the annual reports and of the information, documents
and other reports (or copies of such portions of any of the foregoing as the Securities and Exchange Commission may from time to time
by rules and regulations prescribe) that the Company files with the Securities and Exchange Commission pursuant to Section 13
or Section 15(d) of the Exchange Act; provided, however, the Company shall not be required to deliver to the Trustee any materials
for which the Company has sought and received confidential treatment by the SEC. The Company shall also comply with the requirements of
Section 314 of the Trust Indenture Act, but only to the extent then applicable to the Company.
Section 5.04 Reports by the Trustee.
(a) On or before July 1 in each year
in which any of the Securities are Outstanding, the Trustee shall transmit by mail, first class postage prepaid, to the Securityholders,
as their names and addresses appear upon the Security Register, a brief report dated as of the preceding May 1, if and to the extent
required under Section 313(a) of the Trust Indenture Act.
(b) The Trustee shall comply with Section 313(b) and
313(c) of the Trust Indenture Act.
(c) A copy of each such report shall, at the
time of such transmission to Securityholders, be filed by the Trustee with the Company, with each securities exchange upon which any Securities
are listed (if so listed) and also with the Securities and Exchange Commission. The Company agrees to notify the Trustee when any Securities
become listed on any securities exchange.
ARTICLE 6
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
Section 6.01 Events of Default.
(a) Whenever used herein with respect to Securities
of a particular series, “Event of Default” means any one or more of the following events that has occurred and is continuing:
(1) the Company defaults in the payment of any
installment of interest upon any of the Securities of that series, as and when the same shall become due and payable, and such default
continues for a period of 90 days; provided, however, that a valid extension of an interest payment period by the Company in accordance
with the terms of any indenture supplemental hereto shall not constitute a default in the payment of interest for this purpose;
(2) the Company defaults in the payment of the
principal of (or premium, if any, on) any of the Securities of that series as and when the same shall become due and payable whether at
maturity, upon redemption, by declaration or otherwise, or in any payment required by any sinking or analogous fund established with respect
to that series; provided, however, that a valid extension of the maturity of such Securities in accordance with the terms of any indenture
supplemental hereto shall not constitute a default in the payment of principal or premium, if any;
(3) the Company fails to observe or perform
any other of its covenants or agreements with respect to that series contained in this Indenture or otherwise established with respect
to that series of Securities pursuant to Section 2.01 hereof (other than a covenant or agreement that has been expressly included
in this Indenture solely for the benefit of one or more series of Securities other than such series) for a period of 90 days after the
date on which written notice of such failure, requiring the same to be remedied and stating that such notice is a “Notice of Default”
hereunder, shall have been given to the Company by the Trustee, by registered or certified mail, or to the Company and the Trustee by
the holders of at least 25% in principal amount of the Securities of that series at the time Outstanding;
(4) the Company pursuant to or within the meaning
of any Bankruptcy Law (i) commences a voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary
case, (iii) consents to the appointment of a Custodian of it or for all or substantially all of its property or (iv) makes a
general assignment for the benefit of its creditors; or
(5) a court of competent jurisdiction enters
an order under any Bankruptcy Law that (i) is for relief against the Company in an involuntary case, (ii) appoints a Custodian
of the Company for all or substantially all of its property or (iii) orders the liquidation of the Company, and the order or decree
remains unstayed and in effect for 90 days.
(b) In each and every such case (other than
an Event of Default specified in clause (4) or clause (5) above), unless the principal of all the Securities of that series
shall have already become due and payable, either the Trustee or the holders of not less than 25% in aggregate principal amount of the
Securities of that series then Outstanding hereunder, by notice in writing to the Company (and to the Trustee if given by such Securityholders),
may declare the principal of (and premium, if any, on) and accrued and unpaid interest on all the Securities of that series to be due
and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable. If an Event of
Default specified in clause (4) or clause (5) above occurs, the principal of and accrued and unpaid interest on all the Securities
of that series shall automatically be immediately due and payable without any declaration or other act on the part of the Trustee or the
holders of the Securities.
(c) At any time after the principal of (and
premium, if any, on) and accrued and unpaid interest on the Securities of that series shall have been so declared due and payable, and
before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the holders
of a majority in aggregate principal amount of the Securities of that series then Outstanding hereunder, by written notice to the Company
and the Trustee, may rescind and annul such declaration and its consequences if: (i) the Company has paid or deposited with the Trustee
a sum sufficient to pay all matured installments of interest upon all the Securities of that series and the principal of (and premium,
if any, on) any and all Securities of that series that shall have become due otherwise than by acceleration (with interest upon such principal
and premium, if any, and, to the extent that such payment is enforceable under applicable law, upon overdue installments of interest,
at the rate per annum expressed in the Securities of that series to the date of such payment or deposit) and the amount payable to the
Trustee under Section 7.06, and (ii) any and all Events of Default under the Indenture with respect to such series, other than
the nonpayment of principal on (and premium, if any, on) and accrued and unpaid interest on Securities of that series that shall not have
become due by their terms, shall have been remedied or waived as provided in Section 6.06.
No such rescission and annulment shall extend to or shall affect any
subsequent default or impair any right consequent thereon.
(d) In case the Trustee shall have proceeded
to enforce any right with respect to Securities of that series under this Indenture and such proceedings shall have been discontinued
or abandoned because of such rescission or annulment or for any other reason or shall have been determined adversely to the Trustee, then
and in every such case, subject to any determination in such proceedings, the Company and the Trustee shall be restored respectively to
their former positions and rights hereunder, and all rights, remedies and powers of the Company and the Trustee shall continue as though
no such proceedings had been taken.
Section 6.02 Collection of Indebtedness and Suits for
Enforcement by Trustee.
(a) The Company covenants that (i) in
case it shall default in the payment of any installment of interest on any of the Securities of a series, or in any payment required by
any sinking or analogous fund established with respect to that series as and when the same shall have become due and payable, and such
default shall have continued for a period of 90 Business Days, or (ii) in case it shall default in the payment of the principal of
(or premium, if any, on) any of the Securities of a series when the same shall have become due and payable, whether upon maturity of the
Securities of a series or upon redemption or upon declaration or otherwise then, upon demand of the Trustee, the Company will pay to the
Trustee, for the benefit of the holders of the Securities of that series, the whole amount that then shall have been become due and payable
on all such Securities for principal (and premium, if any) or interest, or both, as the case may be, with interest upon the overdue principal
(and premium, if any) and (to the extent that payment of such interest is enforceable under applicable law) upon overdue installments
of interest at the rate per annum expressed in the Securities of that series; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, and the amount payable to the Trustee under Section 7.06.
(b) If the Company shall fail to pay such
amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to
institute any action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action
or proceeding to judgment or final decree, and may enforce any such judgment or final decree against the Company or other obligor upon
the Securities of that series and collect the moneys adjudged or decreed to be payable in the manner provided by law or equity out of
the property of the Company or other obligor upon the Securities of that series, wherever situated.
(c) In case of any receivership, insolvency,
liquidation, bankruptcy, reorganization, readjustment, arrangement, composition or judicial proceedings affecting the Company, or its
creditors or property, the Trustee shall have power to intervene in such proceedings and take any action therein that may be permitted
by the court and shall (except as may be otherwise provided by law) be entitled to file such proofs of claim and other papers and documents
as may be necessary or advisable in order to have the claims of the Trustee and of the holders of Securities of such series allowed for
the entire amount due and payable by the Company under the Indenture at the date of institution of such proceedings and for any additional
amount that may become due and payable by the Company after such date, and to collect and receive any moneys or other property payable
or deliverable on any such claim, and to distribute the same after the deduction of the amount payable to the Trustee under Section 7.06;
and any receiver, assignee or trustee in bankruptcy or reorganization is hereby authorized by each of the holders of Securities of such
series to make such payments to the Trustee, and, in the event that the Trustee shall consent to the making of such payments directly
to such Securityholders, to pay to the Trustee any amount due it under Section 7.06.
(d) All rights of action and of asserting
claims under this Indenture, or under any of the terms established with respect to Securities of that series, may be enforced by the Trustee
without the possession of any of such Securities, or the production thereof at any trial or other proceeding relative thereto, and any
such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for payment to the Trustee of any amounts due under Section 7.06, be for the ratable benefit of the
holders of the Securities of such series.
In case of an Event of Default hereunder, the Trustee may in its discretion
proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any of such rights, either at law or in equity or in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement contained in the Indenture or in aid of the exercise of any power granted in this Indenture,
or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.
Nothing contained herein shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities of that series or the rights of any holder thereof or to authorize the Trustee to vote in respect of the claim
of any Securityholder in any such proceeding.
Section 6.03 Application of Moneys or Property Collected.
Any moneys or property collected by the Trustee pursuant to this Article with
respect to a particular series of Securities shall be applied in the following order, at the date or dates fixed by the Trustee and, in
case of the distribution of such moneys or property on account of principal (or premium, if any) or interest, upon presentation of the
Securities of that series, and notation thereon of the payment, if only partially paid, and upon surrender thereof if fully paid:
FIRST: To the payment of reasonable costs and expenses of collection
and of all amounts payable to the Trustee under Section 7.06;
SECOND: To the payment of all indebtedness of the Company to which
such series of Securities is subordinated to the extent required by Section 7.06 and Article Fourteen;
THIRD: To the payment of the amounts then due and unpaid upon Securities
of such series for principal (and premium, if any) and interest, in respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal (and premium,
if any) and interest, respectively; and
FOURTH: To the payment of the remainder, if any, to the Company or
any other Person lawfully entitled thereto, as requested by the Company.
Section 6.04 Limitation on Suits.
No holder of any Security of any series shall have any right by virtue
or by availing of any provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or under or with
respect to this Indenture or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (i) such holder
previously shall have given to the Trustee written notice of an Event of Default and of the continuance thereof with respect to the Securities
of such series specifying such Event of Default, as hereinbefore provided; (ii) the holders of not less than 25% in aggregate principal
amount of the Securities of such series then Outstanding shall have made written request upon the Trustee to institute such action, suit
or proceeding in its own name as Trustee hereunder; (iii) such holder or holders shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby; (iv) the Trustee for 90
days after its receipt of such notice, request and offer of indemnity, shall have failed to institute any such action, suit or proceeding
and (v) during such 90 day period, the holders of a majority in principal amount of the Securities of that series do not give the
Trustee a direction inconsistent with the request.
Notwithstanding anything contained herein to the contrary or any other
provisions of this Indenture, the right of any holder of any Security to receive payment of the principal of (and premium, if any) and
interest on such Security, as therein provided, on or after the respective due dates expressed in such Security (or in the case of redemption,
on the redemption date), or to institute suit for the enforcement of any such payment on or after such respective dates or redemption
date, shall not be impaired or affected without the consent of such holder and by accepting a Security hereunder it is expressly understood,
intended and covenanted by the taker and holder of every Security of such series with every other such taker and holder and the Trustee,
that no one or more holders of Securities of such series shall have any right in any manner whatsoever by virtue or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of the holders of any other of such Securities, or to obtain or
seek to obtain priority over or preference to any other such holder, or to enforce any right under this Indenture, except in the manner
herein provided and for the equal, ratable and common benefit of all holders of Securities of such series. For the protection and enforcement
of the provisions of this Section, each and every Securityholder and the Trustee shall be entitled to such relief as can be given either
at law or in equity.
Section 6.05 Rights and Remedies Cumulative; Delay or
Omission Not Waiver.
(a) Except as otherwise provided in Section 2.07,
all powers and remedies given by this Article to the Trustee or to the Securityholders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any other powers and remedies available to the Trustee or the holders of the Securities, by judicial
proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture or otherwise
established with respect to such Securities.
(b) No delay or omission of the Trustee or
of any holder of any of the Securities to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid
shall impair any such right or power, or shall be construed to be a waiver of any such default or an acquiescence therein; and, subject
to the provisions of Section 6.04, every power and remedy given by this Article or by law to the Trustee or the Securityholders
may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Securityholders.
Section 6.06 Control by Securityholders.
The holders of a majority in aggregate principal amount of the Securities
of any series at the time Outstanding, determined in accordance with Section 8.04, shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee
with respect to such series; provided, however, that such direction shall not be in conflict with any rule of law or with this Indenture.
Subject to the provisions of Section 7.01, the Trustee shall have the right to decline to follow any such direction if the Trustee
in good faith shall, by a Responsible Officer or officers of the Trustee, determine that the proceeding so directed, subject to the Trustee’s
duties under the Trust Indenture Act, would involve the Trustee in personal liability or might be unduly prejudicial to the Securityholders
not involved in the proceeding. The holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding
affected thereby, determined in accordance with Section 8.04, may on behalf of the holders of all of the Securities of such series
waive any past default in the performance of any of the covenants contained herein or established pursuant to Section 2.01 with respect
to such series and its consequences, except a default in the payment of the principal of, or premium, if any, or interest on, any of the
Securities of that series as and when the same shall become due by the terms of such Securities otherwise than by acceleration (unless
such default has been cured and a sum sufficient to pay all matured installments of interest and principal and any premium has been deposited
with the Trustee (in accordance with Section 6.01(c)). Upon any such waiver, the default covered thereby shall be deemed to be cured
for all purposes of this Indenture and the Company, the Trustee and the holders of the Securities of such series shall be restored to
their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other default or impair
any right consequent thereon.
Section 6.07 Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of any Securities
by such holder’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it
as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall
not apply to any suit instituted by the Trustee, to any suit instituted by any Securityholder, or group of Securityholders, holding more
than 10% in aggregate principal amount of the Outstanding Securities of any series, or to any suit instituted by any Securityholder for
the enforcement of the payment of the principal of (or premium, if any) or interest on any Security of such series, on or after the respective
due dates expressed in such Security or established pursuant to this Indenture.
ARTICLE 7
CONCERNING THE TRUSTEE
Section 7.01 Certain Duties and Responsibilities of Trustee.
(a) The Trustee, prior to the occurrence of
an Event of Default with respect to the Securities of a series and after the curing of all Events of Default with respect to the Securities
of that series that may have occurred, shall undertake to perform with respect to the Securities of such series such duties and only such
duties as are specifically set forth in this Indenture, and no implied covenants shall be read into this Indenture against the Trustee.
In case an Event of Default with respect to the Securities of a series has occurred (that has not been cured or waived), the Trustee shall
exercise with respect to Securities of that series such of the rights and powers vested in it by this Indenture, and use the same degree
of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.
(b) No provision of this Indenture shall be
construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct,
except that:
(i) prior to the occurrence of an Event of Default
with respect to the Securities of a series and after the curing or waiving of all such Events of Default with respect to that series that
may have occurred:
(A) the duties and obligations of the Trustee
shall with respect to the Securities of such series be determined solely by the express provisions of this Indenture, and the Trustee
shall not be liable with respect to the Securities of such series except for the performance of such duties and obligations as are specifically
set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(B) in the absence of bad faith on the part
of the Trustee, the Trustee may with respect to the Securities of such series conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirement of this
Indenture;
(ii) the Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders of not less than a majority
in principal amount of the Securities of any series at the time Outstanding relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture with respect
to the Securities of that series; and
(iv) None of the provisions contained in this
Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance
of any of its duties or in the exercise of any of its rights or powers if there is reasonable ground for believing that the repayment
of such funds or liability is not reasonably assured to it under the terms of this Indenture or adequate indemnity against such risk is
not reasonably assured to it.
Section 7.02 Certain Rights of Trustee.
Except as otherwise provided in Section 7.01:
(a) The Trustee may rely conclusively and
shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond, security or other paper or document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) Any request, direction, order or demand
of the Company mentioned herein shall be sufficiently evidenced by a Board Resolution or an instrument signed in the name of the Company
by any authorized officer of the Company (unless other evidence in respect thereof is specifically prescribed herein);
(c) The Trustee may consult with counsel and
the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted hereunder in good faith and in reliance thereon;
(d) The Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Securityholders
pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities that may be incurred therein or thereby; nothing contained herein shall, however, relieve
the Trustee of the obligation, upon the occurrence of an Event of Default with respect to a series of the Securities (that has not been
cured or waived), to exercise with respect to Securities of that series such of the rights and powers vested in it by this Indenture,
and to use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs;
(e) The Trustee shall not be liable for any
action taken or omitted to be taken by it in good faith and believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture;
(f) The Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond, security, or other papers or documents, unless requested in writing so to do by the holders of not less
than a majority in principal amount of the Outstanding Securities of the particular series affected thereby (determined as provided in
Section 8.04); provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee
by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such costs, expenses
or liabilities as a condition to so proceeding. The reasonable expense of every such examination shall be paid by the Company or, if paid
by the Trustee, shall be repaid by the Company upon demand; and
(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.
In addition, the Trustee shall not be deemed to have knowledge of any
Default or Event of Default except (1) any Event of Default occurring pursuant to Sections 6.01(a)(1), 6.01(a)(2) and 4.01 hereof
or (2) any Default or Event of Default of which the Trustee shall have received written notification in the manner set forth in this
Indenture or a Responsible Officer of the Trustee shall have obtained actual knowledge. Delivery of reports, information and documents
to the Trustee under Section 5.03 is for informational purposes only and the information and the Trustee’s receipt of the foregoing
shall not constitute constructive notice of any information contained therein, or determinable from information contained therein including
the Company’s compliance with any of their covenants thereunder (as to which the Trustee is entitled to rely conclusively on an
Officers’ Certificate).
Section 7.03 Trustee Not Responsible for Recitals or Issuance
or Securities.
(a) The recitals contained herein and in the
Securities shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same.
(b) The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities.
(c) The Trustee shall not be accountable for
the use or application by the Company of any of the Securities or of the proceeds of such Securities, or for the use or application of
any moneys paid over by the Trustee in accordance with any provision of this Indenture or established pursuant to Section 2.01, or
for the use or application of any moneys received by any paying agent other than the Trustee.
Section 7.04 May Hold Securities.
The Trustee or any paying agent or Security Registrar, in its individual
or any other capacity, may become the owner or pledgee of Securities with the same rights it would have if it were not Trustee, paying
agent or Security Registrar.
Section 7.05 Moneys Held in Trust.
Subject to the provisions of Section 11.05, all moneys received
by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need
not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any moneys
received by it hereunder except such as it may agree with the Company to pay thereon.
Section 7.06 Compensation and Reimbursement.
(a) The Company covenants and agrees to pay
to the Trustee, and the Trustee shall be entitled to, such reasonable compensation (which shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust) as the Company and the Trustee may from time to time agree in writing,
for all services rendered by it in the execution of the trusts hereby created and in the exercise and performance of any of the powers
and duties hereunder of the Trustee, and, except as otherwise expressly provided herein, the Company will pay or reimburse the Trustee
upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all Persons
not regularly in its employ), except any such expense, disbursement or advance as may arise from its negligence or bad faith and except
as the Company and Trustee may from time to time agree in writing. The Company also covenants to indemnify the Trustee (and its officers,
agents, directors and employees) for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad
faith on the part of the Trustee and arising out of or in connection with the acceptance or administration of this trust, including the
reasonable costs and expenses of defending itself against any claim of liability in the premises.
(b) The obligations of the Company under this
Section to compensate and indemnify the Trustee and to pay or reimburse the Trustee for reasonable expenses, disbursements and advances
shall constitute indebtedness of the Company to which the Securities are subordinated. Such additional indebtedness shall be secured by
a lien prior to that of the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust
for the benefit of the holders of particular Securities.
Section 7.07 Reliance on Officers’ Certificate.
Except as otherwise provided in Section 7.01, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it reasonably necessary or desirable that a matter be proved
or established prior to taking or suffering or omitting to take any action hereunder, such matter (unless other evidence in respect thereof
be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively
proved and established by an Officers’ Certificate delivered to the Trustee and such certificate, in the absence of negligence or
bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted to be taken by it
under the provisions of this Indenture upon the faith thereof.
Section 7.08 Disqualification; Conflicting Interests.
If the Trustee has or shall acquire any “conflicting interest”
within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the Company shall in all respects comply with
the provisions of Section 310(b) of the Trust Indenture Act.
Section 7.09 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee with respect to the Securities
issued hereunder which shall at all times be a corporation organized and doing business under the laws of the United States of America
or any state or territory thereof or of the District of Columbia, or a corporation or other Person permitted to act as trustee by the
Securities and Exchange Commission, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus
of at least fifty million U.S. dollars ($50,000,000), and subject to supervision or examination by federal, state, territorial, or District
of Columbia authority.
If such corporation or other Person publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of
this Section, the combined capital and surplus of such corporation or other Person shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published. The Company may not, nor may any Person directly or indirectly controlling,
controlled by, or under common control with the Company, serve as Trustee. In case at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, the Trustee shall resign immediately in the manner and with the effect specified in
Section 7.10.
Section 7.10 Resignation and Removal; Appointment of Successor.
(a) The Trustee or any successor hereafter
appointed may at any time resign with respect to the Securities of one or more series by giving written notice thereof to the Company
and by transmitting notice of resignation by mail, first class postage prepaid, to the Securityholders of such series, as their names
and addresses appear upon the Security Register. Upon receiving such notice of resignation, the Company shall promptly appoint a successor
trustee with respect to Securities of such series by written instrument, in duplicate, executed by order of the Board of Directors, one
copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted appointment within 30 days after the mailing of such notice of resignation, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a successor trustee with respect to Securities of such series,
or any Securityholder of that series who has been a bona fide holder of a Security or Securities for at least six months may on behalf
of himself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon
after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any one of the following
shall occur:
(i) the Trustee shall fail to comply with the
provisions of Section 7.08 after written request therefor by the Company or by any Securityholder who has been a bona fide holder
of a Security or Securities for at least six months; or
(ii) the Trustee shall cease to be eligible
in accordance with the provisions of Section 7.09 and shall fail to resign after written request therefor by the Company or by any
such Securityholder; or
(iii) the Trustee shall become incapable of
acting, or shall be adjudged a bankrupt or insolvent, or commence a voluntary bankruptcy proceeding, or a receiver of the Trustee or of
its property shall be appointed or consented to, or any public officer shall take charge or control of the Trustee or of its property
or affairs for the purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Company may remove the Trustee with respect
to all Securities and appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one
copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or any Securityholder who
has been a bona fide holder of a Security or Securities for at least six months may, on behalf of that holder and all others similarly
situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee. Such
court may thereupon after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate
principal amount of the Securities of any series at the time Outstanding may at any time remove the Trustee with respect to such series
by so notifying the Trustee and the Company and may appoint a successor Trustee for such series with the consent of the Company.
(d) Any resignation or removal of the Trustee
and appointment of a successor trustee with respect to the Securities of a series pursuant to any of the provisions of this Section shall
become effective upon acceptance of appointment by the successor trustee as provided in Section 7.11.
(e) Any successor trustee appointed pursuant
to this Section may be appointed with respect to the Securities of one or more series or all of such series, and at any time there
shall be only one Trustee with respect to the Securities of any particular series.
Section 7.11 Acceptance of Appointment By Successor.
(a) In case of the appointment hereunder of
a successor trustee with respect to all Securities, every such successor trustee so appointed shall execute, acknowledge and deliver to
the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor trustee, such retiring
Trustee shall, upon payment of 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.
(b) In case of the appointment hereunder of
a successor trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor
trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor
trustee shall accept such appointment and which (i) shall contain such provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, each successor trustee all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such successor trustee relates, (ii) shall contain such provisions
as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring
Trustee, and (iii) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture
shall constitute such Trustees co-trustees of the same trust, that each such Trustee shall be trustee of a trust or trusts hereunder separate
and apart from any trust or trusts hereunder administered by any other such Trustee and that no Trustee shall be responsible for any act
or failure to act on the part of any other Trustee hereunder; and upon the execution and delivery of such supplemental indenture the resignation
or removal of the retiring Trustee shall become effective to the extent provided therein, such retiring Trustee shall with respect to
the Securities of that or those series to which the appointment of such successor trustee relates have no further responsibility for the
exercise of rights and powers or for the performance of the duties and obligations vested in the Trustee under this Indenture, and each
such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor trustee relates;
but, on request of the Company or any successor trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor
trustee, to the extent contemplated by such supplemental indenture, the property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of such successor trustee relates.
(c) Upon request of any such successor trustee,
the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor trustee all
such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor trustee shall accept its
appointment unless at the time of such acceptance such successor trustee shall be qualified and eligible under this Article.
(e) Upon acceptance of appointment by a successor
trustee as provided in this Section, the Company shall transmit notice of the succession of such trustee hereunder by mail, first class
postage prepaid, to the Securityholders, as their names and addresses appear upon the Security Register. If the Company fails to transmit
such notice within ten days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to
be transmitted at the expense of the Company.
Section 7.12 Merger, Conversion, Consolidation or Succession
to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall
be a party, or any corporation succeeding to the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be qualified under the provisions of Section 7.08 and eligible under the provisions of Section 7.09,
without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated
with the same effect as if such successor Trustee had itself authenticated such Securities.
Section 7.13 Preferential Collection of Claims Against
the Company.
The Trustee shall comply with Section 311(a) of the Trust
Indenture Act, excluding any creditor relationship described in Section 311(b) of the Trust Indenture Act. A Trustee who has
resigned or been removed shall be subject to Section 311(a) of the Trust Indenture Act to the extent included therein.
Section 7.14 Notice of Default
If any Default or any Event of Default occurs and is continuing and
if such Default or Event of Default is known to a Responsible Officer of the Trustee, the Trustee shall mail to each Securityholder in
the manner and to the extent provided in Section 313(c) of the Trust Indenture Act notice of the Default or Event of Default
within 45 days after it occurs and becomes known to the Trustee, unless such Default or Event of Default has been cured; provided,
however, that, except in the case of a default in the payment of the principal of (or premium, if any) or interest on any Security,
the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the
interest of the Securityholders.
ARTICLE 8
CONCERNING THE SECURITYHOLDERS
Section 8.01 Evidence of Action by Securityholders.
Whenever in this Indenture it is provided that the holders of a majority
or specified percentage in aggregate principal amount of the Securities of a particular series may take any action (including the making
of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of
taking any such action the holders of such majority or specified percentage of that series have joined therein may be evidenced by any
instrument or any number of instruments of similar tenor executed by such holders of Securities of that series in person or by agent or
proxy appointed in writing.
If the Company shall solicit from the Securityholders of any series
any request, demand, authorization, direction, notice, consent, waiver or other action, the Company may, at its option, as evidenced by
an Officers’ Certificate, fix in advance a record date for such series for the determination of Securityholders entitled to give
such request, demand, authorization, direction, notice, consent, waiver or other action, but the Company shall have no obligation to do
so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Securityholders of record at the close of business on the record date shall be deemed to
be Securityholders for the purposes of determining whether Securityholders of the requisite proportion of Outstanding Securities of that
series have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other action,
and for that purpose the Outstanding Securities of that series shall be computed as of the record date; provided, however, that no such
authorization, agreement or consent by such Securityholders on the record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the record date.
Section 8.02 Proof of Execution by Securityholders.
Subject to the provisions of Section 7.01, proof of the execution
of any instrument by a Securityholder (such proof will not require notarization) or his agent or proxy and proof of the holding by any
Person of any of the Securities shall be sufficient if made in the following manner:
(a) The fact and date of the execution by
any such Person of any instrument may be proved in any reasonable manner acceptable to the Trustee.
(b) The ownership of Securities shall be proved
by the Security Register of such Securities or by a certificate of the Security Registrar thereof.
The Trustee may require such additional proof of any matter referred
to in this Section as it shall deem necessary.
Section 8.03 Who May be Deemed Owners.
Prior to the due presentment for registration of transfer of any Security,
the Company, the Trustee, any paying agent and any Security Registrar may deem and treat the Person in whose name such Security shall
be registered upon the books of the Company as the absolute owner of such Security (whether or not such Security shall be overdue and
notwithstanding any notice of ownership or writing thereon made by anyone other than the Security Registrar) for the purpose of receiving
payment of or on account of the principal of, premium, if any, and (subject to Section 2.03) interest on such Security and for all
other purposes; and neither the Company nor the Trustee nor any paying agent nor any Security Registrar shall be affected by any notice
to the contrary.
Section 8.04 Certain Securities Owned by Company Disregarded.
In determining whether the holders of the requisite aggregate principal
amount of Securities of a particular series have concurred in any direction, consent or waiver under this Indenture, the Securities of
that series that are owned by the Company or any other obligor on the Securities of that series or by any Person directly or indirectly
controlling or controlled by or under common control with the Company or any other obligor on the Securities of that series shall be disregarded
and deemed not to be Outstanding for the purpose of any such determination, except that for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, consent or waiver, only Securities of such series that the Trustee actually knows
are so owned shall be so disregarded. The Securities so owned that have been pledged in good faith may be regarded as Outstanding for
the purposes of this Section, if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right so to act with
respect to such Securities and that the pledgee is not a Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company or any such other obligor. In case of a dispute as to such right, any decision by the Trustee
taken upon the advice of counsel shall be full protection to the Trustee.
Section 8.05 Actions Binding on Future Securityholders.
At any time prior to (but not after) the evidencing to the Trustee,
as provided in Section 8.01, of the taking of any action by the holders of the majority or percentage in aggregate principal amount
of the Securities of a particular series specified in this Indenture in connection with such action, any holder of a Security of that
series that is shown by the evidence to be included in the Securities the holders of which have consented to such action may, by filing
written notice with the Trustee, and upon proof of holding as provided in Section 8.02, revoke such action so far as concerns such
Security. Except as aforesaid any such action taken by the holder of any Security shall be conclusive and binding upon such holder and
upon all future holders and owners of such Security, and of any Security issued in exchange therefor, on registration of transfer thereof
or in place thereof, irrespective of whether or not any notation in regard thereto is made upon such Security. Any action taken by the
holders of the majority or percentage in aggregate principal amount of the Securities of a particular series specified in this Indenture
in connection with such action shall be conclusively binding upon the Company, the Trustee and the holders of all the Securities of that
series.
ARTICLE 9
SUPPLEMENTAL INDENTURES
Section 9.01 Supplemental Indentures Without the Consent
of Securityholders.
In addition to any supplemental indenture otherwise authorized by this
Indenture, the Company and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto
(which shall conform to the provisions of the Trust Indenture Act as then in effect), without the consent of the Securityholders, for
one or more of the following purposes:
(a) to cure any ambiguity, defect, or inconsistency
herein or in the Securities of any series;
(b) to comply with Article Ten;
(c) to provide for uncertificated Securities
in addition to or in place of certificated Securities and to make all appropriate changes for such purpose;
(d) to add to the covenants, restrictions,
conditions or provisions relating to the Company for the benefit of the holders of all or any series of Securities (and if such covenants,
restrictions, conditions or provisions are to be for the benefit of less than all series of Securities, stating that such covenants, restrictions,
conditions or provisions are expressly being included solely for the benefit of such series), to make the occurrence, or the occurrence
and the continuance, of a default in any such additional covenants, restrictions, conditions or provisions an Event of Default, or to
surrender any right or power herein conferred upon the Company;
(e) to add to, delete from, or revise the
conditions, limitations, and restrictions on the authorized amount, terms, or purposes of issue, authentication, and delivery of Securities,
as herein set forth;
(f) to make any change that does not adversely
affect the rights of any Securityholder in any material respect;
(g) to provide for the issuance of and establish
the form and terms and conditions of the Securities of any series as provided in Section 2.01, to establish the form of any certifications
required to be furnished pursuant to the terms of this Indenture or any series of Securities, or to add to the rights of the holders of
any series of Securities;
(h) to evidence and provide for the acceptance
of appointment hereunder by a successor trustee; or
(i) to comply with any requirements of the
Securities and Exchange Commission or any successor in connection with the qualification of this Indenture under the Trust Indenture Act.
The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture, and to make any further appropriate agreements and stipulations that may be therein contained, but
the Trustee shall not be obligated to enter into any such supplemental indenture that affects the Trustee’s own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section may
be executed by the Company and the Trustee without the consent of the holders of any of the Securities at the time Outstanding, notwithstanding
any of the provisions of Section 9.02.
Section 9.02 Supplemental Indentures With Consent of Securityholders.
With the consent (evidenced as provided in Section 8.01) of the
holders of not less than a majority in aggregate principal amount of the Securities of each series affected by such supplemental indenture
or indentures at the time Outstanding, the Company, when authorized by a Board Resolution, and the Trustee may from time to time and at
any time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as
then in effect) for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture
or of any supplemental indenture or of modifying in any manner not covered by Section 9.01 the rights of the holders of the Securities
of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the holders
of each Security then Outstanding and affected thereby, (a) extend the fixed maturity of any Securities of any series, or reduce
the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable upon
the redemption thereof or (b) reduce the aforesaid percentage of Securities, the holders of which are required to consent to any
such supplemental indenture.
It shall not be necessary for the consent of the Securityholders of
any series affected thereby under this Section to approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such consent shall approve the substance thereof.
Section 9.03 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture pursuant to the provisions
of this Article or of Section 10.01, this Indenture shall, with respect to such series, be and be deemed to be modified and
amended in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture
of the Trustee, the Company and the holders of Securities of the series affected thereby shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.
Section 9.04 Securities Affected by Supplemental Indentures.
Securities of any series affected by a supplemental indenture, authenticated
and delivered after the execution of such supplemental indenture pursuant to the provisions of this Article or of Section 10.01,
may bear a notation in form approved by the Company, provided such form meets the requirements of any securities exchange upon which such
series may be listed, as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities
of that series so modified as to conform, in the opinion of the Board of Directors, to any modification of this Indenture contained in
any such supplemental indenture may be prepared by the Company, authenticated by the Trustee and delivered in exchange for the Securities
of that series then Outstanding.
Section 9.05 Execution of Supplemental Indentures.
Upon the request of the Company, accompanied by its Board Resolutions
authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Securityholders
required to consent thereto as aforesaid, the Trustee shall join with the Company in the execution of such supplemental indenture unless
such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion but shall not be obligated to enter into such supplemental indenture. The Trustee, subject to the provisions
of Section 7.01, will be entitled to receive and will be fully protected in relying upon an Officers’ Certificate and an Opinion
of Counsel stating that any supplemental indenture executed pursuant to this Article is authorized or permitted by, and conforms
to, the terms of this Article and that it is proper for the Trustee under the provisions of this Article to join in the execution
thereof; provided, however, that such Officers’ Certificate or Opinion of Counsel need not be provided in connection with the execution
of a supplemental indenture that establishes the terms of a series of Securities pursuant to Section 2.01 hereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee shall transmit by mail, first class postage prepaid, a
notice, setting forth in general terms the substance of such supplemental indenture, to the Securityholders of all series affected thereby
as their names and addresses appear upon the Security Register. Any failure of the Trustee to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such supplemental indenture.
ARTICLE 10
SUCCESSOR ENTITY
Section 10.01 Company May Consolidate, Etc.
Except as provided pursuant to Section 2.01 pursuant to a Board
Resolution, and set forth in an Officers’ Certificate, or established in one or more indentures supplemental to this Indenture,
nothing contained in this Indenture shall prevent any consolidation or merger of the Company with or into any other Person (whether or
not affiliated with the Company) or successive consolidations or mergers in which the Company or its successor or successors shall be
a party or parties, or shall prevent any sale, conveyance, transfer or other disposition of the property of the Company or its successor
or successors as an entirety, or substantially as an entirety, to any other corporation (whether or not affiliated with the Company or
its successor or successors) authorized to acquire and operate the same; provided, however, the Company hereby covenants and agrees that,
upon any such consolidation or merger (in each case, if the Company is not the survivor of such transaction), sale, conveyance, transfer
or other disposition, the due and punctual payment of the principal of (premium, if any) and interest on all of the Securities of all
series in accordance with the terms of each series, according to their tenor, and the due and punctual performance and observance of all
the covenants and conditions of this Indenture with respect to each series or established with respect to such series pursuant to Section 2.01
to be kept or performed by the Company shall be expressly assumed, by supplemental indenture (which shall conform to the provisions of
the Trust Indenture Act, as then in effect) reasonably satisfactory in form to the Trustee executed and delivered to the Trustee by the
entity formed by such consolidation, or into which the Company shall have been merged, or by the entity which shall have acquired such
property.
Section 10.02 Successor Entity Substituted.
(a) In case of any such consolidation, merger,
sale, conveyance, transfer or other disposition and upon the assumption by the successor entity by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the obligations set forth under Section 10.01 on all of the
Securities of all series Outstanding, such successor entity shall succeed to and be substituted for the Company with the same effect as
if it had been named as the Company herein, and thereupon the predecessor corporation shall be relieved of all obligations and covenants
under this Indenture and the Securities.
(b) In case of any such consolidation, merger,
sale, conveyance, transfer or other disposition, such changes in phraseology and form (but not in substance) may be made in the Securities
thereafter to be issued as may be appropriate.
(c) Nothing contained in this Article shall
require any action by the Company in the case of a consolidation or merger of any Person into the Company where the Company is the survivor
of such transaction, or the acquisition by the Company, by purchase or otherwise, of all or any part of the property of any other Person
(whether or not affiliated with the Company).
Section 10.03 Evidence of Consolidation, Etc. to Trustee.
The Trustee, subject to the provisions of Section 7.01, may receive
an Officers’ Certificate or an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale, conveyance,
transfer or other disposition, and any such assumption, comply with the provisions of this Article.
ARTICLE 11
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge of Indenture.
If at any time: (a) the Company shall have delivered to the Trustee
for cancellation all Securities of a series theretofore authenticated and not delivered to the Trustee for cancellation (other than any
Securities that shall have been destroyed, lost or stolen and that shall have been replaced or paid as provided in Section 2.07 and
Securities for whose payment money or Governmental Obligations have theretofore been deposited in trust or segregated and held in trust
by the Company and thereupon repaid to the Company or discharged from such trust, as provided in Section 11.05); or (b) all
such Securities of a particular series not theretofore delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory
to the Trustee for the giving of notice of redemption, and the Company shall deposit or cause to be deposited with the Trustee as trust
funds the entire amount in moneys or Governmental Obligations or a combination thereof, sufficient in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay at maturity or upon
redemption all Securities of that series not theretofore delivered to the Trustee for cancellation, including principal (and premium,
if any) and interest due or to become due to such date of maturity or date fixed for redemption, as the case may be, and if the Company
shall also pay or cause to be paid all other sums payable hereunder with respect to such series by the Company then this Indenture shall
thereupon cease to be of further effect with respect to such series except for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02,
4.03 and 7.10, that shall survive until the date of maturity or redemption date, as the case may be, and Sections 7.06 and 11.05, that
shall survive to such date and thereafter, and the Trustee, on demand of the Company and at the cost and expense of the Company shall
execute proper instruments acknowledging satisfaction of and discharging this Indenture with respect to such series.
Section 11.02 Discharge of Obligations.
If at any time all such Securities of a particular series not heretofore
delivered to the Trustee for cancellation or that have not become due and payable as described in Section 11.01 shall have been paid
by the Company by depositing irrevocably with the Trustee as trust funds moneys or an amount of Governmental Obligations sufficient to
pay at maturity or upon redemption all such Securities of that series not theretofore delivered to the Trustee for cancellation, including
principal (and premium, if any) and interest due or to become due to such date of maturity or date fixed for redemption, as the case may
be, and if the Company shall also pay or cause to be paid all other sums payable hereunder by the Company with respect to such series,
then after the date such moneys or Governmental Obligations, as the case may be, are deposited with the Trustee the obligations of the
Company under this Indenture with respect to such series shall cease to be of further effect except for the provisions of Sections 2.03,
2.05, 2.07, 4,01, 4.02, 4,03, 7.05, 7.10 and 11.05 hereof that shall survive until such Securities shall mature and be paid.
Thereafter, Sections 7.06 and 11.05 shall survive.
Section 11.03 Deposited Moneys to be Held in Trust.
All moneys or Governmental Obligations deposited with the Trustee pursuant
to Sections 11.01 or 11.02 shall be held in trust and shall be available for payment as due, either directly or through any paying agent
(including the Company acting as its own paying agent), to the holders of the particular series of Securities for the payment or redemption
of which such moneys or Governmental Obligations have been deposited with the Trustee.
Section 11.04 Payment of Moneys Held by Paying Agents.
In connection with the satisfaction and discharge of this Indenture
all moneys or Governmental Obligations then held by any paying agent under the provisions of this Indenture shall, upon demand of the
Company, be paid to the Trustee and thereupon such paying agent shall be released from all further liability with respect to such moneys
or Governmental Obligations.
Section 11.05 Repayment to Company.
Any moneys or Governmental Obligations deposited with any paying agent
or the Trustee, or then held by the Company, in trust for payment of principal of or premium, if any, or interest on the Securities of
a particular series that are not applied but remain unclaimed by the holders of such Securities for at least two years after the date
upon which the principal of (and premium, if any) or interest on such Securities shall have respectively become due and payable, or such
other shorter period set forth in applicable escheat or abandoned or unclaimed property law, shall be repaid to the Company on May 31
of each year or upon the Company’s request or (if then held by the Company) shall be discharged from such trust; and thereupon the
paying agent and the Trustee shall be released from all further liability with respect to such moneys or Governmental Obligations, and
the holder of any of the Securities entitled to receive such payment shall thereafter, as a general creditor, look only to the Company
for the payment thereof.
ARTICLE 12
IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS
AND DIRECTORS
Section 12.01 No Recourse.
No recourse under or upon any obligation, covenant or agreement of
this Indenture, or of any Security, or for any claim based thereon or otherwise in respect thereof, shall be had against any incorporator,
shareholder, officer or director, past, present or future as such, of the Company or of any predecessor or successor corporation, either
directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that this Indenture and the obligations
issued hereunder are solely corporate obligations, and that no such personal liability whatever shall attach to, or is or shall be incurred
by, the incorporators, shareholders, officers or directors as such, of the Company or of any predecessor or successor corporation, or
any of them, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Securities or implied therefrom; and that any and all such personal liability of every name
and nature, either at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every
such incorporator, shareholder, officer or director as such, because of the creation of the indebtedness hereby authorized, or under or
by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom, are
hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issuance of
such Securities.
ARTICLE 13
MISCELLANEOUS PROVISIONS
Section 13.01 Effect on Successors and Assigns.
All the covenants, stipulations, promises and agreements in this Indenture
made by or on behalf of the Company shall bind its successors and assigns, whether so expressed or not.
Section 13.02 Actions by Successor.
Any act or proceeding by any provision of this Indenture authorized
or required to be done or performed by any board, committee or officer of the Company shall and may be done and performed with like force
and effect by the corresponding board, committee or officer of any corporation that shall at the time be the lawful successor of the Company.
Section 13.03 Surrender of Company Powers.
The Company by instrument in writing executed by authority of its Board
of Directors and delivered to the Trustee may surrender any of the powers reserved to the Company, and thereupon such power so surrendered
shall terminate both as to the Company and as to any successor corporation.
Section 13.04 Notices.
Except as otherwise expressly provided herein, any notice, request
or demand that by any provision of this Indenture is required or permitted to be given, made or served by the Trustee or by the holders
of Securities or by any other Person pursuant to this Indenture to or on the Company may be given or served by being deposited in first
class mail, postage prepaid, addressed (until another address is filed in writing by the Company with the Trustee), as follows: 9 North
West Fourth Ring Road, Yingu Mansion Ste 1708, Haidian District, Beijing F4 100190, with a copy to Hunter Taubman Fischer & Li
LLC, 1450 Broadway, 26th Floor, New York, NY 10018, Attn: Joan Wu, Esq. Any notice, election, request or demand by the
Company or any Securityholder or by any other Person pursuant to this Indenture to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or made in writing at the Corporate Trust Office of the Trustee.
Section 13.05 Governing Law.
This Indenture and each Security shall be deemed to be a contract made
under the internal laws of the State of New York, and for all purposes shall be construed in accordance with the laws of said State, except
to the extent that the Trust Indenture Act is applicable.
Section 13.06 Treatment of Securities as Debt.
It is intended that the Securities will be treated as indebtedness
and not as equity for federal income tax purposes. The provisions of this Indenture shall be interpreted to further this intention.
Section 13.07 Certificates and Opinions as to Conditions
Precedent.
(a) Upon any application or demand by the
Company to the Trustee to take any action under any of the provisions of this Indenture, the Company shall furnish to the Trustee an Officers’
Certificate stating that all conditions precedent provided for in this Indenture (other than the certificate to be delivered pursuant
to Section 13.13) relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent have been complied with, except that in the case of any such application or demand as to which
the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or
demand, no additional certificate or opinion need be furnished.
(b) Each certificate or opinion provided for
in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant in this Indenture shall include
(i) a statement that the Person making such certificate or opinion has read such covenant or condition; (ii) a brief statement
as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or
opinion are based; (iii) a statement that, in the opinion of such Person, he has made such examination or investigation as is reasonably
necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (iv) a
statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.
Section 13.08 Payments on Business Days.
Except as provided pursuant to Section 2.01 pursuant to a Board
Resolution, and set forth in an Officers’ Certificate, or established in one or more indentures supplemental to this Indenture,
in any case where the date of maturity of interest or principal of any Security or the date of redemption of any Security shall not be
a Business Day, then payment of interest or principal (and premium, if any) may be made on the next succeeding Business Day with the same
force and effect as if made on the nominal date of maturity or redemption, and no interest shall accrue for the period after such nominal
date.
Section 13.09 Conflict with Trust Indenture Act.
If and to the extent that any provision of this Indenture limits, qualifies
or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control.
Section 13.10 Indenture and Securities Solely Corporate
Obligations.
No recourse for the payment of the principal of, premium, if any, or
interest on any Securities, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation,
covenant or agreement of the Company in this Indenture or in any supplemental indenture or in any Security, or because of the creation
of any indebtedness represented thereby, shall be had against any incorporator, shareholder, employee, agent, officer, director or subsidiary,
as such, past, present or future, of the Company or of any successor entity, either directly or through the Company or any successor entity,
whether by virtue of any constitution, statute, or rule of law, or by the enforcement of any assessment or penalty or otherwise;
it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration
for, the execution of this Indenture and the issuance of the Securities.
Section 13.11 Counterparts.
This Indenture may be executed in any number of counterparts, each
of which shall be an original, but such counterparts shall together constitute but one and the same instrument.
Section 13.12 Separability.
In case any one or more of the provisions contained in this Indenture
or in the Securities of any series shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this Indenture or of such Securities, but this Indenture and such
Securities shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein.
Section 13.13 Compliance Certificates.
The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year during which any Securities of any series were outstanding, a compliance certificate stating whether or not the
signer knows of any Default or Event of Default that occurred during such fiscal year. Such certificate shall contain a certification
from the principal executive officer, principal financial officer or principal accounting officer of the Company that a review has been
conducted of the activities of the Company and the Company’s performance under this Indenture and that the Company has complied
with all conditions and covenants under this Indenture. For purposes of this Section 13.13, such compliance shall be determined without
regard to any period of grace or requirement of notice provided under this Indenture. If the officer of the Company signing such certificate
has knowledge of such a Default or Event of Default, the certificate shall describe any such Default or Event of Default and its status.
ARTICLE 14
SUBORDINATION OF SECURITIES
Section 14.01 Subordination Terms.
The payment by the Company of the principal of, premium, if any, and
interest on any series of securities issued hereunder shall be subordinated to the extent set forth in an indenture supplemental hereto
relating to such Securities.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed all as of the day and year first above written.
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MDJM LTD
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By:
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Name:
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Title:
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[TRUSTEE], as Trustee
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By:
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Name:
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Title:
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CROSS-REFERENCE TABLE (1)
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Section of Trust Indenture Act Of 1939, as Amended
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Section of Indenture
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310(a)
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7.09
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310(b)
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7.08
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7.10
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310(c)
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Inapplicable
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311(a)
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7.13
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311(b)
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7.13
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311(c)
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Inapplicable
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312(a)
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5.01
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5.02(a)
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312(b)
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5.02(c)
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312(c)
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5.02(c)
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313(a)
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5.04(a)
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313(b)
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5.04(b)
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313(c)
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5.04(a)
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5.04(b)
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313(d)
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5.04(c)
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314(a)
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5.03
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13.12
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314(b)
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Inapplicable
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314(c)
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13.07(a)
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314(d)
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Inapplicable
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314(e)
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13.07(b)
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314(f)
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Inapplicable
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315(a)
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7.01(a)
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7.01(b)
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315(b)
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7.14
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315(c)
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7.01
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315(d)
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7.01(b)
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315(e)
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6.07
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316(a)
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6.06
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8.04
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316(b)
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6.04
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316(c)
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8.01
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317(a)
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6.02
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317(b)
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4.03
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318(a)
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13.09
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(1)
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This Cross-Reference Table does not constitute part of the Indenture and shall not have any bearing on the interpretation of any of its terms or provisions.
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Exhibit 23.1
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CONSENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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We hereby consent to the incorporation by reference in this Registration
Statement on Amendment No. 1 to Form F-3 of our report dated April 16, 2021 with respect to our audit of the consolidated
financial statements of MDJM Ltd and Subsidiaries as of December 31, 2020 and 2019, and for each of the three years in the period
ended December 31, 2020, and the related notes, appearing in the Annual Report of MDJM Ltd for the year ended December 31, 2020,
filed with the Securities and Exchange Commission.
We also consent to the reference to our Firm under the caption “Experts”
appearing in such Registration Statement.
/s/ RBSM LLP
New York, NY
January 28, 2022