EXHIBIT 4.2
THIRD SUPPLEMENTAL INDENTURE
Dated as of October 7, 1996
to
INDENTURE
Dated as of September 20, 1996
between
HEALTH AND RETIREMENT PROPERTIES TRUST
and
FLEET NATIONAL BANK
as Trustee
--------------------------
7.25% Convertible Subordinated Debentures
Due 2001
--------------------------
THIRD SUPPLEMENTAL INDENTURE
THIRD SUPPLEMENTAL INDENTURE, dated as of October 7, 1996
(this "Supplement"), between Health and Retirement Properties Trust, a Maryland
real estate investment trust (the "Company"), and Fleet National Bank, a United
States Bank, as trustee (the "Trustee"), to that certain Indenture, dated as of
September 20, 1996, between the Company and the Trustee (the "Indenture").
WHEREAS, the parties hereto have entered into the Indenture
which provides for the issuance by the Company of the individual series of
securities thereunder, upon the Company and Trustee entering into a supplemental
indenture to the Indenture authorizing such series; and
WHEREAS, the Company wishes to issue its first series of
securities thereunder, designated its 7.25% Convertible Subordinated Debentures
Due 2001, (the "Securities"); and
WHEREAS, all acts necessary to constitute this First
Supplemental Indenture as a valid, binding and legal obligation of the Company
have been done and performed.
NOW, THEREFORE, witnesseth that, in consideration of the
premises and of the covenants contained herein, it is hereby agreed as follows:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions.
Solely for purposes of this Supplement, Section 101 of the Indenture is
hereby amended by inserting, in their appropriate alphabetical locations, each
of the following defined terms:
"Agent" means any Registrar, Paying Agent, Conversion Agent,
co-registrar or agent for service of notices and demands.
"Capital Stock" means any and all shares or other equivalents (however
designated) of capital stock, including all common stock and all preferred
stock, in the case of corporation, or partnership interests or other equivalents
(however designated) in the case of a partnership or common shares of beneficial
interest or other equivalents (however designated) in the case of a trust.
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"Closing Price" means with respect to the shares of Capital Stock of
the Company on any day, (i) the reported last sale price regular way or, in case
no such reported sale takes place on such day, the average of the reported
closing bid and asked prices regular way, in either case on the New York Stock
Exchange, or (ii) if the shares of Capital Stock are not listed or admitted to
trading on the New York Stock Exchange, the reported last sale price regular way
or, in case no such reported sale takes place on such day, the average of the
reported closing bid and asked prices regular way, in either case on the
principal national securities exchange on which the shares of Capital Stock are
listed or admitted to trading, or (iii) if the shares of Capital Stock are not
listed or admitted to trading on any national securities exchange, the average
of the closing bid and asked prices as furnished by any New York Stock Exchange
member firm selected from time to time by the Company for that purpose.
"Common Shares" means the Company's common shares of beneficial
interest, $.01 par value per share, or as such shares may be reconstituted from
time to time.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Indebtedness" as applied to any Person, means, without duplication:
(a) all liabilities and obligations, contingent or otherwise, of such Person (i)
in respect of borrowed money whether or not evidenced by a promissory note,
draft or similar instrument (whether or not the recourse of the lender is to the
whole of the assets of such Person or only to a portion thereof); (ii) evidenced
by bonds, notes, debentures or similar instruments; (iii) evidenced by a letter
of credit or reimbursement obligation of such Person with respect to any letter
of credit; (iv) evidenced by bankers' acceptances or similar instruments issued
or accepted by banks; (v) for the payment of money relating to obligations with
respect to any lease that is properly classified as a liability on a balance
sheet in accordance with generally accepted accounting principles; and (vi)
representing the balance deferred and unpaid for all or any part of the purchase
price of property or services (except any such balance that constitutes (a) a
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trade payable or an accrued liability arising in the ordinary course of business
or (b) a trade draft or note payable issued in the ordinary course of business
in connection with the purchase of goods or services); (b) all net obligations
of such Person under Interest Swap and Hedging Obligations; (c) all liabilities
of others described in the preceding clauses (a) and (b) which such Person has
guaranteed or for which it is otherwise liable and all obligations to purchase,
redeem or acquire any Capital Stock; and (d) any and all deferrals, amendments,
renewals, extensions, supplements, refinancings or refundings (whether direct or
indirect) of any liability or obligations described in any of the preceding
clauses (a), (b) or (c), or this clause (d), whether or not between or among the
same parties.
"Interest Swap and Hedging Obligation" means any obligation of any
person pursuant to any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate exchange agreement,
currency exchange agreement or any other agreement or arrangement designed to
protect against fluctuations in interest rates or currency values, including,
without limitation, any arrangement whereby, directly or indirectly, such person
is entitled to receive from time to time periodic payments calculated by
applying either a fixed or floating rate of interest on a stated notional amount
in exchange for periodic payments made by such person calculated by applying a
fixed or floating rate of interest on the same notional amount.
"Junior Securities" of any Person means any Capital Stock and any
Indebtedness of such Person that is (i) subordinated in right of payment to the
Securities and has no scheduled installment of principal due, by redemption,
sinking fund payment or otherwise, on or prior to the Stated Maturity of the
Securities and (ii) subordinated in right of payment to all Senior Indebtedness
at least to the same extent as the Securities.
"Officer" means the President, the Chief Operating Officer, any Vice
President, the Treasurer, the Chief Financial Officer, any Assistant Treasurer,
the Secretary or any Assistant Secretary of the Company.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Securities" means the securities in the form of Exhibit A hereto.
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"Senior Indebtedness" means the principal, premium, if any, and unpaid
interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not a claim
for post-filing interest is allowed in such proceeding), fees, charges,
expenses, reimbursement and indemnification obligations, and all other amounts
payable under or in respect of (i) any Indebtedness of the Company and (ii) any
and all deferrals, renewals, extensions, refundings and refinancings (whether
direct or indirect) of any such Indebtedness, whether any such Indebtedness
exists as of the date of this Indenture or shall hereafter be created, incurred,
assumed or guaranteed; provided, however, that Senior Indebtedness shall not
include (A) the Securities, (B) the Series A Debentures or the Series B
Debentures, (C) Indebtedness of the Company owed or owing to a Subsidiary or any
officer, director, trustee or employee of the Company or any Subsidiary, (D)
Indebtedness of the Company which, pursuant to the terms of the instrument
creating or evidencing such Indebtedness, is expressly made pari passu with or
subordinate in right of payment to the Securities or (E) any liability for taxes
owed or owing to the Company.
"Series A Debentures" means the Company's 7.5% Convertible Subordinated
Debentures Due 2003, Series B, in the aggregate principal amount of up to
$80,500,000, issued pursuant to a First Supplemental Indenture, dated as of
October 7, 1996, between the Company and the Trustee.
"Series B Debentures" means the Company's 7.5% Convertible Subordinated
Debentures Due 2003, Series B, in the aggregate principal amount of $149,500,000
issued pursuant to a Second Supplemental Indenture, dated as of October 7, 1996,
between the Company and the Trustee.
"Trust Officer", when used with respect to the Trustee, means an
officer of the Trustee customarily performing functions in corporate trust
matters or any other officer of the Trustee to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
SECTION 1.2 Incorporation by Reference to Trust Indenture Act.
Solely for purposes of this Supplement, Article One of the Indenture is
hereby amended to add thereto the following:
SECTION 114. Incorporation by Reference to Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
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"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company or
any other obligor on the indenture securities.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rules have
the meanings assigned to them therein.
ARTICLE 2
THE SECURITIES
SECTION 2.1 Form; Dating; Incorporation of Form in Indenture.
In accordance with Sections 201 and 301 of the Indenture, there shall
be and is hereby authorized a single series of Securities designated the "7.25%
Convertible Subordinated Debentures Due 2001" limited in aggregate principal
amount to $40,000,000, except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Securities
pursuant to Sections 9.5 or 10.1 hereof or pursuant to Sections 304, 305, 306 or
1107 of the Indenture.
Their fixed maturity shall be October 1, 2001, and they shall bear
interest at the rate per annum of 7.25%, from and including the date of issuance
thereof until maturity or earlier redemption, payable semiannually on April 1
and October 1 commencing April 1, 1997, until the principal thereof is paid or
made available for payment.
The principal of and premium, if any, and interest on the Securities
shall be payable at the office or agency of the Company in the City of Boston
maintained for such purpose and at any other office or agency maintained by the
Company for such purpose; provided, however, that at the option of the Company
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payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register.
The Securities shall be redeemable as provided in Article 3.
The Securities shall be subordinated in right of payment to Senior
Indebtedness, to the extent provided in Article 11 hereof.
The Securities shall be convertible as provided in Article 10 hereof.
The Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A which is incorporated in and made part of
this Supplement. The Securities may have notations, legends or endorsements
required by law, stock exchange rules, agreements to which the Company is
subject, or usage. The Company shall approve the form of the Securities and any
notation, legend or endorsement on them. Each Security shall be dated the date
of its authentication.
The terms and provisions contained in the Securities shall constitute,
and are hereby expressly made, a part of this Supplement and to the extent
applicable, the Company and the Trustee, by their execution and delivery of this
Supplement, expressly agree to such terms and provisions and to be bound
thereby. The Securities shall be issuable only in registered form without
coupons.
SECTION 2.2 Registrar and Agents.
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar"), an office
or agency where the Securities may be presented for payment ("Paying Agent"), an
office or agency where Securities may be presented for conversion ("Conversion
Agent") and an office or agency where notices and demands to or upon the Company
in respect of the Securities and this Supplement may be served. The Registrar
shall keep a register of the Securities (the "Security Register") and of their
transfer and exchange. The Company may have one or more co- registrars, one or
more additional Paying Agents and one or more additional Conversion Agents. The
Company or any Subsidiary may act as Paying Agent and/or Conversion Agent. The
term "Paying Agent" includes any additional paying agent and the term
"Conversion Agent" includes any additional conversion agent.
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The Company may change any Paying Agent, Registrar, Conversion Agent or
Co-Registrar on sixty (60) days' prior written notice to the Trustee. The
Company shall notify the Trustee in writing of the name and address of any such
Agent. If the Company fails to maintain a Registrar, Paying Agent, Conversion
Agent or agent for service of notices and demands, or fails to give the
foregoing notice, the Trustee shall act as such.
The Company initially appoints the Trustee as Registrar, Paying Agent,
Conversion Agent and agent for service of notices and demands.
SECTION 2.3 Paying Agent to Hold Money in Trust.
On or before 11:00 a.m. (Boston time) on each due date of the principal
of, premium if any, and interest on any Securities, the Company shall deposit
with each Paying Agent a sum sufficient to pay such principal, premium, if any,
and interest so becoming due. The Company shall require each Paying Agent other
than the Trustee to agree in writing that it will hold in trust for the benefit
of Holders of the Securities or the Trustee all money held by the Paying Agent
for the payment of principal of, premium if any, or interest on the Securities
and to notify the Trustee of any default by the Company (or any other obligor on
the Securities) in making any such payment. If the Company or a Subsidiary acts
as Paying Agent, it shall on or before each due date of the principal of,
premium, if any, or interest on any Securities segregate the money and hold it
as a separate trust fund. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee and the Trustee may at any time during
the continuance of any payment default, upon written request to a Paying Agent,
require such Paying Agent to forthwith pay to the Trustee all sums so held in
trust by such Paying Agent. Upon doing so, the Paying Agent (if other than the
Company or a Subsidiary thereof) shall have no further liability for the money.
SECTION 2.4 Outstanding Securities.
Securities outstanding at any time are all Securities theretofore
authenticated and delivered under this Supplement except: (a) Securities
theretofore canceled by the Trustee or delivered to the Trustee for
cancellation; and (b) Securities in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this Supplement,
other than any Securities in respect of which there shall have been presented to
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the Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid obligations of the
Issuer; provided, that in determining whether the Securityholders of the
requisite principal amount of outstanding Securities are present at a meeting of
Securityholders for quorum purposes or have voted or taken or concurred in any
action under this Supplement, including the making of any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such determination as to the presence of a quorum or upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which a Trust Officer of the Trustee actually knows to be so owned
shall be disregarded.
If a Security is replaced pursuant to Section 306 of the Indenture, it
ceases to be outstanding until the Trustee receives proof satisfactory to it
that the replaced Security is held by a bona fide purchaser.
If the Paying Agent (other than the Company or a Subsidiary) holds on a
Redemption Date or maturity date money deposited with it by or on behalf of the
Company sufficient to pay the principal of, premium, if any, and accrued
interest on Securities payable on that date, then on and after that date such
Securities cease to be outstanding and interest on them ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate holds the Security.
SECTION 2.5 Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Registrar shall
furnish to the Trustee at least seven Business Days prior to each semiannual
interest payment date and at such other times as the Trustee may reasonably
request in writing a list in such form and as of such date as the Trustee may
require of the names and addresses of Securityholders upon which the Trustee may
conclusively rely. The Trustee may destroy any such list upon receipt of a
replacement list. The Paying Agent will solicit from each Securityholder a
certification of social security number or taxpayer identification number in
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accordance with its customary practice and as required by law, unless the Paying
Agent is in possession of such certification. Each Paying Agent is authorized to
impose back-up withholding with respect to payments to be made to
Securityholders to the extent required by law.
SECTION 2.6 CUSIP Number.
The Company shall use a "CUSIP" number when issuing the Securities. The
Trustee may use the CUSIP number in notices of redemption or exchange as a
convenience to Securityholders; provided that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Securities and that reliance may be placed only
on the other identification numbers printed on the Securities.
SECTION 2.7 Restrictions on Transfer.
The Securities shall be subject to certain restrictions on transfer,
set forth in Section 24 of the form of Security attached hereto as Exhibit A.
The Security shall bear a legend substantially to the following effect:
IF NECESSARY TO EFFECT COMPLIANCE BY THE COMPANY WITH THE
REQUIREMENTS OF THE INTERNAL REVENUE CODE 1986, AS AMENDED,
RELATING TO REAL ESTATE INVESTMENT TRUSTS, OWNERSHIP OF THE
SECURITY REPRESENTED HEREBY MAY BE RESTRICTED BY THE COMPANY
AND/OR THE TRANSFER HEREOF MAY BE PROHIBITED, AS SET FORTH
MORE FULLY ON THE REVERSE HEREOF.
ARTICLE 3
REDEMPTION
SECTION 3.1 Effect of Notice of Redemption.
The Securities are subject to redemption as provided in Section 3 of
the form of Security attached hereto as Exhibit A. Once notice of redemption is
mailed, Securities called for redemption become due and payable on the
applicable Redemption Date and at the applicable Redemption Price. Upon
surrender to the Paying Agent, such Securities shall be paid at the Redemption
Price, plus accrued interest to the Redemption Date.
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ARTICLE 4
COVENANTS
SECTION 4.1 Payment of the Securities.
Section 1001 of the Indenture is hereby amended by adding thereto the
following:
The Company shall pay interest on overdue principal and premium, if
any, at the rate borne by the Security; it shall pay interest, including
post-petition interest in the event of a proceeding under any Bankruptcy Law, on
overdue installments of interest at the same rate to the extent lawful.
SECTION 4.2 Notice of Default.
Article Ten of the Indenture is hereby amended by adding thereto the
following:
SECTION 1009. Notice of Default. The Company will, so long as any
Securities are outstanding, deliver to the Trustee, within 10 days of becoming
aware of any Default or Event of Default in the performance of any covenant,
agreement or condition in this Indenture, an Officers' Certificate specifying
such Default or Event of Default, the period of existence thereof and what
action the Company is taking or proposes to take with respect thereto.
SECTION 4.3 Limitation on Dividends and Other Distributions.
Article Ten of the Indenture is hereby amended by adding thereto the
following:
SECTION 1010. Limitation on Dividends and Other Distributions. The
Company will not (i) declare or pay any dividend of make any distribution on its
shares of Common Shares or to holders of Common Shares (other than dividends or
distributions payable in Common Shares or other than as the Company determines
in good faith is necessary to maintain its qualification as a real estate
investment trust under the Code) or (ii) purchase, redeem or otherwise acquire
or retire for value any of its Common Shares, if at the time of such action an
Event of Default has occurred and is continuing or would exist immediately after
such action. Notwithstanding the foregoing, the provisions of this Section 1010
will not prevent (i) the payment of any dividend within 60 days after the date
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of declaration when the payment would have complied with the foregoing provision
on the date of declaration, or (ii) the Company's retirement of any of its
Common Shares by exchange for, or out of the proceeds of the substantially
concurrent sale of, other Common Shares.
ARTICLE 5
RESERVED
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.1 Events of Default.
(a) Solely for purposes of this Supplement, Section 501 of the
Indenture is hereby amended by deleting paragraphs (1) and (2) thereof and
replacing said paragraphs in their entirety with the following:
(1) default in the payment of any installment interest upon
any Security or any Series A Debenture or any installment of interest
upon or any Additional Amounts payable in respect of any Series B
Debenture or of any coupon appertaining thereto, when such interest,
Additional Amounts or coupon becomes due and payable, and continuance
of such default for a period of 30 days; or
(2) default in the payment of the principal of (or premium, if
any, on) any Security or any Series A Debenture or any Series B
Debenture when it becomes due and payable at its Maturity; or
(b) Solely for purposes of this Supplement, Section 501 of the
Indenture is hereby amended by deleting paragraph (3) thereof.
(c) Solely for purposes of this Supplement, Section 501 of the
Indenture is hereby amended by deleting paragraph (8) thereof and replacing it
with the following:
(8) the failure by the Company to perform any conversion of
the Securities, the Series A Debentures or the Series B Debentures and
the continuance of such failure for a period of 60 days;
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SECTION 6.2 Rights of Holders to Receive Payment.
Section 508 of the Indenture is hereby amended to add thereto the
following:
Notwithstanding any other provision of this Indenture, the right of any
Holder of any Security to convert such Security or to bring suit for the
enforcement of such right shall not be impaired or affected without the written
consent of the Holder.
ARTICLE 7
TRUSTEE
SECTION 7.1 Duties of Trustee.
Article Six of the Indenture is hereby amended by adding thereto the
following:
SECTION 612. Duties of Trustee.
(1) The duties and responsibilities of the Trustee shall be as provided
by the TIA. If an Event of Default has occurred and is continuing, the Trustee
shall exercise its rights and powers vested in it by this Indenture and use the
same degree of care and skill in their exercise as a prudent Person would
exercise or use under the circumstances in the conduct of his own affairs.
(2) Except during the continuance of an Event of Default and after the
curing or waiving of all such Events of Default which may have occurred:
(a) The Trustee need perform only those duties that are
specifically set forth in this Indenture, and the Trustee shall not be
liable except for the performance of such duties as are specifically
set forth in this Indenture, and no others, and no implied covenants or
obligation shall be read into this Indenture against the Trustee.
(b) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any statements
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. The Trustee, however, shall examine the
certificates and opinions to determine whether or not they conform to
the requirements of this Indenture.
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(3) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(a) This paragraph does not limit the effect of paragraph (2)
of this Section 612.
(b) The Trustee shall not be liable for any error in judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts.
(c) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 512.
(d) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
it.
(4) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (1), (2), (3), (5) and (6) of this Section 612
and subject to Sections 315 and 316 of the TIA.
(5) Subject to subsection (3), the Trustee may refuse to perform any
duty or exercise any right or power unless, subject to the provisions of the
TIA, it receives indemnity satisfactory to it against any loss, liability,
expense or fee.
(6) The Trustee shall not be liable for interest on any money received
by it. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
SECTION 7.2 Eligibility; Disqualification.
Section 607 of the Indenture is hereby amended by adding thereto the
following:
The Trustee shall comply with TIA ss. 310(b), including the optional
provision permitted by the second sentence of TIA ss. 310(b)(9).
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SECTION 7.3 Preferential Collection of Claims Against Company.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 8.1 Defeasance of the Securities.
The provisions for defeasance of the Securities under Section 1402 of
the Indenture and for covenant defeasance of the Securities under Section 1403
of the Indenture and all related provisions of Article 14 of the Indenture shall
apply with respect to the Securities.
ARTICLE 9
AMENDMENTS AND WAIVERS
SECTION 9.1 Amendments and Waivers with Consent of Holders.
Section 902 of the Indenture is hereby amended to add thereto the
following:
With the written consent of the Holders of not less than a majority in
aggregate principal amount of the Securities at the time outstanding, the
Company, when authorized by Board Resolution, and the Trustee may amend or
supplement this Indenture (any such amendment or supplement to be in a form
satisfactory to the Trustee) or the Securities for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture or of modifying in any manner
the rights of the Holders of the Securities. The Holders of a majority in
principal amount of the Securities then outstanding may waive compliance in a
particular instance by the Company with any provision of this Indenture or the
Securities without notice to any Securityholder. Subject to Section 904, without
the consent of each Holder of Securities affected, however, an amendment,
supplement or waiver, may not:
(1) make any change in Section 508 of this Indenture;
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(2) make any change that adversely affects the right to
convert any Security; or
(3) make any change in Article 11 of the Third Supplemental
Indenture, dated as of October 7, 1996, which adversely affects the
rights of any Securityholder.
SECTION 9.2 Revocation and Effect of Consents.
Section 904 of the Indenture is hereby amended by adding thereto the
following:
Subject to this Indenture, each amendment, supplement or waiver
evidencing other action shall become effective in accordance with its terms.
Until an amendment, supplement or waiver becomes effective, a consent to it by a
Holder of a Security is a continuing consent by the Holder even if notation of
the consent is not made on any Security. Any such Holder or subsequent Holder,
however, may revoke the consent as to his Security or portion of a Security, if
the Trustee receives the notice of revocation before the date the amendment,
waiver or other action becomes effective.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the
provisions of the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies) and only those
Persons, shall be entitled to consent to such amendment, supplement or waiver or
to revoke any consent previously given, whether or not such Persons continue to
be Holders after such record date. No consent shall be valid or effective for
more than 90 days after such record date unless consent from Holders of the
principal amount of Securities then outstanding required hereunder for such
amendment, supplement or waiver to be effective shall have also been given and
not revoked within such 90-day period.
After an amendment, waiver or other action becomes effective, pursuant
to Section 901 or 902, as the case may be, it shall bind every Holder of a
Security.
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ARTICLE 10
CONVERSION OF SECURITIES
SECTION 10.1 Right of Conversion; Conversion Price.
Subject to the provisions of Section 7 of the Securities, the Holder of
any Security or Securities shall have the right, at such Holder's option, at any
time before the close of business on October 1, 2003 (except that, with respect
to any Security or portion of a Security which shall be called for redemption,
such right shall terminate at the close of business on the second Business Day
preceding the Redemption Date fixed for redemption of such Security or portion
of a Security unless the Company shall default in payment due upon redemption
thereof), to convert, subject to the terms and provisions of this Article 10,
the principal of any such Security or Securities or any portion thereof which is
$1,000 principal amount or an integral multiple thereof into Common Shares
initially at the conversion price per share of $18.00 or, in case an adjustment
of such price has taken place pursuant to the provisions of Section 10.4, then
at the price as last adjusted (such price or adjusted price being referred to
herein as the "conversion price"), upon surrender of the Security or Securities,
the principal of which is so to be converted, accompanied by written notice of
conversion duly executed, to the Company, at any time during usual business
hours at the office or agency maintained by it for such purpose, and, if so
required by the Conversion Agent or Registrar, accompanied by a written
instrument or instruments of transfer in form satisfactory to the Conversion
Agent or Registrar duly executed by the Holder or his duly authorized
representative in writing. For convenience, the conversion of any portion of the
principal of any Security or Securities into Common Shares is hereinafter
sometimes referred to as the conversion of such Security or Securities.
SECTION 10.2 Issuance of Shares on Conversion.
As promptly as practicable after the surrender, as herein provided, of
any Security or Securities for conversion, the Company shall deliver or cause to
be delivered at its said office or agency, to or upon the written order of the
Holder of the Security or Securities so surrendered, certificates representing
the number of fully paid and nonassessable Common Shares into which such
Security or Securities may be converted in accordance with the provisions of
this Article 10. Such conversion shall be deemed to have been made as of the
close of business on the date that such Security or Securities shall have been
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surrendered for conversion by delivery thereof with a written notice of
conversion duly executed, so that the rights of the Holder of such Security or
Securities as a Securityholder shall cease at such time and, subject to the
following provisions of this paragraph, the Person or Persons entitled to
receive the Common Shares upon conversion of such Security or Securities shall
be treated for all purposes as having become the record holder or holders of
such Common Shares at such time and such conversion shall be at the conversion
price in effect at such time; provided, however, that no such surrender on any
date when the stock transfer books of the Company shall be closed shall be
effective to constitute the Person or Persons entitled to receive the Common
Shares upon such conversion as the record holder or holders of such Common
Shares on such date, but such surrender shall be effective to constitute the
Person or Persons entitled to receive such Common Shares as the record holder or
holders thereof for all purposes at the close of business on the next succeeding
day on which such stock transfer books are open; and provided, further, that in
such event such conversion shall be at the conversion price in effect on the
date that such Security or Securities shall have been surrendered for conversion
by delivery thereof, as if the stock transfer books of the Company had not been
closed. The Company shall give or cause to be given to the Trustee written
notice whenever the stock transfer books of the Company shall be closed.
Upon Conversion of any Security which is converted in part only, the
Company shall execute and the Trustee shall authenticate and deliver to or on
the order of the Holder thereof, at the expense of the Company, a new Security
or Securities of authorized denominations in principal amount equal to the
unconverted portion of such Security.
SECTION 10.3 No Adjustment for Interest or Dividends.
No payment or adjustment in respect of interest on the Securities or
dividends on the Common Shares shall be made upon the conversion of any Security
or Securities; provided, however, that if a Security or any portion thereof
shall be converted subsequent to any regular record date and on or prior to the
next succeeding interest payment date, the interest falling due on such interest
payment date shall be payable on such interest payment date notwithstanding such
conversion, and such interest (whether or not punctually paid or duly provided
for) shall be paid to the Person in whose name such Security is registered at
the close of business on such regular record date and Securities surrendered for
conversion during the period from the close of business on any regular record
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date to the opening of business on the corresponding interest payment date must
be accompanied by payment of an amount equal to the interest payable on such
interest payment date unless such interest payment date is October 1, 1999, in
which case such payment in respect of interest is not required to accompany any
such Securities.
SECTION 10.4 Adjustment of Conversion Price.
(1) In case the Company shall pay or make a dividend or other
distribution on any class of Capital Stock of the Company in Common Shares, the
conversion price in effect at the opening of business on the day following the
date fixed for the determination of shareholders entitled to receive such
dividend or other distribution shall be reduced so that the same shall equal the
price determined by multiplying such conversion price by a fraction of which the
numerator shall be the number of Common Shares outstanding at the close of
business on the date fixed for such determination and the denominator shall be
the sum of such number of shares and the total number of shares constituting
such dividend or other distribution, such adjustment to become effective
immediately after the opening of business on the day following the date fixed
for such determination and in the event that such dividend or other distribution
is not so made, or is made in part, the conversion price shall again be adjusted
to be the conversion price which would then be in effect (i) if such record date
has not been fixed or (ii) based on the actual number of shares actually issued,
as the case may be.
(2) In case at any time the Company shall (A) subdivide its outstanding
Common Shares into a greater number of shares, (B) combine its outstanding
Common Shares into a smaller number of shares, or (C) issue by reclassification
of its Common Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing corporation) any
shares of Capital Stock, the conversion price in effect at the effective date of
such subdivision, combination or reclassification shall be proportionately
adjusted so that the holder of any Security surrendered for conversion after
such time shall be entitled to receive the aggregate number and kind of shares
which, if such Security had been converted immediately prior to such time, he
would have owned upon such conversion and been entitled to receive upon such
subdivision, combination or reclassification. Such adjustment shall become
effective immediately after the effective date of such subdivision, combination
or reclassification. Such adjustment shall be made successively whenever any
event listed above shall occur.
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(3) In case at any time the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of its Common Shares
entitling them to subscribe for or purchase Common Shares (or securities
convertible into Common Shares) at a price per share less than the current
market price per Common Share on such record date, the conversion price in
effect at the opening of business on the day following such record date shall be
reduced so that the same shall equal the price determined by multiplying such
conversion price by a fraction of which the numerator shall be the number of
Common Shares outstanding at the close of business on such record date plus the
number of Common Shares (or its equivalent) which the aggregate of the offering
price of the total number of shares so offered for subscription or purchase
would purchase at such current market price per Common Share and the denominator
shall be the number of Common Shares outstanding at the close of business on
such record date plus the number of Common Shares (or its equivalent) so offered
for subscription or purchase, such reduction to become effective immediately
after the opening of business on the day following such record date; provided,
however, that no adjustment to the conversion price shall be made pursuant to
this Section 10.4(3) if the holders of Securities receive, or are entitled to
receive upon conversion or otherwise, the same rights, options or warrants as
are issued to the holders of Common Shares, on the same terms and conditions as
such rights, options or warrants are so issued to the holders of Common Shares.
Such reduction shall be made successively whenever such a record date is fixed;
and in the event that such rights, options or warrants are not so issued, or are
issued in part, or are issued but all or part of which expire unexercised, the
conversion price shall again be adjusted to be the conversion price which would
then be in effect (i) if such record date had not been fixed or (ii) based on
the actual number of rights, options or warrants actually issued, as the case
may be.
(4) In case at any time the Company shall fix a record date for the
making of a distribution, by dividend or otherwise, to all holders of its Common
Shares, of shares of beneficial interest in Hospitality Properties Trust, a
Maryland real estate investment trust ("HPT"), then in each such case the
conversion price in effect after such record date shall be determined by
multiplying the conversion price in effect immediately prior to such record date
by a fraction, of which the numerator shall be the total number of outstanding
Common Shares multiplied by the current market price per Common Share on such
record date, less the fair market value (as determined by a Board Resolution,
whose determination shall be conclusive and described in a statement filed with
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the Trustee) of the shares of beneficial interest in HPT so to be distributed,
and of which the denominator shall be the total number of outstanding Common
Shares multiplied by such current market price per Common Share. Such adjustment
shall be made successively whenever such a record date is fixed and shall become
effective immediately after the record date for the determination of
stockholders entitled to receive the distribution; and in the event that such
distribution is not so made, the conversion price shall again be adjusted to be
the conversion price which would then be in effect if such record date has not
been fixed.
(5) For the purpose of any computation under paragraphs (3) and (4) for
this Section, the current market price per share of Common Stock on any date
shall be deemed to be the average of the Closing Prices for the 15 consecutive
Business Days selected by the Company commencing not more than 30 and not less
than 20 Business Days before the date in question.
(6) No adjustment in the conversion price shall be required unless such
adjustment (plus any adjustments not previously made by reason of this paragraph
(6)) would require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this paragraph (6)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this paragraph (6) shall be
made to the nearest cent.
(7) The Company may, but shall not be required to, make such reductions
in the conversion price, in addition to those required by paragraph (1), (2),
(3) and (4) of this Section 10.4 as the Company's Board of Directors considers
to be advisable in order to avoid or diminish any income tax to any holders of
shares of Common Stock resulting from any dividend or distribution of stock or
issuance of rights or warrants to purchase or subscribe for stock or from any
event treated as such for income tax purposes or for any other reasons. The
Board of Directors shall have the power to resolve any ambiguity or correct any
error in the adjustments made pursuant to this Section 10.4 and its actions in
so doing shall be final and conclusive.
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(8) The adjustments provided for in this Section 10.4 shall be made
successively whenever any event listed above shall occur.
SECTION 10.5 Notice of Adjustment of Conversion Price.
Whenever the conversion price for the Securities is adjusted as herein
provided:
(1) the Company shall compute the adjusted conversion price in
accordance with Section 10.4 and shall prepare an Officers' Certificate
setting forth the adjusted conversion price and showing in reasonable
detail the facts upon which such adjustment is based and the
computation thereof, and such certificate shall forthwith be filed at
each office or agency maintained for the purpose of conversion of the
Securities pursuant to Section 2.4 and with the Trustee; and
(2) a notice stating that the conversion price has been
adjusted and setting forth the adjusted conversion price shall as soon
as practicable be mailed by the Company to all Holders of the
Securities at their last addresses as they shall appear in the Security
Register.
(3) If the conversion price is adjusted and the Company fails
to file an Officers' Certificate with the Trustee as provided by
Section 10.5(1) and the Trustee is acting as the Conversion Agent, the
Trustee shall be entitled to rely conclusively on the conversion price
set forth in the Officer's Certificate most recently received by the
Trustee (or as set forth in the Securities and this Indenture if the
conversion price shall not have been adjusted).
SECTION 10.6 Notice of Certain Corporate Action.
(1) In case:
(a) the Company shall authorize the granting to holders of its
Common Shares of rights or warrants entitling them to subscribe for or
purchase any shares of Capital Stock of any class or of any other
rights; or
(b) of any reclassification of the Common Shares of the
Company, or of any distribution of any assets of the Company to the
holders of its Common Shares, or of any consolidation or merger to
which the Company is a party and for which approval of any shareholders
of the Company is required, or of the sale or transfer of all or
substantially all of the assets of the Company; or
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(c) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of the Securities pursuant to Section 2.2 and shall
cause to be mailed to the Trustee and all Holders of the Securities at their
last addresses as they shall appear in the Security Register, at least 20 days
(or 10 days in any case specified in clause (a) or (b) above) prior to the
applicable record date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend, distribution,
rights or warrants, or, if a record is not to be taken, the date as of which the
Holders of Common Shares of record to be entitled to such dividend,
distribution, rights or warrants are to be determined, or (y) the date on which
such reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective, and the date as of
which it is expected that holders of Common Shares of record shall be entitled
to exchange their Common Shares for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up. Such notice shall also state whether
such transaction will result in any adjustment in the conversion price
applicable to the Securities and, if so, shall state what the adjusted
conversion price will be and when it will become effective. Neither the failure
to give the notice required by this Section, nor any defect therein, to any
particular Holder shall affect the sufficiency of the notice or the legality or
validity of any such dividend, distribution, right, warrant, reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding-up,
or the vote on any action authorizing such with respect to the other holders.
(2) In case the Company or any Affiliate of the Company shall propose
to engage in a "Rule 13e-3 Transaction" as defined in the Commission's Rule
13e-3 under the Exchange Act, the Company shall, no later than the date on which
any information with respect to such Rule 13e-3 Transaction is first required to
be given to the Commission or any other Person pursuant to such Rule 13e-3,
cause to be mailed to all Holders at their last addresses as they shall appear
in the Security Register, a copy of all information required to be given to the
holders of the Company's Capital Stock pursuant to such Rule 13e-3. The
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information required to be given under this paragraph shall be in addition to
and not in lieu of any other information required to be given by the Company
pursuant to this Section 10.6 or any other provision of the Securities or this
Indenture.
SECTION 10.7 Taxes on Conversions.
The Company will pay any and all stamp or similar taxes that may be
payable in respect of the issuance or delivery of Common Shares on conversion of
the Securities pursuant hereto. The Company shall not, however, be required to
pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of Common Shares in a name other than that of the Holder
of the Security or Securities to be converted, and no such issuance or delivery
shall be made unless and until the Person requesting such issuance has paid to
the Company the amount of any such tax, or has established to the satisfaction
of the Company that such tax has been paid.
SECTION 10.8 Fractional Shares.
No fractional shares or scrip representing fractional shares shall be
issued upon any conversion of the Securities. If any such conversion would
otherwise require the issuance of a fractional share an amount equal to such
fraction multiplied by the current market price per Common Share (determined as
provided in paragraph (5) of Section 10.4) on the day of conversion shall be
paid to the Holder in cash by the Company.
SECTION 10.9 Cancellation of Converted Securities.
All Securities delivered for conversion shall be delivered to the
Trustee or the Conversion Agent to be canceled by or at the direction of the
Trustee or the Conversion Agent, which shall dispose of the same as provided in
Section 309 of the Indenture.
SECTION 10.10 Provisions in Case of Consolidation, Merger or Sale of Assets.
(1) In case of any consolidation of the Company with, or merger of the
Company into, any Person, or in case of any merger of another Person into the
Company (other than a consolidation or merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding Common
Shares), or in case of any sale or transfer of all or substantially all of the
assets of the Company, the Person formed by such consolidation or resulting from
such merger or which acquires such assets, as the case may be, shall execute and
deliver to the Trustee a supplemental indenture providing that the Holder of
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each Security then outstanding shall have the right thereafter, during the
period such Security shall be convertible as specified in Section 10.1 to
convert such Security only into the kind and amount of securities, cash and
other property receivable upon such consolidation, merger, sale or transfer by a
holder of the number of Common Shares into which such Security might have been
converted immediately prior to such consolidation, merger, sale or transfer.
Such supplemental indenture shall provide for adjustments which, for events
subsequent to the effective date of such supplemental indenture, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Article 10. The above provisions of this Section 10.10 shall similarly apply to
successive consolidations, mergers, sales or transfers.
(2) The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any such supplemental indenture
relating either to the kind or amount of shares of stock or securities or
property receivable by Holders upon the conversion of their Securities after any
such reclassification, change, consolidation, merger, sale or conveyance or to
any adjustment to be made with respect thereto.
SECTION 10.11 Disclaimer by Trustee of Responsibility for Certain Matters.
The Trustee and each Conversion Agent (other than the Company or any
Subsidiary) shall not at any time be under any duty or responsibility to any
Holder of the Securities to determine whether any facts exist which may require
any adjustment of the conversion price, how it should be calculated or what it
should be, or with respect to the nature or extent of any such adjustment when
made, or with respect to the method employed, or herein or in any supplemental
indenture provided to be employed, in making the same. The Trustee and each
Conversion Agent (other than the Company or any Subsidiary) shall not be
accountable with respect to the validity, value, kind or amount of any Common
Shares, or of any securities or property, which may at any time be issued or
delivered upon the conversion of any Security; and it makes no representation
with respect thereto. The Trustee and each Conversion Agent (other than the
Company or any Subsidiary) shall not be responsible for any failure of the
Company to issue, transfer or deliver any Common Shares or share certificates or
other securities or property upon the surrender of any Security for the purpose
of conversion or, subject to Section 7.1, to comply with any of the covenants of
the Company contained in this Article 10.
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SECTION 10.12 Covenant to Reserve Shares.
The Company covenants that it will at all times reserve and keep
available, free from preemptive rights, out of its authorized Common Shares,
solely for the purpose of issuance upon conversion of the Securities as herein
provided, such number of Common Shares as shall then be issuable upon the
conversion of all outstanding Securities. The Company covenants that all Common
Shares which shall be so issuable shall be, when issued, duly and validly issued
and fully paid and non-assessable. For purposes of this Section 10.12, the
number of Common Shares which shall be deliverable upon the conversion of all
outstanding Securities shall be computed as if at the time of computation all
outstanding Securities were held by a single holder.
ARTICLE 11
SUBORDINATION
SECTION 11.1 Securities Subordinated to Senior Indebtedness.
The Company and each Holder, by its acceptance of Securities, agree
that (a) the payment of the principal of and interest on the Securities and (b)
any other payment in respect of the Securities, including on account of the
acquisition or redemption of the Securities by the Company is subordinated, to
the extent and in the manner provided in this Article 11, to the prior payment
in full of all Senior Indebtedness of the Company, and all other Obligations in
respect thereof, whether outstanding at the date of this Supplement or
thereafter created, incurred, assumed or guaranteed, and that these
subordination provisions are for the benefit of the holders of Senior
Indebtedness.
This Article 11 shall constitute a continuing offer to all Persons who,
in reliance upon such provisions, become holders of, or continue to hold, Senior
Indebtedness, and such provisions are made for the benefit of the holders of
Senior Indebtedness, and such holders are made obligees hereunder and any one or
more of them may enforce such provisions.
To the extent any provision of this Article 11 conflicts or is
inconsistent with any other provision of the Indenture or this Supplement, the
provisions of this Article 11 shall govern and supersede such inconsistent or
conflicting provision.
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SECTION 11.2 No Payment on Securities in Certain Circumstances.
(a) No payment may be made by the Company on account of the principal
of, premium, if any, interest on the Securities, or to acquire or repurchase any
of the Securities for cash or property, or on account of the redemption
provisions of the Securities, in each case other than payments made with Junior
Securities of the Company, (i) upon the maturity of any Senior Indebtedness of
the Company by lapse of time, acceleration (unless waived) or otherwise, unless
and until all principal of, premium, if any, and interest on such Senior
Indebtedness and all other [Obligations] in respect thereof are first paid in
full (or such payment is duly provided for), or (ii) in the event of default in
the payment of any principal of, premium, if any, or interest on, or any other
Obligation in respect of, any Senior Indebtedness of the Company when it becomes
due and payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise (a "Payment Default"), unless and until such Payment
Default has been cured or waived by the holders of such Senior Indebtedness or
otherwise has ceased to exist.
(b) Upon (i) the happening of an event of default (other than a Payment
Default) that permits the holders of any Senior Indebtedness or their
representative immediately to accelerate its maturity and (ii) either such event
of default shall be the subject of a judicial proceeding or written notice of
such event of default given to the Company by the requisite holders of such
Senior Indebtedness or their representative (a "Payment Notice"), then, unless
and until such event of default has been cured or waived by the requisite
holders of such Senior Indebtedness or otherwise has ceased to exist, no payment
(by set-off or otherwise) may be made by or on behalf of the Company on account
of the principal of, premium, if any, interest on the Securities, or to acquire
or repurchase any of the Securities for cash or property, or on account of the
redemption provisions of the Securities, in any such case other than payments
made with Junior Securities of the Company.
(c) In furtherance of the provisions of Section 11.1, in the event
that, notwithstanding the foregoing provisions of this Section 11.2, any payment
or distribution of assets of the Company (other than Junior Securities) shall be
received by the Trustee or the Holders or any Paying Agent at a time when such
payment or distribution is prohibited by the provisions of this Section 11.2,
then such payment or distribution shall be received and held in trust by the
Trustee or such Holders or Paying Agent (or, if the Company or any Affiliate of
the Company is acting as its own Paying Agent, money for any such payment or
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distribution shall be segregated or held in trust) for the benefit of the
holders of Senior Indebtedness of the Company, and shall be paid or delivered by
the Trustee or such Holders or such Paying Agent, as the case may be, to the
holders of Senior Indebtedness of the Company remaining unpaid or unprovided for
or their representative or representatives, or to the trustee or trustees under
any indenture pursuant to which any instruments evidencing any of such Senior
Indebtedness of the Company may have been issued, ratably according to the
aggregate amounts remaining unpaid on account of the Senior Indebtedness of the
Company held or represented by each, for application to the payment of all
Senior Indebtedness of the Company in full after giving effect to any concurrent
payment and distribution to the holders of such Senior Indebtedness, but only to
the extent that as to any holder of such Senior Indebtedness, as promptly as
practical following receipt by such holder of written notice from the Trustee to
the holders of such Senior Indebtedness that such prohibited payment has been
received by the Trustee, Holder(s) or Paying Agent (or has been segregated as
provided above), such holder (or a representative therefor) notifies the Trustee
in writing of the amounts then due and owing on such Senior Indebtedness, if
any, held by such holder and only the amounts specified in such notices to the
Trustee shall be paid to the holders of such Senior Indebtedness.
SECTION 11.3 Securities Subordinated to Prior Payment of All Senior Indebtedness
on Dissolution, Liquidation or Reorganization.
Upon any distribution of assets of the Company upon any dissolution,
winding up, total or partial liquidation or reorganization of the Company,
whether voluntary or involuntary, in bankruptcy, insolvency, receivership or a
similar proceeding or upon assignment for the benefit of creditors or any
marshalling of assets or liabilities:
(a) the holders of all Senior Indebtedness of the Company shall first
be entitled to receive payments in full (or have such payment duly provided for)
before the Holders are entitled to receive any payment on account of the
principal of, premium, if any, interest on, and Additional Amounts with respect
to, the Securities (other than Junior Securities);
(b) any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (other than Junior
Securities) to which the Holders or the Trustee on behalf of the Holders would
be entitled (by set-off or otherwise), except for the provisions of this Article
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11, shall be paid by the liquidating trustee or agent or other Person making
such a payment or distribution directly to the holders of Senior Indebtedness of
the Company or their representative to the extent necessary to make payment in
full of all such Senior Indebtedness remaining unpaid, after giving effect to
any concurrent payment or distribution to the holders of such Senior
Indebtedness; and
(c) in the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities (other than Junior Securities), shall be received by the
Trustee or the Holders or any Paying Agent (or, if the Company or any Affiliate
of the Company is acting as its own Paying Agent, money for any such payment or
distribution shall be segregated or held in trust) on account of the principal
of, premium, if any, interest on, or Additional Amounts with respect to, the
Securities before all Senior Indebtedness of the Company is paid in full, such
payment or distribution shall be received and held in trust by the Trustee or
such Holder or Paying Agent (or, if the Company or any Affiliate of the Company
is acting as its own Paying Agent, money for any such payment or distribution
shall be segregated or held in trust) for the benefit of the holders of such
Senior Indebtedness, or their respective representative, or the trustee or
trustees under any indenture pursuant to which any instruments evidencing any of
such Senior Indebtedness of the Company may have been issued, ratably according
to the respective amounts of such Senior Indebtedness held or represented by
each, to the extent necessary to make payment as provided herein of all such
Senior Indebtedness remaining unpaid after giving effect to all concurrent
payments and distributions and all provisions therefor to or for the holders of
such Senior Indebtedness, but only to the extent that as to any holder of such
Senior Indebtedness, as promptly as practical following receipt by such holder
of written notice from the Trustee to the holders of such Senior Indebtedness
that such prohibited payment has been received by the Trustee, Holder(s) or
Paying Agent (or has been segregated as provided above), such holder (or a
representative therefor) notifies the Trustee in writing of the amounts then due
and owing on such Senior Indebtedness, if any, held by such holder and only the
amounts specified in such notices to the Trustee shall be paid to the holders of
such Senior Indebtedness.
SECTION 11.4 Securityholders to Be Subrogated to Rights of Holders of Senior
Indebtedness.
Subject to the payment in full of all Senior Indebtedness of the
Company as provided herein, the Holders of Securities shall be subrogated to the
rights of the holders of such Senior Indebtedness to receive payments or
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distributions of assets of the Company applicable to the Senior Indebtedness
until all amounts owing on the Securities shall be paid in full, and for the
purpose of such subrogation no such payments or distributions to the holders of
such Senior Indebtedness by the Company, or by or on behalf of the Holders by
virtue of this Article 11, which otherwise would have been made to the Holders
shall, as between the Company and the Holders, be deemed to be payment by the
Company on account of such Senior Indebtedness, it being understood that the
provisions of this Article 11 are and are intended solely for the purpose of
defining the relative rights of the Holders, on the one hand, and the holders of
such Senior Indebtedness, on the other hand.
If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article 11 shall have been
applied, pursuant to the provisions of this Article 11, to the payment of
amounts payable under Senior Indebtedness of the Company, then the Holders shall
be entitled to receive from the holders of such Senior Indebtedness any payments
or distributions received by such holders of Senior Indebtedness in excess of
the amount sufficient to pay all amounts payable under or in respect of such
Senior Indebtedness in full.
SECTION 11.5 Obligations of the Company Unconditional.
Nothing contained in this Article 11 or elsewhere in this Supplement or
in the Securities is intended to or shall impair as between the Company and the
Holders, the obligation of each such Person, which is absolute and
unconditional, to pay to the Holders the principal of, premium, if any, interest
on, and Additional Amounts with respect to, the Securities as and when the same
shall become due and payable in accordance with their terms, or is intended to
or shall affect the relative rights of the Holders and creditors of the Company
other than the holders of the Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or any Holder from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article 11, of the holders of Senior Indebtedness in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy. Notwithstanding anything to the contrary in this
Article 11 or elsewhere in this Supplement or in the Securities, upon any
distribution of assets of the Company referred to in this Article 11, the
Trustee, subject to the provisions of Sections 602 and 612 of the Indenture, and
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the Holders shall be entitled to rely conclusively upon any order or decree made
by any court of competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, or a certificate of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders for the purpose of ascertaining the Persons entitled
to participate in such distribution, the holders of the Senior Indebtedness and
other Indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 11 so long as such court has been apprised of the
provisions of, or the order, decree or certificate makes reference to, the
provisions of this Article 11. The Trustee shall be entitled to rely
conclusively on the delivery to it of a written notice by a person representing
himself to be a holder of Senior Indebtedness (or a trustee or representative on
behalf of such holder) to establish that such a notice has been given by a
holder of Senior Indebtedness (or a trustee or representative on behalf of such
holder). In the event that the Trustee determines, in good faith, that further
evidence is required with respect to the right of any person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article 11, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such person, as to the extent to which such person is entitled to
participate in such payment or distribution, and as to other facts pertinent to
the rights of such person under this Article 11, and if such evidence is not
furnished, the Trustee may defer any payment to such person pending judicial
determination as to the right of such person to receive such payment. Nothing in
this Article 11 shall apply to the claims of, or payments to, the Trustee under
or pursuant to Section 606 of the Indenture.
SECTION 11.6 Trustee Entitled to Assume Payments Not Prohibited in Absence of
Notice.
The Trustee or any Paying Agent (other than the Company acting as its
own Paying Agent) shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee or such Paying Agent unless and until a Trust Officer of the Trustee
or such Paying Agent (other than the Company acting as its own Paying Agent), as
the case may be, shall have received, no later than one Business Day prior to
such payment, written notice thereof from the Company or from one or more
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holders of Senior Indebtedness or from any representative therefor and, prior to
the receipt of any such written notice, the Trustee, subject to the provisions
of Sections 602 and 612 of the Indenture, and such Paying Agent shall be
entitled in all respects conclusively to assume that no such fact exists.
SECTION 11.7 Application by Trustee of Assets Deposited with It.
Any deposit of assets with the Trustee or the Agent (whether or not in
trust) for the payment of principal of or interest on, or Additional Amounts
with respect to, any Securities shall be subject to the provisions of Sections
11.1, 11.2, 11.3 and 11.4; provided that, if prior to one Business Day preceding
the date on which by the terms of this Supplement any such assets may become
distributable for any purpose (including, without limitation, the payment of
either principal of or interest on any Security) the Trustee or a Paying Agent
shall not have received with respect to such assets the written notice provided
for in Section 11.6, then the Trustee or such Paying Agent shall have full power
and authority to receive such assets and to apply the same to the purpose for
which they were received, and shall not be affected by any notice to the
contrary which may be received by it on or after such date.
SECTION 11.8 Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior Indebtedness to
enforce subordination provisions contained in this Article 11 shall at any time
in any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms of this Supplement,
regardless of any knowledge thereof which any such holder may have or be
otherwise charged with. The holders of Senior Indebtedness may extend, renew,
modify or amend the terms of the Senior Indebtedness or any security therefor
and release, sell or exchange such security and otherwise deal freely with the
Company, all without affecting the liabilities and obligations of the parties to
this Indenture or the Holders.
SECTION 11.9 Securityholders Authorize Trustee to Effectuate Subordination of
Securities.
Each Holder of the Securities by his acceptance thereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained in
this Article 11 and to protect the rights of the Holders pursuant to this
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Supplement, and appoints the Trustee its attorney-in-fact for such purpose,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency or receivership
proceedings or upon an assignment for the benefit of creditors of the Company),
the making of a timely filing of a claim for the unpaid balance of its
Securities in the form required in said proceedings and cause said claim to be
approved. If the Trustee does not file a proper claim or proof of debt in the
form required in such proceeding prior to 30 days before the expiration of the
time to file such claim or claims, then the holders of the Senior Indebtedness
or their representative are or is hereby authorized to have the right to file
and are or is hereby authorized to file an appropriate claim for and on behalf
of the Holders of said Securities. Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Senior Indebtedness or their
representative 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 or the rights of any Holder thereof, or to
authorize the Trustee or the holders of Senior Indebtedness or their
representative to vote in respect of the claim of any Securityholder in any such
proceeding.
SECTION 11.10 Right of Trustee to Hold Senior Indebtedness.
The Trustee shall be entitled to all of the rights set forth in this
Article 11 in respect of any Senior Indebtedness at any time held by it to the
same extent as any other holder of Senior Indebtedness, and nothing in this
Supplement shall be construed to deprive the Trustee of any of its rights as
such holder.
SECTION 11.11 Article 11 Not to Prevent Events of Default.
The failure to make a payment on account of principal of, premium, if
any, interest on, or Additional Amounts with respect to, the Securities by
reason of any provision of this Article 11 shall not be construed as preventing
the occurrence of a Default or an Event of Default under Section 501 of the
Indenture or in any way prevent the Holders or the Trustee from exercising any
right or remedy hereunder or at law or in equity other than the right to receive
payment on the Securities in accordance with the terms of this Article 11.
-32-
SECTION 11.12 No Fiduciary Duty of Trustee to Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness, and shall not be liable to any such holders
(other than for its willful misconduct or negligence) if it shall in good faith
mistakenly pay over or distribute to the Holders of Securities or the Company or
any other Person, cash, property or securities to which any holders of Senior
Indebtedness shall be entitled by virtue of this Article 11 or otherwise.
Nothing in this Section 11.12 shall affect the obligation of any other such
Person to hold such payment for the benefit of, and to pay such payment over to,
the holders of Senior Indebtedness or their representative in accordance with
the provisions hereof.
ARTICLE 12
MISCELLANEOUS
SECTION 12.1 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provisions shall control. The provisions of TIA Sections 310
through 317 that impose duties on any Person (including the provisions
automatically deemed included herein unless expressly excluded by this
Indenture) are a part of and govern this Indenture, whether or not physically
contained herein.
SECTION 12.2 Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA ss. 312(c).
-33-
SECTION 12.3 Governing Law.
The laws of The Commonwealth of Massachusetts shall govern this
Supplement and the Securities without regard to principles of conflicts of law.
SECTION 12.4 No Adverse Interpretation of Other Agreements.
This Supplement may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Supplement.
SECTION 12.5 Successors.
All covenants and agreements of the Company in this Supplement and the
Securities shall bind its successors and assigns. All agreements of the Trustee
in this Indenture shall bind its successors and assigns.
SECTION 12.6 Multiple Counterparts.
The parties may sign multiple counterparts of this Supplement. Each
signed counterpart shall be deemed an original, but all of them together
represent the same agreement.
SECTION 12.7 Headings, etc.
The headings of the Articles and Sections of this Supplement have been
inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
SECTION 12.8 Severability.
In case any provision in this Supplement or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby,
and a Holder shall have no claim therefor against any party hereto.
-34-
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to
be duly executed, all as of the date first written above.
HEALTH AND RETIREMENT PROPERTIES TRUST
a Maryland real estate investment trust
By:
Name:
Title:
FLEET NATIONAL BANK,
as Trustee
By:
Name:
Title:
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EXHIBIT A
Unless and until it is exchanged in whole or in part for Securities in
definitive form, this Security may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇) ("▇▇▇"), to the issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or such other name as may be requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as may be requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.1
IF NECESSARY TO EFFECT COMPLIANCE BY THE COMPANY WITH THE REQUIREMENTS OF THE
UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED, RELATING TO REAL ESTATE
INVESTMENT TRUSTS, OWNERSHIP OF THE SECURITY REPRESENTED HEREBY MAY BE
RESTRICTED BY THE COMPANY AND/OR THE TRANSFER HEREOF MAY BE PROHIBITED, AS SET
FORTH MORE FULLY ON THE REVERSE HEREOF.
HEALTH AND RETIREMENT PROPERTIES TRUST
7.25% Convertible Subordinated Debenture Due 2001
HEALTH AND RETIREMENT PROPERTIES TRUST, a Maryland real estate
investment trust, promises to pay to
7.25% S P E C I M E N 7.25%
DUE 2001 DUE 2001
--------
1 This paragraph should be included only if the Security is issued in global
form.
A-1
or registered assigns, the principal sum of__________ Dollars, on October 1,
2001
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
Additional provisions of this Security are set forth on other side of this
Security.
Dated:
HEALTH AND RETIREMENT PROPERTIES TRUST SEAL
By:___________________________________
By:___________________________________
CERTIFICATE OF AUTHENTICATION
FLEET NATIONAL BANK, as Trustee,
certifies that this is one of the
Securities referred to in the within
mentioned Indenture.
By:__________________________________
Authorized Signatory
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[FORM OF REVERSE OF SECURITY]
HEALTH AND RETIREMENT PROPERTIES TRUST
7.25% Convertible Subordinated Debenture Due 2001
1. Interest. Health and Retirement Properties Trust, a Maryland real
estate investment trust (the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above. The Company
will pay interest semiannually on April 1 and October 1 of each year beginning
April 1, 1997. Interest on the Securities will accrue from the most recent date
to which interest has been paid or, if no interest has been paid, from October
1, 1996; provided that, if there is no existing Default in the payment of
interest, and if this Security is authenticated between a record date referred
to on the face hereof and the next succeeding interest payment date, interest
shall accrue from such interest payment date. Interest will be computed on the
basis of a 360 day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Securities
(except defaulted interest) to the persons who are the registered Holders of the
Securities at the close of business on the March 15 or September 15 next
preceding the interest payment date. Holders must surrender Securities to a
Paying Agent to collect principal and premium payments. The Company will pay
principal, premium and interest in money of the United States that at the time
of payment is legal tender for payment of public and private debts. The Company,
however, may pay principal, premium and interest by its check payable in such
money. It may mail an interest check to a Holder's registered address.
The payment of principal of and premium, if any, on this Security shall
be payable only upon surrender of this Security at the office or agency of the
Paying Agent in the City of Boston, Commonwealth of Massachusetts. Payments of
principal of, premium, if any, and interest on this Security shall be made at
the office or agency of the Trustee maintained in the Borough of Manhattan, City
and State of New York or the City of Boston, Commonwealth of Massachusetts, or,
in the case of any such payments other than the payment of principal and
premium, if any, at the Company's option, by check mailed to the Person entitled
thereto at such Person's address last appearing on the Company's register.
3. Registrar and Agents. Initially, Fleet National Bank will act as
Registrar, Paying Agent, Conversion Agent and agent for service of notices and
demands. The Company may change any Registrar, co-registrar, Paying Agent,
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Conversion Agent and agent for service of notices and demands on sixty days'
prior written notice to the Trustee. The Company or any of its Subsidiaries may
act as Paying Agent or Conversion Agent. The office of Fleet National Bank for
such purpose is ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Corporate
Trust Department.
4. Indenture; Limitations. The Company issued the Securities under an
Indenture, dated as of September 20, 1996 (the "Basic Indenture"), between the
Company and Fleet National Bank (the "Trustee"), as supplemented by a First
Supplemental Indenture, dated as of October 7, 1996, (as used herein, the term
"Indenture" means the Basic Indenture together with the First Supplemental
Indenture). Capitalized terms herein are used as defined in the Indenture unless
otherwise defined herein. The terms of the Securities include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code ▇▇.▇▇. 77aaa-77bbbb) as in effect on the
date of the Indenture. The Securities are subject to all such terms, and the
Holders of the Securities are referred to the Indenture and said Act for a
statement of them.
The Securities are general unsecured obligations of the Company limited
to $40,000,000 principal amount. The Indenture imposes certain limitations on
the ability of the Company to, among other things, make payments in respect of
its Capital Stock, merge or consolidate with any other Person and sell, lease,
transfer or otherwise dispose of its properties or assets.
5. Optional Redemption by the Company. (a) The Company may, at its
option, redeem the Securities (i) at any time and from time to time, in whole or
in part, on and after October 1, 1999, or (ii) in whole or from time to time in
part, prior to October 1, 1999 as deemed necessary by the Board of Trustees of
the Company for the Company to continue to qualify as a real estate investment
trust ("REIT") under Sections 856 through 860 of the Internal Revenue Code of
1986, as amended.
(b) The Securities will be immediately redeemable by the Company to the
extent, but only to the extent, deemed necessary by the Board to prevent the
Holder of such Securities or any other person having an interest therein (if the
Securities were thereupon converted) from being deemed to beneficially own,
A-4
directly or indirectly, 8.5% or more in value of the Capital Stock of the
Company. For purposes of determining a Person's beneficial ownership of Capital
Stock, the Securities beneficially owned by such Person will be deemed converted
and added to the Capital Stock beneficially owned by such Person for purposes of
determining whether such Person beneficially owns in excess of 8.5% in value of
the Capital Stock. For purposes of this paragraph, Capital Stock not owned
directly shall be deemed to be owned indirectly by a Holder if that Holder or a
group including that Holder would be the beneficial owner of such Capital Stock,
as defined as of May 1, 1995, in Rule 13d-3 promulgated by the United States
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended, and/or would be considered to own such Capital Stock by reason of the
attribution rules of Section 544 or Section 856(h) of the Code.
(c) The redemption price pursuant to the foregoing clauses (a) and (b)
shall be equal to 100% of the principal amount thereof, plus accrued and unpaid
interest to the date fixed for redemption.
(d) The Company may at any time buy Securities on the open market at
prices which may be greater or less than the redemption prices set forth herein.
6. Notice of Redemption. Notice of redemption will be mailed at least
30 days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at his registered address. Securities in denominations
larger than $1,000 principal amount may be redeemed in part, but only in whole
multiples thereof. On and after the Redemption Date interest ceases to accrue on
Securities or portions of them called for redemption.
7. Conversion. A Holder of a Security may convert such Security into
Common Shares of the Company after issuance and at any time before the close of
business on October 1, 2003. If the Security is called for redemption, the
Holder may convert it at any time before the close of business on the date fixed
for such redemption. The initial conversion price is $18.00 per share, subject
to adjustment in certain events. To determine the number of shares issuable upon
conversion of a Security, divide the principal amount to be converted by the
conversion price in effect on the conversion date. The Company will deliver a
check for any fractional share.
To convert a Security, a Holder must (1) complete and sign the
conversion notice on the back of the Security, (2) surrender the Security to the
Conversion Agent, (3) furnish appropriate endorsements and transfer documents if
A-5
required by the Registrar or Conversion Agent and (4) pay any transfer or
similar tax if required. No payment or adjustment is to be made on conversion
for interest accrued hereon or for dividends on Common Shares issued on
conversion; provided, however, that if a Security is surrendered for conversion
after the record date for a payment of interest and on or before the interest
payment date, then, notwithstanding such conversion, the interest falling due to
such interest payment date will be paid to the Person in whose name the Security
is registered at the close of business on such record date and any Security
surrendered for conversion during the period from the close of business on any
regular record date to the opening of business on the corresponding interest
payment date must be accompanied by payment of an amount equal to the interest
payable on such interest payment date. A Holder may convert a portion of a
Security if the portion is $1,000 principal amount or an integral multiple
thereof.
If the Company is a party to a consolidation or merger or a transfer or
lease of all or substantially all of its assets, the right to convert a Security
into Common Shares may be changed into a right to convert it into securities,
cash or other assets of the Company or another Person.
8. Subordination. THIS SECURITY IS SUBORDINATED TO ALL SENIOR
INDEBTEDNESS OF THE COMPANY. TO THE EXTENT AND IN THE MANNER PROVIDED IN THE
INDENTURE, SENIOR INDEBTEDNESS MUST BE PAID BEFORE ANY PAYMENT MAY BE MADE TO
ANY HOLDERS OF SECURITIES. ANY SECURITYHOLDER BY ACCEPTING THIS SECURITY AGREES
TO SUCH SUBORDINATION AND AUTHORIZES THE TRUSTEE TO GIVE IT EFFECT.
In addition to all other rights of Senior Indebtedness described in the
Indenture, the Senior Indebtedness shall continue to be Senior Indebtedness and
entitled to the benefits of the subordination provisions irrespective of any
amendment, modification or waiver of any term of any instrument relating to the
Senior Indebtedness or extension or renewal of the Senior Indebtedness.
9. Denominations, Transfer, Exchange. The Securities are in registered
form without coupons in denominations of $1,000 principal amount and integral
multiples thereof. A Holder may register the transfer of or exchange Securities
in accordance with the Indenture. The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and to
pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not register the transfer of or exchange any Securities selected
for redemption or register the transfer of or exchange any Securities for a
period of 15 days before a selection of Securities to be redeemed.
A-6
10. Persons Deemed Owners. The registered Holder of a Security may be
treated as its owner for all purposes.
11. Unclaimed Money. If money for the payment of principal or interest
on any Securities remains unclaimed for two years, the Trustee and the Paying
Agent will pay the money back to the Company at its written request. After that,
Holders may look only to the Company for payment.
12. Discharge Prior to Redemption or Maturity. The Indenture will be
discharged and canceled except for certain sections thereof upon payment of all
the Securities, or upon the irrevocable deposit with the Trustee of funds or
Government Obligations maturing on or before such payment date or Redemption
Date, sufficient to pay principal, premium, if any, and interest on such payment
or redemption.
13. Amendment and Waiver. Subject to certain exceptions, without notice
to the Holders of the Securities, the Indenture or the Securities may be amended
with the consent of the Holders of at least a majority in principal amount of
the Securities then outstanding and any existing default or compliance with any
provision may be waived with the consent of the Holders of a majority in
principal amount of the Securities then outstanding. Without the consent of or
notice to any Securityholder, the Company may amend or supplement the Indenture
or the Securities to, among other things, provide for uncertificated Securities,
to cure any ambiguity, defect or inconsistency or make any other change that
does not adversely affect the rights of any Securityholder.
14. Successors. When a successor assumes all the obligations of its
predecessor under the Securities and the Indenture, the predecessor will be
released from those obligations.
15. Defaults and Remedies. If an Event of Default, as defined in the
Indenture (other than a Event of Default relating to bankruptcy of the Company),
occurs and is continuing, the Trustee or the Holders of a majority in principal
amount of Securities may declare all the Securities to be due and payable
immediately in the manner and with the effect provided in the Indenture. If an
Event of Default relating to bankruptcy of the Company occurs, then all
Securities shall become immediately due and payable without any declaration or
act on the part of the Trustee or any Holder. Holders of Securities may not
enforce the Indenture or the Securities except as provided in the Indenture. The
Trustee may require indemnity satisfactory to it, subject to the provisions of
the TIA, before it enforces the Indenture or the Securities. Subject to certain
A-7
limitations, Holders of a majority in principal amount of the Securities then
outstanding may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders of Securities notice of any continuing default
(except a default in payment of principal or interest) if it determines that
withholding notice is in their interests. The Company is required to file
periodic reports with the Trustee as to the absence of any Default or Event of
Default.
16. Trustee Dealings with the Company. Fleet National Bank, the Trustee
under the Indenture, in its individual or any other capacity, may make loans to,
accept deposits from, and perform services for the Company or its Affiliates,
and may otherwise deal with the Company or its Affiliates, as if it were not
Trustee.
17. No Personal Liability. THE AMENDED AND RESTATED DECLARATION OF
TRUST OF THE COMPANY, DATED JULY 1, 1994, A COPY OF WHICH, TOGETHER WITH ALL
AMENDMENTS THERETO (THE "DECLARATION"), IS DULY FILED IN THE OFFICE OF THE
DEPARTMENT OF ASSESSMENTS AND TAXATION OF THE STATE OF MARYLAND, PROVIDES THAT
THE NAME "HEALTH AND RETIREMENT PROPERTIES TRUST" REFERS TO THE TRUSTEES UNDER
THE DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY,
AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF THE COMPANY
SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY
OBLIGATION OF, OR CLAIM AGAINST, THE COMPANY. ALL PERSONS DEALING WITH THE
COMPANY, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF THE COMPANY FOR THE
PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
18. Authentication. This Security shall not be valid until the Trustee
signs the certificate of authentication on the other side of this Security.
19. Status as United States Real Property Holding Corporation. To the
best of its knowledge, as of the date of the issuance of this Security, the
Company is not a "United States real property holding corporation" as defined in
Section 897(c)(2) of the United States Internal Revenue Code of 1986, as amended
(the "Code"). A non-United States person disposing of this Security may request
from the Company a statement as to whether this Security constitutes a "United
States real property interest" (as defined in Code Section 897(c)(1)) as of the
date of disposition. It may be necessary to obtain a statement that this
Security does not constitute a "United States real property interest" prior to
the time that a tax return would otherwise be required to be filed with the
United States Internal Revenue Service with respect to such disposition in order
to avoid a withholding tax on such disposition. If, at any time while this
A-8
Security is outstanding, the Company determines that it is at such time a
"United States real property holding corporation", it shall provide notice of
such determination in accordance with the provisions of Section 13 hereof. The
Holder of this Security can contact the Company at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ to obtain information as to the United States income tax
consequences of the classification of the Company as a "United States real
property holding corporation."
20. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company will cause
CUSIP numbers to be printed on the Securities as a convenience to the Holders of
the Securities. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
21. Accounting Terms. All accounting terms not otherwise defined herein
shall have the meanings assigned to them in accordance with generally accepted
accounting principles as applied in the United States.
A-9
22. Descriptive Headings. The descriptive headings appearing herein are
for convenience of reference only and shall not alter, limit or define the
provisions hereof.
23. Abbreviations. Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as: TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=Custodian), and U/G/M/A (=Uniform Gifts to
Minors Act).
24. Limitations on certain Holders. This Security may not be
transferred (by sale, transfer, gift, assignment, devise or other disposition,
whether voluntarily or involuntarily, whether beneficially or of record, and
whether effected constructively, by operation of law or otherwise) to any Person
if, as a result of such transfer, the Holder hereof or any other Person having
an interest in this Security (other than an Excepted Person, as defined in the
Company's Amended and Restated Declaration of Trust, as amended), would, if this
Security were fully converted, own or be deemed to own, directly or indirectly,
capital stock of the Company representing 8.5% or more in value of the total
capital stock of the Company outstanding (determined in accordance with the
provisions of paragraph (b) of Section 3 above). ANY TRANSFER IN VIOLATION OF
THIS SECTION 24 NEED NOT BE RECOGNIZED BY THE COMPANY, THE TRUSTEE OR ANY AGENT
(AS DEFINED IN THE INDENTURE), AND ANY PERSON WHO, NOTWITHSTANDING THE
FOREGOING, WOULD, IF THIS SECURITY WERE FULLY CONVERTED, OWN OR BE DEEMED TO
OWN, DIRECTLY OR INDIRECTLY, CAPITAL STOCK OF THE COMPANY REPRESENTING 8.5% OR
MORE IN VALUE OF THE TOTAL CAPITAL STOCK OF THE COMPANY OUTSTANDING (DETERMINED
IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH (B) OF SECTION 3 ABOVE) SHALL, TO
THE EXTENT OF SUCH EXCESS, NOT BE ENTITLED TO CONVERT THIS SECURITY AS OTHERWISE
PROVIDED HEREIN AND IN THE INDENTURE.
The Company will furnish to any Securityholder upon written request and
without charge a copy for the Indenture. It also will furnish the text of this
Security in larger type. Requests may be made to: Health and Retirement
Properties Trust, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Attention:
President.
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TRANSFER NOTICE
If you the Holder wants to assign this Security, fill in the form below and have
your signature guaranteed:
For value received, I or we assign and transfer this Security to
(INSERT ASSIGNEE'S SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER)
------------------------------------------------
------------------------------------------------
................................................................
................................................................
................................................................
................................................................
(Print or type assignee's name, address and zip code)
...........................................................agent
to transfer this Security on the books of the Company. The
agent may substitute another to act for him.
Date:...........................................................
Your signature:.................................................
(Sign exactly as your name appears on the other
side of this Security)
Signature Guarantee*:...........................................
*Signature must be guaranteed by an eligible guarantor institution within the
meaning of Securities and Exchange Commission Rule 17Ad-15 (including banks,
stock brokers, savings and loan associations, national securities exchanges,
registered securities associations, clearing agencies and credit unions) with
membership or participation in an approved signature guarantee medallion program
if this Security is to be delivered other than to and in the name of the
registered holder.
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CONVERSION NOTICE
To convert this Security into common shares of beneficial interest, $.01 par
value per share, of the Company, check the box:
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To convert only part of this Security, state the principal amount to be
converted (which must be a minimum of $1,000 or any multiple thereof):
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$
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If you want the Security certificate, if any, made out in another person's name,
fill in the form below:
(INSERT OTHER PERSON'S SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER)
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................................................................
................................................................
................................................................
................................................................
(Print or type assignee's name, address and zip code)
By submitting this certificate, you hereby certify to the Company that, after
giving effect to the conversion specified herein, you will not own or be deemed
to own, directly or indirectly, shares of beneficial interest in the Company
which, together with shares of beneficial interest issuable upon conversion of
any other Securities owned directly or indirectly by you, represents 8.5% or
more in value of the total shares of beneficial interest of the Company
outstanding (determined in accordance with the provisions of paragraph (b) of
Section 5 of this Security).
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Date:...........................................................
Your Signature:.................................................
(Sign exactly as your name appears on the other side of this
Security)
Signature Guaranteed By:
Note: Signature must be guaranteed
by a member firm of the New York
Stock Exchange or a commercial
bank or trust company.
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