EX 4.1
SUPPLEMENTAL INDENTURE
by and between
HEALTH AND RETIREMENT PROPERTIES TRUST
and
STATE STREET BANK AND TRUST COMPANY
July 9, 1997
HEALTH AND RETIREMENT PROPERTIES TRUST
$200,000,000 Remarketed Reset Notes due July 9, 2007
This SUPPLEMENTAL INDENTURE (this "Supplemental Indenture") made and
entered into as of July 9, 1997 between Health and Retirement Properties Trust,
a Maryland real estate investment trust (the "Company"), and State Street Bank
and Trust Company, a national banking association (the "Trustee").
WITNESSETH THAT:
WHEREAS, the Company and the Trustee have executed and delivered an
Indenture, dated as of July 9, 1997 (the "Indenture"), relating to the Company's
issuance, from time to time, of various series of debt securities; and
WHEREAS, the Company has determined to issue debt securities known as its
$200,000,000 Remarketed Reset Notes due July 9, 2007 (the "Notes"); and
WHEREAS, the Indenture provides that certain terms and conditions for each
series of debt securities issued by the Company thereunder may be set forth in
an indenture supplemental to the Indenture;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
ARTICLE ONE
DEFINED TERMS
Section 101. The following definitions supplement, and, to the extent
inconsistent with, replace the definitions in Section 101 of the Indenture:
"Acquired Debt" means Debt of a Person (i) existing at the time such Person
becomes a Subsidiary or (ii) assumed in connection with the acquisition of
assets from such Person, in each case, other than Debt incurred in connection
with, or in contemplation of, such Person's becoming a Subsidiary or such
acquisition. Acquired Debt shall be deemed to be incurred on the date of the
related acquisition of assets from any Person or the date the acquired Person
becomes a Subsidiary.
"Alternate Spread" means the percentage equal to LIBOR for the Quarterly
Period beginning on the Commencement Date of the relevant Subsequent Spread
Period.
"Annual Service Charge" as of any date means the maximum amount which is
expensed in any 12-month period for interest on Debt of the Company and its
Subsidiaries.
"Business Day" means any day other than a Saturday or Sunday or a day on
which banking institutions in The City of New York are required or authorized to
close and, in the case of Notes in the Floating Rate Mode, that is also a London
Business Day.
"Capital Stock" means, with respect to any Person, any capital stock
(including preferred stock), shares, interests, participation or other ownership
interests (however designated) of such Person and any rights (other than debt
securities convertible into or exchangeable for capital stock), warrants or
options to purchase any thereof.
"Commencement Date" means the first date of a Subsequent Spread Period.
"Consolidated Income Available for Debt Service" for any period means
Earnings from Operations of the Company and its Subsidiaries plus amounts which
have been deducted, and minus amounts which have been added, for the following
(without duplication): (i) interest on Debt of the Company and its Subsidiaries,
(ii) provision for taxes of the Company and its Subsidiaries based on income,
(iii) amortization of debt discount and deferred financing costs, (iv)
provisions for gains and losses on properties and property depreciation and
amortization, (v) the effect of any noncash charge resulting from a change in
accounting principles in determining Earnings from Operations for such period
and (vi) amortization of deferred charges.
"Debt" of the Company or any Subsidiary means, without duplication, any
indebtedness of the Company or any Subsidiary, whether or not contingent, in
respect of (i) borrowed money or evidenced by bonds, notes, debentures or
similar instruments, (ii) indebtedness for borrowed money secured by any
Encumbrance existing on property owned by the Company or any Subsidiary, (iii)
the reimbursement obligations, contingent or otherwise, in connection with any
letters of credit actually issued (other than letters of credit issued to
provide credit enhancement or support with respect to other indebtedness of the
Company or any Subsidiary otherwise reflected as Debt hereunder) or amounts
representing the balance deferred and unpaid of the purchase price of any
property or services, except any such balance that constitutes an accrued
expense or trade payable, or all conditional sale obligations or obligations
under any title retention agreement, (iv) the principal amount of all
obligations of the Company or any Subsidiary with respect to redemption,
repayment or other repurchase of any Disqualified Stock, or (v) any lease of
property by the Company or any Subsidiary as lessee which is reflected on the
Company's consolidated balance sheet as a capitalized lease in accordance with
GAAP, to the extent, in the case of items of indebtedness under (i) through
(iii) above, that any such items (other than letters of credit) would appear as
a liability on the Company's consolidated balance sheet in accordance with GAAP,
and also includes, to the extent not otherwise included, any obligation by the
Company or any Subsidiary to be liable for, or to pay, as obligor, guarantor or
otherwise (other than for purposes of collection in the ordinary course of
business), Debt of another Person (other than the Company or any Subsidiary) (it
being understood that Debt shall be deemed to be incurred by the Company or any
Subsidiary whenever the Company or such Subsidiary shall create, assume,
guarantee or otherwise become liable in respect thereof).
"Disqualified Stock" means, with respect to any Person, any Capital Stock
of such Person which by the terms of such Capital Stock (or by the terms of any
security into which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise (i) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise
(other than Capital Stock which is redeemable solely in exchange for common
stock or
2
shares), (ii) is convertible into or exchangeable or exercisable for Debt or
Disqualified Stock, or (iii) is redeemable at the option of the holder thereof,
in whole or in part (other than Capital Stock which is redeemable solely in
exchange for common stock or shares), in each case on or prior to the stated
maturity of the Notes.
"Duration/Mode Determination Date" means the fifteenth calendar date prior
to the Commencement Date of each Subsequent Spread Period on which the character
and duration of the interest rate on the Notes as well as the redemption type
(and any other relevant terms) for the Subsequent Spread Period will be agreed
to by the Company and the Remarketing Underwriter.
"Earnings from Operations" for any period means net earnings excluding
gains and losses on sales of investments, as reflected in the financial
statements of the Company and its Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP.
"Encumbrance" means any mortgage, lien, charge, pledge or security interest
of any kind.
"Initial Quarterly Period" is defined in the third paragraph of Section
201(c) hereof.
"Initial Spread" means the Spread applicable during the Initial Spread
Period.
"Initial Spread Period" means the one-year period from and including July
9, 1997 to but excluding July 9, 1998 during which the interest rate on the
Notes will be reset quarterly and will equal LIBOR plus the Initial Spread.
"Interest Payment Date" means any date interest is paid on the Notes.
"Interest Reset Date" means the first day of a Quarterly Period.
"LIBOR Determination Date" means the second London Business Day preceding
each Interest Reset Date, on which the Rate Agent will determine LIBOR
applicable for a Quarterly Period.
"LIBOR" means, with respect to determining the interest rate on Notes in
the Floating Rate Mode, the offered rate for three-month deposits in U.S.
Dollars of not less than U.S. $1,000,000, commencing on the second London
Business Day immediately following such LIBOR Determination Date, which appears
on Telerate Page 3750 as of approximately 11:00 a.m., London time, on such LIBOR
Determination Date. With respect to a LIBOR Determination Date on which no rate
appears on Telerate Page 3750 as of approximately 11:00 a.m., London time, on
such LIBOR Determination Date, the Rate Agent shall request the principal London
offices of each of four major reference banks in the London interbank market
selected by the Rate Agent to provide the Rate Agent with a quotation of the
rate at which three-month deposits in U.S. Dollars, commencing on the second
London Business Day immediately following such LIBOR Determination Date, are
offered by it to prime banks in the London interbank market as of approximately
11:00 a.m., London time, on such LIBOR Determination Date and in a principal
3
amount equal to an amount of not less than U.S. $1,000,000 that is
representative for a single transaction in such market at such time. If at least
two such quotations are provided, LIBOR for such LIBOR Determination Date will
be the arithmetic mean of such quotations as calculated by the Rate Agent. If
fewer than two quotations are provided, LIBOR for such LIBOR Determination Date
will be the arithmetic mean of the rates quoted as of approximately 11:00 a.m.,
New York City time, on such LIBOR Determination Date by three major banks in The
City of New York selected by the Rate Agent (after consultation with the
Company) for loans in U.S. Dollars to leading European banks, having a
three-month maturity commencing on the second London Business Day immediately
following such LIBOR Determination Date and in a principal amount equal to an
amount of not less than U.S. $1,000,000 that is representative for a single
transaction in such market at such time; provided, however, that if the banks
selected as aforesaid by the Rate Agent are not quoting as mentioned in this
sentence, LIBOR for such LIBOR Determination Date will be LIBOR determined with
respect to the immediately preceding LIBOR Determination Date, or in the case of
the first LIBOR Determination Date, LIBOR for the Initial Quarterly Period.
"London Business Day" means any day on which dealings in deposits in U.S.
Dollars are transacted in the London interbank market.
"Make-Whole Amount" means, in connection with any optional redemption or
accelerated payment of any Note, the excess, if any, of (i) the aggregate
present value as of the date of such redemption or accelerated payment of each
dollar of principal being redeemed or paid and the amount of interest (exclusive
of interest accrued to the date of redemption or accelerated payment) that would
have been payable in respect of such dollar if such redemption or accelerated
payment had not been made, determined by discounting, on a semiannual basis,
such principal and interest at the Reinvestment Rate (determined on the third
Business Day preceding the date such notice of redemption is given or
declaration of acceleration is made) from the respective dates on which such
principal and interest would have been payable if such redemption or accelerated
payment had not been made, over (ii) the aggregate principal amount of the Notes
being redeemed or paid. For purposes of this Supplemental Indenture and the
Notes, references in the Indenture to the payment of the principal (and premium,
if any) and interest on the Notes shall be deemed to include the payment of the
Make-Whole Amount, if any, due upon redemption with respect to the Notes.
"Make-Whole Redemption" means redemption at a redemption price equal to the
sum of (i) the principal amount of the Notes being redeemed plus accrued
interest thereon, if any, to the redemption date and (ii) the Make-Whole Amount,
if any, with respect to such Notes.
"Par Redemption" means redemption at a redemption price equal to 100% of
the principal amount thereof, plus accrued interest thereon, if any, to the
redemption date.
"Premium Redemption" means redemption at a redemption price or prices
greater than 100% of the principal amount thereof, plus accrued interest
thereon, if any, to the redemption date, as determined on the Duration/Mode
Determination Date.
4
"Quarterly Period" means the period from and including the most recent
Interest Payment Date to which interest has been paid to but excluding the next
Interest Payment Date.
"Rate Agent" means the nationally recognized broker-dealer selected by the
Company as its agent to determine (i) LIBOR and the interest rate on the Notes
for any Quarterly Period and/or (ii) the yield to maturity on the applicable
United States Treasury security that is used in connection with the
determination of the applicable Fixed Rate, and the ensuing applicable Fixed
Rate.
"Record Date" means the fifteenth calendar day, whether or not a Business
Day, next preceding the applicable Interest Payment Date.
"Reinvestment Rate" means 0.25% (twenty-five one hundredths of one percent)
plus the yield on treasury securities at constant maturity under the heading
"Week Ending" published in the Statistical Release under the caption "Treasury
Constant Maturities" for the maturity (rounded to the nearest month)
corresponding to the remaining life to maturity, as of the payment date of the
principal being redeemed or paid. If no maturity exactly corresponds to such
maturity, yields for the two published maturities most closely corresponding to
such maturity shall be calculated pursuant to the immediately preceding sentence
and the Reinvestment Rate shall be interpolated or extrapolated from such yields
on a straight-line basis, rounding in each of such relevant periods to the
nearest month. For purposes of calculating the Reinvestment Rate, the most
recent Statistical Release published prior to the date of determination of the
Make-Whole Amount shall be used.
"Remarketing Underwriter" means the nationally recognized broker-dealer
selected by the Company to act as Remarketing Underwriter.
"Remarketing Underwriting Agreement" means the agreement entered into by
the Company and the Remarketing Underwriter in the event the Company and the
Remarketing Underwriter agree on the Spread on the Spread Determination Date
with respect to any Subsequent Spread Period.
"Secured Debt" means Debt secured by any mortgage, lien, charge, pledge or
security interest of any kind.
"Spread" refers to the percentage that, added to LIBOR (when in the
Floating Rate Mode) or the comparable Treasury rate (when in the Fixed Rate
Mode), equals the interest rate payable on the Notes.
"Spread Determination Date" is the tenth calendar day prior to the
Commencement Date of such Subsequent Spread Period on which the Spread for each
Subsequent Spread Period will be established by 3:00 p.m., New York City time.
5
"Statistical Release" means the statistical release designated "H. 15(519)"
or any successor publication which is published weekly by the Federal Reserve
System and which establishes yields on actively traded United States government
securities adjusted to constant maturities or, if such statistical release is
not published at the time of any determination under this Supplemental
Indenture, then such other reasonably comparable index which shall be designated
by the Rate Agent, after consultation with the Company.
"Subsequent Spread" means the Spread determined by agreement between the
Remarketing Underwriter and the Company to result in a rate which will enable
100% of tendered Notes to be remarketed.
"Subsequent Spread Period" means one or more periods of at least six months
and not more than nine years (or any integral multiple of six months therein),
designated by the Company, commencing on a January 9 or July 9 (or as otherwise
specified by the Company and the Remarketing Underwriter on the applicable
Duration/Mode Determination Date in connection with the establishment of each
Subsequent Spread Period) through and including July 9, 2007.
"Subsidiary" means any corporation or other entity of which a majority of
(i) the voting power of the voting equity securities or (ii) the outstanding
equity interests of which are owned, directly or indirectly, by the Company or
one or more other Subsidiaries of the Company. For the purposes of this
definition, "voting equity securities" means equity securities having voting
power for the election of directors, whether at all times or only so long as no
senior class of security has such voting power by reason of any contingency.
"Telerate Page 3750" means the display designated on page "3750" on the
Telerate Service (or such other page as may replace the 3750 page on that
service or such other service or services as may be nominated by the British
Bankers' Association for the purpose of displaying London interbank offered
rates for U.S. Dollar deposits).
"Tender Date" is defined in Section 201(e) hereof.
"Tender Notice" is defined in Section 201(e) hereof.
"Total Assets" as of any date means the sum of (i) the Undepreciated Real
Estate Assets and (ii) all other assets of the Company and its Subsidiaries
determined in accordance with GAAP (but excluding accounts receivable and
intangibles).
"Total Unencumbered Assets" means the sum of (i) those Undepreciated Real
Estate Assets not subject to an Encumbrance for borrowed money and (ii) all
other assets of the Company and its Subsidiaries not subject to an Encumbrance
for borrowed money determined in accordance with GAAP (but excluding accounts
receivable and intangibles).
6
"Undepreciated Real Estate Assets" as of any date means the cost (original
cost plus capital improvements) of real estate assets of the Company and its
Subsidiaries on such date, before depreciation and amortization determined on a
consolidated basis in accordance with GAAP.
"Unsecured Debt" means Debt which is not secured by any of the properties
of the Company or any Subsidiary.
ARTICLE TWO
TERMS OF THE NOTES
Section 201. Pursuant to Section 301 of the Indenture, the Notes shall have
the following terms and conditions:
(a) Title; Limitation on Aggregate Principal Amount. The Notes shall be
known as the Company's $200,000,000 Remarketed Reset Notes due July 9, 2007. The
Notes will be limited to an aggregate principal amount of $200,000,000.
(b) Principal Repayment; Currency. The stated maturity of the Notes is July
9, 2007, provided, however, the Notes may be earlier redeemed at the option of
the Company as provided in paragraph (d) below. The principal of each Note
payable on the maturity date shall be paid against presentation and surrender
thereof at the corporate trust office of the Trustee, located initially at Xxx
Xxxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, in such coin or currency of
the United States of America as at the time of payment is legal tender for the
payment of public or private debts. The Company will not pay Additional Amounts
(as defined in the Indenture) on the Notes.
(c) Interest Payments. During the Initial Spread Period, the interest rate
on the Notes will be reset on each Interest Reset Date, and will equal LIBOR
plus the Initial Spread. The Initial Spread is .45%. After the Initial Spread
Period, unless notice of redemption of the Notes as a whole has been given, the
duration, redemption dates, redemption type, redemption prices (if applicable),
Commencement Date, Interest Payment Date and interest rate mode will be agreed
to by the Company and the Remarketing Underwriter by 3:00 p.m., New York City
time, on each applicable Duration/Mode Determination Date and the Spread will be
agreed to by the Company and the Remarketing Underwriter by 3:00 p.m., New York
City time, on the corresponding Spread Determination Date. Interest on the Notes
during each Subsequent Spread Period shall be payable, as applicable, either (i)
at a floating interest rate (such Notes being in the "Floating Rate Mode", and
such interest rate being a "Floating Rate") or (ii) at a fixed interest rate
(such Notes being in the "Fixed Rate Mode" and such interest rate being a "Fixed
Rate"), in each case as determined by the Remarketing Underwriter and the
Company in accordance with a Remarketing Agreement between the Remarketing
Underwriter and the Company (the "Remarketing Agreement").
7
After the Initial Spread Period, the Spread applicable to each Subsequent
Spread Period will be determined on each subsequent Spread Determination Date
which precedes the beginning of the corresponding Subsequent Spread Period,
pursuant to agreement between the Company and the Remarketing Underwriter
(except as otherwise provided below), and the interest rate mode used for each
Subsequent Spread Period may be a Floating Rate Mode or a Fixed Rate Mode, at
the discretion of the Company and the Remarketing Underwriter. If the Company
and the Remarketing Underwriter are unable to agree on the Spread for any
Subsequent Spread Period, (1) the Subsequent Spread Period will be one year, (2)
the Notes will be reset to the Floating Rate Mode, (3) the Spread for such
Subsequent Spread Period will be the Alternate Spread and (4) the Notes will be
redeemable at the option of the Company, in whole or in part, upon at least five
Business Days' notice given by no later than the fifth Business Day after the
relevant Spread Determination Date, at a redemption price equal to 100% of the
principal amount thereof, together with accrued interest to the redemption date,
except that the Notes may not be redeemed prior to the Tender Date or later than
the last day of such one-year Subsequent Spread Period. During the Initial
Spread Period, interest on the Notes will be payable in Dollars quarterly in
arrears on October 9, 1997, January 9, 1998, April 9, 1998 and July 9, 1998 (or,
if not a Business Day, on the next succeeding Business Day except as described
herein). After the Initial Spread Period, (i) if the Notes are in the Floating
Rate Mode, interest on the Notes will be payable, unless otherwise specified on
the applicable Duration/Mode Determination Date, quarterly in arrears on each
January 9, April 9, July 9 and October 9, during the applicable Subsequent
Spread Period, or (ii) if the Notes are in the Fixed Rate Mode, interest on the
Notes will be payable, unless otherwise specified on the applicable
Duration/Mode Determination Date, semiannually in arrears on each January 9 and
July 9 beginning on the Commencement Date and for the duration of the applicable
Subsequent Spread Period. Interest on the Notes is payable to the persons in
whose names the Notes are registered at the close of business on the applicable
Record Date next preceding the applicable Interest Payment Date.
Interest on the Notes will accrue from and including each Interest Payment
Date (or in the case of the Initial Quarterly Period, July 9, 1997) to but
excluding the next succeeding Interest Payment Date or maturity date, as the
case may be. The Initial Quarterly Period will be the period from and including
July 9, 1997 to but excluding the first Interest Payment Date (October 9, 1997)
(the "Initial Quarterly Period"). Thereafter, each Quarterly Period during the
Initial Spread Period or any Subsequent Spread Period will be from and including
the most recent Interest Payment Date to which interest has been paid to but
excluding the next Interest Payment Date.
Payment of interest on the Notes shall be made by the Trustee to or at the
direction of The Depository Trust Company or its nominee, Cede & Co., who will
in turn immediately credit the account of the Remarketing Underwriter.
If any Interest Payment Date (other than at maturity), redemption date,
Interest Reset Date, Duration/Mode Determination Date, Spread Determination
Date, Commencement Date or Tender Date would otherwise be a day that is not a
Business Day, such Interest Payment Date, redemption date, Interest Reset Date,
Duration/Mode Determination Date, Spread Determination Date, Commencement Date
or Tender Date will be postponed to the next succeeding day that is a
8
Business Day, except that if such Business Day is in the next succeeding
calendar month, such Interest Payment Date, redemption date, Interest Reset
Date, Commencement Date or Tender Date shall be the next preceding Business Day.
If the maturity date for the Notes falls on a day that is not a Business Day,
the related payment of principal and interest will be made on the next
succeeding Business Day as if it were made on the date such payment was due, and
no interest will accrue on the amounts so payable for the period for the period
from and after such dates.
If the Notes are in the Floating Rate Mode, such Notes will bear interest
at a rate per annum (computed on the basis of the actual number of days elapsed
over a 360-day year) equal to LIBOR for the applicable Quarterly Period plus the
applicable Spread, as agreed to by the Company and the Remarketing Underwriter,
and such interest rate will be reset quarterly. If the Notes are in the Fixed
Rate Mode, interest will equal the applicable Spread, as agreed to by the
Company and the Remarketing Underwriter, plus the applicable Treasury rate,
computed on the basis of a 360-day year of twelve 30-day months. Interest in the
Fixed Rate Mode will accrue from and including each Interest Payment Date to but
excluding the next succeeding Interest Payment Date or maturity date, as the
case may be.
If any Interest Payment Date or any redemption date in the Fixed Rate Mode
falls on a day that is not a Business Day (in either case, other than any
Interest Payment Date or redemption date that falls on a Commencement Date, in
which case such Commencement Date will be postponed to the next day that is a
Business Day), the related payment of principal and interest will be made on the
next succeeding Business Day as if it were made on the date such payment was
due, and no interest will accrue on the amounts so payable for the period from
and after such date.
Unless the Company shall have otherwise provided pursuant to Section 4 of
the Remarketing Agreement, dated as of July 2, 1997 between the Company and
Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("Xxxxxxx Xxxxx"), the Rate Agent will be Xxxxxxx Xxxxx.
All percentages resulting from any calculation in respect of a Note will be
rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upward, and all
dollar amounts used in or resulting from such calculation in respect of a Note
will be rounded to the nearest cent (with one-half cent rounded upward).
Unless notice of redemption of the Notes as a whole has been given, the
Company will cause a notice to be given to holders of Notes on the New York
Business Day (as defined below) following the Spread Determination Date for each
Subsequent Spread Period in the manner described below, specifying (1) the
duration of such Subsequent Spread Period, (2) the mode (i.e., Fixed Rate Mode
or Floating Rate Mode), (3) the Commencement Date, (4) any redemption dates, (5)
any redemption type (i.e., par, premium or make-whole), (6) any redemption
prices, (7) the Spread for such Subsequent Spread Period, (8) the identity of
the Remarketing Underwriter, if applicable, and (9) any other relevant
provisions. The term "New York Business Day" means any
9
day other than a Saturday or Sunday or a day on which banking institutions in
The City of New York are required or authorized to close.
(d) Prepayment at the Option of the Company; Redemption. The Notes are not
redeemable prior to July 9, 1998. On that date and thereafter, the Notes may be
redeemable, at the option of the Company, on those Interest Payment Dates that
are specified as redemption dates by the Company on the applicable Duration/Mode
Determination Date, in whole or in part, upon notice thereof given at any time
during the 45 calendar day period ending on the tenth calendar day prior to the
redemption date (provided that notice of any partial redemption must be given to
the Noteholders at least 15 calendar days prior to the redemption date), in
accordance with the redemption type selected on the Duration/Mode Determination
Date. The redemption type to be chosen by the Company and the Remarketing
Underwriter on the Duration/Mode Determination Date may be one of the following:
(i) Par Redemption; (ii) Premium Redemption; or (iii) Make-Whole Redemption.
(e) Tender at Option of Beneficial Owners. The Company will request, not
later than seven nor more than 15 calendar days prior to any Spread
Determination Date, that The Depository Trust Company ("DTC") notify its
Participants of such Spread Determination Date and of the procedures that must
be followed if any beneficial owner of a Note wishes to tender such Note as
described herein. If the Company and the Remarketing Underwriter agree on the
Spread on the Spread Determination Date with respect to any Subsequent Spread
Period, each Note may be tendered to the Remarketing Underwriter for purchase
from the tendering Noteholder at 100% of its principal amount and for
remarketing by the Remarketing Underwriter on the calendar day (or if such day
is not a Business Day, on the next succeeding Business Day except as otherwise
provided herein) immediately following the end of each Subsequent Spread Period
(the "Tender Date"). In the case of the Initial Spread Period, the Notes may be
tendered on July 9, 1998. Notice of a beneficial owner's election to tender to
the Remarketing Underwriter, which notice is irrevocable (the "Tender Notice"),
must be received by the Remarketing Underwriter during the period commencing on
the calendar day following the Spread Determination Date (or, if not a Business
Day, on the next succeeding Business Day) and ending at 5:00 p.m., New York City
time, on the fifth calendar day following the
10
relevant Spread Determination Date. The obligation of the Remarketing
Underwriter to purchase tendered Notes from the tendering Noteholders will be
subject to certain conditions and termination events as provided in the
Remarketing Underwriting Agreement. If, pursuant to those certain conditions or
termination events set forth in the Remarketing Underwriting Agreement, the
Remarketing Underwriter does not purchase all Notes on the relevant Tender Date,
for which a Tender Notice shall have been given, (1) all Tender Notices relating
thereto will be null and void, (2) none of the Notes for which such Tender
Notices shall have been given will be purchased by the Remarketing Underwriter
on such Tender Date, (3) the Subsequent Spread Period will be one year, which
Subsequent Spread Period shall be deemed to have commenced on the applicable
Commencement Date, (4) the Notes will be reset to the Floating Rate Mode, (5)
the Spread for such Subsequent Spread Period will be the Alternate Spread and
(6) the Notes will be redeemable at the option of the Company, in whole or in
part, upon at least ten Business Days' notice given by no later than the fifth
Business Day following the relevant Tender Date on the date set forth in such
notice, which shall be no later than the last day of such one-year Subsequent
Spread Period, at a redemption price equal to 100% of the principal amount
thereof, together with accrued interest to the redemption date. No beneficial
owner of any Note shall have any rights or claims against the Company or the
Remarketing Underwriter as a result of the Remarketing Underwriter not
purchasing such Notes, except as provided in clause (5) of the preceding
sentence.
If the Remarketing Underwriter does not purchase all Notes tendered for
purchase on any Tender Date, it will promptly notify the Company and the
Trustee. As soon as practicable after receipt of such notice, the Company will
cause a notice to be given to holders of the Notes specifying (1) the one-year
duration of the Subsequent Spread Period, (2) that the Notes will be reset to
the Floating Rate Mode, (3) the Spread for such Subsequent Spread Period (which
shall be the Alternate Spread) and (4) LIBOR for the initial Quarterly Period of
such Subsequent Spread Period.
(f) Form of Notes. The Notes shall be issued by the Company in registered
form as set forth in Exhibit A attached hereto and all of the terms and
provisions thereof are incorporated herein by reference. The Notes will be
issued in the form of single fully registered global security without coupons
(the "Global Note") which will be deposited with, or on behalf of, DTC, and
registered in the name of DTC's nominee, Cede & Co. Except under the
circumstance described below, the Notes will not be issuable in a definitive
form. Unless and until it is exchanged in whole or in part for the individual
notes represented thereby, a Global Note may not be transferred except as a
whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another
nominee of DTC or by DTC or any nominee of DTC to a successor depository or any
nominee of such successor.
So long as DTC or its nominee is the registered owner of such Global Note,
DTC or such nominee, as the case may be, will be considered the sole owner or
holder of the Notes represented by such Global Note for all purposes under this
Supplemental Indenture. Except as described below, owners of beneficial interest
in Notes evidenced by a Global Note will not be entitled to have any of the
individual Notes represented by such Global Note registered in their names, will
not receive or be entitled to receive physical delivery of any such Notes in
definitive form and will not be considered the owners or holders thereof under
the Indenture or this Supplemental Indenture.
If DTC is at any time unwilling, unable or ineligible to continue as
depository and a successor depository is not appointed by the Company within 90
days, the Company will issue individual Notes in exchange for the Global Note
representing such Notes. In addition, the Company may at any time and in its
sole discretion, subject to certain limitations set forth in the Indenture,
determine not to have any of such Notes represented by one or more Global Notes
and in such event will issue individual Notes in exchange for the Global Note or
Notes representing such debt Securities. Individual Notes so issued will be
issued in denominations of $1,000 and integral multiples thereof and will be
issued in registered form only, without coupons.
11
(g) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Company shall be directed
to it at 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxx X.
Xxxxxxx, President; notices to the Trustee shall be directed to it at Xxx
Xxxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Corporate Trust
Division.
ARTICLE THREE
ADDITIONAL COVENANTS
Section 301. In addition to the covenants of the Company set forth in
Article Ten of the Indenture, for the benefit of the holders of the Notes:
(a) Limitations on Incurrence of Debt. (i) The Company will not, and will
not permit any Subsidiary to, incur any Debt if, immediately after giving effect
to the incurrence of such additional Debt and the application of the proceeds
thereof, the aggregate principal amount of all outstanding Debt of the Company
and its Subsidiaries on a consolidated basis determined in accordance with GAAP
is greater than 60% of the sum ("Adjusted Total Assets") of (without
duplication) (i) the Total Assets of the Company and its Subsidiaries as of the
end of the calendar quarter covered in the Company's Annual Report on Form 10-K,
or the Quarterly Report on Form 10-Q, as the case may be, most recently filed
with the Securities and Exchange Commission (or, if such filing is not permitted
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), with
the Trustee) prior to the incurrence of such additional Debt and (ii) the
purchase price of any real estate assets or mortgages receivable acquired, and
the amount of any securities offering proceeds received (to the extent that such
proceeds were not used to acquire real estate assets or mortgages receivable or
used to reduce Debt), by the Company or any Subsidiary since the end of such
calendar quarter, including those proceeds obtained in connection with the
incurrence of such additional Debt.
(ii) In addition to the foregoing limitations on the incurrence of Debt,
the Company will not, and will not permit any Subsidiary to, incur any Secured
Debt if, immediately after giving effect to the incurrence of such additional
Secured Debt and the application of the proceeds thereof, the aggregate
principal amount of all outstanding Secured Debt of the Company and its
Subsidiaries on a consolidated basis is greater than 40% of Adjusted Total
Assets.
(iii) In addition to the foregoing limitations on the Incurrence of Debt,
the Company will not, and will not permit any Subsidiary to, incur any Debt if
the ratio of Consolidated Income Available for Debt Service to the Annual
Service Charge for the four consecutive fiscal quarters most recently ended
prior to the date on which such additional Debt is to be incurred shall have
been less than 1.5x, on a pro forma basis after giving effect thereto and to the
application of the proceeds therefrom, and calculated on the assumption that (i)
such Debt and any other Debt incurred by the Company and its Subsidiaries since
the first day of such four-quarter period and the application of the proceeds
therefrom, including to refinance other Debt, had occurred at the
12
beginning of such period; (ii) the repayment or retirement of any other Debt by
the Company and its Subsidiaries since the first date of such four-quarter
period had been repaid or retired at the beginning of such period (except that,
in making such computation, the amount of Debt under any revolving credit
facility shall be computed based upon the average daily balance of such Debt
during such period); (iii) in the case of Acquired Debt or Debt incurred in
connection with any acquisition since the first day of such four-quarter period,
the related acquisition had occurred as of the first day of such period with
appropriate adjustments with respect to such acquisition being included in such
pro forma calculation; and (iv) in the case of any acquisition or disposition by
the Company or its Subsidiaries of any asset or group of assets since the first
day of such four-quarter period, whether by merger, stock purchase or sale, or
asset purchase or sale, such acquisition or disposition or any related repayment
of Debt had occurred as of the first day of such period with the appropriate
adjustments with respect to such acquisition or disposition being included in
such pro forma calculation.
(b) Maintenance of Total Unencumbered Assets. The Company and its
Subsidiaries will maintain Total Unencumbered Assets of not less than 200% of
the aggregate outstanding principal amount of the Unsecured Debt of the Company
and its Subsidiaries on a consolidated basis.
(c) Applicability of Discharge, Defeasance and Covenant Defeasance
Provisions. The Discharge, Defeasance and Covenant Defeasance provisions in
Article Fourteen of the Indenture will apply to the Notes.
ARTICLE FOUR
ADDITIONAL EVENTS OF DEFAULT
For purposes of this Supplemental Indenture and the Notes, in addition to
the Events of Default set forth in Section 501 of the Indenture, it shall also
constitute an "Event of Default" if an event of default under any bond,
debenture, note or other evidence of indebtedness of the Company (including an
event of default with respect to any other series of securities), or under any
mortgage, indenture or other instrument of the Company under which there may be
issued or by which there may be secured or evidenced any indebtedness of the
Company (or by any Subsidiary, the repayment of which the Company has guaranteed
or for which the Company is directly responsible or liable as obligor or
guarantor), whether such indebtedness now exists or shall hereafter be created,
shall happen and shall result in an aggregate principal amount exceeding
$20,000,000 becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable, without such indebtedness
having been discharged, or such acceleration having been rescinded or annulled,
within a period of ten days after there shall have been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the Trustee
by the holders of at least 25% in principal amount of the outstanding Notes, a
written notice specifying such default and requiring the Company to cause such
indebtedness to be discharged or cause such acceleration to be rescinded or
annulled and stating that such notice is a "Notice of Default" hereunder.
13
ARTICLE FIVE
EFFECTIVENESS
This Supplemental Indenture shall be effective for all purposes as of the
date and time this Supplemental Indenture has been executed and delivered by the
Company and the Trustee in accordance with Article Nine of the Indenture. As
supplemented hereby, the Indenture is hereby confirmed as being in full force
and effect.
ARTICLE SIX
MISCELLANEOUS
Section 601. In the event any provision of this Supplemental Indenture
shall be held invalid or unenforceable by any court of competent jurisdiction,
such holding shall not invalidate or render unenforceable any other provision
hereof or any provision of the Indenture.
Section 602. To the extent that any terms of the Notes are inconsistent
with the terms of the Indenture, the terms of the Notes shall govern and
supersede such inconsistent terms.
Section 603. This Supplemental Indenture shall be governed by and construed
in accordance with the laws of The Commonwealth of Massachusetts.
Section 604. This Supplemental Indenture may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
14
IN WITNESS WHEREOF, the Company and the Trustee have caused this
Supplemental Indenture to be executed as an instrument under seal in their
respective corporate names and attested by their duly authorized officers, all
as of the date first above written.
(SEAL) HEALTH AND RETIREMENT PROPERTIES TRUST
Attest:
By:
------------------------------
Name:
Title:
Name:
Title:
(SEAL) STATE STREET BANK AND TRUST COMPANY
Attest:
By:
------------------------------
Name:
Title:
Name:
Title:
