SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 7, 1996
HEALTH AND RETIREMENT PROPERTIES TRUST
(Exact name of registrant as specified in charter)
Maryland 1-9317 04-6558834
(State or other (Commission file (IRS employer
jurisdiction of number) identification no.)
incorporation)
400 Centre Street, Newton, Massachusetts 02158
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 617-332-3990
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Item 5. Other Events.
On October 7, 1996 Health and Retirement Properties Trust (the
"Company") issued $240 million aggregate principal amount of convertible
subordinated debentures in offerings which were previously announced by the
Company.
Of such amount, $70,000,000 aggregate principal amount of 7.5%
Convertible Subordinated Debentures due 2003, Series A (the "Series A
Debentures") were offered and sold in an underwritten registered public offering
(the "Series A Offering"), and $40,000,000 aggregate principal amount of 7.25%
Convertible Subordinated Debentures due 2001 (the "7.25% Debentures") were
offered and sold in a registered direct placement (the "Registered Placement").
The Series A Debentures and the 7.25% Debentures are convertible at the holder's
option into the Company's common shares of beneficial interest, $.01 par value
per share (the "Common Shares"), at a conversion price of $18.00 per Common
Share. NatWest Securities Limited and Merrill Lynch & Co. acted as managing
underwriters with respect to the Series A Offering, and National Westminster
Bank PLC, New York Branch acted as placement agent with respect to the
Registered Placement. The Series A Offering and the Registered Placement were
made pursuant to the Company's shelf registration statement as declared
effective by the Securities and Exchange Commission on June 24, 1996.
Lastly, the Company issued $130,000,000 aggregate principal amount of
7.5% Convertible Subordinated Debentures due 2003, Series B (the "Series B
Debentures") which were offered and sold in an unregistered offering outside of
the United States (the "Series B Offering") pursuant to Regulation S promulgated
under the Securities Act of 1933, as amended (the "Securities Act"). The Series
B Debentures are convertible at the holder's option on and after October 18,
1996, or 40 days following closing of any exercise of an overallotment option
granted by the Company to the managers of the Series B Offering which may be
exercised at any time, or from time to time, until November 6, 1996, into Common
Shares at a conversion price of $18.00 per Common Share. NatWest Securities
Limited and Merrill Lynch International were the lead managers of the Series B
Offering. The offering price of the Series B Debentures was 100% of the
principal amount thereof, and the aggregate managers' commissions were
$3,120,000. The Series B Debentures have not been registered under the Securites
Act and may not be offered or sold in the United States absent registration or
an applicable exemption from registration requirements.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(c) Exhibits.
4.1 First Supplemental Indenture between the Company and Fleet
National Bank ("Fleet"), as trustee, relating to the Series A
Debentures (including form of Series A Debenture).
4.2 Second Supplemental Indenture between the Company and Fleet,
as trustee, relating to the Series B Debentures (including
form of Series B Debenture).
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4.3 Third Supplemental Indenture between the Company and Fleet, as
trustee, relating to the 7.25% Debentures (including form of
7.25% Debenture).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HEALTH AND RETIREMENT
PROPERTIES TRUST
By: /S/ Ajay Saini
Ajay Saini,
Treasurer and Chief
Financial Officer
Date: October 22, 1996
FIRST 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
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7.50% Convertible Subordinated Debentures
Due 2003, Series A
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FIRST SUPPLEMENTAL INDENTURE
FIRST 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 7.50% Convertible Subordinated Debentures
Due 2003, Series A (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
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(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.
"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
trade payable or an accrued liability arising in the ordinary course of business
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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.
"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
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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 B Debentures or the 7.25% 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 B Debentures" means the Company's 7.50% 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.
"7.25% Debentures" means the Company's 7.25% Convertible Subordinated
Debentures Due 2001, in the aggregate principal amount of up to $40,000,000,
issued pursuant to a Third 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:
"Commission" means the Securities and Exchange Commission.
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"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 "7.50%
Convertible Subordinated Debentures Due 2003, Series A" limited in aggregate
principal amount to $80,500,000, 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, 2003, and they shall bear
interest at the rate per annum of 7.50%, 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
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.
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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.
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
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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
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
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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
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.
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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
of declaration when the payment would have complied with the foregoing provision
on the date of declaration, or (ii) the
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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 7.25% 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 7.25% 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 or any 7.25% Debenture 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.
(e) The Trustee shall have no duty to inquire as to the
performance of the Company's covenants in Article IV hereof. In
addition, the Trustee shall not be deemed to have knowledge of any
Default or Event of Default except (i) any Event of Default occurring
pursuant to Section 6.1(a) (provided that the Trustee is the Paying
Agent), or (ii) any Default or Event of Default of which a Trust
Officer of the Trustee shall have received written notification from
the Company or any Holder or obtained actual knowledge.
(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.
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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).
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
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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;
(2) make any change that adversely affects the right to convert
any Security; or
(3) make any change in Article 11 of the First 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.
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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.
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
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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 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
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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 (except in the case of Securities or
portions thereof which are called for redemption on October 1, 1999 through and
including October 4, 1999, as to which such payment in respect of the October 1,
1999 interest payment date is not required to accompany any such Security).
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,
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combination or reclassification. Such adjustment shall be made successively
whenever any event listed above shall occur.
(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
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determination shall be conclusive and described in a statement filed with 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
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.
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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
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
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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
distribution shall be segregated or held in trust) for the benefit of the
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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
11, shall be paid by the liquidating trustee or agent or other Person making
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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
distributions of assets of the Company applicable to the Senior Indebtedness
until all
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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
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
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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
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.
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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
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
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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.
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
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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).
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.
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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.
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<PAGE>
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: /S/ Ajay Saini
Name: Ajay Saini
Title: Treasurer and Chief Financial Officer
FLEET NATIONAL BANK,
as Trustee
By: /S/ Robert L. Bice II
Name: Robert L. Bice II
Title: Vice President
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<PAGE>
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 Water Street, New
York, New York) ("DTC"), 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
7.50% Convertible Subordinated Debenture Due 2003
Series A
HEALTH AND RETIREMENT PROPERTIES TRUST, a Maryland real estate
investment trust, promises to pay to
7.50% S P E C I M E N 7.50%
DUE 2003 DUE 2003
or registered assigns, the principal sum of__________ Dollars, on
October 1, 2003
___________________
1 This paragraph should be included only if the Security is issued in global
form.
A-1
<PAGE>
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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<PAGE>
[FORM OF REVERSE OF SECURITY]
HEALTH AND RETIREMENT PROPERTIES TRUST
7.50% Convertible Subordinated Debenture Due 2003, Series A
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
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<PAGE>
for service of notices and demands. The Company may change any Registrar,
co-registrar, Paying Agent, 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 One Federal Street, Boston,
Massachusetts 02110, 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 ss.ss. 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 $86,250,000 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, 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,
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<PAGE>
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
required by the Registrar or Conversion Agent and (4) pay any transfer or
similar tax if
A-5
<PAGE>
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 (except in the case of Securities or portions thereof
which are called for redemption on October 1, 1999 through and including October
4, 1999, as to which such payment in respect of the October 1, 1999 interest
payment date need not be made). 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
A-6
<PAGE>
or register the transfer of or exchange any Securities for a period of 15 days
before a selection of Securities to be redeemed.
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
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<PAGE>
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 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
A-8
<PAGE>
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 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 400 Centre Street, Newton, Massachusetts 02158 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.
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 5 above). ANY TRANSFER IN VIOLATION OF
THIS SECTION 24 NEED NOT BE RECOGNIZED BY THE COMPANY, THE TRUSTEE OR ANY
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<PAGE>
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 5 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, 400 Centre Street, Newton, Massachusetts 02158. Attention:
President.
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<PAGE>
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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<PAGE>
CONVERSION NOTICE
To convert this Security into common shares of beneficial interest, $.01 par
value per share, of the Company, check the box:
_______
| |
|_______|
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):
____________________________________
| $ |
|____________________________________|
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)
______________________________________________________
| |
| |
|______________________________________________________|
...............................................................................
...............................................................................
...............................................................................
...............................................................................
(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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<PAGE>
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.
A-13
SECOND 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
--------------------------
7.5 % Convertible Subordinated Debentures
Due 2003, Series B
--------------------------
<PAGE>
SECOND SUPPLEMENTAL INDENTURE
SECOND 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"),
supplemented by the First Supplemental Indenture of even date herewith.
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 second series of
securities thereunder, designated its 7.5 % Convertible Subordinated Debentures
Due 2003, Series B (the "Securities"); and
WHEREAS, all acts necessary to constitute this Second
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:
"Additional Amounts" shall have the meaning specified in Section 2 of
the form of Registered Security and Bearer Security attached hereto as Exhibit
A.
"Additional Closing Date" means the date on which the closing of any
exercise of the over-allotment option contained in the Subscription Agreement,
as designated by the Company to the Trustee, but in no event later than 30 days
following the Closing Date.
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<PAGE>
"Agent" means any Registrar, Paying Agent, Conversion Agent,
Transfer Agent, Authentication Agent co-registrar or agent for
service of notices and demands.
"Bearer Security" shall have the meaning specified in
Section 2.5(c).
"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.
"Closing Date" means October 7, 1996, at 3:00 p.m., London time, or
such other time on the same or such other date, not later than 5:00 p.m., London
time, on the fifth Business Day in London thereafter, as the Lead Managers and
the Company may agree.
"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.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Depositary" means The Chase Manhattan Bank, presently located
at Woolgate House, Coleman Street, London EC2P 2HD, England, as common
depositary for Cedel and Euroclear, or its successor common depositary.
"Common Shares" means the Company's common shares of beneficial
interest, par value $0.01 per common 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.
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<PAGE>
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Date" shall have the meaning specified in Section
2.8(d).
"Holder" or "Securityholder" means, with respect to a Registered
Security, the person in whose name a Registered Security is registered on the
Registrar's books and, with respect to a Bearer Security, the bearer of such
Bearer Security and, with respect to a coupon, the bearer thereof.
"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
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 Payment Date" means the stated due date of an
installment of interest on the Securities.
"Interest Record Date" means an Interest Record Date specified in the
Securities whether or not such Interest Record Date is a Business Day.
"Interest Swap and Hedging Obligation" means any obligation
of any person pursuant to any interest rate swap agreement,
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<PAGE>
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.
"Lead Managers" means NatWest Securities Limited and Merrill
Lynch International.
"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.
"Principal Corporate Trust Office" means One Federal Street,
Boston, Massachusetts (or such other office as the Trustee may
designate as such).
"Registered Security" shall have the meaning specified in
Section 2.5(c).
"Regulation S" means Regulation S promulgated by the Commission under
the Securities Act.
"Regulation S Global Security" shall have the meaning specified in
Section 2.5(c).
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Securities" means the securities in the form of Exhibit A
or Exhibit B hereto.
"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,
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<PAGE>
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 7.25% 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 A, in the aggregate principal amount of up to U.S.
$80,500,000, issued pursuant to a First Supplemental Indenture, dated as of
October 7, 1996, between the Company and the Trustee.
"7.25% Debentures" means the Company's 7.25% Convertible Subordinated
Debentures Due 2001 in the aggregate principal amount of up to U.S. $40,000,000,
issued pursuant to a Third Supplemental Indenture, dated as of October 7, 1996,
between the Company and the Trustee.
"Subscription Agreement" means that certain Subscription Agreement,
dated October 2, 1996, by and between the Company and the several managers named
in Schedule 1 thereto (the "Managers"), as such agreement may be amended,
modified or supplemented from time to time in accordance with the terms thereof.
"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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<PAGE>
"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 "7.5%
Convertible Subordinated Debentures Due 2003, Series B" limited in aggregate
principal amount to $149,500,000, 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, 2003, and they shall bear
interest at the rate per annum of 7.5%, 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 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 Exhibits A and B which are incorporated in and made
part of this Supplement.
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<PAGE>
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, except that Bearer Securities shall be dated October 7, 1996.
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 in registered form, without coupons,
and in bearer form, with interest coupons attached.
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
additional transfer agency or transfer agencies ("Transfer Agent"), 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 Transfer Agents, one or more additional Paying Agents and one or more
additional Conversion Agents. The Company or any Subsidiary may act as Paying
Agent, Transfer Agent and/or Conversion Agent. The term "Paying Agent" includes
any additional paying agent, the term "Transfer Agent" shall include any
additional transfer agent and the term "Conversion Agent" includes any
additional conversion agent.
The Company may change any Paying Agent, Transfer Agent, Registrar,
Conversion Agent or Co-Registrar on sixty (60) days' prior written notice to the
Trustee (or such lesser time to which the Trustee may consent in writing). 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 at its Principal Corporate
Trust Office as Paying Agent (for Registered, but not Bearer Securities),
Transfer Agent, Conversion Agent and agent for service of notices and demands.
The Company further hereby
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<PAGE>
appoints (i) The Chase Manhattan Bank, London, presently located at Woolgate
House, Coleman Street, London EC2P 2HD, England (or such other office in London
designated for the purpose by said institution), as the Registrar and as an
additional Paying Agent, Transfer Agent and Conversion Agent, and (ii) Chase
Manhattan Bank Luxembourg S.A., presently located at 5, rue Plaetis L-2338,
Luxembourg (or such other office in Luxembourg designated for the purpose by
said institution), as an additional Paying Agent, Transfer Agent and Conversion
Agent in respect of the Securities upon the terms and conditions herein set
forth. The Company shall maintain Agents with respect to the Securities as
provided in Section 1002 of the Indenture.
SECTION 2.3 Paying Agent to Hold Money in Trust.
On or before 3:00 p.m. (Luxembourg time) on the Business Day
immediately preceding each due date of the principal of, premium if any, and
interest on any Securities, the Company shall deposit with the Paying Agent
located in Luxembourg 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
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
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<PAGE>
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 Issuance.
(a) The Company has, by the Subscription Agreement,
agreed to issue and sell to the several Managers up to U.S. $149,500,000
aggregate principal amount of its 7.5% Convertible Subordinated Debentures
due 2003, Series B.
(b) Pursuant to the Subscription Agreement, the Manager
may resell the Securities to (i) persons who are not "U.S. Persons" (as such
term is defined in Regulation S) in transactions that meet the requirements
of Regulation S.
(c) The Securities will initially be issued in the form of a
temporary global debenture in bearer form without coupons or conversion rights
in the aggregate principal amount of the entire issue of Securities
substantially in the form of Exhibit B hereto (the "Regulation S Global
Security"). As hereinafter provided, the Regulation S Global Security may
subsequently be exchanged for Securities in printed definitive form either as
(i) bearer Securities ("Bearer Securities") in denominations of U.S. $1,000 and
U.S. $10,000 and with interest coupons attached thereto, representing the
semi-annual interest payable thereon, or (ii) fully registered Securities
("Registered
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Securities") in denominations of U.S. $1,000 and integral multiples thereof,
without interest coupons attached thereto. Bearer Securities shall be
substantially in the form of Exhibit A hereto, including the coupons set forth
therein but excluding the information appearing therein that relates to the
Registered Securities only. Registered Securities shall be substantially in the
form of Exhibit A hereto.
(d) Reserved.
(e) Reserved.
(f) Reserved.
(g) The Registered Securities, the Bearer Securities and the
Regulation S Global Security shall contain such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
the Indenture and this Supplement and may have such letters, numbers or other
marks of identification and such legends or endorsements placed thereon as may,
consistent herewith, be determined by the officer of the Company executing such
Securities, as evidenced by his execution of such Securities.
(h) The Company in issuing the Registered Securities shall use
CUSIP numbers, and the Trustee may use such CUSIP numbers in any notice of
redemption with respect to the Securities. In addition, the Company shall obtain
an ISIN number and a Common Code for the Bearer Securities and the Registered
Securities.
(i) In compliance with United States tax laws and regulations,
Bearer Securities may not be offered or sold during the 40-day period beginning
on the Closing Date (or, if later, any Additional Closing Date), or at any time
if part of a Manager's unsold allotment, to a person who is within the United
States or to a United States person other than (a) foreign branches of United
States financial institutions if such institutions agree in writing to comply
with the requirements of Section 165(j)(3)(A),(B), or (C) of the Code, and the
regulations thereunder, (b) United States offices of exempt distributors, or (c)
United States offices of international organizations or foreign central banks.
United States tax laws and regulations also require that Bearer Securities not
be delivered within the United States.
SECTION 2.6 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
Holders of Registered Securities. If the Trustee is not the Registrar, the
Registrar shall furnish to
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the Trustee on or before the Interest Record Date preceding each Interest
Payment Date and at such times as the Trustee may request in writing a list in
such form and as of such date as the Trustee reasonably may require of the names
and addresses of Holders of Registered Securities.
SECTION 2.7 Transfer and Exchange; Restrictions on Transfer.
Solely for purposes of this Supplement, Section 305 of the Indenture
(other than the first paragraph thereof) is hereby amended to read as follows:
(a) Upon surrender for registration of transfer of any
Registered Security at any office or agency designated for such purpose by the
Company pursuant to Section 2.2 hereof, the Company shall execute, and the
Trustee or an Authenticating Agent shall authenticate, register and deliver, in
the name of the designated transferee or transferees, one or more new Registered
Securities of any authorized denominations and of a like aggregate principal
amount.
(b) Reserved.
(c) Bearer Securities may, at the option of the holder
thereof, be exchanged for an equal aggregate principal amount of Registered
Securities in denominations of $1,000 and integral multiples thereof without
coupons and/or Bearer Securities of authorized denominations, upon surrender of
the Bearer Securities to be exchanged at any office or agency outside the United
States designated for such purpose by the Company pursuant to Section 2.2
hereof, with all unmatured coupons and all matured coupons in default thereto
appertaining. If such Holder is unable to produce any such unmatured coupon or
coupons or matured coupon or coupons in default, such exchange may be effected
if the Bearer Securities are accompanied by payment in funds acceptable to the
Company in an amount equal to the face amount of such missing coupon or coupons
or the surrender of such missing coupon or coupons may be waived by the Company
if there be furnished to it and the Trustee or a Paying Agent, as the case may
be, such security or indemnity as it may require to save it, the Trustee, the
Paying Agent and any paying agency harmless. If thereafter the Holder of such
Security shall surrender to any paying agency any such missing coupon or coupons
in respect of which such a payment shall have been made, such Holder shall be
entitled to receive the amount of such payment from the Company; provided,
however, that, except as otherwise provided in the form of Bearer Security set
forth in Exhibit A hereto, interest represented by coupons shall be payable only
upon presentation and surrender of those coupons outside of the United States,
its territories and its possessions. Bearer Securities and coupons are
transferable upon delivery.
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(d) Registered Securities may, at the option of the holder
thereof, be exchanged for Registered Securities of any other authorized
denominations and of a like aggregate principal amount, upon surrender of the
Registered Securities to be exchanged at any office or agency designated for
such purpose by the Company pursuant to the Indenture or this Supplement.
Registered Securities shall not be exchangeable for Bearer Securities. Whenever
any Registered Securities are so surrendered for exchange, the Company shall
execute, and the Trustee or an Authenticating Agent shall authenticate and
deliver, the Registered Securities which the holder making the exchange is
entitled to receive.
(e) Reserved.
(f) Reserved.
(g) Reserved.
(h) Reserved.
(i) Reserved.
(j) Reserved.
(k) Reserved.
(l) All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same obligations, and entitled to the same benefits under the Indenture and
this Supplement, as the Securities surrendered upon such registration of
transfer or exchange.
(m) Every Registered Security presented for registration of
transfer or surrendered for exchange shall be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Trustee or the Transfer Agent to which such Security is presented or
surrendered, duly executed by the Holder thereof or his attorney duly authorized
in writing. All such instruments shall comply with the applicable provisions of
this Section 2.7. The registration of the transfer of a Registered Security by
the Registrar shall be deemed to be the written acknowledgment of such transfer
on behalf of the Company.
(n) No service charge shall be made for any registration of
transfer or exchange, but the Company or the Transfer Agent may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
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Securities, other than exchanges pursuant to Section 2.5 hereof or not involving
any registration of transfer.
(o) Neither the Company nor the Trustee nor any of the
Transfer Agent shall be required (i) to exchange Bearer Securities for
Registered Securities during the period between the close of business on any
Interest Record Date and the opening of business on the next succeeding Interest
Payment Date, (ii) to exchange any Bearer Security (or portion thereof) for a
Registered Security if the Company shall determine and inform the Trustee and
the Transfer Agents in writing that, as a result thereof, the Company may incur
adverse consequences under the federal income tax laws and regulations
(including proposed regulations) of the United States in effect or proposed at
the time of such exchange, or (iii) in the event of a redemption in part, (A) to
register the transfer or exchange of Registered Securities or to exchange any
Bearer Securities for Registered Securities during a period of 15 days
immediately preceding the date notice is given pursuant to Section 3.1 hereof
and Section 3(e) of the Registered Securities and the Bearer Securities
identifying the serial numbers of any Securities to be redeemed, or (B) to
register the transfer or exchange of any Registered Security so selected for
redemption in whole or in part, except portions not being redeemed of Securities
being redeemed in part, or (C) to exchange any Bearer Security called for
redemption; provided, however, that a Bearer Security called for redemption may
be exchanged, on the terms and conditions set forth above, for a Registered
Security that is simultaneously surrendered, with written instruction for
payment on the Redemption Date, unless the Redemption Date is between the close
of business on any Interest Record Date and the close of business on the next
succeeding Interest Payment Date, in which case such exchange may only be made
prior to the Interest Record Date immediately preceding the Redemption Date.
SECTION 2.8 Exchange of Global Security.
Solely for purposes of this Supplement, Section 304(b) of the Indenture
(other than the first paragraph thereof) is hereby amended to read as follows:
(a) Reserved.
(b) The Regulation S Global Security will be issued upon
payment to the Company or its order in United States dollars by wire transfer to
a United States dollar account designated by the Company, at 3:00 p.m., London
time, on the "Closing Date." Such payment will be made (1) upon authorization
from the Lead Managers, and (2) against the delivery of the Regulation S Global
Security for the Securities to the Common Depositary. The Regulation S Global
Security shall be held on deposit with the Common Depositary for the accounts of
Euroclear and Cedel, for
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credit to the Managers' Securities Clearance Accounts (or to such other accounts
as the Managers may have specified) with Euroclear or Cedel.
(c) Reserved.
(d) On or before the Exchange Date, the Company will execute
and deliver to The Chase Manhattan Bank, London, as Authenticating Agent,
definitive Registered Securities and Bearer Securities in the aggregate
principal amount outstanding in the Regulation S Global Security and in such
proportion of Registered Securities to Bearer Securities as such Authenticating
Agent may specify. "Exchange Date" means the date following the expiration of
the 40-day period commencing on the Closing Date or, if later, an Additional
Closing Date. On or after the Exchange Date, the Regulation S Global Security
may be surrendered to the Registrar to be exchanged, as a whole or in part, for
definitive Bearer Securities without charge, and the Trustee or an
Authenticating Agent shall authenticate and deliver, in exchange for such
Regulation S Global Security or the portions thereof to be exchanged, an equal
aggregate principal amount of definitive Bearer Securities, but only upon
presentation to the Registrar of a certificate of Euroclear or Cedel with
respect to the Regulation S Global Security or portions thereof being exchanged,
to the effect that it has received a certificate or certificates satisfactory to
it with respect to Non-U.S. Person beneficial ownership on the part of the
Holders of the Securities accepted for clearance through Euroclear or Cedel, as
appropriate, dated no earlier than 15 days prior to the Exchange Date and signed
by the person appearing in its records as the owner of the Regulation S Global
Security or portions thereof being exchanged. Similarly, on or after the
Exchange Date, portions of the Regulation S Global Security may be exchanged for
an equal aggregate principal amount of definitive Registered Securities upon
presentation to the Registrar of a request for such exchange accompanied by a
certification of Non-U.S. beneficial ownership.
(e) Reserved.
(f) Bearer Securities and Registered Securities may only be
issued in exchange for interests in the temporary Regulation S Global Security
upon receipt of certification in the form of Exhibit A-2 to the Indenture.
(g) The delivery to the Registrar by Euroclear or Cedel of any
certificate referred to in paragraph (f) above may be relied upon by the Company
and the Registrar as conclusive evidence that a corresponding certificate or
certificates in the form of Exhibit A-1 to the Indenture has or have been
delivered to Euroclear or Cedel pursuant to the terms of this Supplement and the
Indenture.
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(h) Upon any such exchange of a portion of the Regulation S
Global Security for a definitive Bearer Security or Securities or a definitive
Registered Security or Securities, the Regulation S Global Security shall be
endorsed by the Trustee or its agent to reflect the reduction of its principal
amount by an amount equal to the aggregate principal amount of such definitive
Security or Securities; and the Trustee hereby appoints the Registrar as its
agent for such purpose. Until so exchanged in full for definitive Securities,
the Regulation S Global Security shall in all respects be entitled to the same
benefits under the Indenture and this Supplement as definitive Securities
authenticated and delivered hereunder, except that neither the Holder thereof
nor the beneficial owners of the Regulation S Global Security shall be entitled
to receive payment of interest thereon or exercise conversion rights with
respect thereto.
SECTION 2.9 Payment.
Solely for purposes of this Supplement, Section 307 of the Indenture is
hereby amended to read as follows:
(a) The Company will pay or cause to be paid to the Paying
Agent the amounts, at the times and for the purposes, set forth herein and in
the text of the Securities, and the Company hereby authorizes and directs the
Paying Agent to make payment of the principal of, premium, if any, and interest
on and Additional Amounts, if any, on the Securities from such payments.
(b) At least 15 days prior to the date on which any payment of
Additional Amounts shall be required to be made pursuant to Section 2 of the
Securities, the Company will furnish each Paying Agent and the Trustee with a
certificate of one of its duly authorized officers instructing each Paying Agent
as to the amounts required (i) to be deducted or withheld for or on account of
any taxes described in Section 2 of the Securities from a payment to be made on
that date and (ii) to be paid to each holder of Securities or coupons as
Additional Amounts pursuant to that paragraph. If the foregoing amounts are not
uniform for all Holders, then the Company's certificate shall specify by country
of residence or other factor the amounts required to be deducted or withheld and
to be paid as Additional Amounts for each Holder or class of Holders of the
Securities or coupons. In the absence of its receipt of any such certificate
from the Company, each Paying Agent may make payment without deduction or
withholding. The Company hereby agrees to indemnify each Paying Agent and the
Trustee for, and to hold them harmless against, any loss, liability or expense
reasonably incurred without negligence or willful misconduct on their part,
arising out of or in connection with actions taken or omitted by any of them in
reliance on any certificate furnished pursuant to this Section.
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(c) Interest on any Registered Security that is payable, and
is punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the person in whose name that Security is registered at the close of
business on the Interest Record Date even if such Registered Security is
canceled after such Interest Record Date.
(d) If a Registered Security is converted after the close of
business on an Interest Record Date and before the opening of business on the
next succeeding Interest Payment Date, the interest due on such Interest Payment
Date shall be paid on such Interest Payment Date to the person in whose name
that Security is registered at the close of business on that Interest Record
Date.
SECTION 2.10 Computation of Interest.
Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months.
SECTION 2.11 Appointment of Authenticating Agents.
Pursuant to Section 611 of the Indenture, the Trustee hereby
appoints each of (i) the London office of Fleet National Bank (Fleet Bank
London), presently located at 40-41 St. Andrews Hill, London EC4V 5DE, England
(or such other office in London designated for such purpose by said
institution), and (ii) The Chase Manhattan Bank, London, presently located at
Woolgate House, Coleman Street, London EC2P 4HD, England (or such other office
in London designated for such purpose by said institution), as Authenticating
Agents with respect to the Securities. The Company and the Trustee hereby waive
the requirement set forth in the second sentence of Section 611 of the Indenture
with respect to the execution and delivery of an instrument signed by a
Responsible Officer of the Trustee.
ARTICLE 3
REDEMPTION
SECTION 3.1 Right of Redemption.
Solely for the purposes of this Supplement, Section 1104 of the
Indenture is hereby amended as follows:
If, under the circumstances described in Section 3 of the Registered
Securities and Bearer Securities, the Company shall elect or be required to
redeem the outstanding Securities, the
following provisions shall be applicable:
(a) Reserved.
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(b) In case the Company shall give notice to the Trustee of
its election to redeem the Securities pursuant to Section 1102 of the Indenture,
the Trustee shall cause to be given to Holders on behalf of and at the expense
of the Company a notice of redemption in accordance with Section 1104 of the
Indenture. The Trustee shall send a copy of such notice of redemption to the
Company and each Paying Agent (if different from the Trustee). In the case of a
redemption in whole, notice will be given once not more than 60 nor less than 30
days prior to the Redemption Date. In the case of a partial redemption, notice
will be given twice, the first such notice to be given not more than 60 nor less
than 45 days prior to the Redemption Date and the second such notice to be given
not more than 45 and not less than 30 days prior to the Redemption Date. The
Trustee shall notify the Company promptly of the portions of outstanding
Securities to be called for redemption as determined pursuant to Section 3(a) of
the Registered Securities and Bearer Securities.
(c) Reserved.
(d) Notices relating to the redemption of Securities shall
specify: the Redemption Date; the Redemption Price; the place or places of
payment; that payment will be made upon presentation and surrender of the
Securities to be redeemed, together, in the case of a Bearer Security, with all
appurtenant coupons, if any, maturing subsequent to the Redemption Date; that
interest accrued to the Redemption Date will be paid as specified in such
notice; that on and after said date interest thereon will cease to accrue; that
the Holder will have the right to convert such Holder's Securities until the
close of business on the fifth day (or if such day is not a Business Day, the
next succeeding Business Day) preceding the related Redemption Date or Holder
Redemption Date, as the case may be; and such other information as the Company
may wish to include. In the case of a redemption in part at the option of the
Company, notices shall specify the aggregate principal amount of Securities to
be redeemed and the aggregate principal amount of Securities outstanding after
such partial redemption. The first notice shall specify the last date on which
exchanges or transfers of Securities may be made (in accordance with Section
2.6(o) hereof), and the second notice shall specify the serial numbers of the
Securities and the portions thereof called for redemption. In the case of a
redemption in whole or in part by the Company, notices shall specify the date
the conversion privilege expires in accordance with Section 4(a) of the
Registered Securities and Bearer Securities. Such notices shall also state that
the conditions precedent, if any, to such redemption have occurred.
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SECTION 3.2 Effect of Notice of Redemption.
Once notice of redemption is given in accordance with Section
3.1 hereof, Securities called for redemption become due and payable on the
Redemption Date and at the Redemption Price, including accrued and unpaid
interest and Additional Amounts, if any, to the Redemption Date. Upon surrender
to the Trustee or Paying Agent, such Securities called for redemption shall be
paid at the Redemption Price, including accrued and unpaid interest and
Additional Amounts, if any, to the Redemption Date; provided that if the
Redemption Date is after a regular Interest Record Date and on or prior to the
corresponding Interest Payment Date, the accrued interest to the Redemption Date
and Additional Amounts, if any, shall be payable on the Redemption Date to the
Holder of the redeemed Securities registered on the relevant Interest Record
Date; and provided, further, that if a Redemption Date is not a Business Day,
payment shall be made on the next succeeding Business Day and no interest or
Additional Amounts shall accrue for the period from such Redemption Date to such
succeeding Business Day.
SECTION 3.3 Deposit of Redemption Price.
Solely for purposes of this Supplement, Section 1105 of the Indenture
is hereby amended to read as follows:
The Company shall deposit with the Paying Agent in Luxembourg on or
before 3:00 p.m. (Luxembourg time) on the Business Day immediately preceding the
Redemption Date funds sufficient to pay the Redemption Price of, including
accrued and unpaid interest on, and Additional Amounts with respect to, all
Securities to be redeemed on such Redemption Date (other than Securities or
portions thereof called for redemption on that date that have been delivered by
the Company to the Trustee for cancellation). The Paying Agent shall promptly
return to the Company any funds so deposited which are not required for that
purpose upon the written request of the Company.
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.
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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 or 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 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
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:
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(1) default in the payment of any installment interest upon
any Series A Debenture or any 7.25% Debenture or any installment of
interest upon or any Additional Amounts payable in respect of any
Security 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 7.25% 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 or the Series A Debentures or the 7.25% Debentures and
the continuance of such failure for a period of 60 days.
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
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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.
(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.
(e) The Trustee shall have no duty to inquire as to
the performance of the Company's covenants in Article IV
hereof. In addition, the Trustee shall not be deemed to
have knowledge of any Default or Event of Default except (i)
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any Event of Default occurring pursuant to Section 6.1(a) (provided
that the Trustee is the Paying Agent), or (ii) any Default or Event of
Default of which a Trust Officer of the Trustee shall have received
written notification from the Company or any Holder or obtained actual
knowledge.
(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).
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
RESERVED
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:
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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;
(2) make any change that adversely affects the right to
convert any Security; or
(3) make any change in Article 11 of the Second 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
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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.
ARTICLE 10
CONVERSION OF SECURITIES
SECTION 10.1 Right of Conversion; Conversion Price.
Subject to the provisions of Section 4 of the Securities, the Holder of
any Security or Securities shall have the right, at such Holder's option, at any
time on or after the Exchange Date and 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, together with all unmatured coupons (except that any Bearer
Security called for redemption on October 1 through and including October 4,
1999 need not be delivered with the coupon that matures on October 1, 1999), if
any, and any matured coupons in default appertaining thereto, if any,
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.
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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
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 and the
Conversion Agent written notice whenever the stock transfer books of the Company
shall be closed.
In the case of any Registered Security or Bearer Security of a
denomination other than $1,000 that is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Conversion Agent, and the Conversion Agent shall deliver to the
Holder thereof, in each case at the expense and written direction of the
Company, a new Security or Securities of any authorized kind or denomination as
requested by such Holder, in aggregate principal amount equal to the unconverted
portion of the principal amount 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
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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 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
(except in the case of Registered Securities of portions thereof which are
called for redemption on October 1 through and including October 4, 1999, which
need not be accompanied by such amount payable in respect of the October 1, 1999
interest payment date).
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
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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.
(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
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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 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 the
Conversion Agent; 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 and the Conversion
Agent as provided by Section 10.5(1), the Trustee and the Conversion
Agent (other than the Company or a Subsidiary) shall be entitled to
rely conclusively on the conversion price set forth in the Officers'
Certificate most recently received by the Trustee and the Conversion
Agent (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.
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 Conversion Agent and shall
cause to be mailed to the Trustee and given to all Holders of the Securities in
accordance with Section 14 of the Bearer Securities and the Registered
Securities 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.
SECTION 10.7 Taxes on Conversions.
The Company will pay any and all documentation, 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. The
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Company extends no protection with respect to any other taxes imposed in
connection with conversion of Securities.
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
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
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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.
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
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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.
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 to purchase
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 subject of a judicial proceeding or written notice of such
event of default shall have been 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
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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
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
and the Paying Agent 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:
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(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
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 and the Paying Agent in writing of
the amounts then due and owing on such Senior Indebtedness, if any,
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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
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
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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 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 upon 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. The provisions of this Section 11.5 applicable to the
Trustee shall (unless the context requires otherwise) also apply to any Paying
Agent.
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 three Business Days prior to
such payment, written notice thereof
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<PAGE>
from the Company or from one or more 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 any Paying 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 three Business
Days 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
Supplement,
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<PAGE>
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 and any Agent 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 or any Agent 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.
SECTION 11.12 No Fiduciary Duty of Trustee to Holders of Senior
Indebtedness.
Neither the Trustee nor any Paying Agent shall 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
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<PAGE>
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).
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.
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<PAGE>
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.
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<PAGE>
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: /S/ Ajay Saini
Name: Ajay Saini
Title: Treasurer and Chief Financial Officer
FLEET NATIONAL BANK,
as Trustee
By: /S/ Robert L. Bice II
Name: Robert L. Bice II
Title: Vice President
<PAGE>
EXHIBIT A
(FORM OF FACE OF REGISTERED SECURITY)
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
(Organized under the laws of the State of Maryland)
7.5% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2003, SERIES B
CUSIP No.
U.S.$_________
Health and Retirement Properties Trust, a real estate investment trust
duly organized and existing under the laws of the State of Maryland (the
"Company"), for value received, hereby promises to pay to
________________________, or registered assigns, the principal sum of
______________ United States dollars on October 1, 2003 upon presentation and
surrender hereof and to pay interest thereon, from the most recent Interest
Payment Date (as defined below) to which interest has been paid or duly provided
for (or from October 7, 1996 if no interest has been paid or duly provided for
in respect of this Security), semiannually in arrears on April 1 and October 1
in each year (each an "Interest Payment Date"), commencing April 1, 1997, at the
rate of 7.5% per annum until the principal hereof is paid or made available for
payment. Interest hereon shall be calculated on the basis of a 360-day year
comprised of twelve 30-day months. The interest so payable, and punctually paid
or duly provided for, on any Interest Payment Date will, as provided in the
Indenture (as defined on the reverse hereof), be paid to the person in whose
name this Security is registered at the close of business on the Interest Record
Date for such interest payment, which shall be March 15 or September 15 (whether
or not a Business Day) next preceding such Interest Payment Date. To the extent
lawful, the Company shall pay interest on overdue principal and overdue
installments of interest at the rate borne by this Security, compounded
semi-annually. Except as otherwise provided in the Indenture, any such interest
not so punctually paid or duly provided for will forthwith cease to be payable
to the Holder on such Interest Record Date and, together with Defaulted Interest
relating thereto, may be paid at any time in any lawful manner, all as more
fully provided in the Indenture. Payment of interest on this Security shall be
made by United States dollar check drawn on a bank in the City of Boston,
Massachusetts or The City of New York and mailed to the person
A-1
<PAGE>
entitled thereto at his address as it shall appear in the Security Register, or
(if arrangements satisfactory to the Company and the Trustee (as defined on the
reverse hereof) are made) by wire transfer to a United States dollar account
maintained by the payee with a bank in the City of Boston, Massachusetts or The
City of New York; provided, however, that if such mailing is not possible and no
such application shall have been made, payment of interest shall be made at the
Principal Corporate Trust Office of the Trustee (as defined in the Indenture
referred to below), or such other office or agency of the Company as may be
designated for such purpose in the City of Boston, Massachusetts or in The City
of New York in United States currency.
Reference is hereby made to the provisions of this Security set forth
under Terms and Conditions of the Securities on the reverse hereof, which
further provisions shall for all purposes have the same effect as if set forth
at this place.
This Security shall not become valid or enforceable for any purpose
unless and until the certificate of authentication hereon shall have been
manually signed by a duly authorized officer of the Trustee.
IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed in its corporate name and under its corporate seal by the manual or
facsimile signature of a duly authorized signatory.
HEALTH AND RETIREMENT PROPERTIES TRUST
Dated: By: __________________________________
Name:
Title:
[Corporate Seal]
Attest: __________________________
A-2
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the within mentioned Indenture.
FLEET NATIONAL BANK,
as Trustee
[By: [NAME OF AUTHENTICATING AGENT, IF ANY],
as Authenticating Agent]*
By: __________________________________
Authorized Officer
Dated:
- --------------
* To be included in lieu of the Trustee's signature if
authentication to be performed by an Authenticating Agent
appointed by the Trustee.
A-3
<PAGE>
(FORM OF FACE OF BEARER SECURITY)
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE
CODE OF 1986, AS AMENDED.
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
(Organized under the laws of the State of Maryland)
7.5% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2003, SERIES B
No. B ______ U.S.$_______
Health and Retirement Properties Trust, a real estate investment trust
duly organized and existing under the laws of the State of Maryland (the
"Company"), for value received, hereby promises to pay to bearer upon
presentation and surrender of this Security the principal sum
of_____________________________ United States dollars on October 1, 2003 upon
presentation and surrender hereof and to pay interest thereon, from October 7,
1996, semiannually in arrears on April 1 and October 1 in each year (each an
"Interest Payment Date"), commencing April 1, 1997, at the rate of 7.5% per
annum until the principal hereof is paid or made available for payment. Interest
hereon shall be calculated on the basis of a 360-day year comprised of twelve
30-day months. To the extent lawful, the Company shall pay interest on overdue
principal and overdue installments of interest of the rate borne by this
Security, compounded semi-annually. Payments in respect of this Security shall
be made by United States dollar check, subject to any laws or regulations
applicable thereto and to the right of the Company (limited as provided in the
Indenture (as defined on the reverse hereof)) to terminate the appointment of
any paying agency, at The Chase Manhattan Bank, London, presently located at
Woolgate House, Coleman Street, London EC2P 2HD, England (or such other office
in London designated for the purpose by said institution), or Chase Manhattan
Bank Luxembourg S.A., presently located at 5 Rue Plaetis, L-2338 Luxembourg (or
such other office in Luxembourg designated for the purpose by said institution),
or at such other offices or agencies outside the United States of America, its
territories or its possessions as the Company may designate, by United States
dollar check drawn on a bank in the City of Boston, Massachusetts or The City of
New York, or (if arrangements satisfactory to the Company and the paying agent
in Luxembourg are made) by wire transfer to a United States dollar account
maintained by the Holder at a bank outside
A-4
<PAGE>
the United States, its territories and its possessions. Interest on this
Security shall be paid only at an office or agency located outside the United
States, its territories or its possessions and, in the case of interest due on
or before maturity, only upon presentation and surrender at such an office or
agency of the interest coupons hereto attached as they severally mature. No
payment on this Security or any coupon will be made at the Principal Corporate
Trust Office of the Trustee (as defined in the Indenture referred to below) or
any other paying agency maintained by the Company in the United States, nor will
any payment be made by transfer to an account in, or by mail to an address in,
the United States, except as may be permitted by United States tax laws and
regulations in effect at the time of such payment without detriment to the
Company. Notwithstanding the foregoing, payment of this Security and coupons may
be made at the office of the Trustee in the city of Boston if full payment at
all paying agencies outside the United States is illegal or effectively
precluded by exchange controls or other similar restrictions.
Reference is hereby made to the further provisions of this Security set
forth under Terms and Conditions of the Securities on the reverse hereof, which
further provisions shall for all purposes have the same effect as if set forth
at this place.
Neither this Security nor any of the coupons attached hereto shall
become valid or enforceable for any purpose unless and until the certificate of
authentication hereon shall have been manually signed by a duly authorized
officer of the Trustee.
A-5
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed in its corporate name and under its corporate seal by the manual or
facsimile signature of a duly authorized officer and coupons bearing the
facsimile signature of a duly authorized signatory to be annexed hereto.
Dated: October 7, 1996
HEALTH AND RETIREMENT PROPERTIES TRUST
By: __________________________________
Name:
Title:
[Corporate Seal]
Attest: __________________________
A-6
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the within-mentioned Indenture.
FLEET NATIONAL BANK,
as Trustee
[By: [NAME OF AUTHENTICATING AGENT, IF ANY],
as Authenticating Agent]*
By: __________________________________
Authorized Officer
Dated:
- --------------
* To be included in lieu of the Trustee's signature if
authenticating to be performed by an Authenticating Agent
appointed by the Trustee.
A-7
<PAGE>
(FORM OF FACE OF COUPON ON BEARER SECURITIES)
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE
CODE OF 1986, AS AMENDED.
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
(Organized under the laws of the State of Maryland)
7.5% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2003, SERIES B
No. ________ U.S. $______ Due ________
Unless the Bearer Security to which this coupon appertains shall have
been called for redemption prior to the due date hereof and payment thereof duly
provided for or shall have been converted (unless such date of redemption is
October 1 through and including October 4, 1999 and the due date hereof is on or
before October 1, 1999), Health and Retirement Properties Trust (herein called
the "Company") shall, subject to and in accordance with the terms and conditions
of the Bearer Security, the Indenture dated as of September 20, 1996 between the
Company and Fleet National Bank, as Trustee, and the Second Supplemental
Indenture dated as of October 7, 1996 between the Company and Fleet National
Bank, as Trustee, pay to the bearer, on the date set forth herein upon surrender
hereof, the amount shown hereon (together with any Additional Amounts in respect
hereof which the Company may be required to pay according to the terms of said
Bearer Security) at the paying agencies set out on the reverse hereof or at such
other places outside the United States of America, its territories and its
possessions as the Company may determine from time to time, by United States
dollar check drawn on a bank in the City of Boston, Massachusetts or the City of
New York, or (if arrangements satisfactory to the Company and the paying agent
in Luxembourg are made) wire transfer to a United States dollar account
maintained by the bearer at a bank outside the United States of America, its
territories and its possessions, being one-half year's interest then payable on
said Bearer Security.
HEALTH AND RETIREMENT PROPERTIES TRUST
By: __________________________________
Name:
Title:
A-8
<PAGE>
[Reverse of Coupon]
The Chase Manhattan Bank, London Chase Manhattan Bank
Woolgate House Luxembourg S.A.
Coleman Street 5 Rue Plaetis
London EC2P 2HD L-2338 Luxembourg
England
A-9
<PAGE>
(FORM OF REVERSE OF REGISTERED AND BEARER SECURITIES)
Terms and Conditions of the Securities
1. General.
(a) This Security is one of a duly authorized issue of securities of
the Company designated as its 7.5% Convertible Subordinated Debentures due 2003,
Series B (herein called the "Securities"), limited in aggregate principal amount
to U.S. $149,500,000. The Company issued the Securities under an Indenture,
dated as of September 20, 1996, between the Company and Fleet National Bank, as
trustee (the "Trustee") as supplemented by the Second Supplemental Indenture
dated as of October 7, 1996 by and between the Company and Fleet National Bank,
as Trustee (as so supplemented, the "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 United States Trust Indenture Act of 1939, as
amended, as in effect on the date of the Indenture. The Securities are subject
to all such terms, and Holders of Securities are referred to the Indenture and
said Act for a statement of them. The Securities are unsecured obligations of
the Company.
(b) The Securities are issuable as bearer securities (the "Bearer
Securities"), with interest coupons attached, in the denominations of U.S.$1,000
and U.S.$10,000, and as registered securities (the "Registered Securities"),
without coupons, in denominations of U.S.$1,000 and integral multiples thereof.
The Registered Securities, and transfers thereof, shall be registered as
provided in the Indenture. The holder of any Bearer Security or any coupon and
the registered holder of a Registered Security shall (to the fullest extent
permitted by applicable law) be treated at all times, by all persons and for all
purposes, except as provided in the Indenture, as the absolute owner of such
Security or coupon, as the case may be, regardless of any notice of ownership,
theft or loss or of any writing thereon.
2. Additional Amounts.
The Company will pay, as additional interest ("Additional Amounts"), to
the Holder of this Security or of any coupon appertaining hereto who is a United
States Alien (as defined below) such amounts as may be necessary in order that
every net payment of the principal of and premium, if any, and interest on this
Security and any cash payments made in lieu of issuing shares of Common Stock
upon conversion of this Security, after withholding for or on account of any
present or future tax, assessment or other governmental charge imposed upon or
as a result of such payment by the United States or any political
A-10
<PAGE>
subdivision or taxing authority thereof or therein, will not be less than the
interest provided herein or any coupon appertaining hereto to be then due and
payable; provided, however, that the foregoing obligation to pay Additional
Amounts shall not apply to any one or more of the following:
(a) any tax, assessment or other governmental charge which would not
have been so imposed but for (i) the existence of any present or former
connection between such Holder (or between a fiduciary, settlor, beneficiary,
member or stockholder of, or a person holding a power over, such Holder, if such
Holder is an estate, trust, partnership or corporation) and the United States,
including, without limitation, such Holder (or such fiduciary, settlor,
beneficiary, member, stockholder or person holding a power) being or having been
a citizen or resident or treated as a resident thereof or being or having been
engaged in a trade or business or being or having been present therein or having
or having had a permanent establishment therein, (ii) such Holder's present or
former status as a personal holding company, foreign personal holding company,
passive foreign investment company, foreign private foundation or other foreign
tax-exempt entity or controlled foreign corporation for United States federal
income tax purposes or a corporation which accumulates earnings to avoid United
States federal income tax, or (iii) such Holder's status as a bank extending
credit pursuant to a loan agreement entered into in the ordinary course of
business;
(b) any tax, assessment or other governmental charge which would not
have been so imposed but for the presentation by the Holder of this Security or
any coupon appertaining hereto for payment on a date more than 15 days after the
date on which such payment became due and payable or on the date on which
payment thereof is duly provided, whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer or personal or
intangible property tax or any similar tax, assessment or other governmental
charge;
(d) any tax, assessment or other governmental charge which would not
have been imposed but for the failure to comply with certification, information,
documentation or other reporting requirements concerning the nationality,
residence, identity or present or former connection with the United States of
the Holder or beneficial owner of this Security or any related coupon if such
compliance is required by statute, regulation or ruling of the United States or
any political subdivision or taxing authority thereof or therein as a
precondition to relief or exemption from such tax, assessment or other
governmental charge;
(e) any tax, assessment or other governmental charge which
is payable otherwise than by deduction or withholding from
A-11
<PAGE>
payments of principal of and premium, if any, or interest on this
Security;
(f) any tax, assessment or other governmental charge imposed on
interest received by a person holding, actually or constructively, 10% or more
of the total combined voting power of all classes of stock of the Company
entitled to vote; or
(g) any tax, assessment or other governmental charge required to be
withheld by any paying agent from any payment of principal of and premium, if
any, or interest on any Security or interest on any coupon appertaining thereto
if such payment can be made without such withholding by any other paying agent;
nor shall Additional Amounts be paid with respect to any payment of the
principal of or premium, if any, or interest on this Security (or cash in lieu
of issuance of shares of Common Shares upon conversion) to a person other than
the sole beneficial owner of such payment or that is a partnership or fiduciary
to the extent such beneficial owner, member of such partnership or beneficiary
or settlor with respect to such fiduciary would not have been entitled to the
payment of Additional Amounts had such beneficial owner, member, beneficiary or
settlor been the holder of this Security or any coupon appertaining hereto. The
term "United States Alien" means any person who, for United States federal
income tax purposes, is (i) a foreign corporation, (ii) a foreign partnership
one or more of the members of which are, for United States federal income tax
purposes, foreign corporations, non-resident alien individuals or non-resident
alien fiduciaries of a foreign estate or trust, (iii) a non-resident alien
individual or (iv) a non-resident alien fiduciary of a foreign estate or trust,
and the term "United States" means the United States of America (including the
several States and the District of Columbia), its territories, its possessions
and other areas subject to its jurisdiction. Except as specifically provided
herein and in the Indenture, the Company shall not be required to make any
payment with respect to any tax, assessment or other governmental charge imposed
by any government or any political subdivision or taxing authority thereof or
therein. Whenever any Additional Amounts are to be paid on the Securities, the
Company will give notice to the Trustee and any paying agencies of the Company,
all as provided in the Indenture.
3. Redemption.
(a) The Company, at its option, may redeem the Securities, in whole or
in part (but if in part, in aggregate principal amounts of no less than $1,000),
(i) at any time or times on and after October 1, 1999, or (ii) in whole or in
part prior to October 1, 1999 as necessary for the Company to continue to
qualify as a real estate investment trust ("REIT") under Sections 856 through
860 of the United States Internal Revenue Code of
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<PAGE>
1986, as amended (the "Code"), upon notice as hereinafter prescribed, at a
redemption price equal to 100% of their principal amount thereof, plus accrued
and unpaid interest to the date fixed for redemption.
(b) The Company may also, at its option, redeem the Securities to the
extent, but only to the extent, deemed necessary by its Board of Trustees 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, directly or indirectly, 8.5% or more in value of the Capital
Stock (as defined in the Indenture) 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 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.
Securities redeemed pursuant to this paragraph (b) shall be redeemed at a
redemption price equal to 100% of the principal amount thereof, plus accrued and
unpaid interest to the date fixed for redemption.
(c) If, at any time, the Company shall determine that as a result of
any change in or amendment to the laws (or any regulations or rulings
promulgated thereunder) of the United States or any political subdivision or
taxing authority thereof or therein affecting taxation, or any amendment to or
change in an official application or interpretation of such laws, regulations or
rulings which change or amendment becomes effective on or after October 7, 1996
the Company has or will become obligated to pay to the holder of any Security or
coupon Additional Amounts and such obligation cannot be avoided by the Company
taking reasonable measures available to it, then the Company may, as its
election exercised at any time when such conditions continue to exist, redeem
such Securities as a whole but not in part, upon notice as hereinafter
prescribed, at a redemption price equal to 100% of the principal amount,
together with accrued interest, if any, to the date fixed for redemption;
provided that no such notice of redemption shall be given earlier than 90 days
prior to the earliest date on which the Company would be obligated to pay such
Additional Amounts were a payment in respect of such Securities then due; and
provided further, that at the time such notice is given, such obligation to pay
such Additional Amounts remains in effect. Prior to any redemption of the
Securities pursuant to this paragraph (c), the
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Company shall provide the Trustee with one or more certificates of the Company
on which the Trustee may conclusively rely to the effect that the Company is
entitled to redeem such Securities pursuant to such paragraph and that the
conditions precedent to the right of the Company to redeem such Securities
pursuant to such paragraph have occurred and a written Opinion of Counsel (who
may be an employee of the Company) stating that all legal conditions precedent
to the right of the Company to redeem such Securities pursuant to this paragraph
(c) have occurred.
(d) The Company shall, except as set forth in the next succeeding
paragraph, redeem the Bearer Securities as a whole but not in part, upon notice
as hereinafter prescribed, at 100% of their principal amount, together with
interest accrued and unpaid to the date fixed for redemption, less applicable
withholding taxes, if any, plus any applicable Additional Amounts payable, after
the Company determines, based on a written Opinion of Counsel, that any
certification, identification or information reporting requirement of any
present or future United States law or regulation with regard to the
nationality, residence or identity of a beneficial owner of a Bearer Security or
a coupon appertaining thereto who is a United States Alien would be applicable
to a payment of principal of or interest on a Bearer Security or a coupon
appertaining thereto made outside the United States by the Company or a paying
agent (other than a requirement (i) which would not be applicable to a payment
made by the Company or any one of its paying agents (A) directly to the
beneficial owner or (B) to a custodian, nominee or other agent of the beneficial
owner, or (ii) which could be satisfied by the Holder, custodian, nominee or
other agent certifying that the beneficial owner is a United States Alien,
provided, however, in each case referred to in clauses (i)(B) and (ii) payment
by such custodian, nominee or agent of the beneficial owner is not otherwise
subject to any requirement referred to in this sentence). The Company shall make
such determination and will notify the Trustee thereof in writing as soon as
practicable, stating in the notice the effective date of such certification,
identification, or information reporting requirement and the dates within which
the redemption shall occur, and the Trustee shall give prompt notice thereof in
accordance with the Indenture. The Company shall determine the Redemption Date
by notice to the Trustee at least 75 days before the Redemption Date, unless
shorter is acceptable to the Trustee. Such redemption of the Securities must
take place on such date, not later than one year after the publication of the
initial notice of the Company's determination of the existence of such
certification, identification or information reporting requirement. The Company
shall not so redeem the Bearer Securities, however, if the Company shall, based
on a subsequent event, determine, based on a written Opinion of Counsel (who
shall not be an employee of the Company), not less than 30 days prior to the
date fixed for redemption, that no such payment
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would be subject to any requirement described above, in which case the Company
shall notify the Trustee, which shall give prompt notice of that determination
in accordance with the Indenture and any earlier redemption notice shall
thereupon be revoked and of no further effect.
Notwithstanding the preceding paragraph, if and so long as the
certification, identification or information reporting requirement referred to
in the preceding paragraph would be fully satisfied by payment of United States
withholding, backup withholding or similar taxes, the Company may elect, prior
to the giving of the notice of redemption, to have the provisions of this
paragraph apply in lieu of the provisions of the preceding paragraph. In that
event, the Company will pay such Additional Amounts (without regard to clause
(d) of Section 2 hereof) as are necessary in order that, following the effective
date of such requirements, every net payment made outside the United States by
the Company or a paying agent of the principal of and interest on a Bearer
Security or a coupon appertaining thereto to a Holder who is a United States
Alien (without regard to a certification, identification or information
reporting requirement as to the nationality, residence or identity of such
Holder), after deduction for United States withholding, backup withholding or
similar taxes (other than withholding, backup withholding or similar taxes (i)
which would not be applicable in the circumstances referred to in the
parenthetical clauses of the first sentence of the next preceding paragraph or
(ii) are imposed as a result of presentation of such Bearer Security or coupon
for payment more than 10 days after the date on which such payment becomes due
and payable or on which payment thereof is duly provided for, whichever is
later), will not be less than the amount provided in the Bearer Security or the
coupon to be then due and payable. If the Company elects to pay such Additional
Amounts and as long as it is obligated to pay such Additional Amounts, the
Company may subsequently redeem the Bearer Securities, at any time, in whole but
not in part, upon not more than 60 days nor less than 30 days notice, given as
hereinafter prescribed, at 100% of their principal amount, plus accrued interest
to the date fixed for redemption and Additional Amounts, if any.
(e) 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.
(f) If fewer than all of the then outstanding Securities are to be
redeemed, the Securities to be redeemed will be selected by the Trustee as
provided in the Indenture by such method as the Trustee may deem fair and
appropriate, except as otherwise set forth in paragraphs (b) and (c) above.
Provisions of this Security that apply to Securities called for redemption shall
also apply to portions of Securities called for redemption.
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(g) If notice of redemption has been given in the manner set forth in
the Indenture with respect to Securities to be redeemed at the option of the
Company, the Securities so to be redeemed shall become due and payable on the
applicable Redemption Date specified in such notice and upon presentation and
surrender of the Securities at the place or places specified in the notice given
by the Company with respect to such redemption, together in the case of Bearer
Securities with all appurtenant coupons, if any, maturing subsequent to the
Redemption Date, the Securities shall be paid and redeemed by the Company, at
the places and in the manner and currency herein specified and at the Redemption
Price together with accrued interest, if any, to the Redemption Date; provided,
however, that interest due in respect of coupons maturing on or prior to the
Redemption Date shall be payable only upon the presentation and surrender of
such coupons (at an office or agency located outside of the United States of
America). If any Bearer Security surrendered for redemption shall be accompanied
by all appurtenant coupons maturing after the Redemption Date, such Security may
be paid after deducting from the amount otherwise payable an amount equal to the
face amount of all such missing coupons, or the surrender of such missing coupon
or coupons may be waived by the Company and the Trustee or a paying agent if
they are furnished with such security or indemnity as they may require to save
each of them and each other paying agency of the Company harmless. From and
after the Redemption Date, if monies for the redemption of Securities shall have
been available at the principal corporate trust office of the Trustee or at the
office of any paying agent (other than the Company or a Subsidiary) for
redemption on the Redemption Date, the Securities shall cease to bear interest,
the coupons for interest appertaining to Bearer Securities maturing subsequent
to the Redemption Date shall be void, and the only right of the holders of such
Securities shall be to receive payment of the Redemption Price together with
accrued interest to the Redemption Date. If monies for the redemption of the
Securities are not made available by the Company for payment until after the
Redemption Date, the Securities shall not cease to bear interest until such
monies have been so made available.
4. Conversion.
(a) Subject to and upon compliance with the provisions of the
Indenture, a holder of Securities is entitled, at its option, at any time on and
after the Exchange Date and prior to the close of business on October 1, 2003 to
convert such Security (or any portion of the principal amount thereof which is
U.S.$1,000 or an integral multiple thereof), at the principal amount thereof, or
of such portion, into fully paid and nonassessable common shares ("Conversion
Shares") of beneficial interest, par value $0.01 per share ("Common Shares"), of
the Company at a Conversion Price equal to U.S. $18.00 aggregate principal
amount of Securities for
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each Conversion Share (the "Conversion Price") (or at the current adjusted
Conversion Price if an adjustment has been made as provided herein) by surrender
of the Security, together with (i) if a Bearer Security, all unmatured coupons
(except that any Bearer Security called for redemption on October 1 through and
including October 4, 1999 need not be delivered with the coupon that matures on
October 1, 1999) and any matured coupons in default appertaining thereto, or
(ii) if a Registered Security (if so required by the Company or the Trustee or
the agencies set forth below), instruments of transfer in form satisfactory to
the Company and the Trustee or the agencies set forth below, duly executed by
the registered holder or by his duly authorized attorney, and, in either case,
(iii) the Conversion Notice hereon duly executed (x) at the Principal Corporate
Trust Office of the Trustee, or at such other office or agency of the Company as
may be designated by it for such purpose in the City of New York, or (y) subject
to any laws or regulations applicable thereto and subject to the right of the
Company to terminate the appointment of any such conversion agency, at The Chase
Manhattan Bank, London, presently located at Woolgate House, Coleman Street,
London EC2P 2HD, England and Chase Manhattan Bank Luxembourg S.A., 5 Rue
Plaetis, L-2338 Luxembourg, or at such other offices or agencies as the Company
may designate; provided, however, that if any Security or a portion thereof is
called for redemption by the Company, then in respect of such Security (or, in
the case of partial redemption by the Company, such portion thereof) the right
to convert such Security (or, in the case of partial redemption by the Company,
such portion thereof) shall expire (unless the Company defaults in making the
payment due upon redemption) at the close of business on the Redemption Date.
(b) In the case of any Registered Security which is converted after any
Interest Record Date and on or prior to the next succeeding Interest Payment
Date, interest that is payable on such Interest Payment Date shall be payable on
such Interest Payment Date notwithstanding such conversion, and such interest
shall be paid to the person in whose name that Registered Security is registered
at the close of business on such Interest Record Date. Except as otherwise
provided in the immediately preceding sentence and in the parenthetical clause
in Section 4(a)(i) above, no payment or adjustment shall be made upon any
conversion on account of any interest accrued on the Securities surrendered for
conversion or on account of any dividends or distributions on the Conversion
Shares issued upon conversion. Registered Securities surrendered for conversion
during the period after the close of business on any Interest Record Date next
preceding any Interest Payment Date to the close of business on such Interest
Payment Date shall be accompanied by payment of an amount equal to the interest
payable on such Interest Payment Date on the principal amount being surrendered
for conversion (except in the case of Registered Securities or portions thereof
which are called for redemption on October 1 through and
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including October 4, 1999, which need not be accompanied by the payment of such
amount in respect of the October 1, 1999 Interest Payment Date). No fractions of
shares or script representing fractions of shares will be issued or delivered on
conversion, but instead of any fractional interest the Company shall pay a cash
adjustment as provided in the Indenture.
(c) (i) In case at any time 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 stockholders 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 shares 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 of Common 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.
(ii) 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.
(iii) 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
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per share of Common Shares 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
shares 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 share of Common Shares
and the denominator shall be the number of shares of Common Shares outstanding
at the close of business on such record date plus the number of shares 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 4(c)(iii) 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.
(iv) 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 share of Common Shares
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 the Trustee) of shares of beneficial interest 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 share of Common Stock. 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
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Conversion Price which would then be in effect if such record date has not been
fixed.
(v) For the purpose of any computation under paragraphs (iii) and (iv)
for this Section, the current market price per Common Share on any date shall be
deemed to be the average of the Closing Prices (as defined in the Indenture) 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.
(vi) No adjustment in the conversion price shall be required unless
such adjustment (plus any adjustments not previously made by reason of this
paragraph (vi)) would require an increase or decrease of at least 1% in such
price; provided, however, that any adjustments which by reason of this paragraph
(vi) are not required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this paragraph (vi) shall
be made to the nearest cent.
(vii) The Company may, but shall not be required to, make such
reductions in the conversion price, in addition to those required by paragraph
(i), (ii), (iii) and (iv) of this section as the Company's Board of Directors
considers to be advisable in order to avoid or diminish any income tax to any
holders of Common Shares 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 and its actions in so
doing shall be final and conclusive.
(viii) The adjustments provided for in this section shall be made
successively whenever any event listed above shall occur.
(d) Whenever the Conversion Price is adjusted and in the event of
certain other corporate actions, as herein provided, the Company shall give
notice, all as provided in the Indenture.
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5. Transfer and Exchange of Securities.
(a) Title to Bearer Securities and coupons shall pass by delivery. As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of Registered Securities is registrable on the Security Register
upon surrender of a Registered Security for registration of transfer at the
office or agency of the Trustee in the City of Boston, Massachusetts, or,
subject to applicable laws and regulations, at the office of the transfer
agencies in London or Luxembourg, duly endorsed by, or accompanied by a written
instrument of transfer in the form satisfactory to the Company and the Trustee
or such transfer agencies duly executed by the holder thereof or his attorney
duly authorized in writing, and thereupon one or more new Registered Securities,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
(b) As provided in the Indenture and subject to certain limitations
therein set forth, Bearer Securities (with all unmatured coupons appertaining
thereto) are exchangeable at, subject to applicable laws and regulations, the
offices of the paying agencies in London and Luxembourg or as designated by the
Company for such purpose pursuant to the Indenture, for an equal aggregate
principal amount of Registered Securities and/or Bearer Securities of authorized
denominations, and Registered Securities are exchangeable at the principal
corporate trust office of the Trustee in the City of Boston, Massachusetts or,
subject to applicable laws and regulations, the offices of the transfer agencies
in London and Luxembourg or as designated by the Company for such purpose
pursuant to the Indenture, for an equal aggregate principal amount of Registered
Securities of authorized denominations as requested by the Holder surrendering
the same. Registered Securities will not be exchangeable for Bearer Securities.
The Company shall not be required (i) to exchange Bearer Securities for
Registered Securities during the period between the close of business on any
Interest Record Date and the opening of business on the next succeeding Interest
Payment Date, (ii) to exchange any Bearer Security (or portion thereof) for a
Registered Security if the Company shall determine and inform the Trustee in
writing that, as a result thereof, the Company may incur adverse consequences
under the federal income tax laws and regulations (including proposed
regulations) of the United States in effect or proposed at the time of such
exchange, or (iii) in the event of a redemption in part, (A) to register the
transfer of Registered Securities or to exchange Bearer Securities for
Registered Securities during a period of 15 days immediately preceding the date
notice is given identifying the serial numbers of the Securities called for such
redemption; (B) to register the transfer of or exchange any such Registered
Securities, or portion thereof, called for redemption; or (C) to exchange any
such Bearer Securities called for redemption; provided, however,
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that a Bearer Security called for redemption may be exchanged for a Registered
Security which is simultaneously surrendered, with written instruction for
payment on the Redemption Date, unless the Redemption Date is during the period
between the close of business on any Interest Record Date and the close of
business on the next succeeding Interest Payment Date, in which case such
exchange may only be made prior to the close of business on the Interest Record
Date immediately preceding the Redemption Date. The Company also shall not be
required to exchange Securities if, as a result thereof, the Company would incur
adverse consequences under United States federal income tax laws in effect at
the time of such exchange. In the event of redemption or conversion of a
Registered Security in part only, a new Registered Security or Securities for
the unredeemed or unconverted portion hereof will be issued in the name of the
holder thereof.
(c) The costs and expenses of effecting any exchange or registration of
transfer pursuant to the foregoing provisions, except for the expenses of
delivery (if any) by other than regular mail and except, if the Company shall so
require, the payment of a sum sufficient to cover any tax or other governmental
charge or insurance charges that may be imposed in relation thereto, will be
borne by the Company.
(d) The Company has initially appointed the Trustee as transfer agent,
paying agent and conversion agent acting through the Trustee's principal
corporate trust office in the City of Boston, Massachusetts. The Company has
initially appointed The Chase Manhattan Bank, London, presently located at
Woolgate House, Coleman Street, London EC2P 2HD, England, as the registrar and
as a transfer agent, paying agent and conversion agent. In addition, the Company
has initially appointed Chase Manhattan Bank Luxembourg S.A., presently located
at 5, rue Plaetis L-2338, Luxembourg, as a transfer agent, paying agent and
conversion agent. The Company may at any time terminate the appointment of the
registrar and such agents and appoint additional or other registrars and agents
or approve any change in an office through which the registrar or any agent
acts; provided that, until all of the Securities have been delivered to the
Trustee for cancellation, or monies sufficient to pay the Securities have been
made available for payment and either paid or returned to the Company as
provided in the Securities and the Indenture, the Company will maintain a paying
agent and a conversion agent (i) in The City of Boston or The City of New York
in the United States for the payment of the principal and interest on Registered
Securities and for the surrender of Securities for conversion or redemption and
(ii) in a European city that, so long as the Securities are listed on the
Luxembourg Stock Exchange and such exchange shall so require, shall be
Luxembourg, for the payment of the principal and interest on Securities and for
the surrender of Securities for conversion or redemption.
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6. Meetings of Holders.
A meeting of Holders of Securities may be called at any time and from
time to time in the manner and for the purposes set forth in the Indenture. The
Trustee may at any time call a meeting of Holders of the Securities to be held
at such time and at such place in any of such designated locations as the
Trustee shall determine. Notice of every meeting of Holders shall be made as
specified in the Indenture.
7. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented, and any existing Default or Event of Default or
compliance with any provision may be waived, with the written consent of the
Holders of a majority in aggregate principal amount of the Securities then
outstanding. Without notice to or consent of any Holder, the parties thereto may
amend or supplement the Indenture or the Securities to, among other things, cure
any ambiguity, defect or inconsistency, or make any other change that does not
adversely affect the rights of any Holder of a Security.
8. Subordination.
PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, INTEREST ON AND ADDITIONAL
AMOUNTS WITH RESPECT TO THE SECURITIES IS SUBORDINATED, IN THE MANNER AND TO THE
EXTENT SET FORTH IN THE INDENTURE, TO THE PRIOR PAYMENT IN FULL OF ALL SENIOR
INDEBTEDNESS.
9. Successors.
Except as otherwise provided in the Indenture, when a successor assumes
all the obligations of its predecessor under the Securities and the Indenture,
the predecessor will be released from those obligations.
10. Defaults and Remedies.
If an Event of Default occurs and is continuing (other than an Event of
Default relating to certain events of bankruptcy, insolvency or reorganization
in which events all principal, accrued interest and Additional Amounts, if any,
with respect to the Securities will be immediately due and payable without any
declaration or other act on the part of the Trustee or the Holders), then in
every such case, unless the principal of all of the Securities shall have
already become due and payable, either the Trustee or the Holders of not less
than a majority in aggregate principal amount of Securities then outstanding may
declare all the Securities to be due and payable immediately in the manner and
with the effect provided in the Indenture.
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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
before it enforces the Indenture or the Securities. Subject to certain
limitations, Holders of a majority in aggregate 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 or Event of Default (except a Default in payment of
principal, interest or Additional Amounts), if it determines that withholding
notice is in their interest.
11. Trustee Dealings with the Company.
Fleet National Bank, the Trustee under the Indenture and any agent
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 or an agent.
12. 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.
13. Non-Business Days.
In any case where the date of maturity of the principal of or interest
on (or Additional Amounts, if any, with respect thereto) the Securities or the
date fixed for redemption of any Security shall be at any place of payment a day
other than a Business Day, then payment of principal or interest (or Additional
Amounts, if any) need not be made on such date at such place but may be made on
the next succeeding Business Day at such place of payment, with the same force
and effect as if made on the date of maturity or the date fixed for redemption,
and no interest shall accrue for the period after such date.
14. Notices.
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All notices to the Holders of Securities will be published on a
Business Day in Authorized Newspapers in The City of New York and in London,
and, as long as the Securities are listed on the Luxembourg Stock Exchange, in
an Authorized Newspaper in Luxembourg, or, if either publication in London or
Luxembourg is not practical, in an Authorized Newspaper in Western Europe.
Notices shall be deemed to have been given on the date of publication as
aforesaid or, if published on different dates, on the date of the first such
publication. A copy of each notice will be mailed by the Trustee, on behalf of
and at the expense of the Company, by first-class mail to each holder of a
Registered Security at the registered address of such holder as the same shall
appear in the Security Register on the day fifteen days prior to such mailing.
The Trustee shall promptly furnish to the Company and each paying agent of the
Company a copy of each notice so published or mailed.
15. Governing Law.
The Indenture, this Security and any coupons appertaining hereto shall
be governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts, United States of America, without regard to principles of
conflicts of laws.
16. Authentication.
This Security and any coupon appertaining thereto shall not become
valid or obligatory for any purpose until the certificate of authentication
hereon shall have been duly signed by the Trustee or an authenticating agent
acting under the Indenture.
17. Warranty of the Issuer.
Subject to Section 15 hereof, the Company hereby certifies and warrants
that all acts, conditions and things required to be done and performed and to
have happened precedent to the creation and issuance of this Security and any
coupons appertaining thereto, and to constitute the same legal, valid and
binding obligations of the Company enforceable in accordance with their terms,
have been done and performed and have happened in due and strict compliance with
all applicable laws.
18. 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.
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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 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 400 Centre Street, Newton, Massachusetts 02158 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."
19. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
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.
22. Descriptive Headings:
The descriptive headings appearing herein are for convenience of
reference only and shall not alter, limit or define the provisions hereof. The
Company will furnish to any Holder upon written request and without charge a
copy of the Indenture.
Request may be made to:
Health and Retirement Properties Trust
400 Centre Street
Newton, MA 02158
Attention: Secretary
A-26
<PAGE>
23. Limitations on certain Holders.
This Security may not be transferred (by sale, transfer, gift,
assignment, device 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 23 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.
A-27
<PAGE>
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.
A-28
<PAGE>
CONVERSION NOTICE
If (i) Registered Security of denomination U.S.$1,000 or (ii) Bearer
Security of denomination U.S.$1,000:
The undersigned holder of this Security hereby irrevocably exercises
the option to convert this Security into shares of Common Stock of Health and
Retirement Properties Trust in accordance with the terms of this Security and
directs that such shares be registered in the name of and delivered, together
with a check in payment for any fractional share, to the undersigned unless a
different name has been indicated below. If shares are to be registered in the
name of a person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto.
The undersigned hereby certifies that, after giving effect to such
conversion,the undersigned will not own or be deemed to own, directly or
indirectly, capital stock of the Company which, together with capital stock
issuable upon conversion of any other Bearer Securities or Registered Securities
owned directly or indirectly by the undersigned, represents 8.5% or more in
number, value or voting power, of the total capital stock of the Company
outstanding (determined in accordance with the provisions of paragraph (b) of
Section 3 of this Security).
Dated:
-----------------------------
Signature
MUST BE MEDALLION GUARANTEED
IF THE STOCK IS TO BE ISSUED
IN A NAME OTHER THAN THE
REGISTERED HOLDER OF THE
SECURITY
If shares are to be registered in the name of and delivered to a person
other than the holder, please print such person's name and address:
-----------------------------
HOLDER
Please print name
and address of
holder:
A-29
<PAGE>
CONVERSION NOTICE
If (i) Registered Security of denomination greater than U.S.$1,000 or
(ii) Bearer Security of denomination U.S.$10,000:
The undersigned holder of this Security hereby irrevocably exercises
the option to convert this Security, or portion hereof (which is U.S.$1,000 or
an integral multiple thereof below designated, into shares of Common Stock of
Health and Retirement Properties Trust in accordance with the terms of this
Security, and directs that such shares, together with a check in payment for any
fractional share and any Securities representing any unconverted principal
amount hereof, be delivered to and be registered in the name of the undersigned
unless a different name has been indicated below. If shares or Securities are to
be registered in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto.
The undersigned hereby certifies that, after giving effect to such
conversion,the undersigned will not own or be deemed to own, directly or
indirectly, capital stock of the Company which, together with capital stock
issuable upon conversion of any other Bearer Securities or Registered Securities
owned directly or indirectly by the undersigned, represents 8.5% or more in
value of the total capital stock of the Company outstanding (determined in
accordance with the provisions of paragraph (b) of Section 3 of this Security).
Dated: __________________________________
Signature
MUST BE MEDALLION GUARANTEED IF THE
STOCK IS TO BE ISSUED IN A NAME
OTHER THAN THE REGISTERED HOLDER OF
THE SECURITY
A-30
<PAGE>
If shares of Securities If only a portion of the Securities
are to be registered in in the name of is to be converted,
the name of a Person other please indicate:
than the holder, please
print such person's name 1. Principal Amount to be
and address converted: U.S.$__________
2. Kind, amount and denomination
of Securities representing
unconverted principal amount
to be issued:
Bearer-U.S.$_________________
Denominations:U.S.$__________
(U.S.$1,000 or $10,000)
Registered-U.S.$_____________
Denominations:U.S.$__________
(U.S. $1,000 or an
integral multiple thereof)
Registered Securities are not
exchangeable for Bearer Securities.
A-31
<PAGE>
EXHIBIT B
(FORM OF REGULATION S GLOBAL SECURITY)
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OF
AMERICA (INCLUDING THE STATES AND THE DISTRICT OF COLUMBIA), ITS TERRITORIES,
ITS POSSESSIONS AND OTHER AREAS SUBJECT TO ITS JURISDICTION (THE "UNITED
STATES") OR TO ANY CITIZEN, NATIONAL OR RESIDENT OF THE UNITED STATES OR TO ANY
CORPORATION, PARTNERSHIP OR OTHER ENTITY CREATED OR ORGANIZED IN OR UNDER THE
LAWS OF THE UNITED STATES OR ANY POLITICAL SUBDIVISION THEREOF, OR TO ANY ESTATE
OR TRUST THE INCOME OF WHICH IS SUBJECT TO UNITED STATES FEDERAL INCOME TAXATION
REGARDLESS OF ITS SOURCE OR TO ANY OTHER PERSON DEEMED A U.S. PERSON UNDER
REGULATION S UNDER THE SECURITIES ACT ("UNITED STATES PERSONS"), EXCEPT TO
CERTAIN INSTITUTIONAL INVESTORS IN THE UNITED STATES IN TRANSACTIONS NOT
REQUIRED TO BE REGISTERED UNDER THE SECURITIES ACT. ANY UNITED STATES PERSON WHO
HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES
FEDERAL INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j)
AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED. THIS
SECURITY IS A TEMPORARY GLOBAL SECURITY, WITHOUT COUPONS, EXCHANGEABLE FOR
DEFINITIVE BEARER SECURITIES WITH INTEREST COUPONS OR REGISTERED SECURITIES
WITHOUT INTEREST COUPONS. THE RIGHTS ATTACHING TO THIS GLOBAL SECURITY, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE SECURITIES, ARE
AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS GLOBAL SECURITY SHALL BE ENTITLED TO RECEIVE PAYMENT
OF INTEREST HEREON EXCEPT PURSUANT TO THE PROVISIONS HEREOF.
HEALTH AND RETIREMENT PROPERTIES TRUST
(Organized under the laws of the State of Maryland)
7.5% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2003, SERIES B
TEMPORARY GLOBAL DEBENTURE
Health and Retirement Properties Trust, a real estate investment trust
duly organized and existing under the laws of the State of Maryland (the
"Company"), for value received, hereby promises to pay to bearer upon
presentation and surrender of this Global Security the principal sum of
$________________ United States Dollars on October 1, 2003 and to pay interest
thereon, from October 7, 1996 semiannually in arrears on April 1 and October 1
in each year, commencing April 1, 1997, at the rate of 7.5% per annum, until the
principal hereof is paid or made available for payment; provided, however, that
interest on this
B-1
<PAGE>
Global Security shall be payable only after the issuance of the definitive
Securities for which this Global Security is exchangeable and, in the case of
definitive Securities in bearer form, only upon presentation and surrender (at
an office or agency outside the United States, its territories and its
possessions, except as otherwise provided in the Indenture referred to below) of
the interest coupons thereto attached as they severally mature. This Global
Security is one of a duly authorized issue of Securities of the Company
designated as specified in the title hereof, issued and to be issued under the
Indenture dated as of September 20, 1996 between the Company and Fleet National
Bank, as Trustee (the "Trustee," which term includes any successor trustee under
the Indenture), as supplemented by the Second Supplemental Indenture dated as of
October 7, 1996 by and between the Company and the Trustee (such Indenture, as
so supplemented, the "Indenture"). This Global Security is a temporary Security
and is exchangeable in whole or from time to time in part without charge upon
request of the holder hereof for definitive Securities in bearer form, with
interest coupons attached, or in registered form, without coupons, of authorized
denominations, (a) not earlier than 40 days after the date hereof and (b) as
promptly as practicable following presentation of each certification called for
in the Indenture for such purpose, that the beneficial owner or owners of this
Global Security (or, if such exchange is only for a part of this Global
Security, of such part) are not United States persons or other Persons who have
purchased such Security for resale to United States persons. Definitive
Securities in bearer form to be delivered in exchange for any part of this
Global Security shall be delivered only outside of the United States, its
territories and its possessions. Upon any exchange of a part of this Global
Security for definitive Securities, the portion of the principal amount hereof
so exchanged shall be endorsed by the Trustee or its agent on the Schedule of
Exchanges hereto, and the principal amount hereof shall be reduced for all
purposes by the amount so exchanged. Until exchanged in full for definitive
Securities, this Global Security shall in all respects be entitled to the same
benefits under, and subject to the same terms and conditions of, the Indenture
and the Supplemental Indenture as definitive Securities authenticated and
delivered thereunder, except that neither the holder hereof nor the beneficial
owners of this Global Security shall be entitled to receive payment of interest
hereon or to convert this Global Security into shares of Common Stock of the
Company or any other security, cash or other property.
THIS GLOBAL SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, UNITED STATES OF AMERICA, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
B-2
<PAGE>
All terms used in this Global Security which are defined in the Indenture
or the Supplemental Indenture shall have the meanings assigned to them in the
Indenture or the Supplemental Indenture, as the case may be. Unless the
certificate of authentication hereon has been manually executed by an authorized
signatory of the Trustee, this Global Security shall not be entitled to any
benefit under the Indenture or the Supplemental Indenture or valid or obligatory
for any purpose.
B-3
<PAGE>
IN WITNESS, WHEREOF, the Company has caused this Global Security to be
duly executed in its corporate name by its duly authorized signatory under its
corporate seal.
Dated: October 7, 1996 HEALTH AND RETIREMENT PROPERTIES TRUST
By: _________________________________
Name:
Title:
[Corporate Seal]
Attest: _________________________________
CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the within-mentioned Indenture.
FLEET NATIONAL BANK,
as Trustee
[By: [NAME OF AUTHENTICATION AGENT, IF ANY],
as Authentication Agent]*
By: _________________________________
Authorized Officer
- -------------
* To be included in lieu of the Trustee's signature if
authentication to be performed by an Authentication Agent
appointed by the Trustee.
B-4
<PAGE>
SCHEDULE OF EXCHANGES
Remaining
principal
Principal amount
amount exchanged following Notation made
Date for definitive such on behalf of
made Securities exchange the Trustee*
- ---- ---------------- --------- -------------
- ---- ---------------- --------- -------------
- ---- ---------------- --------- -------------
- ---- ---------------- --------- -------------
- ---- ---------------- --------- -------------
- ---- ---------------- --------- -------------
- ---- ---------------- --------- -------------
- ---- ---------------- --------- -------------
- ---- ---------------- --------- -------------
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- -------------------------
*Or the agent of the Trustee
B-5
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
--------------------------
<PAGE>
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
-1-
<PAGE>
beneficial interest or other equivalents (however designated) in
the case of a trust.
"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
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
-2-
<PAGE>
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.
"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
-3-
<PAGE>
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:
"Commission" means the Securities and Exchange Commission.
-4-
<PAGE>
"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
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.
-5-
<PAGE>
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.
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.
-6-
<PAGE>
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
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
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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
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.
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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
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,
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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;
SECTION 6.2 Rights of Holders to Receive Payment.
Section 508 of the Indenture is hereby amended to add thereto the
following:
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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.
(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.
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(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.
(e) The Trustee shall have no duty to inquire as to the
performance of the Company's covenants in Article IV hereof. In
addition, the Trustee shall not be deemed to have knowledge of any
Default or Event of Default except (i) any Event of Default occurring
pursuant to Section 6.1(a) (provided that the Trustee is the Paying
Agent), or (ii) any Default or Event of Default of which a Trust
Officer of the Trustee shall have received written notification from
the Company or any Holder or obtained actual knowledge.
(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.
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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).
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
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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;
(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.
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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.
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
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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 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
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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 (except in the case of Securities or
portions thereof which are called for redemption on October 1, 1999 through and
including October 4, 1999, as to which such payment in respect of the October 1,
1999 interest payment date is not required to accompany any such Security).
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
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successively whenever any event listed above shall occur.
(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
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determination shall be conclusive and described in a statement filed with 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
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.
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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
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
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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
distribution shall be segregated or held in trust) for the benefit of the
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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
11, shall be paid by the liquidating trustee or agent or other Person making
such a payment or distribution directly to the holders of
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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
distributions of assets of the Company applicable to the Senior Indebtedness
until all
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<PAGE>
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
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
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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
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.
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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
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
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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.
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
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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).
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.
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<PAGE>
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.
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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: /S/ Ajay Saini
Name: Ajay Saini
Title: Treasurer and Chief Financial Officer
FLEET NATIONAL BANK,
as Trustee
By: /S/ Robert L. Bice II
Name: Robert L. Bice II
Title: Vice President
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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 Water Street, New
York, New York) ("DTC"), 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
or registered assigns, the principal sum of__________ Dollars, on
October 1, 2001
- --------
1 This paragraph should be included only if the Security is issued in global
form.
A-1
<PAGE>
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
A-2
<PAGE>
[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
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for service of notices and demands. The Company may change any Registrar,
co-registrar, Paying Agent, 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 One Federal Street, Boston,
Massachusetts 02110, 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 ss.ss. 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, 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,
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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
required by the Registrar or Conversion Agent and (4) pay any transfer or
similar tax if
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<PAGE>
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 (except in the case of Securities or portions thereof
which are called for redemption on October 1, 1999 through and including October
4, 1999, as to which such payment in respect of the October 1, 1999 interest
payment date need not be made). 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
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<PAGE>
or register the transfer of or exchange any Securities for a period of 15 days
before a selection of Securities to be redeemed.
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
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<PAGE>
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 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
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<PAGE>
Service with respect to such disposition in order to avoid a withholding tax on
such disposition. If, at any time while this 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 400 Centre Street, Newton, Massachusetts 02158 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.
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 5 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,
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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 5 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, 400
Centre Street, Newton, Massachusetts 02158. Attention:
President.
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<PAGE>
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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<PAGE>
CONVERSION NOTICE
To convert this Security into common shares of beneficial interest, $.01 par
value per share, of the Company, check the box:
_______
| |
|_______|
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):
_________________________________
| $ |
|_________________________________|
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)
_________________________________________________
| |
|_________________________________________________|
................................................................
................................................................
................................................................
................................................................
(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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<PAGE>
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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