Service Properties Trust 8-K, filed Jun 3, 2024
Service Properties Trust (SVC)
About this 8-K
Service Properties Trust filed this 8-K on June 3, 2024.
Items reported
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
(Exact Name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction of Incorporation)
| (Commission File Number) | (IRS Employer Identification No.) |
| (Address of Principal Executive Offices) | (Zip Code) |
(Registrant’s Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
In this Current Report on Form 8-K, the terms “we”, “us”, “our” and “the Company” refer to Service Properties Trust.
| Item 8.01. | Other Events. |
New Notes Offerings
On June 3, 2024, we issued $700.0 million aggregate principal amount of 8.375% Senior Guaranteed Unsecured Notes due 2029, or the 2029 Notes, and $500.0 million aggregate principal amount of 8.875% Senior Guaranteed Unsecured Notes due 2032, or the 2032 Notes, and, together with the 2029 Notes, the Notes, in underwritten public offerings, or the New Notes Offerings. The Notes are fully and unconditionally guaranteed, on a joint and several basis and on a senior unsecured basis, by all of our subsidiaries, except for our foreign subsidiaries and certain other excluded subsidiaries. Such other excluded subsidiaries include, but are not limited to, subsidiaries whose equity has been pledged to secure borrowings under our credit agreement, our net lease mortgage notes and our 8.625% Senior Secured Notes due 2031. The Notes and the guarantees thereof were issued under our Indenture, dated February 3, 2016, or the Base Indenture, between us and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as trustee, or the Indenture Trustee, and supplemental indentures thereto, dated June 3, 2024, among us, the subsidiary guarantors and the Indenture Trustee, or, together, the Supplemental Indentures, and, together with the Base Indenture, the Indenture. The Notes are our senior unsecured obligations and the guarantees are the subsidiary guarantors’ senior unsecured obligations.
The Notes are subject to certain restrictive financial and operating covenants, including covenants that generally restrict our ability to incur debts, including debts secured by mortgages on our properties, in excess of calculated amounts, and require us to maintain various financial ratios.
The 2029 Notes were sold to the public at 99.001% of their principal amount and the 2032 Notes were sold to the public at 98.000% of their principal amount. We used a portion of the approximately $1.16 billion of the net proceeds from the New Notes Offerings (after deducting estimated offering expenses and underwriters’ discounts) to fund the purchase and effect the discharge of all of the $350.0 million principal amount outstanding of our 4.50% Senior Notes due 2025, or the 4.50% Notes, pursuant to the Tender Offer (as defined below). We expect to use the remaining net proceeds from the New Notes Offerings and cash on hand to redeem the $800.0 million principal amount outstanding of our 7.50% Senior Notes due 2025, or the 7.50% Notes as described below.
Affiliates of some of the underwriters own some of our 4.50% Notes or 7.50% Notes and received or will receive pro rata portions of the net proceeds from the New Notes Offerings used to purchase or redeem such notes.
The foregoing description of the Indenture, including the description of covenants contained therein, is qualified in its entirety by reference to the Base Indenture, a copy of which is incorporated by reference into this Current Report on Form 8-K as Exhibit 4.1, and the Supplemental Indentures, copies of which are filed as Exhibits 4.2 and 4.3 to this Current Report on Form 8-K.
Tender Offer for the 4.50% Notes
On May 15, 2024, we commenced a tender offer, or the Tender Offer, to purchase for cash any and all of the $350.0 million principal amount outstanding of our 4.50% Notes. As of May 29, 2024, or the Early Tender Deadline, holders of approximately $272.0 million aggregate principal amount of the 4.50% Notes had tendered their 4.50% Notes. Pursuant to the terms and conditions set forth in the Offer to Purchase and Consent Solicitation Statement dated May 15, 2024, we purchased on June 3, 2024 an aggregate principal amount of approximately $272.0 million of the 4.50% Notes at a price of $991.33 per $1,000 principal amount of the outstanding 4.50% Notes using a portion of the net proceeds from the New Notes Offerings. On June 3, 2024, we effected the satisfaction and discharge of the indenture governing the 4.50% Notes with respect to the remaining approximately $78.0 million 4.50% Notes that were not purchased as part of the Tender Offer in accordance with its terms.
Redemption of the 7.50% Notes
In connection with the New Notes Offering, on May 20, 2024, we delivered a notice of redemption to the Indenture Trustee with respect to all of our outstanding 7.50% Notes for a redemption price equal to the principal amount of $800.0 million, plus accrued and unpaid interest to but excluding the date of redemption, plus a make-whole premium. This redemption is expected to occur on June 4, 2024. This Current Report on Form 8-K does not constitute a notice of redemption with respect to the 7.50% Notes.
Warning Concerning Forward-Looking Statements
This Current Report on Form 8-K contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Also, whenever we use words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, “will”, “may” and negatives or derivatives of these or similar expressions, we are making forward-looking statements. These forward-looking statements are based upon our present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. Actual results may differ materially from those contained in or implied by our forward-looking statements as a result of various factors. For example: We currently intend to use the remaining net proceeds from the New Notes Offerings and cash on hand to redeem all of the outstanding 7.50% Notes. However, the redemption of the 7.50% Notes may not occur when expected and may be delayed.
The information contained in our filings with the Securities and Exchange Commission, or the SEC, including under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, identifies other important factors that could cause our actual results to differ materially from those stated in or implied by our forward-looking statements. Our filings with the SEC are available on the SEC’s website at www.sec.gov.
You should not place undue reliance upon forward-looking statements.
Except as required by law, we do not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
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 hereunto duly authorized.
| SERVICE PROPERTIES TRUST | ||
| By: | /s/ Brian E. Donley | |
| Name: | Brian E. Donley | |
| Title: | Chief Financial Officer and Treasurer | |
Dated: June 3, 2024
Exhibit 1.1
SERVICE PROPERTIES TRUST
(a Maryland real estate investment trust)
$700,000,000 Aggregate Principal Amount 8.375% Senior Guaranteed Unsecured Notes due 2029
$500,000,000 Aggregate Principal Amount 8.875% Senior Guaranteed Unsecured Notes due 2032
UNDERWRITING AGREEMENT
May 17, 2024
Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
BofA Securities, Inc.
One Bryant Park
New York, New York 10036
J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179
as Representatives of the several Underwriters
c/o Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Service Properties Trust, a Maryland real estate investment trust (the “Company”), confirms its agreement with Citigroup Global Markets Inc. (“Citi”), BofA Securities, Inc. (“BofA”) and J.P. Morgan Securities LLC (“JPMorgan”) and each of the other Underwriters named in Schedule A hereto (collectively, the “Underwriters,” which term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof), for whom Citi, BofA and JPMorgan are acting as representatives (in such capacity, the “Representatives”), with respect to the issue and sale by the Company and the purchase by the Underwriters, acting severally and not jointly, of the respective principal amounts set forth in said Schedule A (plus such additional principal amounts of notes each Underwriter may be obligated to purchase pursuant to Section 10 hereof) of (i) $700,000,000 aggregate principal amount of the Company’s 8.375% Senior Guaranteed Unsecured Notes due 2029 (the “2029 Notes”) and (ii) $500,000,000 aggregate principal amount of the Company’s 8.875% Senior Guaranteed Unsecured Notes due 2032 (the “2032 Notes” and together with the 2029 Notes, the “Notes”). The payment of principal of, premium, if any, and interest on the Notes will be fully and unconditionally guaranteed on a senior unsecured basis (the “Guarantees”), jointly and severally by each of the entities named in Schedule B hereto (the “Guarantors”), each of which is a subsidiary of the Company. The Notes and the Guarantees are collectively referred to herein as the “Securities.”
The Securities are to be issued pursuant to an indenture dated as of February 3, 2016 (the “Base Indenture”) between the Company and U.S. Bank National Association, a national banking organization organized and existing under the laws of the United States, as trustee (the “Trustee”), as supplemented by one or more supplemental indentures relating to the Securities to be dated on or about the Closing Time referred to in Section 2(b) hereof (the “Supplemental Indentures” and, together with the Base Indenture, the “Indenture”), among the Company, the Guarantors and the Trustee.
The Company and the Guarantors understand that the Underwriters propose to make a public offering of the Securities as soon as the Representatives deem advisable after this Agreement has been executed and delivered.
The Company and the Guarantors have filed with the Securities and Exchange Commission (the “Commission”) an automatic shelf registration statement on Form S-3 (No. 333-258975), and post-effective amendments No. 1 and No. 2 thereto (collectively, the “Post-Effective Amendments”), in each case including a related prospectus, if required. Such registration statement and the Post-Effective Amendments, which, collectively, cover the registration of various securities that may be issued from time to time by the Company, including the Notes, and by the Guarantors, including the Guarantees, became effective under the Securities Act of 1933, as amended (the “1933 Act”) upon filing with the Commission pursuant to Rule 462(e) (“Rule 462(e)”) of the rules and regulations of the Commission under the 1933 Act (the “1933 Act Regulations”). Promptly after execution and delivery of this Agreement, the Company will prepare and file a prospectus supplement relating to the Securities in accordance with the provisions of Rule 430B (“Rule 430B”) of the 1933 Act Regulations and paragraph (b) of Rule 424 (“Rule 424(b)”) of the 1933 Act Regulations. Any information included in such prospectus supplement that was omitted from such registration statement, as amended by the Post-Effective Amendments at the time the Post-Effective Amendments became effective but that is deemed to be a part of and included in the registration statement pursuant to Rule 430B is referred to as “Rule 430B Information.” Each prospectus used in connection with the offering of the Securities that omitted Rule 430B Information is herein called a “preliminary prospectus.” Such registration statement, at any given time, including the amendments thereto (including the Post-Effective Amendments) at such time, the exhibits and any schedules thereto at such time, the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act at such time and the documents otherwise deemed to be a part thereof or included therein by the 1933 Act Regulations, is herein called the “Registration Statement.” The Registration Statement at the time it originally became effective is herein called the “Original Registration Statement.” The final prospectus, in the form furnished to the Underwriters for use in connection with the offering of the Securities, including the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act at the time of the execution of this Agreement, is herein called the “Prospectus.” For purposes of this Agreement, all references to the Registration Statement, any preliminary prospectus, the Prospectus or any amendment or supplement to any of the foregoing (including the Post-Effective Amendments) shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering Analysis and Retrieval system (“EDGAR”).
| 2 |
All references in this Agreement to financial statements and schedules and other information which is “contained,” “included” or “stated” in the Registration Statement, any preliminary prospectus, the Prospectus or the General Disclosure Package (as defined herein), or other references of like import, shall be deemed to mean and include all such financial statements and schedules and other information which are incorporated by reference in or otherwise deemed by the 1933 Act Regulations to be a part of or included in the Registration Statement, any preliminary prospectus, the Prospectus or the General Disclosure Package, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement, any preliminary prospectus, the Prospectus or the General Disclosure Package shall be deemed to mean and include the filing of any document under the Securities Exchange Act of 1934, as amended (the “1934 Act”), which is incorporated by reference in or otherwise deemed by the 1933 Act Regulations to be a part of or included in the Registration Statement, such preliminary prospectus, the Prospectus or the General Disclosure Package, as the case may be.
The 220 hotels described in the preliminary prospectus, the Prospectus and the General Disclosure Package as being owned by the Company as of March 31, 2024 are collectively referred to herein as the “Hotels.” The 749 service-oriented retail properties described in the preliminary prospectus, the Prospectus and the General Disclosure Package as being owned by the Company as of March 31, 2024 are collectively referred to herein as the “Retail Properties.”
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company and the Guarantors. The Company and the Guarantors, jointly and severally, represent and warrant to each of the Underwriters as of the date hereof, the Applicable Time referred to in Section 1(a)(1) hereof and as of the Closing Time referred to in Section 2(b) hereof, and agree with each Underwriter, as follows:
(1) Compliance with Registration Requirements. (A) At the time of filing of each of the Original Registration Statement and the Post-Effective Amendments, (B) at the time of the most recent amendment to the Registration Statement, if any, for the purposes of complying with Section 10(a)(3) of the 1933 Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the 1934 Act or form of prospectus), (C) at the time the Company, the Guarantors or any person acting on their behalf (within the meaning, for this clause only, of Rule 163(c) of the 1933 Act Regulations) made any offer relating to the Securities in reliance on the exemption provided by Rule 163 of the 1933 Act Regulations (“Rule 163”) and (D) at the date hereof, the Company was and is a “well-known seasoned issuer” as defined in Rule 405 of the 1933 Act Regulations (“Rule 405”), including not having been and not being an “ineligible issuer” as defined in Rule 405. The Registration Statement is an “automatic shelf registration statement,” as defined in Rule 405, and the Securities, since their registration on the Registration Statement, have been and remain eligible for registration by the Company and the Guarantors on a Rule 405 “automatic shelf registration statement”. The Company has not received from the Commission any notice pursuant to Rule 401(g)(2) of the 1933 Act Regulations objecting to the use of the automatic shelf registration statement form.
| 3 |
At the time of filing of each of the Original Registration Statement and the Post-Effective Amendments, at the earliest time thereafter that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the 1933 Act Regulations) of the Securities and at the date hereof, each of the Company and, except with respect to Guarantors not included in the Original Registration Statement at the time of filing the Original Registration Statement, the Guarantors was not and is not an “ineligible issuer,” as defined in Rule 405.
The Original Registration Statement became effective upon filing pursuant to Rule 462(e) and any post-effective amendment thereto, including the Post-Effective Amendments, also became effective upon filing pursuant to Rule 462(e). No stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company and the Guarantors, are threatened by the Commission, and any request on the part of the Commission for additional information has been complied with.
Any offer that is a written communication relating to the Securities made prior to the filing of the Post-Effective Amendments by the Company, the Guarantors or any person acting on their behalf (within the meaning, for this paragraph only, of Rule 163(c) of the 1933 Act Regulations) has been filed with the Commission in accordance with the exemption provided by Rule 163 and otherwise complied with the requirements of Rule 163, including without limitation the legending requirement, to qualify such offer for the exemption from Section 5(c) of the 1933 Act provided by Rule 163.
At the respective times the Original Registration Statement, the Post-Effective Amendments and any other amendment to the Registration Statement became effective, at each deemed effective date with respect to the Underwriters pursuant to Rule 430B(f)(2) of the 1933 Act Regulations and at the Closing Time, the Registration Statement complied and will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations, and did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
Neither the Prospectus nor any amendments or supplements thereto, at the time the Prospectus or any such amendment or supplement was issued and at the Closing Time, included or will include an untrue statement of a material fact or omitted or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
Any preliminary prospectus (and the prospectus or prospectuses filed as part of the Original Registration Statement, the Post-Effective Amendments or any other amendment to the Registration Statement, if any) complied when so filed in all material respects with the 1933 Act and the 1933 Act Regulations and any such preliminary prospectus was and the Prospectus delivered to the Underwriters for use in connection with this offering will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
| 4 |
As of the Applicable Time (as defined below), any Issuer Free Writing Prospectus (as defined below) issued at or prior to the Applicable Time and the Statutory Prospectus (as defined below), all considered together (collectively, the “General Disclosure Package”) did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
Any individual Written Testing-the-Waters Communication (as defined below), when considered together with the General Disclosure Package as of the Applicable Time, did not, and as of the Closing Time, will not, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
The representations and warranties in the preceding five paragraphs shall not apply to statements in or omissions from the Registration Statement or any post-effective amendment thereto, any preliminary prospectus, the Prospectus or any amendments or supplements thereto, or the General Disclosure Package made in reliance upon and in conformity with information furnished to the Company by the Underwriters through the Representatives in writing expressly for use in the Registration Statement (including the prospectus filed with the Original Registration Statement and with the Post-Effective Amendments, if any) or any post-effective amendment thereto, any preliminary prospectus, the Prospectus, or any amendments or supplements thereto, the General Disclosure Package or any Written Testing-the-Waters Communication.
As used in this subsection and elsewhere in this Agreement:
“Applicable Time” means 3:08 p.m. (New York City time) on May 17, 2024 or such other time as agreed by the Company and the Representatives.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the 1933 Act Regulations (“Rule 433”), relating to the Securities (including those identified on Schedule C hereto) that (i) is required to be filed with the Commission by the Company or any Guarantor, (ii) is a “road show that is a written communication” within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission or (iii) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the Securities or of the offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s or any Guarantor’s records pursuant to Rule 433(g).
| 5 |
“Statutory Prospectus” as of any time means the prospectus relating to the Securities that is included in the Registration Statement immediately prior to that time, including the documents incorporated by reference therein and any preliminary or other prospectus deemed to be a part thereof.
“Testing-the-Waters Communication” means any oral or written communication with potential investors undertaken in reliance on Rule 163B of the 1933 Act Regulations.
“Written Testing-the-Waters Communication” means any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 of the 1933 Act Regulations.
(2) Incorporated Documents. The documents incorporated or deemed to be incorporated by reference in the Registration Statement, any preliminary prospectus and the Prospectus, at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder (the “1934 Act Regulations”), and when read together with the other information in the Registration Statement, such preliminary prospectus or Prospectus, as the case may be, (a) at the respective times the Original Registration Statement and the Post-Effective Amendments became effective, (b) at the earlier of the time the preliminary prospectus or the Prospectus was first used and the date and time of the first contract of sale of Securities in this offering and (c) at the Closing Time did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(3) No Conflicting Information in Issuer Free Writing Prospectuses. Each Issuer Free Writing Prospectus attached to Schedule C hereto, as of its issue date and at all subsequent times through the completion of the public offer and sale of the Securities or until any earlier date that the Company notified or notifies the Representatives as described in Section 3(f) hereof, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement or the Prospectus, including any document incorporated by reference therein and any preliminary or other prospectus deemed to be a part thereof that has not been superseded or modified. The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by the Underwriters through the Representatives specifically for use therein.
(4) Testing-the-Waters Materials. Neither the Company nor any Guarantor (A) has alone engaged in any Testing-the-Waters Communication other than Testing-the-Waters Communications with the consent of the Representatives with entities that are qualified institutional buyers within the meaning of Rule 144A of the 1933 Act Regulations or institutions that are accredited investors within the meaning of Rule 501 of the 1933 Act Regulations and otherwise in compliance with the requirements of Rule 163B of the 1933 Act Regulations or (B) has authorized anyone other than the Representatives to engage in Testing-the-Waters Communications. The Company and the Guarantors reconfirm that the Representatives have been authorized to act on their behalf in undertaking Testing-the-Waters Communications. Neither the Company nor any Guarantor has distributed or approved for distribution any Written Testing-the-Waters Communications.
| 6 |
(5) Independent Accountants. The accounting firm that has certified the financial statements of the Company and its consolidated subsidiaries included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus is an independent registered public accounting firm as required by the 1933 Act, the 1933 Act Regulations, the 1934 Act, the 1934 Act Regulations and the Public Company Accounting Oversight Board (United States).
(6) Financial Statements. The financial statements of the Company and its consolidated subsidiaries included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus comply as to form in all material respects with the requirements of the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations. Such financial statements of the Company, together with the related schedules and notes, present fairly the financial position of the Company and its consolidated subsidiaries at the dates indicated and the statement of operations, shareholders’ equity and cash flows of the Company and its consolidated subsidiaries for the respective periods specified. Such financial statements have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”) applied on a consistent basis throughout the periods involved. The supporting schedules, if any, included in the Registration Statement, the General Disclosure Package and the Prospectus present fairly in accordance with GAAP for the respective periods specified the information required to be stated therein. The selected financial data and the summary financial information included in the Registration Statement, the General Disclosure Package and the Prospectus present fairly the information shown therein for the respective periods specified and have been compiled on a basis consistent with that of the audited financial statements included in the Registration Statement, the General Disclosure Package and the Prospectus. The interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto.
In addition, any pro forma financial statements of the Company and its consolidated subsidiaries and the related notes thereto included in the Registration Statement, the General Disclosure Package and the Prospectus present fairly the information shown therein, have been prepared in accordance with the Commission’s rules and guidelines with respect to pro forma financial statements and have been properly compiled on the bases described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. Any summarized financial information with respect to the Guarantors included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus complies as to form in all material respects with the applicable accounting requirements under Regulation S-X of the 1933 Act.
| 7 |
All disclosures contained in the Registration Statement, the General Disclosure Package and the Prospectus regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply, in all material respects, with Regulation G of the 1934 Act and the 1934 Act Regulations and Item 10 of Regulation S-K under the 1933 Act, to the extent applicable.
Except as included therein, no historical or pro forma financial statements or supporting schedules are required to be included or incorporated by reference in the Registration Statement, the General Disclosure Package or the Prospectus under the 1933 Act or the 1933 Act Regulations.
(7) No Material Adverse Change in Business. Since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package and the Prospectus, except as otherwise stated therein, (A) there has been no material adverse change in the condition, financial or otherwise, or on the results of operations, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business (a “Material Adverse Change”), (B) there have been no transactions entered into by the Company and any of its subsidiaries, on a consolidated basis, other than those arising in the ordinary course of business or in contemplation of the offering of the Securities, which are material with respect to the Company and its subsidiaries considered as one enterprise, (C) except for regular dividends on the Company’s common shares of beneficial interest, par value $.01 per share (the “Common Shares”), or the Company’s preferred shares, if any, in amounts per share that are consistent with past practice or the applicable charter document or supplement thereto, respectively, there have been no dividends or distributions of any kind declared, paid or made by the Company on any class of its capital shares and (D) there has not been (i) any material decrease in the Company’s consolidated net worth or (ii) any material increase in the short-term or long-term debt (including capitalized lease obligations but excluding borrowings under existing bank lines of credit) of the Company and its subsidiaries, on a consolidated basis.
(8) Good Standing of the Company and the Guarantors. Each of the Company and each Guarantor has been duly organized and is validly existing as a corporation, limited liability company, real estate investment trust or trust, as the case may be, in good standing under the laws of the jurisdiction of its incorporation, formation or organization, as the case may be, and has power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the General Disclosure Package and the Prospectus, and to enter into and perform its obligations under, or as contemplated under, this Agreement. Each of the Company and each Guarantor is duly qualified to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing would not, singly or in the aggregate, have a material adverse effect on the condition, financial or otherwise, or on the results of operations, management, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, or on the ability of the Company or the Guarantors to perform their respective obligations under this Agreement, the Indenture or the Securities (a “Material Adverse Effect”).
| 8 |
(9) Good Standing of Subsidiaries; Other Matters. Each “significant subsidiary” of the Company (as such term is defined in Rule 1-02 of Regulation S-X promulgated under the 1933 Act) (each, a “Subsidiary” and, collectively, the “Subsidiaries”), if any, has been duly organized and is validly existing as a corporation, limited liability company or real estate investment trust, as the case may be, in good standing under the laws of the jurisdiction of its incorporation or formation, as the case may be, has corporate, limited liability company or trust, as the case may be, power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the General Disclosure Package and the Prospectus and is duly qualified as a foreign corporation, limited liability company or real estate investment trust, as the case may be, to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing would not have a Material Adverse Effect. Except as otherwise stated in the Registration Statement, the General Disclosure Package and the Prospectus, all of the issued and outstanding capital shares of each Guarantor and each Subsidiary have been duly authorized and are validly issued, fully paid and non-assessable and are or will be owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity. None of the outstanding capital shares of any Guarantor or Subsidiary was issued in violation of preemptive or other similar rights of any securityholder of such Guarantor or Subsidiary.
(10) Capitalization. The authorized, issued and outstanding capital shares of the Company have been duly authorized and validly issued by the Company and are fully paid and non-assessable (except as otherwise described in the Registration Statement, the General Disclosure Package and the Prospectus), and none of such capital shares was issued in violation of preemptive or other similar rights of any securityholder of the Company; and all the outstanding shares of capital stock or other equity interests of each Subsidiary have been duly and validly authorized and issued, are fully paid and non-assessable, and, except as otherwise described in the General Disclosure Package and the Prospectus each of the Subsidiaries is wholly-owned directly or indirectly by the Company, free and clear of any lien, charge, encumbrance, security interest, restriction on voting or transfer or any other claim of any third party.
(11) Authorization of this Agreement. This Agreement has been duly authorized, executed and delivered by the Company and each of the Guarantors.
(12) Authorization of the Notes and the Guarantees. The Notes have been duly authorized by the Company for issuance and sale pursuant to this Agreement. The Notes, when issued and authenticated in the manner provided for in the Indenture and delivered against payment of the consideration therefor specified herein, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally or by general equitable principles (regardless of whether enforcement is considered in a proceeding in equity or at law). The Guarantees have been duly authorized by each of the Guarantors, and, when the Notes have been issued and authenticated in the manner provided for in the Indenture and delivered against payment of the consideration therefor specified herein, will constitute valid and binding obligations of each of the Guarantors, in each case enforceable against each of the Guarantors in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally or by general equitable principles (regardless of whether enforcement is considered in a proceeding in equity or at law), and will be entitled to the benefits of the Indenture.
| 9 |
(13) Authorization of the Indenture. The Indenture has been duly authorized by the Company, the Base Indenture has been duly executed and delivered by the Company and, upon execution and delivery of the Supplemental Indentures by the Company and assuming due execution and delivery by each Guarantor and the Trustee, the Indenture will constitute a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally or by general equitable principles (regardless of whether enforcement is considered in a proceeding in equity or at law). The Indenture has been duly qualified under the Trust Indenture Act.
(14) Authorization of the Supplemental Indentures by the Guarantors. The Supplemental Indentures have been duly authorized, and, upon execution and delivery thereof by each Guarantor and assuming due execution and delivery by the Company and the Trustee, will constitute a valid and binding agreement of each Guarantor, enforceable against each Guarantor in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally or by general equitable principles (regardless of whether enforcement is considered in a proceeding in equity or at law).
(15) Descriptions of the Securities and the Indenture. The Securities and the Indenture conform in all material respects to the statements relating thereto contained in the Registration Statement, the General Disclosure Package and the Prospectus and are in substantially the form filed or incorporated by reference, as the case may be, as an exhibit to the Registration Statement.
| 10 |
(16) Absence of Defaults and Conflicts. Neither the Company nor any of its subsidiaries is (i) in violation of its declaration of trust, charter, bylaws or other comparable governing document or (ii) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound, or to which any of the assets, properties or operations of the Company or any of its subsidiaries is subject (collectively, “Agreements and Instruments”), except, with respect to clause (ii) above, for such defaults that would not, singly or in the aggregate, have a Material Adverse Effect. The execution, delivery and performance of this Agreement, the Indenture and any other agreement or instrument entered into or issued or to be entered into or issued by the Company or the Guarantors in connection with the transactions contemplated hereby or thereby (including the issuance and sale of the Securities and the use of the proceeds from the sale of the Securities as described in the General Disclosure Package and the Prospectus under the caption “Use of Proceeds”) and compliance by the Company and the Guarantors with their obligations hereunder and thereunder have been duly authorized by all necessary corporate, limited liability company or trust action, as the case may be, and, except as would not, singly or in the aggregate, have a Material Adverse Effect, do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any assets, properties or operations of the Company or any of its subsidiaries pursuant to, any Agreements and Instruments, nor will such action result in any violation of the provisions of the charter or bylaws of the Company or any of its subsidiaries or, except as would not, singly or in the aggregate, have a Material Adverse Effect, any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company or any of its subsidiaries or any of their assets, properties or operations. As used herein, a “Repayment Event” means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its subsidiaries.
(17) Absence of Proceedings. There is not now pending or, to the knowledge of the Company or any Guarantor, any threatened litigation, action, suit or proceeding to which the Company or any Guarantor is or will be a party before or by any court or governmental agency or body, which is required to be disclosed in the Registration Statement, the General Disclosure Package and the Prospectus (other than as stated therein), or which, if determined adversely to the Company or any of its subsidiaries, would reasonably be expected to have a Material Adverse Effect or would prohibit the consummation of the transactions contemplated in the Registration Statement, the General Disclosure Package and the Prospectus or under this Agreement, the Indenture or the performance by the Company or the Guarantors of their obligations hereunder and under the Indenture. The aggregate of all pending legal or governmental proceedings to which the Company or any of its subsidiaries is a party or of which any of their respective assets, properties or operations is the subject which are not described in the Registration Statement, the General Disclosure Package and the Prospectus, including ordinary routine litigation incidental to the business, would not have a Material Adverse Effect.
(18) Accuracy of Exhibits. There are no contracts or documents which are required to be described in the Registration Statement, the General Disclosure Package, the Prospectus or to be filed as exhibits thereto which have not been so described and filed as required, except for the absence of any such description or filing as would not cause any material noncompliance with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder.
| 11 |
(19) Absence of Further Requirements. No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency, domestic or foreign, is necessary or required for the due authorization, execution and delivery by the Company and the Guarantors of this Agreement or for the performance by the Company and the Guarantors of the transactions contemplated in the Registration Statement, the General Disclosure Package and the Prospectus or under this Agreement or the Indenture, except such as may be required and will be obtained or made at or prior to the Closing Time and such as may be required by the securities or Blue Sky laws or real estate syndication laws of the various states in connection with the offer, sale and issuance of the Securities and, in the case of the performance thereof, except as are contemplated by the express terms of such documents to occur after the Closing Time and except (x) such as are otherwise described in the Registration Statement, the General Disclosure Package and the Prospectus or (y) such that the failure to obtain would not have a Material Adverse Effect.
(20) Possession of Intellectual Property. The Company and each of its subsidiaries owns, or possesses adequate rights to use, all patents, trademarks, trade names, service marks, copyrights, licenses and other rights necessary for the conduct of their respective businesses as described in the Registration Statement, the General Disclosure Package and the Prospectus, and neither the Company nor any of its subsidiaries has received any notice of conflict with, or infringement of, the asserted rights of others with respect to any such patents, trademarks, trade names, service marks, copyrights, licenses and other such rights (other than conflicts or infringements that, if proven, would not have a Material Adverse Effect), and neither the Company nor any of its subsidiaries knows of any basis therefor.
(21) Possession of Licenses and Permits. The Company and its subsidiaries have, and as of the Closing Time will have, all permits, licenses, approvals, certificates, franchises and authorizations of governmental or regulatory authorities (“Approvals”) as may be necessary for the conduct of their respective businesses as described in the Registration Statement, the General Disclosure Package and the Prospectus, except for those Approvals the absence of which would not have a Material Adverse Effect, and to the knowledge of the Company and the Guarantors, each manager or lessee of a Hotel or Retail Property has, and as of the Closing Time will have, all Approvals as may be necessary to lease, operate or manage each such Hotel or Retail Property, as the case may be, in the manner described in or contemplated by the General Disclosure Package and the Prospectus, except for those Approvals the absence of which would not have a Material Adverse Effect.
(22) Title to Property. Except as would not, singly or in the aggregate, have a Material Adverse Effect, the Company and its subsidiaries have good and marketable fee or leasehold title to all real property owned or leased by the Company and its subsidiaries and good title to all other properties owned by them, in each case, free and clear of all mortgages, pledges, liens, security interests, or other monetary claims, restrictions or encumbrances of any kind, except (A) as otherwise stated in the Registration Statement, the General Disclosure Package and the Prospectus, (B) in the case of liens for taxes not yet due and payable and (C) in the case of personal property located at certain Hotels and Retail Properties, such as are subject to purchase money, equipment lease or similar financing arrangements which have been entered into in the ordinary course of business. Except as otherwise stated in the Registration Statement, the General Disclosure Package and the Prospectus, all of the leases and subleases material to the business of the Company and its subsidiaries considered as one enterprise, and under which the Company or any of its subsidiaries holds properties described in the Registration Statement, the General Disclosure Package and the Prospectus, are in full force and effect, and neither the Company nor any of its subsidiaries has received any written notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company or any of its subsidiaries under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company or such subsidiary to the continued possession of the leased or subleased premises under any such lease or sublease, in each case, except as would not, singly or in the aggregate, have a Material Adverse Effect.
| 12 |
(23) Commodity Exchange Act. The Securities, upon issuance, will be excluded or exempted under, or beyond the purview of, the Commodity Exchange Act, as amended (the “Commodity Exchange Act”), and the rules and regulations of the Commodity Futures Trading Commission under the Commodity Exchange Act.
(24) Investment Company Act. Neither the Company nor any of its subsidiaries is, and upon the issuance and sale of the Securities as herein contemplated and the application of the net proceeds therefrom as described in the Registration Statement, the General Disclosure Package and the Prospectus, will be, an “investment company” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company” as such terms are defined in the Investment Company Act of 1940, as amended, or an “investment adviser” as such term is defined in the Investment Advisers Act of 1940, as amended.
(25) Environmental Laws. (a) Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus or as would not, singly or in the aggregate, have a Material Adverse Effect, (i) the Company and the Guarantors are, and, to the knowledge of the Company and the Guarantors, each Hotel, and each Retail Property, is, and as of the Closing Time will be, in compliance with all applicable federal, state and local laws and regulations relating to the protection of human health (from exposure to hazardous or toxic substances), the environment, hazardous or toxic substances and wastes, pollutants and contaminants (“Environmental Laws”), (ii) the Company, or, to the knowledge of the Company and the Guarantors, the Company’s lessees or managers, as applicable, have received, or as of the Closing Time will receive, all permits, licenses or other approvals required under applicable Environmental Laws to conduct the respective businesses presently conducted at each Hotel and each Retail Property and (iii) the Company or, to the knowledge of the Company and the Guarantors, the Company’s lessees or managers, as applicable, are, or as of the Closing Time will be, in compliance with all terms and conditions of any such permit, license or approval.
| 13 |
(b) To the knowledge of the Company and the Guarantors, except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, neither the Company nor any of the Guarantors has any costs or liabilities associated with Environmental Laws (including, without limitation, any capital or operating expenditures required for clean-up, remediation or closure of properties or compliance with Environmental Laws and any potential liabilities to third parties) that, as of the date hereof, would, or as of the Closing Time will, singly or in the aggregate, have a Material Adverse Effect.
(c) In respect of each Hotel and each Retail Property, except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, (i) each Hotel and each Retail Property is not in violation of any applicable building code, zoning ordinance or other land use law or regulation, except where such violation of any applicable building code, zoning ordinance or other land use law or regulation would not, singly or in the aggregate, have a Material Adverse Effect; (ii) the Company has not received notice of any proposed material special assessment or any proposed change in any property tax, zoning or land use laws or availability of water affecting any Hotel or Retail Property that would have, singly or in the aggregate, a Material Adverse Effect; (iii) there does not exist any material violation of any declaration of covenants, conditions and restrictions with respect to any Hotel or Retail Property that would have, singly or in the aggregate, a Material Adverse Effect, or any state of facts or circumstances or condition or event which could, with the giving of notice or passage of time, or both, constitute such a violation; and (iv) the improvements comprising any portion of each Hotel or Retail Property (the “Improvements”) are free of any and all material physical, mechanical, structural, design and construction defects that would have, singly or in the aggregate, a Material Adverse Effect and the mechanical, electrical and utility systems servicing the Improvements (including, without limitation, all water, electric, sewer, plumbing, heating, ventilation, gas and air conditioning) are in good condition, in proper working order and free of defects, except to the extent the failure of such systems being in good condition, in working order and free of defects would not have, singly or in the aggregate, a Material Adverse Effect.
(26) REIT Qualification. The Company is organized in conformity with the requirements for qualification, and, as of the date hereof the Company operates, and as of Closing Time the Company will operate, in a manner that qualifies the Company as a “real estate investment trust” under the Internal Revenue Code of 1986, as amended (the “Code”), and the rules and regulations thereunder, for 2024 and subsequent years. The Company qualified as a real estate investment trust under the Code for each of the taxable years ended December 31, 1995 through December 31, 2023.
(27) Possession of Insurance. The Company and its subsidiaries and their Hotels and Retail Properties are, and as of the Closing Time will be, insured in the manner described in the Registration Statement, the General Disclosure Package and the Prospectus by insurers of recognized financial responsibility against such losses and risks and in such amounts as are customary in the businesses in which the Company and its subsidiaries are engaged and propose to engage and the Company has no reason to believe that it, its subsidiaries or its tenants will not be able to renew such insurance coverage as and when such coverage expires or to obtain similar coverage as may be necessary to continue its business at economically viable rates. The Company and/or its subsidiaries, as applicable, has obtained an ALTA Owner’s Policy of Title Insurance or its local equivalent (or an irrevocable commitment to issue such a policy) on all of the Hotels and Retail Properties owned by the Company or its subsidiaries and such title insurance is in full force and effect, except to the extent the failure to obtain such title insurance and keep it in full force and effect would not, singly or in the aggregate, have a Material Adverse Effect.
| 14 |
(28) Absence of Indebtedness. At the Closing Time, the Company will have no indebtedness for money borrowed except: (i) amounts outstanding under the Company’s $650 million aggregate principal amount secured revolving credit facility which matures in 2027; (ii) $350 million aggregate principal amount of the Company’s 4.50% Senior Notes due 2025; (iii) $800 million aggregate principal amount of the Company’s 7.50% Senior Notes due 2025; (iv) $350 million aggregate principal amount of the Company’s 5.25% Senior Notes due 2026; (v) $450 million aggregate principal amount of the Company’s 4.75% Senior Notes due 2026; (vi) $400 million aggregate principal amount of the Company’s 4.95% Senior Notes due 2027; (vii) $450 million aggregate principal amount of the Company 5.50% Senior Notes due 2027; (viii) $400 million aggregate principal amount of the Company’s 3.95% Senior Notes due 2028; (ix) $425 million aggregate principal amount of the Company’s 4.95% Senior Notes due 2029; (x) $400 million aggregate principal amount of the Company’s 4.375% Senior Notes due 2030; (xi) $1 billion aggregate principal amount of 8.625% Senior Secured Notes due 2031; (xii) $608.1 million aggregate outstanding principal amount of net lease mortgage notes issued by a wholly owned, indirect subsidiary of the Company; (xiii) purchase money, equipment lease or similar financing arrangements in respect of personal property located at certain Hotels and Retail Properties which have been entered into in the ordinary course of business and that are not in the aggregate material; and (xiv) any indebtedness as to which the Representatives shall have given their prior written consent.
(29) Disclosure Controls. The Company and each of its Subsidiaries has established and maintain disclosure controls and procedures and effective internal control over financial reporting (as such terms are defined in Rule 13a-15 and 15d-15 under the 1934 Act) in accordance with the rules and regulations under the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and the 1934 Act. Such disclosure controls and procedures (a) are designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the Company’s Chief Investment Officer and its Chief Financial Officer (or persons performing similar functions), particularly during the periods in which the filings made by the Company with the Commission which it may make under Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act are being prepared, (b) have been evaluated for effectiveness as of the end of the period covered by the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Commission and (c) are effective to perform the functions for which they were established. The Company’s independent registered public accounting firm and the audit committee of the board of trustees of the Company have been advised of (x) any significant deficiencies in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial data and (y) any fraud, whether or not material, that involves management or other employees who have a role in the Company’s internal control over financial reporting. The principal executive officers (or their equivalents) and principal financial officers (or their equivalents) of the Company have made all certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act and any related rules and regulations promulgated by the Commission, and the statements contained in any such certification were complete and correct as of the dates made. Since the date of the most recent evaluation of such disclosure controls and procedures, there have been no significant changes in the Company’s internal control over financial reporting or in other factors that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting. As of December 31, 2023, there were no material weaknesses or significant deficiencies in the Company’s internal controls.
| 15 |
(30) XBRL. The interactive data in eXtensibile Business Reporting Language included or incorporated by reference in the Registration Statement fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto.
(31) Good Standing of the Manager. Except as otherwise disclosed in the General Disclosure Package and the Prospectus, since the respective dates as of which information is given in the General Disclosure Package and the Prospectus there has been no material adverse change in the business, operations, earnings, prospects, properties or condition (financial or otherwise) of The RMR Group LLC (the “Manager”), whether or not arising in the ordinary course of business, that would have a Material Adverse Effect. The Second Amended and Restated Business Management Agreement, dated June 5, 2015, between the Company and the Manager, as amended to date, has been duly authorized, executed and delivered by the parties thereto and constitutes the valid agreement of the parties thereto, enforceable in accordance with its terms, except as limited by (a) the effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws relating to or affecting the rights or remedies of creditors or (b) the effect of general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
(32) Periodic Reporting Requirements. The Company is subject to the reporting requirements of either Section 13 or Section 15(d) of the 1934 Act and files reports with the Commission on EDGAR.
(33) Sarbanes-Oxley Act. There is and has been no failure on the part of the Company or, to the Company's knowledge, any of the Company's trustees or officers, in their capacities as such, to comply in any material respect with any applicable provision of the Sarbanes-Oxley Act and the rules and regulations promulgated by the Commission in connection therewith, including Section 402 related to loans and Sections 302 and 906 related to certifications.
| 16 |
(34) Margin Rules. Neither the issuance, sale and delivery of the Securities nor the application of the proceeds thereof by the Company as described in the General Disclosure Package and the Prospectus will violate or result in a violation of Section 7 of the 1934 Act, or any regulation promulgated thereunder, including without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System or any other regulation of such Board of Governors.
(35) Anti-Corruption Laws. None of the Company, the Guarantors or, to the knowledge of the Company and the Guarantors, any trustee, director, officer, agent, affiliate, or other person acting on behalf of the Company or its subsidiaries has taken any action, directly or indirectly, that would result in a violation by such person of the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”) or any other similar law or regulation of any jurisdiction relating to the prevention or prohibition of bribery or corruption (together with the FCPA, collectively, the “Anti-Corruption Laws”), in each case if and to the extent applicable, including, without limitation, by taking any action in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office. The Company and the Guarantors and, to the knowledge of the Company and the Guarantors, their respective affiliates have conducted their respective businesses in compliance with applicable Anti-Corruption Laws and have instituted and maintain policies and procedures designed to promote and achieve compliance therewith.
(36) Anti-Money Laundering Laws. The operations of the Company and the Guarantors are and have been conducted at all times in compliance with the financial recordkeeping and reporting requirements of the Bank Secrecy Act of 1970, as amended by the USA PATRIOT Act of 2001, and any related or similar laws, rules, regulations or guidelines of any jurisdiction relating to the prevention or prohibition of money laundering or terrorism financing (collectively, the “Anti-Money Laundering Laws”), in each case if and to the extent applicable. No action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or the Guarantors or any of their respective subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the knowledge of the Company or Guarantors, threatened.
(37) Sanctions. None of the Company, the Guarantors or, to the knowledge of the Company and the Guarantors, any trustee, officer, agent, affiliate, or person acting on behalf of the Company or any of the Guarantors is currently the subject or target of any economic or financial sanctions (collectively, “Sanctions”) administered or enforced by the U.S. Government, (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”) and the U.S. Department of State), the United Nations Security Council, the European Union, the United Kingdom (including, without limitation, His Majesty’s Treasury), or any other relevant sanctions authority (each, a “Sanctions Authority”), including, without limitation, by virtue of being (i) identified on any Sanctions-related list of designated persons maintained by any Sanctions Authority, including, without limitation, the Specially Designated Nationals and Blocked Persons List maintained by OFAC, (ii) domiciled, organized or resident in a country or territory that is the subject or target of Sanctions (as of the date hereof, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic, the Crimea Region of Ukraine, Cuba, Iran, North Korea and Syria) (each a “Sanctioned Country”), or (iii) owned or controlled, directly or indirectly, by any person described in the foregoing clause (i) or (ii) (any such person, a “Sanctioned Person”). None of the Company or the Guarantors or any of their respective subsidiaries has engaged, during the past ten (10) years, or is engaged currently, in any dealings or transactions (A) with or involving any Sanctioned Person or Sanctioned Country, or (B) in any manner in violation of applicable Sanctions.
| 17 |
(38) Compliance with Anti-Corruption Laws, Anti-Money Laundering Laws and Sanctions. The Company will not, directly or indirectly, use any portion of the proceeds of the offering of the Securities hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person: (i) in violation of applicable Anti-Corruption Laws or Anti-Money Laundering Laws; (ii) to fund, finance or facilitate any dealings of or business with or involving any Sanctioned Person or Sanctioned Country; or (iii) in any other manner that would constitute or give rise to a violation of Sanctions by any Person (including any Person involved in or facilitating the offering of the Securities, whether as initial purchaser, underwriter or otherwise).
(39) Cybersecurity. Except as would not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect (i) to the knowledge of the Company and the Guarantors, there has been no security breach or incident, unauthorized access or disclosure, or other compromise of or relating to the Company’s or its subsidiaries’ information technology and computer systems, networks, hardware, software, data and databases (including the data and information of their respective customers, employees, suppliers, vendors and any third party data maintained, processed or stored by the Company or its subsidiaries, and any such data processed or stored by third parties on behalf of the Company or its subsidiaries), equipment or technology (collectively, “IT Systems and Data”); (ii) neither the Company nor any of its subsidiaries has been notified of, and has no knowledge of any event or condition that would result in, any security breach or incident, unauthorized access or disclosure or other compromise to their IT Systems and Data and (iii) the Company and its subsidiaries have implemented appropriate controls, policies, procedures, and technological safeguards to maintain and protect the integrity, continuous operation, redundancy and security of their IT Systems and Data reasonably consistent with industry standards and practices, or as required by applicable regulatory standards. The Company and its subsidiaries are presently in compliance in all material respects with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification.
| 18 |
(b) Officers’ Certificates. Any certificate signed by any officer of the Company or any Guarantor or any of their respective subsidiaries and delivered to the Underwriters or to counsel for the Underwriters in connection with the offering of the Securities shall be deemed a representation and warranty by the Company and the Guarantors to the Underwriters as to the matters covered thereby on the date of such certificate.
SECTION 2. Sale and Delivery to the Underwriters; Closing.
(a) Notes. The commitments of the several Underwriters to purchase the Notes pursuant to the terms hereof shall be deemed to have been made on the basis of the representations, warranties and agreements herein contained and shall be subject to the terms and conditions herein set forth.
(b) Payment. The Company will deliver against payment of the purchase price of (i) 97.501% of the principal amount of the 2029 Notes, plus accrued interest, if applicable and (ii) 96.500% of the principal amount of the 2032 Notes, plus accrued interest, if applicable, each in the form of one or more permanent global securities in definitive form representing the Notes (each a “Global Security” and collectively the “Global Securities”) deposited with the Trustee, in its capacity as trustee for the Notes, as custodian for The Depository Trust Company (“DTC”) and registered in the name of Cede & Co., as nominee for DTC. Interests in the Global Securities will be held only in book-entry form through DTC, except in the limited circumstances described in the Prospectus. Payment for the Notes shall be made by the Underwriters in Federal (same day) funds by wire transfer to an account of the Company at a bank reasonably acceptable to the Representatives on June 3, 2024, or at such other time not later than ten full business days thereafter as the Representatives and the Company determine, such time being herein referred to as the “Closing Time”, against delivery to the Trustee, in its capacity as trustee for the Notes, as custodian for DTC of the Global Securities. The Global Securities will be made available for checking at the office of Sullivan & Worcester LLP, Boston, Massachusetts, at least 24 hours prior to the Closing Time.
(c) Denominations; Registration. The Notes shall be issued in such authorized denominations and registered in such names as the Representatives shall request not later than one business day prior to the Closing Time. The Notes shall be made available for inspection not later than 10:00 a.m. (New York City time) on the business day prior to the Closing Time, at the office of The Depository Trust Company or its designated custodian.
SECTION 3. Covenants of the Company and the Guarantors. The Company and the Guarantors, jointly and severally, covenant with each Underwriter as follows:
(a) Immediately following the execution of this Agreement, the Company will prepare a Prospectus setting forth the aggregate principal amount of Notes covered thereby and their terms not otherwise specified in the preliminary prospectus, the name of each Underwriter, the price at which the Notes are to be purchased by the Underwriters from the Company, and such other information as the Representatives and the Company deem appropriate in connection with the offering of the Securities; and the Company and the Guarantors will effect the filings required under Rule 424(b), in the manner and within the time period required by Rule 424(b) (without reliance on Rule 424(b)(8)), and will furnish to the Underwriters as many copies (including by electronic means, if so requested in lieu of paper copies) of the Prospectus as they shall reasonably request, including, if requested by the Underwriters, in addition to or in lieu thereof, electronic copies of the Prospectus. The Company shall pay the required Commission filing fees relating to the Securities within the time required by Rule 456(b)(1)(i) of the 1933 Act Regulations and otherwise in accordance with Rules 456(b) and 457(r) of the 1933 Act Regulations.
| 19 |
(b) During the period beginning on the Applicable Time and ending on the later of the Closing Time or such date, as in the reasonable opinion of counsel for the Underwriters, the Prospectus is no longer required under the 1933 Act or the 1934 Act to be delivered in connection with sales by the Underwriters or a dealer, including in circumstances where such requirement may be satisfied pursuant to Rule 172 of the 1933 Act Regulations (the “Prospectus Delivery Period”), the Company and the Guarantors will comply with the requirements of Rule 430B and will notify the Representatives immediately, and confirm the notice in writing, (i) of the transmittal to the Commission for filing of any amendment to the Registration Statement, (ii) of the transmittal to the Commission for filing of any supplement or amendment to the Prospectus or any document to be filed pursuant to the 1934 Act, (iii) of the receipt of any comments from the Commission with respect to the Registration Statement or Prospectus or documents incorporated or deemed to be incorporated by reference therein, (iv) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus with respect to the Securities or for additional information relating thereto, and (v) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose. The Company and each Guarantor will make every reasonable effort to prevent the issuance of any such stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment.
(c) During the Prospectus Delivery Period, prior to amending or supplementing the Registration Statement (including any filing under Rule 462(b) of the 1933 Act Regulations), any preliminary prospectus or the Prospectus (including any amendment or supplement through incorporation by reference of any report filed under the 1934 Act), the Company will furnish to the Representatives for review a copy of each such proposed amendment or supplement a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file any such amendment or supplement or use any such prospectus to which counsel for the Underwriters shall reasonably object. The Company has given the Representatives notice of any filings made pursuant to the 1934 Act or 1934 Act Regulations within 48 hours prior to the Applicable Time; the Company will give the Representatives notice of its intention to make any such filing from the Applicable Time to the Closing Time and will furnish the Representatives with copies of any such documents a reasonable amount of time prior to such proposed filing and will not file or use any such document to which the Representatives or counsel for the Underwriters shall reasonably object by written notice of the Representatives to the Company. The Company will prepare a final term sheet substantially in the form set forth in Schedule C hereto (the “Final Term Sheet”) reflecting the final terms of the Securities, and shall file such Final Term Sheet as an “issuer free writing prospectus” pursuant to Rule 433 prior to the close of business two business days after the date hereof; provided that the Company shall furnish the Representatives with copies of any such Final Term Sheet a reasonable amount of time prior to such proposed filing and will not use or file any such document to which the Representatives or counsel for the Underwriters shall reasonably object.
| 20 |
(d) Upon request, the Company will deliver to the Underwriters a conformed copy of the Original Registration Statement as originally filed, the Post-Effective Amendments and of any other amendment to the Registration Statement filed prior to the termination of the initial offering of the Securities (including exhibits filed therewith or incorporated by reference therein and the documents incorporated by reference into the Prospectus pursuant to Item 12 of Form S-3).
(e) The Company will furnish to the Underwriters, from time to time during the Prospectus Delivery Period, such number of copies (including by electronic means, if so requested by the Underwriters, in addition to or in lieu of, paper copies) of the Prospectus (as amended or supplemented) as the Underwriters may reasonably request for the purposes contemplated by the 1933 Act, the 1933 Act Regulations, the 1934 Act or 1934 Act Regulations.
(f) If at any time when a prospectus is required by the 1933 Act to be delivered in connection with the sale of the Securities after the date hereof any event shall occur as a result of which it is necessary, in the opinion of counsel for the Underwriters, which shall be communicated by the Underwriters through the Representatives in writing to the Company, to amend or supplement the Prospectus in order to make the Prospectus not misleading in the light of the circumstances existing at the time it is delivered, the Company will promptly either (i) forthwith prepare and furnish to the Underwriters an amendment of or supplement to the Prospectus or (ii) make an appropriate filing pursuant to Section 13, 14 or 15 of the 1934 Act, in each case, in form and substance reasonably satisfactory to counsel for the Underwriters, which will amend or supplement the Prospectus so that it will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time it is delivered, not misleading. If at any time after the date hereof, an event or development occurs as a result of which the General Disclosure Package contains an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time it is used, not misleading, the Company will promptly notify the Representatives and will promptly amend or supplement in a manner reasonably satisfactory to the Representatives, at its own expense, the General Disclosure Package to eliminate or correct such untrue statement or omission. If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement (or any other registration statement relating to the Securities) or the Statutory Prospectus or any preliminary prospectus or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Company will promptly notify the Representatives and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission. If at any time following the distribution of any Written Testing-the-Waters Communication there occurred or occurs an event or development as a result of which such Written Testing-the-Waters Communication included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company will promptly notify the Representatives and will promptly amend or supplement, at its own expense, such Written Testing-the-Waters Communication to eliminate or correct such untrue statement or omission. The Underwriters’ delivery of any such amendment or supplement shall not constitute a waiver of any of the conditions in Section 5 hereof.
| 21 |
(g) Each of the Company and each Guarantor represents and agrees that, unless it obtains the prior written consent of the Representatives, and each Underwriter agrees that, unless it obtains the prior written consent of the Company and the Representatives, it has not made and will not make any offer relating to the Securities that would constitute an “issuer free writing prospectus”, as defined in Rule 433, or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405, required to be filed with the Commission; provided, however, that prior to the preparation of the Final Term Sheet in accordance with Section 3(c) hereof, the Underwriters are authorized to use the information with respect to the final terms of the Securities in communications conveying information relating to the offering to investors. Any such free writing prospectus consented to by the Company and the Representatives is hereinafter referred to as a “Permitted Free Writing Prospectus.” Each of the Company and each Guarantor represents that it has treated or agrees that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has complied and will comply with the requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely filing with the Commission where required, legending and record keeping.
(h) The Company and the Guarantors will endeavor in good faith, in cooperation with the Representatives, to qualify the Securities for offering and sale under the applicable securities laws and real estate syndication laws of such states and other jurisdictions of the United States as the Representatives may designate; provided that, in connection therewith, neither the Company nor any Guarantor shall be required to qualify as a foreign corporation, limited liability company or trust, as the case may be, or to file any general consent to service of process. In each jurisdiction in which the Securities have been so qualified, the Company and the Guarantors will file such statements and reports as may be required by the laws of such jurisdiction to continue such qualification in effect for so long as required for the distribution of the Securities.
(i) The Company will make generally available to its security holders as soon as reasonably practicable, but not later than 90 days after the close of the period covered thereby, an earning statement of the Company (in form complying with the provisions of Rule 158 of the 1933 Act Regulations) covering a period of at least twelve months beginning not later than the first day of the Company’s fiscal quarter next following the effective date of the Registration Statement. “Earning statement”, “make generally available” and “effective date” will have the meanings contained in Rule 158 of the 1933 Act Regulations.
(j) The Company will use the net proceeds received by it from the sale of the Securities in the manner specified in the General Disclosure Package and the Prospectus under the caption “Use of Proceeds” in all material respects.
(k) The Company currently intends to continue to qualify as a “real estate investment trust” under the Code, and use its best efforts to continue to meet the requirements for qualification as a “real estate investment trust” under the Code.
(l) The Company will timely file any document which it is required to file pursuant to the 1934 Act prior to the termination of the offering of the Securities.
| 22 |
(m) Neither the Company nor the Guarantors will offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the Commission a registration statement under the 1933 Act relating to debt securities issued or guaranteed by the Company and having a maturity of more than one year from the date of issue, or publicly disclose the intention to make any such offer, sale, pledge, disposition or filing, without the prior written consent of the Representatives for a period beginning at the date of this Agreement and ending at the later of the Closing Time or the lifting of trading restrictions by the Representatives. For the avoidance of doubt, this covenant does not prohibit (i) draws and pledges of the equity of Subsidiaries under the Company’s existing $650 million aggregate principal amount secured revolving credit facility which matures in 2027 during the period specified in the foregoing sentence or (ii) the incurrence or issuance of any secured debt, whether or not securitized, including in each case any related direct or indirect offer, sale, contract to sell, pledge or other disposition or filing or any public disclosure related thereto.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company and the Guarantors, jointly and severally, agree to pay all expenses incident to the performance of their obligations under this Agreement, including (i) the preparation, printing, delivery and filing of the Registration Statement (including financial statements and exhibits) as originally filed and of each amendment or supplement thereto, (ii) the preparation, issuance and delivery of the Securities and any certificates for the Securities to the Underwriters, including any transfer taxes and any stamp or other duties payable upon the sale, issuance or delivery of the Securities to the Underwriters, (iii) the fees and disbursements of the Company’s and the Guarantors’ counsel, accountants and other advisors or agents, as well as the fees and disbursements of the Trustee and their respective counsel, (iv) the qualification of the Securities under state securities laws in accordance with the provisions of Section 3(h) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Company or the Underwriters in connection therewith and in connection with the preparation, printing and delivery of a Blue Sky Survey, and any amendment thereto, (v) the printing and delivery to the Underwriters of copies of any preliminary prospectus, any Permitted Free Writing Prospectus and the Prospectus and any amendments or supplements thereto, (vi) any fees charged by any “nationally recognized statistical rating organization” (as that term is defined in Section 3(a)(62) under the 1934 Act, a “NRSRO”) for the rating of the Notes, (vii) the filing fees incident to, and the reasonable fees and disbursements of counsel for the Underwriters in connection with, the review, if any, by the Financial Industry Regulatory Authority, Inc. (“FINRA”) of the terms of the sale of the Notes, (viii) the cost of providing any CUSIP or other identification numbers for the Notes, and (ix) the costs and expenses (including without limitation any damages or other amounts payable in connection with legal or contractual liability) associated with the reforming of any contracts for sale of the Securities made by the Underwriters caused by a breach of the representation contained in the fifth paragraph of Section 1(a)(1) hereof (it being understood that the representation contained in such paragraph shall not apply to statements in or omissions from the General Disclosure Package made in reliance upon and in conformity with information furnished to the Company by the Underwriters through the Representatives in writing expressly for use in the General Disclosure Package).
| 23 |
(b) Termination of Agreement. If this Agreement is terminated by the Underwriters in accordance with the provisions of Section 5(n) or Section 9(a)(i) hereof, the Company and the Guarantors, jointly and severally, agree to reimburse the Underwriters for all of their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of the Underwriters’ Obligations. The Underwriters’ obligations to purchase and pay for the Securities pursuant to the terms hereof are subject to the accuracy of the representations and warranties of the Company and the Guarantors contained in Section 1 hereof or in certificates of any officer of the Company, the Guarantors or any of their respective subsidiaries delivered pursuant to the provisions hereof, to the performance by the Company and the Guarantors of their covenants and other obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. Each of the Original Registration Statement and the Post-Effective Amendments has become effective under the 1933 Act and no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act and no proceedings for that purpose shall have been instituted or be pending or threatened by the Commission, and any request on the part of the Commission for additional information shall have been complied with to the reasonable satisfaction of counsel for the Underwriters. A prospectus containing the Rule 430B Information shall have been filed with the Commission in the manner and within the time period required by Rule 424(b) without reliance on Rule 424(b)(8) (or a post-effective amendment providing such information shall have been filed and become effective in accordance with the requirements of Rule 430B) and any required filing of each Issuer Free Writing Prospectus pursuant to Rule 433 has been made in the manner and within the time period required by Rule 433(d).
(b) Opinion of Counsel for the Company and the Guarantors. At Closing Time, the Representatives shall have received the favorable opinion, dated as of Closing Time, of Sullivan & Worcester LLP, counsel for the Company and the Guarantors, in form and substance reasonably satisfactory to counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters.
In rendering their opinion, Sullivan & Worcester LLP may rely upon opinions, dated as of Closing Time, of Venable LLP as to matters governed by Maryland law, provided that such reliance is expressly authorized by such opinion. In addition, in rendering such opinion, such counsel may state that their opinion as to laws of the State of Delaware is limited to the Delaware General Corporation Law and the Delaware Limited Liability Company Act, that their opinions, if any, with respect to subsidiaries organized in jurisdictions other than Delaware, Massachusetts or New York are based on their review of statutes of such jurisdictions comparable to such Delaware statutes, and that their opinion with respect to the qualification of the Company and its subsidiaries to do business in jurisdictions other than their respective jurisdictions of organization is based solely upon certificates to such effect issued by an appropriate official of the applicable jurisdictions.
(c) Opinion of Special Maryland Counsel for the Company. At Closing Time, the Representatives shall have received the favorable opinion, dated as of Closing Time, of Venable LLP, special Maryland counsel for the Company, in form and substance reasonably satisfactory to counsel for the Underwriters.
| 24 |
(d) Opinion of Counsel for the Underwriters. At Closing Time the Representatives shall have received an opinion, dated as of Closing Time, of Sidley Austin LLP, counsel for the Underwriters, in form and substance reasonably satisfactory to the Representatives.
In rendering their opinion as aforesaid, Sidley Austin LLP may rely upon an opinion, dated as of Closing Time, of Venable LLP as to matters governed by Maryland law, and the opinion of Sullivan & Worcester LLP referred to above as to matters governed by Massachusetts law.
(e) Officers’ Certificate. At Closing Time, there shall not have been, since the date of this Agreement or since the respective dates as of which information is given in the General Disclosure Package or the Prospectus, any Material Adverse Change and the Representatives shall have received a certificate of the President or a Vice President of the Company and of the Chief Financial Officer or Chief Accounting Officer of the Company, dated as of Closing Time, to the effect that (i) there has been no Material Adverse Change, (ii) the representations and warranties in Section 1(a) hereof are true and correct with the same force and effect as though expressly made at and as of the Closing Time, (iii) the Company and the Guarantors have complied with all agreements and satisfied all conditions on their part to be performed or satisfied at or prior to the Closing Time, and (iv) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted, are pending, or, to such officers’ knowledge, are threatened by the Commission.
(f) Manager’s Certificate. At Closing Time, there shall not have been, since the respective dates as of which information is given in the Registration Statement and the Prospectus, or since the respective dates as of which information is given in the General Disclosure Package, any material adverse change in the business, operations, earnings, prospects, properties or condition (financial or otherwise) of the Manager, whether or not arising in the ordinary course of business; and the Representatives shall have received, at Closing Time, a certificate of the President or a Vice President of the Manager evidencing compliance with this subsection (f).
(g) Comfort Letter. At the time of the execution of this Agreement, the Representatives shall have received from Deloitte & Touche LLP a letter dated as of such date, in form and substance satisfactory to the Representatives, together with signed or reproduced copies of such letter for each of the other Underwriters, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to certain financial statements (including financial statements pursuant to Rule 3-14 of Regulation S-X and pro forma financial statements, if applicable) and certain other financial information contained in or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus.
(h) Bring-down Comfort Letter. At the Closing Time, the Representatives shall have received from Deloitte & Touche LLP a letter, dated as of the Closing Time, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (g) of this Section, except that the specified date referred to shall be a date not more than three business days prior to the Closing Time.
| 25 |
(k) CFO Certificate. At the Closing Time, the Representatives shall have received a certificate from the Chief Financial Officer or Chief Accounting Officer of the Company, in form and substance reasonably satisfactory to the Representatives.
(l) No Ratings Downgrade. Subsequent to the execution and delivery of this Agreement and at the Closing Time, there shall not have occurred any downgrading, nor shall any notice or announcement have been given or made of (i) any intended or potential downgrading or (ii) any review or possible change that does not indicate an improvement, in the rating accorded any securities issued or guaranteed by the Company by any NRSRO.
(m) At the Closing Time, the Indenture shall have been fully executed and delivered by the Company, and the Supplemental Indentures shall have been fully executed and delivered by the Guarantors.
(n) No Objection. If the Registration Statement or the offering of the Securities has been filed with FINRA for review, FINRA shall not have raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements.
(o) Additional Documents. At Closing Time, the Company and the Guarantors shall have furnished counsel for the Underwriters with such documents and opinions as they may reasonably require for the purpose of enabling them to pass upon the issuance and sale of the Securities as herein contemplated, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company or the Guarantors in connection with the issuance and sale of the Securities as herein contemplated shall be reasonably satisfactory in form and substance to the Representatives and counsel to the Underwriters.
(p) Termination of this Agreement. If any condition specified in this Section 5 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Underwriters by notice to the Company at any time at or prior to the Closing Time, and such termination shall be without liability of any party to any other party except as provided in Section 4 hereof and except that Sections 1, 6, 7, 8 and 14 hereof shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company and each of the Guarantors, jointly and severally, agree to indemnify and hold harmless each Underwriter, its officers, directors and agents, their affiliates, and each person, if any, who controls each Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and the successors and assigns of all of the foregoing persons as follows:
(i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the Rule 430B Information, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact included in any Issuer Free Writing Prospectus, any Written Testing-the-Waters Communication, the General Disclosure Package or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
| 26 |
(ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 6(d) below) any such settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by the Underwriters), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by the Underwriters through the Representatives in writing expressly for use in the Registration Statement (or any amendment thereto), including the Rule 430B Information, any Issuer Free Writing Prospectus, any Written Testing-the-Waters Communication, the General Disclosure Package or the Prospectus (or any amendment or supplement thereto).
(b) Indemnification of the Company, the Guarantors and Certain Persons. Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company and each of the Guarantors, each of their respective trustees, directors and managers, each of their respective officers who signed the Registration Statement, their respective affiliates, and each person, if any, who controls the Company or any of the Guarantors within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and the successors and assigns of all of the foregoing persons, against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto), including the Rule 430B Information, any Issuer Free Writing Prospectus, any Written Testing-the-Waters Communication, the General Disclosure Package or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by the Underwriters through the Representatives in writing expressly for use therein.
| 27 |
(c) Actions against Parties; Notification. Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. The indemnifying party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such indemnified parties and payment of all fees and expenses. The indemnified parties shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the indemnified parties unless (i) the employment of such counsel shall have been specifically authorized in writing by the indemnifying party, (ii) the indemnifying party shall have failed to assume the defense and employ counsel or (iii) the named parties to any such action (including any impleaded parties) include both the indemnified parties and the indemnifying party and the indemnified parties shall have been advised by such counsel that there may be one or more legal defenses available to them which are different from or additional to those available to the indemnifying party (in which case the indemnifying party shall not have the right to assume the defense of such action on behalf of the indemnified parties, it being understood, however, that the indemnifying party shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) for the indemnified parties, which firm shall be designated in writing by the indemnified parties and that all such fees and expenses shall be reimbursed as they are incurred). No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 6 or Section 7 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 6(a)(ii) hereof effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors, on the one hand, and the Underwriters, on the other hand, from the offering of the Securities pursuant hereto or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Guarantors, on the one hand, and the Underwriters, on the other hand, in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations.
| 28 |
The relative benefits received by the Company and the Guarantors, on the one hand, and the Underwriters, on the other hand, in connection with the offering of the Securities pursuant hereto shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Securities (before deducting expenses) received by the Company and the total underwriting discount received by the Underwriters, in each case as set forth on the cover of the Prospectus, bear to the aggregate initial public offering price of the Notes as set forth on such cover.
The relative fault of the Company and the Guarantors, on the one hand, and the Underwriters, on the other hand, shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company and the Guarantors or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Company, the Guarantors and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purposes) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 7. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Notes underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriters has otherwise been required to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls each Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as such Underwriter, each trustee of the Company, each trustee, manager or director of a Guarantor, each officer of the Company or a Guarantor who signed the Registration Statement, and each person, if any, who controls the Company or any Guarantor within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company or the applicable Guarantor, as the case may be. The Underwriters’ contribution obligations under this Section 7 are several, in proportion to their respective underwriting commitments, and not joint.
| 29 |
SECTION 8. Representations, Warranties and Agreements to Survive Delivery. All representations, warranties and agreements contained in this Agreement of the Company and the Guarantors or in certificates of officers of the Company, the Guarantors or any of their respective subsidiaries submitted pursuant hereto or thereto shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Underwriters or controlling persons, or by or on behalf of the Company or the Guarantors, and shall survive delivery of and payment for the Securities.
SECTION 9. Termination.
(a) The Underwriters may terminate this Agreement, by notice to the Company, at any time at or prior to Closing Time (i) if there has occurred any change, or any development or event involving a prospective change since the respective dates as of which information is given in the Prospectus (exclusive of any supplement thereto) or the General Disclosure Package, in the condition (financial or other), business, properties or results of operations of the Company and its subsidiaries taken as one enterprise which, in the sole judgment of the Underwriters, is material and adverse and makes it impractical or inadvisable to proceed with completion of the public offering or the sale of and payment for the Securities; (ii) if any change in U.S. or international financial, political or economic conditions or currency exchange rates or exchange controls as would, in the judgment of the Representatives, be likely to prejudice materially the success of the proposed issuance, sale or distribution of the Securities, whether in the primary market or in respect of dealings in the secondary market; (iii) if trading in the Company’s Common Shares has been suspended by the Commission or The Nasdaq Stock Market LLC (the “Nasdaq”); (iv) if there has occurred any material suspension or material limitation of trading in securities generally on the Nasdaq, or any setting of minimum prices for trading on such exchange, or any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market; (v) if there has occurred any banking moratorium declared by U.S. Federal or New York authorities; (vi) if there has occurred any major disruption of settlements of securities or clearance services in the United States; (vii) any attack on, outbreak or escalation of hostilities or act of terrorism involving the United States, any declaration of war by Congress or any other national or international calamity or emergency if, in the sole judgment of the Underwriters, the effect of any such attack, outbreak, escalation, act, declaration, calamity or emergency makes it impractical or inadvisable to proceed with completion of the public offering or the sale of and payment for the Securities or (viii) if the ratings assigned to debt securities issued or guaranteed by the Company by any NRSRO, as of the date hereof shall have been lowered since such date or if any such rating organization shall have publicly announced that it has placed any such debt securities on what is commonly termed a “watch list” for possible downgrading.
(b) If this Agreement is terminated pursuant to this Section 9, such termination shall be without liability of any party to any other party except as provided in Section 4 hereof, and provided further that Sections 6 and 7 hereof shall survive such termination.
| 30 |
SECTION 10. Default by One or More of the Underwriters. If one or more of the Underwriters shall fail at the Closing Time to purchase the principal amount of the 2029 Notes and/or the 2032 Notes which it or they are obligated to purchase under this Agreement (the “Defaulted Notes”), then the Representatives shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Notes in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Representatives shall not have completed such arrangements within such 24-hour period, then:
(i) if the principal amount of Defaulted Notes does not exceed 10% of the aggregate principal amount of the Notes to be purchased hereunder, each of the non-defaulting Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or
(ii) if the principal amount of Defaulted Notes exceeds 10% of the aggregate principal amount of the Notes to be purchased hereunder, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter or the Company.
No action taken pursuant to this Section 10 shall relieve any defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of this Agreement, either the Representatives or the Company shall have the right to postpone the Closing Time for a period not exceeding seven days in order to effect any required changes in the Registration Statement or the Prospectus or in any other documents or arrangements. As used herein, the term “Underwriter” includes any person substituted for an Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to the Representatives at Citigroup Global Markets, 388 Greenwich Street, New York, New York 10013, Attention: General Counsel, Facsimile: (646) 291-1469; BofA Securities, Inc., 114 West 47th Street, 7th Floor, NY8-114-07-01 New York, New York 10036, Email: BofA_HY_Legal_Notices@bofa.com, Attention: High Yield Legal Department and J.P. Morgan Securities LLC, 383 Madison Avenue, New York, New York 10179, Attention: Investment Grade Syndicate Desk – 3rd Floor, Facsimile: (212) 834-6081 and notices to the Company or the Guarantors shall be directed to the Company at Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458-1634, Attention: Brian E. Donley, Chief Financial Officer and Treasurer, Facsimile: (617) 969-5730.
SECTION 12. No Fiduciary Relationship. The Company and the Guarantors acknowledge and agree that (i) the purchase and sale of the Securities pursuant to this Agreement, including the determination of the public offering price of the Notes and any related discounts and commissions, is an arm's-length commercial transaction, between the Company and the Guarantors on the one hand, and the Underwriters, on the other hand, (ii) in connection with the offering contemplated hereby and the process leading to such transaction, each Underwriter is and has been acting solely as a principal and is not the agent or fiduciary of the Company or the Guarantors or their respective shareholders, creditors, employees, or any other party, (iii) no Underwriter has assumed or will assume an advisory or fiduciary responsibility in favor of the Company or any Guarantor with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company or such Guarantor on other matters) and no Underwriter has any obligation to the Company or any Guarantor with respect to the offering contemplated hereby except the obligations expressly set forth in this Agreement, (iv) the Underwriters and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company and the Guarantors, and (v) the Underwriters have not provided any legal, accounting, regulatory or tax advice with respect to the transaction contemplated hereby and the Company and the Guarantors have consulted their own legal, accounting, regulatory and tax advisors to the extent they deemed appropriate.
| 31 |
SECTION 13. Parties. This Agreement shall inure to the benefit of and be binding upon the Company, the Guarantors and the Underwriters and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters, the Company and the Guarantors and their respective successors and the controlling persons and officers, trustees, directors and managers referred to in Sections 6 and 7 hereof and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the parties hereto and their respective successors, and said controlling persons and officers, trustees, directors and managers and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of the Securities from an Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Waiver of Jury Trial. All parties hereby irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
SECTION 16. Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction hereof.
SECTION 17. Counterparts and Electronic Signatures. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement. The words “execution,” “signed,” “signature,” and words of like import in this Agreement or in any other certificate, agreement or document related to this Agreement, the Indenture or the Securities shall include images of manually executed signatures transmitted by facsimile or other electronic format (including, without limitation, “pdf”, “tif” or “jpg”) and other electronic signatures (including, without limitation, DocuSign and AdobeSign). The use of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based recordkeeping system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act or the Uniform Commercial Code.
| 32 |
SECTION 18. Recognition of the U.S. Special Resolution Regimes.
(a) In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
(b) In the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.
For purposes of this Section 18 a “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k). “Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b). “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable. “U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
SECTION 19. Compliance with USA PATRIOT Act. In accordance with the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law on October 26, 2001)), the Underwriters are required to obtain, verify and record information that identifies their respective clients, including the Company and the Guarantors, which information may include the name and addresses of their respective clients, as well as other information that will allow the Underwriters to properly identify their respective clients.
THE AMENDED AND RESTATED DECLARATION OF TRUST ESTABLISHING SERVICE PROPERTIES TRUST, DATED AUGUST 21, 1995, AS AMENDED AND SUPPLEMENTED, AS FILED WITH THE STATE DEPARTMENT OF ASSESSMENTS AND TAXATION OF MARYLAND, PROVIDES THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF SERVICE PROPERTIES TRUST SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, SERVICE PROPERTIES TRUST. ALL PERSONS DEALING WITH SERVICE PROPERTIES TRUST IN ANY WAY SHALL LOOK ONLY TO THE ASSETS OF SERVICE PROPERTIES TRUST FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
[Signature Pages Follow]
| 33 |
If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this Agreement, along with all counterparts, will become a binding agreement among the Underwriters, the Company and the Guarantors in accordance with its terms.
| Very truly yours, | ||
| Service Properties Trust | ||
| By | /s/ Brian E. Donley | |
| Brian E. Donley | ||
| Chief Financial Officer and Treasurer | ||
Signature Page to Underwriting Agreement
| Cambridge TRS, Inc. | ||
| Harbor Court Associates, LLC | ||
| Highway Ventures Borrower LLC | ||
| Highway Ventures LLC | ||
| Highway Ventures Properties LLC | ||
| Highway Ventures Properties Trust | ||
| HPT Clift TRS LLC | ||
| HPT CW MA Realty LLC | ||
| HPT CY TRS, Inc. | ||
| HPT Geary ABC Holdings LLC | ||
| HPT Geary Properties Trust | ||
| HPT IHG Chicago Property LLC | ||
| HPT IHG GA Properties LLC | ||
| HPT IHG-2 Properties Trust | ||
| HPT IHG-3 Properties LLC | ||
| HPT SN Holding, Inc. | ||
| HPT State Street TRS LLC | ||
| HPT TA Properties LLC | ||
| HPT TA Properties Trust | ||
| HPT TRS IHG-2, Inc. | ||
| HPT TRS Inc. | ||
| HPT TRS MRP, Inc. | ||
| HPT TRS SPES II, Inc. | ||
| HPT TRS WYN, Inc. | ||
| HPT Wacker Drive TRS LLC | ||
| HPTCY Properties Trust | ||
| HPTWN Properties Trust | ||
| SVC Gatehall Drive TRS LLC | ||
| SVC Higgins Road TRS LLC | ||
| SVC Holdings LLC | ||
| SVC Jersey City TRS LLC | ||
| SVC Mannheim Road TRS LLC | ||
| SVC Minneapolis TRS LLC | ||
| SVC Morris Plains TRS LLC | ||
| SVC Nanuet TRS LLC | ||
| SVC NJ TRS LLC | ||
| SVC Randolph Street TRS LLC | ||
| SVC Redondo Beach TRS LLC | ||
| SVCN 1 LLC | ||
| SVCN 2 LLC | ||
| SVCN 3 LLC | ||
| SVCN 4 LLC | ||
| SVCN 5 LLC | ||
| By: | /s/ Brian E. Donley | |
| Brian E. Donley | ||
| Chief Financial Officer and Treasurer | ||
Signature Page to Underwriting Agreement
| HPT CW MA Realty Trust | ||
| By: | /s/ Brian E. Donley | |
| Brian E. Donley | ||
| as Trustee and not individually | ||
Signature Page to Underwriting Agreement
| The foregoing Underwriting Agreement is hereby confirmed and accepted as of the date first above written. | |
| Citigroup Global Markets Inc. | |
| BofA Securities, Inc. | |
| J.P. Morgan Securities LLC | |
| Citigroup Global Markets Inc. | ||
| By: | /s/ Ryan Dodds | |
| Name: | Ryan Dodds | |
| Title: | Director | |
| BofA securities, Inc. | ||
| By: | /s/ Reagan C. Philipp | |
| Name: | Reagan C. Philipp | |
| Title: | Managing Director | |
| J.P. Morgan Securities LLC | ||
| By: | /s/ Chris Lingenfelter | |
| Name: | Chris Lingenfelter | |
| Title: | Managing Director | |
For themselves and as Representatives of the other Underwriters named in Schedule A hereto.
Signature Page to Underwriting Agreement
Schedule A
| Name of Underwriter | Principal Amount of 2029 Notes | Principal Amount of 2032 Notes | ||||||
| Citigroup Global Markets Inc. | $ | 108,640,000 | $ | 77,600,000 | ||||
| BofA Securities, Inc. | 108,570,000 | 77,550,000 | ||||||
| J.P. Morgan Securities LLC | 108,570,000 | 77,550,000 | ||||||
| BMO Capital Markets Corp. | 62,370,000 | 44,550,000 | ||||||
| Goldman Sachs & Co. LLC | 62,370,000 | 44,550,000 | ||||||
| Morgan Stanley & Co. LLC | 62,370,000 | 44,550,000 | ||||||
| PNC Capital Markets LLC | 62,370,000 | 44,550,000 | ||||||
| UBS Securities LLC | 62,370,000 | 44,550,000 | ||||||
| Wells Fargo Securities, LLC | 62,370,000 | 44,550,000 | ||||||
| TOTAL | $ | 700,000,000 | $ | 500,000,000 | ||||
| A- 1 |
Schedule B
Guarantors
| Cambridge TRS, Inc. | |
| Harbor Court Associates, LLC | |
| Highway Ventures Borrower LLC | |
| Highway Ventures LLC | |
| Highway Ventures Properties LLC | |
| Highway Ventures Properties Trust | |
| HPT Clift TRS LLC | |
| HPT CW MA Realty LLC | |
| HPT CW MA Realty Trust | |
| HPT CY TRS, Inc. | |
| HPT Geary ABC Holdings LLC | |
| HPT Geary Properties Trust | |
| HPT IHG Chicago Property LLC | |
| HPT IHG GA Properties LLC | |
| HPT IHG-2 Properties Trust | |
| HPT IHG-3 Properties LLC | |
| HPT SN Holding, Inc. | |
| HPT State Street TRS LLC | |
| HPT TA Properties LLC | |
| HPT TA Properties Trust | |
| HPT TRS IHG-2, Inc. | |
| HPT TRS Inc. | |
| HPT TRS MRP, Inc. | |
| HPT TRS SPES II, Inc. | |
| HPT TRS WYN, Inc. | |
| HPT Wacker Drive TRS LLC | |
| HPTCY Properties Trust | |
| HPTWN Properties Trust | |
| SVC Gatehall Drive TRS LLC | |
| SVC Higgins Road TRS LLC | |
| SVC Holdings LLC | |
| SVC Jersey City TRS LLC | |
| SVC Mannheim Road TRS LLC | |
| SVC Minneapolis TRS LLC | |
| SVC Morris Plains TRS LLC | |
| SVC Nanuet TRS LLC | |
| SVC NJ TRS LLC | |
| SVC Randolph Street TRS LLC | |
| SVC Redondo Beach TRS LLC | |
| SVCN 1 LLC | |
| SVCN 2 LLC | |
| SVCN 3 LLC | |
| SVCN 4 LLC | |
| SVCN 5 LLC |
| B- 1 |
Schedule C
Schedule of Issuer Free Writing Prospectuses Included in the General Disclosure Package
1. Final Term Sheet, attached hereto as Annex A to this Schedule C
| C- 1 |
Annex A to Schedule C
Filed Pursuant to Rule 433
Issuer Free Writing Prospectus
dated May 17, 2024
Registration No. 333-258975
Supplementing the Preliminary
Prospectus Supplement dated May 15, 2024
and Prospectus dated August 20, 2021
SERVICE PROPERTIES TRUST
PRICING TERM SHEET
This pricing term sheet is qualified in its entirety by reference to the Preliminary Prospectus Supplement dated May 15, 2024 relating to these offerings (the “Preliminary Prospectus Supplement”). The information in this pricing term sheet supplements and updates the Preliminary Prospectus Supplement. Terms used and not defined herein have the meanings assigned in the Preliminary Prospectus Supplement.
| Issuer: | Service Properties Trust (the “Issuer”) | |
| Guarantors: | Certain of the Issuer’s direct and indirect subsidiaries as described in the Preliminary Prospectus Supplement referred to above (the “Guarantors”) | |
| Securities: | 8.375% Senior Guaranteed Unsecured Notes due 2029 (the “2029 Notes”) 8.875% Senior Guaranteed Unsecured Notes due 2032 (the “2032 Notes” and together with the 2029 Notes, the “Notes”) | |
| Ranking: | Senior Unsecured | |
| Format: | SEC Registered | |
| Trade Date: | May 17, 2024 | |
| Settlement Date: | June 3, 2024 (T+10)** | |
| Use of Proceeds: | The Issuer expects to use the net proceeds from these offerings to redeem the $800.0 million principal amount outstanding of its 7.50% Senior Notes due 2025 and to purchase any and all of the $350.0 million principal amount outstanding of its 4.50% Senior Notes due 2025 pursuant to a tender offer. The Issuer intends to use any remaining net proceeds for general corporate purposes. | |
| Principal Amount: | 2029 Notes: $700,000,000 2032 Notes: $500,000,000 |
| C- 2 |
| Gross Proceeds (before Underwriting Discount and Expenses) to the Issuer: | $ 1,183,007,000 | |
| Maturity Date: | 2029 Notes: June 15, 2029 2032 Notes: June 15, 2032 | |
| Interest Payment Dates: | 2029 Notes: June 1 and December 1, commencing December 1, 2024 2032 Notes: June 1 and December 1, commencing December 1, 2024 | |
| Record Dates: | 2029 Notes: May 15 and November 15 2032 Notes: May 15 and November 15 | |
| Benchmark Security: | 2029 Notes: 4.625% due April 30, 2029 2032 Notes: 4.625% due April 30, 2031 | |
| Spread to Benchmark: | 2029 Notes: 419 bps 2032 Notes: 481 bps | |
| Yield to Maturity: | 2029 Notes: 8.625% 2032 Notes: 9.234% | |
| Coupon (Interest Rate): | 2029 Notes: 8.375% per annum 2032 Notes: 8.875% per annum | |
| Price to Public: | 2029 Notes: 99.001% of principal amount of the 2029 Notes, plus accrued interest, if any, from June 3, 2024 2032 Notes: 98.000% of principal amount of the 2032 Notes, plus accrued interest, if any, from June 3, 2024 | |
| Redemption Provisions: | ||
| Make-whole Call: | 2029 Notes: Before June 15, 2026, at a make-whole premium of Treasury Rate + 50 bps 2032 Notes: Before June 15, 2027, at a make-whole premium of Treasury Rate + 50 bps |
| C- 3 |
| Optional Redemption: | 2029 Notes: On or after June 15, 2026, the Issuer may redeem the 2029 Notes, in whole or in part, at the redemption prices (expressed as a percentage of the principal amount of such notes to be redeemed) set forth below, plus accrued and unpaid interest thereon, if redeemed during the twelve- month period beginning on June 15 of each of the years indicated below: |
| 2026: | 104.188% | ||||
| 2027: | 102.094% | ||||
| 2028 and thereafter: | 100.000% |
| 2032 Notes: On or after June 15, 2027, the Issuer may redeem the 2032 Notes, in whole or in part, at the redemption prices (expressed as a percentage of the principal amount of such notes to be redeemed) set forth below, plus accrued and unpaid interest thereon, if redeemed during the twelve- month period beginning on June 15 of each of the years indicated below: |
| 2027: | 104.438% | ||||
| 2028: | 102.219% | ||||
| 2029 and thereafter: | 100.000% |
| Equity Clawback: | 2029 Notes: Up to 40% of the aggregate principal amount of the 2029 Notes at 108.375% prior to June 15, 2026 2032 Notes: Up to 40% of the aggregate principal amount of the 2032 Notes at 108.875% prior to June 15, 2027 | |
| Change of Control: | Putable at 101% of principal plus accrued and unpaid interest | |
| Supplemental Risk Factor Related to the 2032 Notes: | The 2032 Notes will be issued with original issue discount for U.S. federal income tax purposes.
The 2032 Notes will be issued with original issue discount for U.S. federal income tax purposes. Accordingly, holders subject to U.S. federal income taxation, whether on the cash or accrual method of tax accounting, generally will be required to include amounts representing original issue discount in gross income (as ordinary income) as the original issue discount accrues on a constant yield to maturity basis, in advance of the receipt of cash payments to which such income is attributable. See “Material United States Federal Income Tax Considerations” in the Preliminary Prospectus Supplement. |
| C- 4 |
| Certain Covenants: | Notwithstanding compliance with the covenants described under “Description of the Notes—Certain Covenants—Limitations on Incurrence of Debt” in the Preliminary Prospectus Supplement, SVC will not, and will not permit any Subsidiary to, incur additional guaranteed Debt that is “pari” to the notes offered under the Preliminary Prospectus Supplement if such additional Debt would cause the ratio of SVC’s Total Unencumbered Assets in Guarantor Subsidiaries to SVC’s Total Senior Guaranteed Unsecured Debt to be less than 2.2 to 1.0. For purposes of the foregoing, “Total Unencumbered Assets in Guarantor Subsidiaries” shall mean Total Unencumbered Assets less the portion of Total Unencumbered Assets of Subsidiaries that are not guarantors of the notes, and “Total Senior Guaranteed Unsecured Debt” shall mean (1) $450,000,000 aggregate principal amount of SVC’s outstanding 5.500% Senior Guaranteed Unsecured Notes due 2027; (2) the $1,200,000,000 aggregate principal amount of notes offered under the Preliminary Prospectus Supplement; and (3) any future subsidiary guaranteed unsecured Debt, but shall not include (x) $1,000,000,000 aggregate principal amount of SVC’s outstanding 8.625% Senior Secured Notes due 2031, (y) amounts outstanding under the Existing Credit Agreement or (z) any future secured Debt. | |
| CUSIP / ISIN: | 2029 Notes: 81761L AD4 / US81761LAD47 2032 Notes: 81761L AE2 / US81761LAE20 | |
| Denominations/Multiple: | $2,000 / $1,000 | |
| Joint Book-Running Managers: | Citigroup Global Markets Inc. BofA Securities, Inc. J.P. Morgan Securities LLC BMO Capital Markets Corp. Goldman Sachs & Co. LLC Morgan Stanley & Co. LLC PNC Capital Markets LLC UBS Securities LLC Wells Fargo Securities, LLC |
** The Issuer expects that delivery of the Notes will be made against payment therefore on or about June 3, 2024, which will be the 10th business day following the trade date referred to above (the “trade date”) (such settlement cycle being herein referred to as “T+10”). Pursuant to Rule 15c6-1 under the Exchange Act of 1934, as amended, trades in the secondary market generally are required to settle in two business days (one business day, effective May 28, 2024), unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the Notes on the trade date or the next succeeding eight business days will be required, by virtue of the fact that the Notes initially will settle T+10, to specify an alternate settlement cycle at the time of any such trade to prevent a failed settlement. Purchasers of the Notes who wish to trade the notes on the trade date or the next succeeding eight business days should consult their own advisor.
| C- 5 |
The Issuer and the Guarantors have filed a registration statement (including a prospectus dated August 20, 2021 and the Preliminary Prospectus Supplement) with the SEC for the offerings to which this communication relates. Before you invest, you should read the prospectus in that registration statement, the related Preliminary Prospectus Supplement and other documents the Issuer has filed with the SEC for more complete information about the Issuer, the Guarantors and these offerings. You may obtain these documents for free by visiting EDGAR on the SEC web site at www.sec.gov. Alternatively, the Issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus and Preliminary Prospectus Supplement if you request it by calling Citigroup Global Markets Inc. toll free at (800) 831-9146, BofA Securities, Inc. toll free at (800) 294-1322 or J.P. Morgan Securities LLC collect at (212)-834-4533.
| C- 6 |
Exhibit 4.2
ELEVENTH SUPPLEMENTAL INDENTURE
among
SERVICE PROPERTIES TRUST
THE SUBSIDIARY GUARANTORS NAMED HEREIN
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
Dated as of June 3, 2024
SUPPLEMENTAL TO THE INDENTURE DATED AS OF FEBRUARY 3, 2016
SERVICE PROPERTIES TRUST
8.375% Senior Guaranteed Unsecured Notes due 2029
This ELEVENTH SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”) dated as of June 3, 2024 among Service Properties Trust, a real estate investment trust organized and existing under the laws of the State of Maryland (the “Company”) having its principal office at Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458, the other entities (other than the Trustee (as defined below)) listed on the signature pages hereto (the “Initial Subsidiary Guarantors”) and U.S. Bank Trust Company, National Association, a national banking organization organized and existing under the laws of the United States, as Trustee (the “Trustee”).
RECITALS OF THE COMPANY
The Company (then known as Hospitality Properties Trust) and the Trustee are parties to an Indenture, dated as of February 3, 2016 (as from time to time hereafter amended, supplemented or otherwise modified in so far as it applies to the Notes (as defined herein), the “Base Indenture” and, together with this Supplemental Indenture, as amended, supplemented or otherwise modified from time to time, the “Indenture”) to provide for the future issuance of the Company’s senior unsecured debentures, notes or other evidences of indebtedness (the “Securities”) to be issued from time to time in one or more series, including any such Securities that may have the benefit of guarantees; and
Pursuant to the terms of the Base Indenture, the Company desires to provide for the establishment of a series of its Securities, to be known as its 8.375% Senior Guaranteed Unsecured Notes due 2029, the form and substance of such Securities and the terms, provisions and conditions thereof, including the guarantees thereof by the Subsidiary Guarantors (as defined herein), to be set forth as provided in the Indenture;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
ARTICLE 1
DEFINED TERMS
Section 1.1 Terms Defined in Indenture. Capitalized terms used herein and not defined herein have the meanings ascribed to such terms in the Base Indenture.
Section 1.2 Supplemental Definitions. The following definitions supplement, and, to the extent inconsistent with, replace the definitions in Section 101 of the Base Indenture:
“Acquired Debt” means Debt of a Person (i) existing at the time such Person becomes a Subsidiary or (ii) assumed in connection with the acquisition of assets from such Person, in each case, other than Debt incurred in connection with, or in contemplation of, such Person becoming a Subsidiary or such acquisition. Acquired Debt shall be deemed to be incurred on the date of the related acquisition of assets from any Person or the date the acquired Person becomes a Subsidiary.
“Adjusted Total Assets” has the meaning provided in clause (i) of Section 3.1(a) of this Supplemental Indenture.
“Annual Debt Service” as of any date means the maximum amount which is expensed in any 12-month period for interest on Debt of the Company and its Subsidiaries, excluding amortization of debt discounts and deferred financing costs.
“Applicable Premium” means with respect to any Note on any Redemption Date, the greater of
(a) 1.0% of the principal amount of such note on such Redemption Date; and
(b) the excess, if any, of (x) the present value at such Redemption Date of (A) the redemption price of such Note at June 15, 2026 (such redemption price being set forth in the table appearing in paragraph 2 on the reverse side of the form of Note attached as Exhibit A hereto), plus (B) all required interest payments due on such Note through June 15, 2026 (excluding accrued but unpaid interest to the Redemption Date), computed using a discount rate equal to the applicable Treasury Rate as of such Redemption Date plus 50 basis points; over (y) the principal amount of such Note.
The Company shall determine the Applicable Premium and, prior to the Redemption Date, file an Officer’s Certificate with the Trustee setting forth the Treasury Rate and Applicable Premium and showing the calculation of each in reasonable detail.
“Business Day” means any day other than a Saturday or Sunday or a day on which banking institutions in The City of New York or in the city in which the corporate trust office of the Trustee is located are required or authorized to close.
“Capital Stock” means, with respect to any Person, any capital stock (including preferred stock), shares, interests, participation or other ownership interests (however designated) of such Person and any rights (other than debt securities convertible into or exchangeable for capital stock), warrants or options to purchase any thereof.
“Cash Equivalents” means demand deposits, certificates of deposit or repurchase agreements with banks or other financial institutions, marketable obligations issued or directly and fully guaranteed as to timely payment by the United States of America or any of its agencies or instrumentalities, or any commercial paper or other obligation rated, at time of purchase, “P-2” (or its equivalent) or better by Moody’s or “A-2” (or its equivalent) or better by Standard & Poor’s.
2
“Change of Control” means the occurrence of any of the following:
(1) the Company consolidates with, or merges with or into, another Person, or the Company, directly or indirectly, sells, leases or transfers all or substantially all of the properties or assets of the Company and its Subsidiaries, taken as a whole (other than by way of merger or consolidation or to the Company or any Subsidiary), in one or a series of related transactions, or any Person consolidates with, or merges with or into, the Company, in any such event other than pursuant to a transaction (a “Permitted Holdco Transaction”) in which the Persons that beneficially owned the shares of the Voting Stock of the Company immediately prior to such transaction beneficially own at least a majority of the total voting power of all outstanding Voting Stock (other than Disqualified Stock) of the surviving or transferee Person; or
(2) the Company becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act or any successor provision), in a single transaction or in a related series of transactions, by way of merger, consolidation or other business combination or purchase, of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) of more than 50% of the total voting power of the Voting Stock of the Company.
For purposes of this definition, (x) any direct or indirect holding company of the Company shall not itself be considered a “Person” or “group” for purposes of clause (2) above; provided that no “Person” or “group” beneficially owns, directly or indirectly, more than 50% of the total voting power of the Voting Stock of such holding company and (y) for the avoidance of doubt, any Permitted Holdco Transaction shall not constitute a “Change of Control” pursuant to any clause of this definition.
Notwithstanding the preceding or any provision of Section 13d-3 of the Exchange Act, (i) a Person or group shall not be deemed to beneficially own Voting Stock subject to a stock or asset purchase agreement, merger agreement, option agreement, warrant agreement or similar agreement (or voting or option or similar agreement related thereto) until the consummation of the acquisition of the Voting Stock in connection with the transactions contemplated by such agreement, (ii) a Person or group will not be deemed to beneficially own the Voting Stock of another Person as a result of its ownership of Voting Stock or other securities of such other Person’s parent entity (or related contractual rights) unless it owns 50% or more of the total voting power of the Voting Stock entitled to vote for the election of directors of such parent entity having a majority of the aggregate votes on the board of directors (or similar body) of such parent entity and (iii) the right to acquire Voting Stock (so long as such Person does not have the right to direct the voting of the Voting Stock subject to such right) or any veto power in connection with the acquisition or disposition of Voting Stock will not cause a party to be a beneficial owner.
“Change of Control Repurchase Event” means the occurrence of both a Change of Control and a Rating Decline.
“Consolidated Income Available for Debt Service” for any period means Earnings from Operations of the Company and its Subsidiaries plus amounts which have been deducted, and minus amounts which have been added, for the following (without duplication): (i) interest on Debt of the Company and its Subsidiaries, (ii) cash reserves made by lessees as required by the Company’s leases for periodic replacement and refurbishment of the Company’s assets, (iii) provision for taxes of the Company and its Subsidiaries based on income, (iv) amortization of debt premiums/discounts and deferred debt issuance costs, (v) provisions for gains and losses on properties and property depreciation and amortization, (vi) the effect of any noncash charge resulting from a change in accounting principles in determining Earnings from Operations for such period and (vii) amortization of deferred charges.
3
“Debt” of the Company or any Subsidiary means, without duplication, any indebtedness of the Company or any Subsidiary, whether or not contingent, in respect of:
(i) borrowed money or evidenced by bonds, notes, debentures or similar instruments;
(ii) borrowed money secured by any Encumbrance existing on property owned by the Company or any Subsidiary, to the extent of the lesser of (x) the amount of indebtedness so secured or (y) the fair market value of the property subject to such Encumbrance;
(iii) the reimbursement obligations, contingent or otherwise, in connection with any letters of credit actually issued (other than letters of credit issued to provide credit enhancement or support with respect to other indebtedness of the Company or any Subsidiary otherwise reflected as Debt hereunder) or amounts representing the balance deferred and unpaid of the purchase price of any property or services, except any such balance that constitutes an accrued expense or trade payable, or all conditional sale obligations or obligations under any title retention agreement;
(iv) the principal amount of all obligations of the Company or any Subsidiary with respect to the redemption, repayment or other repurchase of any Disqualified Stock; or
(v) any lease of property by the Company or any Subsidiary as lessee which is reflected on the Company’s consolidated balance sheet as a capitalized lease in accordance with generally accepted accounting principles,
to the extent, in the case of items of indebtedness under (i) through (iv) above, that any such items (other than letters of credit) would be properly classified as a liability on the Company’s consolidated balance sheet in accordance with generally accepted accounting principles. Debt also (1) excludes any indebtedness (A) with respect to which a defeasance or covenant defeasance or discharge has been effected (or an irrevocable deposit is made with a trustee in an amount at least equal to the outstanding principal amount of such indebtedness, the remaining scheduled payments of interest thereon to, but not including, the applicable maturity date or redemption date, and any premium or otherwise as provided in the terms of such indebtedness) in accordance with the terms thereof or which has been repurchased, retired, repaid, redeemed, irrevocably called for redemption (and an irrevocable deposit is made with a trustee in an amount at least equal to the outstanding principal amount of such indebtedness, the remaining scheduled payments of interest thereon to, but not including, such redemption date, and any premium) or otherwise satisfied or (B) that is secured by cash or Cash Equivalents irrevocably deposited with a trustee in an amount, in the case of this clause (B), at least equal to the outstanding principal amount of such indebtedness and the remaining scheduled payments of interest thereon and (2) includes, to the extent not otherwise included, any obligation by the Company or any Subsidiary to be liable for, or to pay, as obligor, guarantor or otherwise (other than for purposes of collection in the ordinary course of business), Debt of another Person (other than the Company or any Subsidiary) (it being understood that Debt shall be deemed to be incurred by the Company or any Subsidiary whenever the Company or such Subsidiary shall create, assume, guarantee or otherwise become liable in respect thereof).
“Depositary” has the meaning provided in Section 2.1(d) of this Supplemental Indenture.
“Disqualified Stock” means, with respect to any Person, any Capital Stock of such Person which by the terms of such Capital Stock (or by the terms of any security into which it is convertible or for which it is exchangeable or exercisable), upon the happening of any event or otherwise (i) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than Capital Stock which is redeemable solely in exchange for Capital Stock which is not Disqualified Stock or for Subordinated Debt), (ii) is convertible into or exchangeable or exercisable for Debt, other than Subordinated Debt, or Disqualified Stock, or (iii) is redeemable at the option of the holder thereof, in whole or in part (other than Capital Stock which is redeemable solely in exchange for Capital Stock which is not Disqualified Stock or for Subordinated Debt), in each case on or prior to the Stated Maturity of the principal of the Notes.
“Domestic Subsidiary” means any Subsidiary of the Company that was organized under the laws of the United States or any state of the United States or the District of Columbia (excluding, for the avoidance of doubt, any Subsidiary organized under U.S. possessions such as Puerto Rico).
4
“Earnings from Operations” for any period means net earnings excluding gains and losses on sales of investments, extraordinary items, gains and losses from early extinguishment of debt and property valuation losses, in each case as reflected in the financial statements of the Company and its Subsidiaries for such period, determined on a consolidated basis in accordance with generally accepted accounting principles.
“Encumbrance” means any mortgage, lien, charge, pledge, security interest or other encumbrance of any kind.
“Equity Offering” means any public or private sale of equity of the Company or any direct or indirect parent of the Company (provided that, in the case of a sale of such stock by such parent, the cash proceeds therefrom are contributed to the equity capital of the Company).
“Excluded Subsidiary” means any Subsidiary of the Company (i) that is a Pledged Subsidiary, (ii) that is not a Wholly Owned Subsidiary or that holds no material assets other than the Capital Stock of one or more Subsidiaries that are not Wholly Owned Subsidiaries or (iii)(a) holding title to or beneficially owning Properties which are subject to an Encumbrance securing Debt of such Subsidiary, or being a beneficial owner of a Subsidiary of the Company holding title to or beneficially owning such Properties (but having no material assets other than such beneficial ownership interests or the Capital Stock of a Subsidiary of the Company having no material assets other than such beneficial ownership interests) and (b) which (x) is, or is expected to be, prohibited from Guaranteeing the indebtedness of any other Person pursuant to any document, instrument or agreement evidencing such Secured Debt or (y) is prohibited from Guaranteeing the indebtedness of any other Person pursuant to a provision of such Subsidiary’s organizational documents which provision was included in such Subsidiary’s organizational documents as a condition or anticipated condition to the extension of such Secured Debt; for purposes of this subsection (iii), any Subsidiary which is a lessee under a lease with a Subsidiary which is an Excluded Subsidiary under this subsection (iii) shall also be deemed to be an Excluded Subsidiary. In addition, (i) Candlewood Jersey City-Urban Renewal, L.L.C., a New Jersey limited liability company, and (ii) any Subsidiary that is an “Excluded Subsidiary” as defined under the Existing Credit Agreement or the indenture for the Secured 2031 Notes shall be deemed to be an Excluded Subsidiary for purposes of this definition.
“Existing Credit Agreement” means that certain Third Amended and Restated Credit Agreement, dated June 29, 2023, by and among the Company, Wells Fargo Bank, National Association, as administrative agent, and the lenders and the other parties thereto, as amended by the First Amendment thereto, dated November 3, 2023, and as may be further amended, restated, supplemented, modified, renewed, refunded, increased, extended, replaced in any manner (whether upon or after termination or otherwise) or refinanced in whole or in part from time to time.
“Foreign Subsidiary” means (a) any Real Foreign Subsidiary, (b) any Domestic Subsidiary that has no material assets (with the determination of materiality to be made in good faith by the Company) other than Capital Stock of one or more Real Foreign Subsidiaries, and (c) any Subsidiary (including any Subsidiary that would otherwise be a Domestic Subsidiary) of the Company that owns any Capital Stock of a Real Foreign Subsidiary if the provision of a subsidiary guarantee by such Subsidiary could reasonably be expected, in the good faith judgment of the Company, cause any earnings of such Real Foreign Subsidiary, as determined for U.S. federal income tax purposes, to be treated as a deemed dividend to such Real Foreign Subsidiary’s United States parent for U.S. federal income tax purposes.
“generally accepted accounting principles” means generally accepted accounting principles in the United States of America, which were in effect on February 3, 2016.
“Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any indebtedness of any other Person and any obligation, direct or indirect, contingent or otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds for the purchase or payment of) such indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise); or
5
(2) entered into for purposes of assuring in any other manner the obligee of such indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part);
provided, however, that the term “Guarantee” will not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.
“Interest Payment Date” with respect to the Notes is defined in Section 101 of the Base Indenture and Section 2.1(e) of this Supplemental Indenture.
“Issue Date” means June 3, 2024.
“Joint Venture Interests” means assets of the Company and its Subsidiaries constituting an equity investment in real estate assets or other properties, or in an entity holding real estate assets or other properties, jointly owned by the Company and its Subsidiaries, on the one hand, and one or more other Persons not constituting Affiliates of the Company, on the other hand, excluding any entity or properties (i) which is a Subsidiary or are properties if the co-ownership thereof (if in a separate entity) would constitute or would have constituted a Subsidiary, or (ii) to which, at the time of determination, the Company’s manager at such time or an Affiliate of the Company’s manager at such time provides management services. In no event shall Joint Venture Interests include equity securities that are part of a class of equity securities that are traded on a national or regional securities exchange or a recognized over-the-counter market or any investments in debt securities, mortgages or other Debt.
“Mid-BBB Investment Grade Rating” means a rating equal to or higher than Baa2 (or the equivalent) by Moody’s or BBB (or the equivalent) by Standard & Poor’s, or if Moody’s or Standard & Poor’s ceases to rate the Notes for reasons outside of the Company’s control, the equivalent investment grade rating from any other Rating Agency.
“Moody’s” means Moody’s Investors Service, Inc., or any successor thereof.
“Notes” means the Company’s 8.375% Senior Guaranteed Unsecured Notes due 2029, issued under this Supplemental Indenture and the Indenture, as amended or supplemented from time to time.
“Pledged Subsidiary” means a Subsidiary the Capital Stock of which has been pledged as collateral to secure amounts outstanding under the Existing Credit Agreement or the indenture for the Secured 2031 Notes.
“Property” means any parcel of real property, together with all improvements thereon.
“Rating Agencies” means (1) each of Moody’s and Standard & Poor’s; and (2) if either Moody’s or Standard & Poor’s ceases to rate the Notes or fails to make a rating of the Notes publicly available for reasons outside of the Company’s control, a “nationally recognized statistical rating organization” as such term is defined in Section 3(a)(62) of the Exchange Act, selected by the Company as a replacement agency for Moody’s or Standard & Poor’s, or either of them, as the case may be.
“Rating Category” means (a) with respect to Standard & Poor’s, any of the following categories: BB, B, CCC, CC, C and D (or equivalent successor categories); (b) with respect to Moody’s, any of the following categories: Ba, B, Caa, Ca, C and D (or equivalent successor categories); and (c) the equivalent of any such category of Standard & Poor’s or Moody’s used by another Rating Agency selected by the Company. In determining whether the rating of the Notes has decreased by one or more gradations, gradations within Rating Categories ((i) + and-for Standard & Poor’s; (ii) 1, 2 and 3 for Moody’s; and (iii) the equivalent gradations for another Rating Agency selected by the Company) shall be taken into account (e.g., with respect to Standard & Poor’s, a decline in a rating from BB+ to BB, or from BB− to B+, will constitute a decrease of one gradation).
“Rating Date” means the date which is ninety (90) days prior to the earlier of (a) a Change of Control or (b) public notice of the occurrence of a Change of Control or of the intention by the Company to effect a Change of Control.
6
“Rating Decline” with respect to the Notes shall be deemed to occur if, within sixty (60) days after public notice of the occurrence of a Change of Control (which period shall be extended so long as the rating of such notes is under publicly announced consideration for possible downgrade by either of the Rating Agencies with respect to a Rating Category), the rating of the Notes by each Rating Agency shall be decreased by one or more gradations to or within a Rating Category (including gradations within Rating Categories as well as between Rating Categories) as compared to the rating of the Notes on the Rating Date; provided that each Rating Agency indicates that such downgrade is as a result of such Change of Control.
“Real Foreign Subsidiary” means a Subsidiary of the Company that is not a Domestic Subsidiary.
“Redemption Date” means the date of redemption of any Notes in accordance with this Supplemental Indenture.
“Regular Record Date” with respect to the Notes is defined in Section 101 of the Base Indenture and Section 2.1(e) of this Supplemental Indenture.
“Secured Debt” means Debt of the Company or its Subsidiaries secured by an Encumbrance on the property of the Company or its Subsidiaries.
“Secured 2031 Notes” means the $1,000,000,000 aggregate principal amount of 8.625% senior secured notes due 2031 issued by that certain Indenture, dated as of November 16, 2023, among the Company, certain subsidiaries of the Company named therein as guarantors and the Trustee.
“Significant Subsidiary” means any Subsidiary which is a “significant subsidiary” (within the meaning of Regulation S-X, promulgated by the Commission under the Securities Act) of the Company.
“Standard & Poor’s” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, or any successor thereof.
“Stated Maturity” means June 15, 2029.
“Subordinated Debt” means Debt which by the terms of such Debt is subordinated in right of payment to the principal of and interest and premium, if any, on the Notes.
“Subsidiary” means any corporation or other Person of which a majority of (i) the voting power of the voting equity securities or (ii) the outstanding equity interests of which are owned, directly or indirectly, by the Company or one or more other Subsidiaries of the Company, and which is required to be consolidated in accordance with generally accepted accounting principles. For the purposes of this definition, “voting equity securities” means equity securities having voting power for the election of directors or persons serving comparable functions as directors, whether at all times or only so long as no senior class of security has such voting power by reason of any contingency.
“Subsidiary Guarantee” means, individually, any Guarantee of payment of the Notes by a Subsidiary Guarantor pursuant to the terms of Article 6 of this Supplemental Indenture.
“Subsidiary Guarantor” means each Initial Subsidiary Guarantor and any other Subsidiary of the Company that provides a Subsidiary Guarantee of the Notes in accordance with the Indenture; provided that upon the release or discharge of such Person from its Subsidiary Guarantee in accordance with the Indenture, such Person ceases to be a Subsidiary Guarantor.
“Total Assets” as of any date means the sum of (i) the Undepreciated Real Estate Assets and (ii) all other assets of the Company and its Subsidiaries determined in accordance with generally accepted accounting principles (but excluding accounts receivable and intangibles).
7
“Total Senior Guaranteed Unsecured Debt” shall mean (1) $450,000,000 aggregate principal amount of the Company’s outstanding 5.500% senior guaranteed unsecured notes due 2027; (2) the Notes; (3) $500,000,000 aggregate principal amount of the Company’s outstanding 8.875% senior guaranteed unsecured notes due 2032; and (4) any future subsidiary guaranteed unsecured Debt, but shall not include (x) the Secured 2031 Notes, (y) amounts outstanding under the Existing Credit Agreement or (z) any future secured Debt.
“Total Unencumbered Assets” as of any date means the sum of (i) Undepreciated Real Estate Assets not securing any portion of Secured Debt and (ii) the amount of all other assets of the Company and its Subsidiaries not securing any portion of Secured Debt, in each case on such date determined on a consolidated basis in accordance with generally accepted accounting principles (but excluding accounts receivable and intangibles); provided that, in determining Total Unencumbered Assets as a percentage of the aggregate outstanding principal amount of the Unsecured Debt of the Company and its Subsidiaries on a consolidated basis for purposes of the covenant set forth in Section 3.1(b) of this Supplemental Indenture, Joint Venture Interests shall be excluded from Total Unencumbered Assets to the extent such Joint Venture Interests would otherwise be included therein.
“Total Unencumbered Assets in Guarantor Subsidiaries” as of any date means Total Unencumbered Assets less the portion of Total Unencumbered Assets of Subsidiaries that are not guarantors of the Notes.
“Treasury Rate” means, as of any Redemption Date, the yield to maturity as of such Redemption Date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two (2) Business Days prior to the Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the Redemption Date to June 15, 2026; provided, however, that if the period from the Redemption Date to June 15, 2026 is less than one year, the weekly average yield on actively traded United States Treasury securities adjusted to a constant maturity of one year will be used.
“Undepreciated Real Estate Assets” as of any date means the cost (original cost plus capital improvements) of real estate and associated tangible personal property used in connection with the real estate assets of the Company and its Subsidiaries on such date, before depreciation and amortization determined on a consolidated basis in accordance with generally accepted accounting principles.
“Unsecured Debt” means any Debt of the Company or its Subsidiaries which is not Secured Debt.
“Voting Stock” means with respect to any Person, Capital Stock of any class or kind ordinarily having the power to vote for the election of directors, trustees, managers or other voting members of the governing body of such Person.
“Wholly Owned Subsidiary” means any Subsidiary of the Company of which all the outstanding Voting Stock of such Subsidiary (other than directors’ qualifying shares and other than an immaterial amount of Voting Stock required to be owned by other Persons pursuant to applicable law or regulation) is owned by the Company and/or one or more Subsidiaries of the Company.
ARTICLE 2
TERMS OF THE NOTES
Section 2.1 Terms of the Notes. Pursuant to Section 301 of the Base Indenture, the Notes shall have the following terms and conditions:
(a) Title. The Notes shall be in registered form under the Indenture and shall be known as the Company’s “8.375% Senior Guaranteed Unsecured Notes due 2029.”
(b) Aggregate Principal Amount. Except (i) as provided in this Section and (ii) for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section 304, 305, 306, 906 or 1107 of the Base Indenture and except for any Notes which, pursuant to Section 303 of the Base Indenture, are deemed never to have been authenticated and delivered hereunder, the Notes will be limited to an aggregate principal amount of $700,000,000, subject to the right of the Company to reopen such series for issuances of additional Notes having the same terms and conditions as the Notes issued on the Issue Date except for issue date, issue price and, if applicable, the first Interest Payment Date thereon and related interest accrual date.
8
(c) Form of Notes. The Notes (together with the Trustee’s certificate of authentication) shall be substantially in the form of Exhibit A hereto, which is hereby incorporated in and made a part of this Supplemental Indenture.
(d) Registered Securities in Book Entry Form. The Notes shall be initially issued in the form of one or more registered Global Securities without coupons (each, a “Global Note”) and shall be deposited with, or on behalf of, The Depository Trust Company (“DTC” and, together with any successor depositary with respect to the Global Notes appointed under the Indenture, the “Depositary”) and registered in the name of DTC’s nominee, Cede & Co. Unless and until it is exchanged in whole or in part for the individual Notes represented thereby under the circumstances described below, a Global Note may not be transferred except as a whole by a Depositary to its nominee, by a nominee of a Depositary to such Depositary or another nominee of such Depositary, or by a Depositary or its nominee to a successor Depositary or a nominee of such successor.
So long as a Depositary or its nominee is the Holder of a Global Note, such Depositary or its nominee, as the case may be, will be considered the sole owner or Holder of the Notes represented by such Global Note for all purposes under the Indenture. Except as provided below, owners of a beneficial interest in Notes evidenced by a Global Note will not be entitled to have any of the individual Notes represented by such Global Note registered in their names, will not receive or be entitled to receive physical delivery of any such Notes in definitive form and will not be considered the owners or Holders thereof under the Indenture for any purpose, including with respect to giving of any direction, instructions or approvals to the Trustee hereunder.
A Global Note may be exchanged in whole or in part for individual Notes represented thereby only if (i) the Depositary (A) has notified the Company that it is unwilling or unable to continue as a depositary for such Global Note or (B) has ceased to be a clearing agency registered under the Exchange Act, and in either case a successor depositary shall not have been appointed by the Company within ninety (90) days after such notice is received by the Company or the Company becomes aware of such cessation, respectively, or (ii) there shall have occurred and be continuing an Event of Default with respect to such Global Note and the Security Registrar has received a written request from an owner of beneficial interest in such Global Note to receive registered Notes. In any such case, the Company will issue individual Notes in exchange for such Global Note representing such Notes in authorized denominations.
Notwithstanding any provisions of Section 2.1(c) or Section 2.1(f) of this Supplemental Indenture to the contrary, payments of principal, premium, if any, and interest on any Global Note shall be made in accordance with the procedures of the Depositary and its participants in effect from time to time.
(e) Interest and Interest Rate. The Notes will bear interest at a rate of 8.375% per annum, from June 3, 2024 (or, in the case of Notes issued after June 3, 2024, from the date designated by the Company in connection with such issuance), or from the immediately preceding Interest Payment Date to which interest has been paid or duly provided for, payable semi-annually in arrears on June 1 and December 1 of each year, commencing December 1, 2024 (each of which shall be an “Interest Payment Date”), or if such day is not a Business Day, on the next succeeding Business Day, to the Persons in whose names the Notes are registered in the Security Register at the close of business on the Regular Record Date for such interest, which shall be May 15 or November 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date (each, a “Regular Record Date”).
(f) Principal Repayment; Currency. The Stated Maturity of the principal of the Notes is June 15, 2029; provided, however, the Notes may be earlier redeemed at the option of the Company as provided in Section 2.1(g)(vii) of this Supplemental Indenture. The principal of each Note payable at its Maturity shall be paid against presentation and surrender thereof at the Corporate Trust Office, in such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public or private debts.
9
(g) Redemption
(i) Notices to Trustee. If the Company elects to redeem Notes pursuant to Section 2.1(g)(vii) hereof, it shall furnish to the Trustee, at least two (2) Business Days before notice of redemption is transmitted or caused to be transmitted to the applicable Holders pursuant to Section 2.1(g)(iii), an Officer’s Certificate setting forth (i) the paragraph or subparagraph of such Note and/or Section of this Supplemental Indenture pursuant to which the redemption shall occur, (ii) the Redemption Date, (iii) the principal amount of the Notes to be redeemed and (iv) the redemption price.
(ii) Selection of Notes to Be Redeemed or Purchased. If the Company is redeeming or repurchasing less than all of the Notes at any time, the Trustee shall select the Notes to be redeemed or purchased (a) if the Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the Notes are listed, (b) on a pro rata basis to the extent practicable or (c) by lot or such other similar method in accordance with the procedures of DTC; provided that no Notes of $2,000 or less shall be redeemed or repurchased in part. In the event of partial redemption or purchase by lot, the particular Notes to be redeemed or purchased shall be selected, unless otherwise provided herein, not less than fifteen (15) nor more than sixty (60) days prior to the Redemption Date by the Trustee from the outstanding Notes not previously called for redemption or purchase.
The Trustee shall promptly notify the Company in writing of the Notes selected for redemption or purchase and, in the case of any Note selected for partial redemption or purchase, the principal amount thereof to be redeemed or purchased. Notes and portions of Notes selected shall be in amounts of $2,000 or whole multiples of $1,000 in excess thereof; no Notes of $2,000 or less can be redeemed in part, except that if all of the Notes of a Holder are to be redeemed or purchased, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed or purchased. Except as provided in the preceding sentence, provisions of this Supplemental Indenture that apply to Notes called for redemption or purchase also apply to portions of Notes called for redemption or purchase.
(iii) Notice of Purchase or Redemption. Notices of purchase or redemption shall be electronically delivered or sent at least fifteen (15) days but not more than sixty (60) days before the purchase or Redemption Date to each Holder of Notes to be redeemed at such Holder’s registered address, except that redemption notices may be transmitted more than sixty (60) days prior to a Redemption Date if the notice is issued in connection with satisfaction and discharge of the Indenture or Defeasance or Covenant Defeasance of the Notes in accordance with Article Four or Article Thirteen of the Base Indenture subject to Section 5.7 and Section 5.8 hereof.
The notice shall identify the Notes (including the CUSIP or ISIN number) to be purchased or redeemed and shall state:
| 1. | the purchase or Redemption Date; |
| 2. | the purchase or redemption price; |
| 3. | if any Note is to be redeemed in part only, the portion of the principal amount of that Note that has been or is to be purchased or redeemed and that, after the Redemption Date upon surrender of such Note, the Company will issue a new Note or Notes in principal amount equal to the unredeemed portion of the original Note in the name of the Holder upon cancellation of the original Note; |
| 4. | the name and address of the paying agent; |
| 5. | that Notes called for redemption must be surrendered to the paying agent to collect the redemption price; |
| 6. | that, unless the Company default in making such redemption payment, and subject to any conditions specified in such notice, interest on Notes called for redemption ceases to accrue on and after the Redemption Date; |
10
| 7. | the paragraph or subparagraph of the Notes and/or Section of this Supplemental Indenture pursuant to which the Notes called for purchase or redemption are being redeemed; |
| 8. | that no representation is made as to the correctness or accuracy of the CUSIP or ISIN number, as applicable, if any, listed in such notice or printed on the Notes; and |
| 9. | any condition to such redemption. |
Notice of redemption may, at the Company’s option and discretion, be subject to one or more conditions precedent. If any such redemption or notice is subject to satisfaction of one or more conditions precedent, such notice shall state that, in the Company’s discretion, the Redemption Date may be delayed until such time as any or all such conditions shall be satisfied, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the Redemption Date, or by the Redemption Date so delayed. The Company shall provide notice to the Trustee of the satisfaction of the conditions precedent.
At the Company’s request, the Trustee shall give the notice of purchase or redemption in the Company’s names and at their expense; provided that the Company shall have delivered to the Trustee, at least two (2) Business Days before notice of redemption is required to be transmitted or caused to be transmitted to Holders pursuant to this Section 2.1(g)(iii) (unless a shorter notice shall be agreed to by the Trustee), an Officer’s Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.
(iv) Effect of Notice of Redemption. Once notice of redemption is transmitted in accordance with Section 2.1(g)(iii) hereof, Notes called for redemption become irrevocably due and payable on the Redemption Date at the redemption price (subject to satisfaction of any conditions specified in the applicable notice). The notice, if transmitted in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. In any case, failure to give such notice or any defect in the notice to the Holder of any Note designated for redemption in whole or in part shall not affect the validity of the proceedings for the redemption of any other Note. Subject to Section 2.1(g)(v) hereof, on and after the Redemption Date, interest ceases to accrue on Notes or portions of Notes called for redemption.
(v) Deposit of Redemption of Purchase Price. Prior to 11:00 a.m. (New York City time) on the redemption or purchase date, the Company shall deposit with the paying agent money sufficient to pay the redemption or purchase price of and accrued and unpaid interest on all Notes to be redeemed or purchased on that date. The paying agent shall promptly return to the Company any money deposited with the paying agent by the Company in excess of the amounts necessary to pay the redemption price of, and accrued and unpaid interest on, all Notes to be redeemed or purchased.
If the Company complies with the provisions of the preceding paragraph, on and after the redemption or purchase date, interest shall cease to accrue on the Notes, or the portions of Notes called for redemption or purchase. If a Note is redeemed or purchased on or after a record date but on or prior to the related Interest Payment Date, then any accrued and unpaid interest to the redemption or purchase date shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for redemption or purchase shall not be so paid upon surrender for redemption or purchase because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption or purchase date until such principal is paid, and to the extent lawful on any interest accrued to the redemption or purchase date not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 2.1(e) hereof.
(vi) Notes Redeemed or Purchased in Part. Upon surrender of a Note that is redeemed or purchased in part, the Company shall issue and the Trustee shall authenticate for the Holder at the expense of the Company a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered representing the same indebtedness to the extent not redeemed or purchased; provided that each new Note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. It is understood that, notwithstanding anything in this Supplemental Indenture to the contrary, only an Authentication Order and not an Opinion of Counsel or Officer’s Certificate is required for the Trustee to authenticate such new Note.
11
(vii) Optional Redemption. The Notes may be redeemed, at any time in whole, or from time to time in part, subject to the conditions and at the redemption prices set forth in Paragraph 2 of the form of Note set forth in Exhibit A hereto, which is hereby incorporated by reference and made a part of this Supplemental Indenture, together with accrued and unpaid interest, if any, to the Redemption Date.
(h) Notices. Notices to the Company or any Subsidiary Guarantor shall be directed to it at Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458-1634, fax number (617) 796-8349, Attention: President; notices to the Trustee shall be directed to it at One Federal Street, 3rd Floor, Boston, Massachusetts 02110, email david.doucette@usbank.com, fax number (617) 603-6683, Attention: Corporate Trust Department, Re: Service Properties Trust 8.375% Senior Guaranteed Unsecured Notes due 2029, or as to any party, at such other address as shall be designated by such party in a written notice to the other parties. All notices and communications (other than those sent to Holders of the Notes) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five (5) calendar days after mailing if sent by registered or certified mail, postage prepaid (except that a notice of change of address shall not be deemed to have been given until actually received by the addressee); when receipt is acknowledged, if sent by e-mail or facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.
(i) Legal Holidays. If any Interest Payment Date, Redemption Date or the Stated Maturity for the principal of the Notes falls on a day that is not a Business Day, the payment otherwise payable on such day will be due and payable on the next succeeding Business Day, and no interest will accrue thereon for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be, through such next succeeding Business Day. The provisions of this Section 2.1(i) shall supersede and replace Section 113 of the Base Indenture with respect to the Notes.
ARTICLE 3
ADDITIONAL COVENANTS
Section 3.1 Additional Covenants. In addition to the covenants of the Company set forth in Article Eight and Article Ten of the Base Indenture, the Holders of the Notes shall have the benefit of the following covenants:
(a) Limitations on Incurrence of Debt.
(i) The Company will not, and will not permit any Subsidiary to, incur any Debt if, immediately after giving effect to the incurrence of such additional Debt and the application of the proceeds therefrom, the aggregate principal amount of all outstanding Debt of the Company and its Subsidiaries on a consolidated basis determined in accordance with generally accepted accounting principles is greater than 60% of the sum of (without duplication):
(A) the Total Assets of the Company and its Subsidiaries as of the end of the fiscal quarter covered by the Company’s Annual Report on Form 10-K, or its Quarterly Report on Form 10-Q, as the case may be, most recently filed with the Commission (or, if such filing is not permitted or required under the Exchange Act, with the Trustee) prior to the incurrence of such additional Debt; and
(B) the purchase price of any real estate assets or mortgages receivable acquired, and the amount of any securities offering proceeds received (to the extent that such proceeds were not used to acquire real estate assets or mortgages receivable or used to reduce Debt), by the Company or any Subsidiary since the end of such fiscal quarter, including those proceeds obtained in connection with the incurrence of such additional Debt.
12
For purposes of this Supplemental Indenture, “Adjusted Total Assets” means the sum of (A) and (B) above.
(ii) The Company will not, and will not permit any Subsidiary to, incur any Secured Debt if, immediately after giving effect to the incurrence of such additional Secured Debt and the application of the proceeds therefrom, the aggregate principal amount of all outstanding Secured Debt of the Company and its Subsidiaries on a consolidated basis determined in accordance with generally accepted accounting principles is greater than 40% of Adjusted Total Assets.
(iii) The Company will not, and will not permit any Subsidiary to, incur any Debt if, immediately after giving effect to the incurrence of such additional Debt and on a pro forma basis, including the application of the proceeds therefrom, the ratio of Consolidated Income Available for Debt Service to the Annual Debt Service for the four consecutive fiscal quarters most recently ended prior to the date on which such additional Debt is to be incurred is less than 1.5 to 1.0, calculated on the assumptions that:
(A) such Debt and any other Debt incurred by the Company and its Subsidiaries on a consolidated basis since the first day of such four-quarter period and the application of the proceeds therefrom, including to refinance other Debt, had occurred at the beginning of such period;
(B) the repayment, retirement or other discharge of any other Debt by the Company and its Subsidiaries on a consolidated basis since the first day of such four-quarter period had occurred at the beginning of such period (except that, in making such computation, the amount of Debt under any revolving credit facility shall be computed based upon the average daily balance of such Debt during such period);
(C) in the case of Acquired Debt or Debt incurred in connection with or in contemplation of any acquisition, including any Person becoming a Subsidiary, since the first day of such four-quarter period, the related acquisition had occurred as of the first day of such period with appropriate adjustments with respect to such acquisition being included in such pro forma calculation; and
(D) in the case of any acquisition or disposition by the Company and its Subsidiaries of any asset or group of assets since the first day of such four-quarter period, whether by merger, stock purchase or sale, or asset purchase or sale, such acquisition or disposition or any related repayment of Debt had occurred as of the first day of such period with the appropriate adjustments with respect to such acquisition or disposition being included in such pro forma calculation.
If the Debt giving rise to the need to make the foregoing calculation or any other Debt incurred after the first day of the relevant four-quarter period bears interest at a floating interest rate, then, for purposes of calculating the Annual Debt Service, the interest rate on such Debt shall be computed on a pro forma basis as if the average interest rate which would have been in effect during the entirety of such four-quarter period had been the applicable rate for the entirety of such period.
None of the foregoing paragraphs described in this Section 3.1(a) shall apply to any incurrence of Debt, including Secured Debt (such Debt or Secured Debt, as the case may be, “Refinancing Debt”), by the Company or any of its Subsidiaries to refinance any Debt; provided that the principal amount of any Refinancing Debt shall not exceed the principal amount of the Debt being refinanced plus any amounts necessary to pay premiums (including tender premiums), accrued interest, defeasance costs and reasonable expenses in connection therewith; provided, further, that notwithstanding compliance with this Section 3.1(a), the Company will not, and will not permit any Subsidiary to, incur additional guaranteed Debt that is “pari” to the Notes if such additional Debt would cause the ratio of the Company’s Total Unencumbered Assets in Guarantor Subsidiaries to the Company’s Total Senior Guaranteed Unsecured Debt to be less than 2.2 to 1.0.
13
(b) Maintenance of Total Unencumbered Assets. The Company and its Subsidiaries will at all times maintain Total Unencumbered Assets of not less than 150% of the aggregate outstanding principal amount of the Unsecured Debt of the Company and its Subsidiaries on a consolidated basis in accordance with generally accepted accounting principles.
(c) Provision of Financial Information. Whether or not the Company is subject to Section 13 or 15(d) of the Exchange Act, it will, within fifteen (15) days after each of the respective dates by which it would have been required to file annual reports, quarterly reports and other documents with the Commission if it were so subject, (1) transmit by mail to all Holders, as their names and addresses appear in the Security Register, without cost to such Holders, copies of the annual reports, quarterly and other reports, financial statements and other documents which it would have been required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act, if it were subject to such Sections, (2) file with the Trustee copies of the annual reports, quarterly or other reports, financial statements and other documents which it would have been required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act, if it was subject to such Sections, and (3) promptly upon written request and payment of the reasonable cost of duplication and delivery, supply copies of such documents to any prospective Holder; provided that, the foregoing requirements shall be deemed satisfied if the foregoing materials are available on the Commission’s EDGAR system or on the Company’s website within the applicable time period. The Trustee shall have no liability or responsibility for the filing, timeliness or content of any such reports, financial statements, documents or information filed by the Company and delivery of such reports, financial statements, documents or information to the Trustee is for informational purposes only and receipt of such shall not constitute constructive notice thereof or any information contained therein.
Notwithstanding the foregoing, if at any time the Notes are guaranteed by any direct or indirect parent company of the Company, the Company may satisfy its obligations under this Section 3.1(c) with respect to financial information relating to the Company by furnishing financial information relating to such direct or indirect parent company; provided, however, that the same is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to such direct or indirect parent company and any of its Subsidiaries other than the Company and its Subsidiaries, on the one hand, and the information relating to the Company and its Subsidiaries on a standalone basis, on the other hand.
(d) Additional Subsidiary Guarantees. If at any time (i) any Subsidiary (whether existing at the Issue Date or acquired or created after the Issue Date) becomes (including on the date of acquisition or creation) a Subsidiary that is not an Excluded Subsidiary or a Foreign Subsidiary or (ii) any Subsidiary ceases to be an Excluded Subsidiary or a Foreign Subsidiary, then the Company will cause such Subsidiary to execute and deliver to the Trustee, within thirty (30) days from the date such Subsidiary became a Subsidiary that is not an Excluded Subsidiary or a Foreign Subsidiary or ceased to be an Excluded Subsidiary or a Foreign Subsidiary, as the case may be, a supplemental indenture in a form reasonably satisfactory to the Trustee pursuant to which such Subsidiary will fully and unconditionally guarantee the Notes, jointly and severally with all other Subsidiary Guarantors, and deliver an Officer’s Certificate and Opinion of Counsel reasonably satisfactory to the Trustee.
The covenant in this Section 3.1(d) will automatically and permanently terminate and the Company will be automatically and permanently released from all its obligations under this Section 3.1(d) on and after the date on which (a) the Notes have received a Mid-BBB Investment Grade Rating from both Rating Agencies; and (b) no Default or Event of Default has occurred and is continuing.
(e) Subsidiary Guarantor May Consolidate, Etc., Only on Certain Terms; Successor Substituted. A Subsidiary Guarantor may not consolidate with or merge into any other Person or convey, transfer or lease all or substantially all of its properties and assets to any other Person (other than the Company or another Subsidiary Guarantor), and a Subsidiary Guarantor may not permit any other Person (other than the Company or another Subsidiary Guarantor) to consolidate with or merge into it, unless:
(i) either (1) the Subsidiary Guarantor is the surviving entity or (2) the Person formed by or surviving any such consolidation or merger (if other than the Subsidiary Guarantor) or to which such conveyance, transfer or lease has been made is an entity organized and validly existing under the laws of the United States, any state thereof or the District of Columbia and expressly assumes, by a supplemental indenture executed and delivered to the Trustee, in form satisfactory to the Trustee, the Subsidiary Guarantor’s obligations under its Subsidiary Guarantee and the Indenture;
14
(ii) immediately after giving effect to such transaction, and treating any indebtedness which becomes an obligation of the Subsidiary Guarantor, any other Subsidiary or the Company as a result of such transaction as having been incurred by the Subsidiary Guarantor, such Subsidiary or the Company at the time of such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default shall have happened and be continuing; and
(iii) the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Section 3.1(e) and that all conditions precedent provided for in the Indenture relating to such transaction have been complied with;
provided that this Section 3.1(e) shall not apply to a transaction pursuant to which such Subsidiary Guarantor shall be released from its obligations under its Subsidiary Guarantee and the Indenture in accordance with Section 6.4 of this Supplemental Indenture.
Upon any consolidation of a Subsidiary Guarantor with, or merger of a Subsidiary Guarantor into, any other Person or any conveyance, transfer or lease all or substantially all of the properties and assets of a Subsidiary Guarantor in accordance with this Section 3.1(e), the successor Person formed by such consolidation or into which such Subsidiary Guarantor is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, such Subsidiary Guarantor under the Indenture with the same effect as if such successor Person had been named as a Subsidiary Guarantor in the Indenture, and thereafter, except in the case of a lease, the predecessor Subsidiary Guarantor shall be relieved of all obligations and covenants under the Indenture and its Subsidiary Guarantee.
(f) Offers to Repurchase upon Change of Control.
(i) If a Change of Control Repurchase Event occurs after the Issue Date, unless the Company has previously or concurrently transmitted a redemption notice with respect to all the outstanding Notes pursuant to Section 2.1(g)(vii) hereof, the Company shall make an offer to purchase all of the Notes pursuant to the offer described below (the “Change of Control Offer”) at a price in cash (the “Change of Control Payment”) equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to, but excluding, the date of purchase, subject to the right of Holders of the Notes of record on the relevant record date to receive interest due on the relevant Interest Payment Date. Within thirty (30) days following any Change of Control Repurchase Event, unless the Company has previously or concurrently transmitted a redemption notice with respect to all the outstanding Notes pursuant to Section 2.1(g)(vii) hereof, the Company shall send notice of such Change of Control Offer, with a copy to the Trustee, to each Holder of Notes to the address of such Holder appearing in the security register or otherwise in accordance with the procedures of DTC, with the following information:
(A) that a Change of Control Offer is being made pursuant to this Section 3.1(f) and that all Notes properly tendered pursuant to such Change of Control Offer will be accepted for payment by the Company;
(B) the purchase price and the purchase date, which will, subject to clause (G) of this Section 3.1(f)(i), be no earlier than thirty (30) days nor later than sixty (60) days from the date such notice is transmitted (the “Change of Control Payment Date”);
(C) that any Note not properly tendered will remain outstanding and continue to accrue interest;
15
(D) that unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest on the Change of Control Payment Date;
(E) that Holders will be entitled to withdraw their tendered Notes and their election to require the Company to purchase such Notes, provided that the paying agent receives, not later than the close of business on the 30th day following the date of the Change of Control Repurchase Event notice, facsimile transmission or letter setting forth the name of the Holder of the Notes, the principal amount of Notes tendered for purchase, and a statement that such Holder is withdrawing its tendered Notes and its election to have such Notes purchased;
(F) that if the Holders tender less than all of the Notes, the Holders of the remaining Notes will be issued new Notes and such new Notes will be equal in principal amount to the unpurchased portion of the Notes surrendered. The unpurchased portion of the Notes must be equal to $2,000 or an integral multiple of $1,000 in excess thereof;
(G) if such notice is delivered prior to the occurrence of a Change of Control, stating that the Change of Control Offer is conditional on the occurrence of such Change of Control, and if applicable, shall state that, in the Company’s discretion, the Change of Control Payment Date may be delayed until such time as the Change of Control shall occur, or that such redemption may not occur and such notice may be rescinded in the event that the Company shall determine that such condition will not be satisfied by the Change of Control Payment Date or by the Change of Control Payment Date as so delayed; and
(H) the other instructions, as determined by the Company, consistent with this Section 3.1(f), that a Holder must follow.
The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Supplemental Indenture, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached their obligations under this Supplemental Indenture by virtue thereof.
(ii) On the Change of Control Payment Date, the Company will, to the extent permitted by law,
(A) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer,
(B) deposit with the paying agent an amount equal to the aggregate Change of Control Payment in respect of all Notes or portions thereof so tendered, and
(C) deliver, or cause to be delivered, to the Trustee for cancellation the Notes so accepted together with an Officer’s Certificate to the Trustee stating that such Notes or portions thereof have been tendered to and purchased by the Company.
(iii) The Company shall not be required to make a Change of Control Offer following a Change of Control Repurchase Event if (1) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Supplemental Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer or (2) notice of redemption has been given pursuant to this Supplemental Indenture with respect to all of the outstanding Notes pursuant to Section 2.1(g)(vii), unless and until there is a default in payment of the applicable redemption price. Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.
16
(iv) In the event that Holders of not less than 90% in aggregate principal amount of the then outstanding Notes accept a Change of Control Offer and the Company (or any third party making such Change of Control Offer in lieu of the Company as described above) purchase all of the Notes tendered by such Holders, the Company (or any such third party) will have the right, upon not less than ten (10) nor more than sixty (60) days’ prior notice, given not more than thirty (30) days following the purchase pursuant to such Change of Control Offer described above, to redeem all of such Notes that remain outstanding following such purchase at a redemption price equal to the Change of Control Payment, plus, to the extent not included in the Change of Control Payment, accrued and unpaid interest on the Notes that remain outstanding, to, but excluding, the date of purchase.
(v) Notes repurchased by the Company pursuant to a Change of Control Offer will have the status of Notes issued but not outstanding or will be retired and canceled at the option of the Company. Notes purchased by a third party pursuant to Section 3.1(f)(iv) will have the status of Notes issued and outstanding unless transferred to the Company.
(vi) Other than as specifically provided in this Section 3.1(f), any purchase pursuant to this Section 3.1(f) shall be made pursuant to the provisions of Sections 2.1(g)(ii), 2.1(g)(v) and 2.1(g)(vi), hereof.
ARTICLE 4
SUPPLEMENTAL INDENTURES
Section 4.1 Restatement of Section 901 of the Base Indenture. The provisions of Section 901 of the Base Indenture, as applied to the Notes, are restated in their entirety and shall be deemed to read as follows in lieu of the provisions set forth therein:
“Section 901 Supplemental Indentures Without Consent of Holders
Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the Company or a Subsidiary Guarantor and the assumption by any such successor of the covenants of the Company herein and in the Securities or the covenants of such Subsidiary Guarantor herein and in its Subsidiary Guarantee; or
(b) to add to the covenants of the Company or any Subsidiary Guarantor for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company or any Subsidiary Guarantor; or
(c) to add any additional Events of Default for the benefit of the Holders of all or any series of Securities (and if such additional Events of Default are to be for the benefit of less than all series of Securities, stating that such additional Events of Default are expressly being included solely for the benefit of such series); or
(d) to add to or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of Securities of any series in bearer form, registrable or not registrable as to principal, and with or without interest coupons, or to permit or facilitate the issuance of any series of Securities in uncertificated form; or
17
(e) to add to, change or eliminate any of the provisions of this Indenture in respect of one or more series of Securities, provided that any such addition, change or elimination (i) shall neither (A) apply to any Security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (B) modify the rights of the Holder of any such Security with respect to such provision or (ii) shall become effective only when there is no such Security Outstanding; or
(f) to add guarantees of or to secure all or any series of the Securities or any guarantees thereof; or
(g) to evidence the release of any Subsidiary Guarantor or any guarantor of the Securities of any series; or
(h) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 611; or
(i) to establish the forms or terms of Securities of any series as permitted by Sections 201 and 301 or to provide for the issuance of additional Securities of any series; or
(j) to cure any ambiguity, to correct or supplement any provision contained herein or in any indenture supplemental hereto which may be defective or inconsistent with any other provision contained herein or in any supplemental indenture or to conform the terms hereof, as amended and supplemented, that are applicable to the Securities of any series to the description of the terms of such Securities in the offering memorandum, prospectus supplement or other offering document applicable to such Securities at the time of initial sale thereof; or
(k) to supplement any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the defeasance (whether legal or covenant defeasance) or satisfaction and discharge of any series of Securities; provided that any such action shall not adversely affect the interests of the Holders of Securities of such series or any other series of Securities in any material respect; or
(l) to prohibit the authentication and delivery of additional series of Securities; or
(m) to add to or change or eliminate any provision of this Indenture as shall be necessary or desirable in accordance with any amendments to the Trust Indenture Act;
(n) to comply with the rules of any applicable Depositary; or
(o) to make any other provisions with respect to matters or questions arising under the Indenture, provided that such action pursuant to this clause (o) shall not adversely affect the interests of the Holders of Securities of any series in any material respect.”
Section 4.2 Restatement of Section 902 of the Base Indenture. The provisions of Section 902 of the Base Indenture, as applied to the Notes, are restated in their entirety and shall be deemed to read as follows in lieu of the provisions set forth therein:
“Section 902 Supplemental Indentures With Consent of Holders
With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities of each series affected by such supplemental indenture, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby,
18
(a) change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon, or reduce the amount (including the amount of any premium) due upon the redemption thereof, or reduce the amount of the principal of a Security which would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502, or change the date on which any Security may be subject to redemption, or change any Place of Payment where, or the coin or currency in which, any Security or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or
(b) reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or
(c) release any Subsidiary Guarantor from any of its obligations under its Subsidiary Guarantee or this Indenture except in accordance with the terms of this Indenture; or
(d) modify any of the provisions of this Section, Section 513 or Section 1006, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby; provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to “the Trustee” and concomitant changes in this Section and Section 1006, or the deletion of this proviso, in accordance with the requirements of Section 611 and clause (h) of Section 901.
A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.”
ARTICLE 5
OTHER PROVISIONS
Section 5.1 Restatement of Section 101 of the Base Indenture.
(a) The provisions of Section 101(a) of the Base Indenture, as applied to the Notes, are restated in their entirety and shall be deemed to read as follows in lieu of the provisions set forth therein:
“(a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular, and the terms “Notes,” “Subsidiary Guarantee” and “Subsidiary Guarantor” have the meanings assigned to them in the Supplemental Indenture and include the plural as well as the singular;”
(b) Section 101 of the Base Indenture, as applied to the Notes, is further amended by adding the following defined term in its appropriate alphabetical position:
“Supplemental Indenture” means the Eleventh Supplemental Indenture to this Indenture, dated as of June 3, 2024, by and among the Company, the subsidiary guarantors named therein, and the Trustee, as the same may be amended or supplemented from time to time.”
19
Section 5.2 Sinking Funds not Applicable. Section 501(c) of the Base Indenture shall not be applicable to the Notes.
Section 5.3 Restatement of Section 501(d) of the Base Indenture. The provisions of Section 501(d) of the Base Indenture, as applied to the Notes, are restated in their entirety and shall be deemed to read as follows in lieu of the provisions set forth therein:
“(d) default in the performance of, or breach of, any covenant of the Company or any Subsidiary Guarantor in this Indenture (other than a default under Section 501(a) or Section 501(b) or which has been expressly included in this Indenture solely for the benefit of a series of Securities other than that series), and continuance of such default or breach for a period of sixty (60) days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of more than 25% in principal amount of the Outstanding Securities of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or”
Section 5.4 Restatement of Section 501(e) of Base Indenture. The provisions of Section 501(e) of the Base Indenture, as applied to the Notes, are restated in their entirety and shall be deemed to read as follows in lieu of the provisions set forth therein:
“(e) the Company or one of its Significant Subsidiaries, if any, pursuant to or within the meaning of any Bankruptcy Law (i) commences a voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary case, or (iii) consents to the appointment of a Custodian of it or for all or substantially all of its property; or”
Section 5.5 Restatement of Section 501(f) of Base Indenture. The provisions of Section 501(f) of the Base Indenture, as applied to the Notes, are restated in their entirety and shall be deemed to read as follows in lieu of the provisions set forth therein:
“(f) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (i) is for relief against the Company or one of its Significant Subsidiaries in an involuntary case, (ii) appoints a Custodian of the Company or such Significant Subsidiary or for all or substantially all of its property, or (iii) orders the liquidation of the Company or such Significant Subsidiary, and the order or decree remains unstayed and in effect for ninety (90) days; or”
Section 5.6 Additional Events of Default. In accordance with Section 501(g) of the Base Indenture, each of the following shall also constitute an “Event of Default” with respect to the Notes:
(a) default under any bond, debenture, note or other evidence of indebtedness of the Company, or under any mortgage, indenture or other instrument of the Company (including a default with respect to Securities issued under the Indenture other than the Notes) under which there may be issued or by which there may be secured any indebtedness of the Company (or by any Subsidiary, the repayment of which the Company has guaranteed or for which the Company is directly responsible or liable as obligor or guarantor), whether such indebtedness now exists or shall hereafter be created, which default shall constitute a failure to pay an aggregate principal amount exceeding $50,000,000 of such indebtedness when due and payable after the expiration of any applicable grace period with respect thereto and shall have resulted in such indebtedness in an aggregate principal amount exceeding $50,000,000 becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, without such indebtedness having been discharged, or such acceleration having been rescinded or annulled, within a period of ten (10) days after there shall have been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of more than 25% in aggregate principal amount of the Outstanding Notes, a written notice specifying such default and requiring the Company to cause such indebtedness to be discharged or cause such acceleration to be rescinded or annulled and stating that such notice is a “Notice of Default” under the Indenture; and
20
(b) any Subsidiary Guarantee of a Subsidiary Guarantor that is a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms of the Indenture) or is declared null and void in a judicial proceeding or any Subsidiary Guarantor that is a Significant Subsidiary or group of Subsidiary Guarantors that taken together would constitute a Significant Subsidiary denies or disaffirms its or their, as the case may be, obligations under the Indenture or its or their Subsidiary Guarantees, as the case may be.
Section 5.7 Applicability of Satisfaction and Discharge. Article Four of the Base Indenture applies to the Notes, except for the proviso at the end of Section 401(a). For the avoidance of doubt, upon satisfaction and discharge of the Indenture with respect to the Notes pursuant to Article Four of the Base Indenture, the Subsidiary Guarantees will automatically terminate, all other obligations of the Subsidiary Guarantors under the Indenture will automatically terminate and the Subsidiary Guarantors will be automatically released from their obligations under their Subsidiary Guarantees and their other obligations under the Indenture.
Section 5.8 Applicability of Defeasance and Covenant Defeasance Provisions. Article Thirteen of the Base Indenture, including provisions for Defeasance and Covenant Defeasance, applies to the Notes, except for the proviso at the end of the first sentence of Section 1304(a). For the avoidance of doubt, upon Defeasance or Covenant Defeasance with respect to the Notes, the Subsidiary Guarantees will automatically terminate, all other obligations of the Subsidiary Guarantors under the Indenture will automatically terminate and the Subsidiary Guarantors will be automatically released from their obligations under their Subsidiary Guarantees and their obligations under the Indenture.
Section 5.9 Restatement of Section 608 of Base Indenture. The provisions of Section 608 of the Base Indenture, as applied to the Notes, shall be deemed to read as follows in lieu of the provisions set forth therein:
“If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. To the extent permitted by such Act, the Trustee shall not be deemed to have a conflicting interest by virtue of being a trustee under this Indenture with respect to Securities of more than one series or a trustee under that certain Indenture, dated as of February 25, 1998, between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association).”
ARTICLE 6
SUBSIDIARY GUARANTEES
Section 6.1 Subsidiary Guarantee. Subject to this Article 6, each of the Subsidiary Guarantors hereby, jointly and severally, unconditionally guarantees on a senior unsecured basis to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Notes or the obligations of the Company under the Indenture or the Notes, that: (a) the principal of and interest on the Notes shall be promptly paid in full when due, whether at Stated Maturity, upon redemption, by acceleration or otherwise, and interest on the overdue principal of, and overdue premium and interest on, the Notes, if any, if lawful, and all other obligations of the Company to Holders of the Notes or the Trustee under the Indenture or the Notes shall be promptly paid in full or promptly performed, as the case may be, all in accordance with the terms of the Indenture and the Notes; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, upon redemption, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or failing performance of any other obligation so guaranteed for whatever reason, each Subsidiary Guarantor shall be obligated to pay, or to perform or cause the performance of, the same immediately. Each Subsidiary Guarantor agrees that this is a guarantee of payment and not a guarantee of collection.
21
Each of the Subsidiary Guarantors hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions of the Indenture or the Notes, the release of any other Subsidiary Guarantor, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a Subsidiary Guarantor. Each Subsidiary Guarantor hereby waives, to the extent permitted by applicable law, diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenant that this Subsidiary Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and the Indenture.
Unless and until released with respect to any Subsidiary Guarantor in accordance with Section 6.4 of this Supplemental Indenture, this Subsidiary Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Company for liquidation or reorganization, should the Company become insolvent or make an assignment for the benefit of creditors or should a custodian, trustee, liquidator or other similar official be appointed for all or any part of the Company’s assets. If any Holder of the Notes or the Trustee is required by any court or governmental authority or is otherwise required to return to the Company, any Subsidiary Guarantor or any custodian, trustee, liquidator or other similar official acting in relation to the Company or such Subsidiary Guarantor, any amount paid by the Company or such Subsidiary Guarantor to the Trustee or such Holder, the Notes and this Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Subsidiary Guarantor further agrees (to the fullest extent permitted by law) that, as between it, on the one hand, and the Holders of the Notes and the Trustee, on the other hand, (a) subject to this Article 6, the maturity of the obligations guaranteed hereby may be accelerated as provided in Article Five of the Base Indenture, as supplemented by this Supplemental Indenture, for the purposes of this Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (b) in the event of any acceleration of such obligations as provided in such Article Five, such obligations (whether or not due and payable) shall forthwith become due and payable by the Subsidiary Guarantors for the purpose of this Subsidiary Guarantee.
Section 6.2 Limitation on Subsidiary Guarantor Liability. Each Subsidiary Guarantor, and by its acceptance of Notes, each Holder of the Notes, hereby confirms that it is the intention of all such parties that the Subsidiary Guarantee of such Subsidiary Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar Federal or state law to the extent applicable to any Subsidiary Guarantee. To effectuate the foregoing intention, the Trustee, the Holders of the Notes and the Subsidiary Guarantors hereby irrevocably agree that the obligations of each Subsidiary Guarantor under its Subsidiary Guarantee will be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Subsidiary Guarantor that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Subsidiary Guarantor in respect of the obligations of such other Subsidiary Guarantor under this Article 6, result in the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee and the Indenture not constituting a fraudulent transfer or conveyance under such laws. Each Subsidiary Guarantor that makes a payment under its Subsidiary Guarantee is entitled to a contribution from each other Subsidiary Guarantor in a pro rata amount based on the adjusted net assets of each Subsidiary Guarantor, so long as the exercise of such right does not impair the rights of the Holders of the Notes under this Subsidiary Guarantee.
Section 6.3 Execution and Delivery of Subsidiary Guarantee. To evidence its Subsidiary Guarantee set forth in Section 6.1 of this Supplemental Indenture, each Subsidiary Guarantor hereby agrees that this Supplemental Indenture or a supplemental indenture entered into by such Subsidiary Guarantor pursuant to Section 3.1(d) of this Supplemental Indenture, as the case may be, shall be executed on behalf of such Subsidiary Guarantor by an officer or other authorized signatory of such Subsidiary Guarantor.
Each Subsidiary Guarantor hereby agrees that its Subsidiary Guarantee set forth in Section 6.1 of this Supplemental Indenture shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Subsidiary Guarantee on the Notes.
If an officer or other authorized signatory of any Subsidiary Guarantor whose signature is on this Supplemental Indenture or a supplemental indenture entered into by such Subsidiary Guarantor pursuant to Section 3.1(d) of this Supplemental Indenture, as the case may be, no longer holds that office or is no longer such an authorized signatory at the time the Trustee authenticates any Note, the Subsidiary Guarantee of such Subsidiary Guarantor shall be valid nevertheless with respect to such Note.
22
The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee set forth in the Indenture on behalf of the Subsidiary Guarantors.
Section 6.4 Release of a Subsidiary Guarantor. The Subsidiary Guarantee of a Subsidiary Guarantor will automatically terminate and be released, all other obligations of such Subsidiary Guarantor under the Indenture will automatically terminate and such Subsidiary Guarantor will be automatically released from its obligations under its Subsidiary Guarantee and its other obligations under the Indenture:
(a) in the event of a sale or other disposition of all or substantially all of the properties or assets of such Subsidiary Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) the Company or a Subsidiary;
(b) in the event of a sale or other disposition (including through merger or consolidation) of Capital Stock of such Subsidiary Guarantor to a Person that is not (either before or after giving effect to such transaction) the Company or a Subsidiary and such Subsidiary Guarantor ceases to be a Subsidiary as a result of the sale or other disposition;
(c) upon such Subsidiary Guarantor becoming an Excluded Subsidiary or a Foreign Subsidiary;
(d) upon the satisfaction and discharge, Defeasance or Covenant Defeasance of the Notes in accordance with Article Four or Article Thirteen of the Base Indenture;
(e) upon the liquidation or dissolution of such Subsidiary Guarantor, provided no Default or Event of Default has occurred that is continuing;
(f) upon the merger of such Subsidiary Guarantor into, or the consolidation of such Subsidiary Guarantor with, (a) a Subsidiary if the surviving or resulting entity is an Excluded Subsidiary or a Foreign Subsidiary or (b) the Company or another Subsidiary Guarantor; or
(g) on and after the date on which (a) the Notes have received a Mid-BBB Investment Grade Rating from both Rating Agencies; and (b) no Default or Event of Default has occurred and is continuing.
At the request of the Company, and upon delivery to the Trustee of an Officers’ Certificate and an Opinion of Counsel each stating that all conditions provided for in this Supplemental Indenture to the release of a Subsidiary Guarantor from its Subsidiary Guarantee have been complied with (provided that the legal counsel delivering such Opinion of Counsel may rely as to matters of fact on one or more Officer’s Certificates of the Company), the Trustee shall execute and deliver an appropriate instrument evidencing such release (it being understood that the failure to obtain any such instrument shall not impair any release pursuant to this Section 6.4).
Section 6.5 Benefits Acknowledged. Each Subsidiary Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Supplemental Indenture and that the guarantee and waivers made by it pursuant to its Subsidiary Guarantee are knowingly made in contemplation of such benefits.
Section 6.6 Waiver of Subrogation. Until all of the Notes are discharged and paid in full, each Subsidiary Guarantor hereby irrevocably waives and agrees not to exercise any claim or other rights which it may now or hereafter acquire against the Company that arise from the existence, payment, performance or enforcement of the Company’s obligations under the Notes or the Indenture and such Subsidiary Guarantor’s obligations under this Subsidiary Guarantee and the Indenture, in any such instance including, without limitation, any right of subrogation, reimbursement, exoneration, contribution, indemnification, and any right to participate in any claim or remedy of the Holders of the Notes against the Company, whether or not such claim, remedy or right arises in equity, or under contract, statute or common law, including, without limitation, the right to take or receive from the Company, directly or indirectly, in cash or other assets or by set off or in any other manner, payment or security on account of such claim or other rights. If any amount shall be paid to any Subsidiary Guarantor in violation of the preceding sentence and any amounts owing to the Trustee or the Holders of the Notes under the Notes or the Indenture, shall not have been paid in full, such amount shall have been deemed to have been paid to such Subsidiary Guarantor for the benefit of, and held in trust for the benefit of, the Trustee or the Holders of the Notes and shall forthwith be paid to the Trustee for the benefit of itself or such Holders to be credited and applied to the obligations in favor of the Trustee or such Holders, as the case may be, whether matured or unmatured, in accordance with the terms of the Indenture.
23
Section 6.7 Same Currency; No Set Off. Each payment to be made by a Subsidiary Guarantor under its Subsidiary Guarantee shall be payable in the currency in which corresponding payment obligations of the Company under the Notes or the Indenture are denominated, and shall be made without set off, counterclaim, reduction or diminution of any kind or nature.
Section 6.8 Guarantee Obligations Continuing. The obligations of each Subsidiary Guarantor under the Indenture shall be continuing and shall remain in full force and effect until all such obligations have been paid and satisfied in full. Each Subsidiary Guarantor agrees with the Trustee that, to the fullest extent permitted by applicable law, it will from time to time deliver to the Trustee suitable acknowledgments of this continued liability in such form as counsel to the Trustee may reasonably request and as will prevent any action brought against it in respect of any default under the Indenture being barred by any statute of limitations now or hereafter in force and, in the event of the failure of a Subsidiary Guarantor so to do, it hereby irrevocably appoints the Trustee the attorney and agent of such Subsidiary Guarantor to make, execute and deliver such written acknowledgment or acknowledgments or other instruments as may from time to time become necessary or reasonably advisable, in the judgment of the Trustee on the advice of counsel, to fully maintain and keep in force the liability of such Subsidiary Guarantor under the Indenture.
Section 6.9 No Merger or Waiver; Cumulative Remedies. To the fullest extent permitted by applicable law, no Subsidiary Guarantee shall operate by way of merger of any of the obligations of a Subsidiary Guarantor under any other agreement. To the fullest extent permitted by applicable law, no failure to exercise and no delay in exercising, on the part of the Trustee or the Holders of the Notes, any right, remedy, power or privilege under the Indenture or the Notes, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or under the Indenture or the Notes preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. To the fullest extent permitted by applicable law, the rights, remedies, powers and privileges in the Indenture, the Notes and any other document or instrument between a Subsidiary Guarantor and/or the Company and the Trustee and the Holders of the Notes are cumulative and not exclusive of any rights, remedies, powers and privilege provided by law.
Section 6.10 Dealing with the Company and Others. The Holders and the Trustee, without releasing, discharging, limiting or otherwise affecting in whole or in part the obligations and liabilities of any Subsidiary Guarantor under the Indenture and without the consent of or notice to any Subsidiary Guarantor, may to the fullest extent permitted by applicable law:
(a) grant time, renewals, extensions, compromises, concessions, waivers, releases, discharges and other indulgences to the Company or any other Person;
(b) take or abstain from taking security or collateral from the Company or from perfecting security or collateral of the Company;
(c) release, discharge, compromise, realize, enforce or otherwise deal with or do any act or thing in respect of (with or without consideration) any and all collateral, mortgages or other security given by the Company or any third party with respect to the obligations or matters contemplated by the Indenture or the Notes
(d) accept compromises or arrangements from the Company;
(e) apply all monies at any time received from the Company or from any security upon such part of the obligations of the Subsidiary Guarantors under Section 6.1 of this Supplemental Indenture as the Holders may see fit or change any such application in whole or in part from time to time as the Holders may see fit; and
24
(f) otherwise deal with, or waive or modify their right to deal with, the Company and all other Persons and any security as the Holders or the Trustee may see fit.
Section 6.11 Enforcement; Expenses. If any Subsidiary Guarantor defaults in performing any of its obligations under the Indenture, the Trustee may proceed in its name as trustee under the Indenture in the enforcement of such obligations against such Subsidiary Guarantor by any remedy provided by law, whether by legal proceedings or otherwise. Each of the Subsidiary Guarantors, jointly and severally, agree to pay all costs, fees and expenses (including, without limitation, reasonable fees and expenses of legal counsel) incurred by the Trustee, any Holder of the Notes, or the agent, advisor or counsel of the Trustee or any Holder, in enforcing the performance by any Subsidiary Guarantor of its obligations under the Indenture.
ARTICLE 7
EFFECTIVENESS
This Supplemental Indenture shall be effective for all purposes as of the date and time this Supplemental Indenture has been executed and delivered by the Company, the Initial Subsidiary Guarantors and the Trustee in accordance with Article Nine of the Base Indenture. As supplemented hereby, the Base Indenture is hereby confirmed as being in full force and effect.
ARTICLE 8
MISCELLANEOUS
Section 8.1 Separability. In the event any provision of this Supplemental Indenture shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof or any provision of the Indenture.
Section 8.2 Construction of Terms. To the extent that any terms of this Supplemental Indenture or the Notes are inconsistent with the terms of the Base Indenture, the terms of this Supplemental Indenture or the Notes shall govern and supersede such inconsistent terms.
Section 8.3 Effect of Headings. The section headings herein are for convenience only and shall not affect the construction hereof.
Section 8.4 Governing Law. This Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York.
Section 8.5 Counterparts. This Supplemental Indenture may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. The words “execution,” “signed,” “signature,” and words of like import in this Supplemental Indenture or in any other certificate, agreement or document related to this Supplemental Indenture or the Notes shall include images of manually executed signatures transmitted by facsimile or other electronic format (including, without limitation, “pdf”, “tif” or “jpg”) and other electronic signatures (including, DocuSign, Orbit, AdobeSign and any other electronic signature provider identified by the Company and the Subsidiary Guarantors that is acceptable to the Trustee). The use of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based recordkeeping system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act or the Uniform Commercial Code. The Trustee shall have the right to accept and act upon any communication, including any funds transfer instruction received pursuant to this Indenture by electronic transmission (including by e-mail, facsimile transmission, web portal or other electronic methods) and shall not have any duty to confirm that the person sending such communication is, in fact, a person authorized to do so. The Company and the Subsidiary Guarantors agree to assume all risks arising out of the use of electronic signatures and electronic methods to submit communications to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties. Notwithstanding the foregoing, the Trustee may in any instance and in its sole discretion require that communication in the form of an original document bearing a manually executed signature be delivered to the Trustee in lieu of, or in addition to, any such electronic communication.
[Signature Page Follows]
25
IN WITNESS WHEREOF, the Company, the Initial Subsidiary Guarantors and the Trustee have caused this Supplemental Indenture to be executed as an instrument under seal in their respective corporate names as of the date first above written.
| COMPANY: | |
| SERVICE PROPERTIES TRUST |
| By: | /s/ Brian E. Donley | ||
| Name: | Brian E. Donley | ||
| Title: | Chief Financial Officer and Treasurer | ||
| INITIAL SUBSIDIARY GUARANTORS: | |
| Cambridge TRS, Inc. | |
| Harbor Court Associates, LLC | |
| Highway Ventures Borrower LLC | |
| Highway Ventures LLC | |
| HIGHWAY VENTURES PROPERTIES LLC | |
| HIGHWAY VENTURES PROPERTIES TRUST | |
| HPT Clift TRS LLC | |
| HPT CW MA Realty LLC | |
| HPT CY TRS, Inc. | |
| HPT Geary ABC Holdings LLC | |
| HPT Geary Properties Trust | |
| HPT IHG Chicago Property LLC | |
| HPT IHG GA Properties LLC | |
| HPT IHG-2 Properties Trust | |
| HPT IHG-3 Properties LLC | |
| HPT SN Holding, Inc. | |
| HPT State Street TRS LLC | |
| HPT TA PROPERTIES LLC | |
| HPT TA Properties Trust | |
| HPT TRS IHG-2, Inc. | |
| HPT TRS Inc. | |
| HPT TRS MRP, Inc. | |
| HPT TRS SPES II, Inc. | |
| HPT TRS WYN, Inc. | |
| HPT Wacker Drive TRS LLC | |
| HPTCY Properties Trust | |
| HPTWN PROPERTIES TRUST | |
| SVC GATEHALL DRIVE TRS LLC | |
| SVC HIGGINS ROAD TRS LLC | |
| SVC Holdings LLC | |
| SVC jersey city trs llc | |
| SVC MANNHEIM ROAD TRS LLC | |
| SVC MINNEAPOLIS TRS LLC | |
| svc morris plains trs llc | |
| svc nanuet trs llc | |
| svc nj trs llc | |
| svc randolph street trs llc | |
| svc redondo beach trs llc | |
| SVCN 1 LLC | |
| SVCN 2 LLC | |
| svcn 3 llc | |
| SVCN 4 LLC | |
| SVCN 5 LLC |
[Signature Page to Eleventh Supplemental Indenture]
| By: | /s/ Brian E. Donley | ||
| Name: | Brian E. Donley | ||
| Title: | Chief Financial Officer and Treasurer | ||
| HPT CW MA REALTY TRUST | ||
| By: | /s/ Brian E. Donley | |
| Brian E. Donley | ||
| as Trustee and not individually | ||
| TRUSTEE: | |
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee |
| By: | /s/ David W. Doucette | ||
| Name: | David W. Doucette | ||
| Title: | Vice President | ||
[Signature Page to Eleventh Supplemental Indenture]
EXHIBIT A
FORM OF NOTE
[Form of Face of Security]
[Insert Applicable Legends]
SERVICE PROPERTIES TRUST
8.375% Senior Guaranteed Unsecured Notes due 2029
| No. | $ |
Service Properties Trust, a real estate investment trust duly organized and existing under the laws of Maryland (herein called the “Company”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to , or registered assigns, the principal sum of Dollars ($ ) [(as the same may be revised from time to time on the Schedule of Exchanges of Interests in the Global Security attached hereto)] on June 15, 2029, and to pay interest thereon from , 20 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on June 1 and December 1 in each year, commencing December 1, 2024 at the rate of 8.375% per annum, until the principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be May 15 or November 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and any such interest on this Security will be made at the office or agency of the Company maintained for that purpose in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts or, in the case of any Note that is a Global Security, in accordance with the procedures of The Depository Trust Company (“DTC”), or any successor depositary with respect to the Global Notes appointed under the Indenture, the “Depositary”), and its participants in effect from time to time; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.
Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
THE AMENDED AND RESTATED DECLARATION OF TRUST ESTABLISHING SERVICE PROPERTIES TRUST, DATED AUGUST 21, 1995, AS AMENDED AND SUPPLEMENTED, AS FILED WITH THE STATE DEPARTMENT OF ASSESSMENTS AND TAXATION OF MARYLAND, PROVIDES THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF SERVICE PROPERTIES TRUST SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, SERVICE PROPERTIES TRUST. ALL PERSONS DEALING WITH SERVICE PROPERTIES TRUST IN ANY WAY SHALL LOOK ONLY TO THE ASSETS OF SERVICE PROPERTIES TRUST FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
A-1
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
| Dated: | SERVICE PROPERTIES TRUST | ||
| By: | |||
| Name: | |||
| Title: | |||
CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee | |||
| By: | |||
| Name: | |||
| Title: | |||
[Form of Reverse of Security]
1. General. This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of February 3, 2016 (the “Base Indenture”), between the Company and U.S. Bank Trust Company, National Association (herein called the “Trustee”, which term includes any successor trustee under the Base Indenture), as supplemented by an Eleventh Supplemental Indenture, dated as of June 3, 2024 (as amended, supplemented or otherwise modified from time to time, the “Supplemental Indenture” and the Base Indenture, as supplemented by such Supplemental Indenture, the “Indenture”), among the Company, the Initial Subsidiary Guarantors and the Trustee, and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Subsidiary Guarantors, the Trustee, and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof (such series, the “Notes”).
2. Optional Redemption. Except as set forth below, the Company will not be entitled to redeem the Notes at its option prior to June 15, 2026.
At any time prior to June 15, 2026, the Company may, at its option, redeem all or a part of the Notes upon notice as described in Section 2.1(g)(iii) of the Indenture on one or more occasions, at a redemption price equal to 100% of the principal amount of Notes redeemed plus the Applicable Premium as of the Redemption Date, and, without duplication, accrued and unpaid interest, if any, to, but excluding, the Redemption Date, subject to the rights of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date.
A-2
On and after June 15, 2026, the Company may, at its option, redeem the Notes, in whole or in part, upon notice as described in Section 2.1(g)(iii) of the Indenture on one or more occasions, at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon, if any, to, but excluding, the applicable Redemption Date, subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on June 15 of each of the years indicated below:
| Year | Percentage |
| 2026 | 104.188% |
| 2027 | 102.094% |
| 2028 and thereafter | 100.000% |
The Notes will be subject to redemption in whole at any time or in part from time to time prior to their maturity at the option of the Company upon not less than fifteen (15) nor more than sixty (60) days’ notice to each Holder of Notes to be redeemed at its address appearing in the Security Register or, in the case of any Note that is a Global Security, in accordance with the procedures of the Depositary and its participants in effect from time to time. In the event the Company elects to redeem less than all of the Notes, the particular Notes to be redeemed will be selected by the Trustee by such method as the Trustee shall deem appropriate and in accordance with the procedures of DTC and its participants in effect from time to time.
The Company shall not be required to make sinking fund or redemption payments with respect to the Notes.
In addition, at any time prior to June 15, 2026, the Company may, at its option, upon notice as described in Section 2.1(g)(iii) of the Indenture on one or more occasions, redeem up to 40% of the aggregate principal amount of Notes issued by them (including any additional Notes) at a redemption price equal to 108.375% of the aggregate principal amount thereof plus accrued and unpaid interest thereon, if any, to, but excluding, the applicable Redemption Date, with the net cash proceeds of one or more Equity Offerings; provided that each such redemption occurs within one hundred and twenty (120) days of the date of closing of each such Equity Offering. Notice of any redemption upon any Equity Offering may be given prior to such Equity Offering, and any redemption or notice may, at the Company’s discretion, be subject to conditions, including completion of the related Equity Offering. If any such redemption or notice is subject to satisfaction of one or more conditions precedent, such notice shall state that, in the Company’s discretion, the Redemption Date may be delayed until such time as any or all such conditions shall be satisfied, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the Redemption Date, or by the Redemption Date so delayed. The Company shall provide notice to the Trustee of the satisfaction of the condition precedent by the close of business on the Business Day prior to the Redemption Date.
Notwithstanding the foregoing, in connection with any tender offer for the Notes, in the event that Holders of not less than 90% in aggregate principal amount of the then outstanding Notes accept a tender offer and the Company (or any third party making such offer) purchase all of the Notes tendered by such Holders, the Company (or any such third party) will have the right, upon not less than ten (10) nor more than sixty (60) days’ prior notice, given not more than thirty (30) days following the purchase pursuant to the tender offer described above, to redeem all of such Notes that remain outstanding following such purchase at a redemption price equal to the highest price paid in such tender offer, plus, without duplication, accrued and unpaid interest on the Notes that remain outstanding, to, but excluding, the date of purchase.
In the event that Holders of not less than 90% in aggregate principal amount of the then outstanding Notes accept a Change of Control Offer and the Company (or any third party making such Change of Control Offer in lieu of the Company as described in the terms of the Indenture) purchase all of the Notes tendered by such Holders, the Company (or any such third party) will have the right, upon not less than ten (10) nor more than sixty (60) days’ prior notice, given not more than thirty (30) days following the purchase pursuant to such Change of Control Offer, to redeem all of such Notes that remain outstanding following such purchase at a redemption price equal to the Change of Control Payment, plus, to the extent not included in the Change of Control Payment, accrued and unpaid interest on the Notes that remain outstanding, to, but excluding, the date of purchase.
In the event of redemption of this Security in part only, a new Note or Notes and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.
3. Discharge and Defeasance. The Indenture contains provisions for discharge or defeasance at any time of the entire indebtedness of this Security or certain restrictive covenants and Events of Default with respect to this Security, in each case upon compliance with certain conditions set forth in the Indenture.
A-3
4. Defaults and Remedies. If an Event of Default with respect to the Notes shall occur and be continuing, the principal of the Notes, plus accrued and unpaid interest thereon, may be declared due and payable in the manner and with the effect provided in the Indenture.
5. Actions of Holders. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or this Security or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Notes, the Holders of not less than a majority in principal amount of the Notes at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not have received from the Holders of a majority in principal amount of Notes at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for sixty (60) days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.
6. Payments Not Impaired. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.
7. Denominations, Transfer, Exchange. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Notes are exchangeable for a like aggregate principal amount of Notes and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
8. Persons Deemed Owners. Prior to due presentment of this Security for registration of transfer, the Company, the Subsidiary Guarantors, the Trustee and any agent of the Company, any Subsidiary Guarantor or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Subsidiary Guarantors, the Trustee nor any such agent shall be affected by notice to the contrary.
A-4
9. Subsidiary Guarantees. The Notes will be entitled to the benefits of certain Subsidiary Guarantees made for the benefit of the Holders of the Notes. Reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and obligations thereunder of the Subsidiary Guarantors, the Trustee and the Holders.
10. Defined Terms. All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.
A-5
[ASSIGNMENT FORM]
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:
| TEN COM | -- | as tenants in common | UNIF GIFT MIN ACT |
-- | Custodian |
| TEN ENT | -- | as tenants by the entireties | (Cust) | (Minor) | |
| JT TEN | -- | as joint tenants with right of survivorship | Under Uniform Gifts to Minors | ||
| and not as tenants in common | Act | ||||
| (State) |
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned registered Holder hereby sell(s), assign(s) and transfer(s) unto
Please Insert Social Security Or Other Identifying Number of Assignee
|
|
| Please Print Or Typewrite Name And Address Of Assignee |
| the within security and all rights thereunder, hereby irrevocably constituting and appointing |
| Attorney | |
| to transfer said security on the books of the Company with full power of substitution in the premises. | |
| Dated: | Signed: |
| Notice: The signature to this assignment must correspond with the name as it appears upon the face of the within security in every particular, without alteration or enlargement or any change whatever. | |||
| Signature Guarantee*: | |||
| * Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). | |||
A-6
[Include this Schedule only for a Global Security]
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL SECURITY
The initial principal amount of this Global Security is $[●].
The following exchanges, transfers or cancellations of this Global Security have been made:
| Date of Exchange | Amount of Decrease in Principal Amount of this Global Security |
Amount of Increase in Principal Amount of this Global Security |
Principal Amount of this Global Security Following Such Decrease (or Increase) |
Signature of Authorized Officer of Trustee |
A-7
Exhibit 4.3
TWELFTH SUPPLEMENTAL INDENTURE
among
SERVICE PROPERTIES TRUST
THE SUBSIDIARY GUARANTORS NAMED HEREIN
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
Dated as of June 3, 2024
SUPPLEMENTAL TO THE INDENTURE DATED AS OF FEBRUARY 3, 2016
SERVICE PROPERTIES TRUST
8.875% Senior Guaranteed Unsecured Notes due 2032
This TWELFTH SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”) dated as of June 3, 2024 among Service Properties Trust, a real estate investment trust organized and existing under the laws of the State of Maryland (the “Company”) having its principal office at Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458, the other entities (other than the Trustee (as defined below)) listed on the signature pages hereto (the “Initial Subsidiary Guarantors”) and U.S. Bank Trust Company, National Association, a national banking organization organized and existing under the laws of the United States, as Trustee (the “Trustee”).
RECITALS OF THE COMPANY
The Company (then known as Hospitality Properties Trust) and the Trustee are parties to an Indenture, dated as of February 3, 2016 (as from time to time hereafter amended, supplemented or otherwise modified in so far as it applies to the Notes (as defined herein), the “Base Indenture” and, together with this Supplemental Indenture, as amended, supplemented or otherwise modified from time to time, the “Indenture”) to provide for the future issuance of the Company’s senior unsecured debentures, notes or other evidences of indebtedness (the “Securities”) to be issued from time to time in one or more series, including any such Securities that may have the benefit of guarantees; and
Pursuant to the terms of the Base Indenture, the Company desires to provide for the establishment of a series of its Securities, to be known as its 8.875% Senior Guaranteed Unsecured Notes due 2032, the form and substance of such Securities and the terms, provisions and conditions thereof, including the guarantees thereof by the Subsidiary Guarantors (as defined herein), to be set forth as provided in the Indenture;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
ARTICLE 1
DEFINED TERMS
Section 1.1 Terms Defined in Indenture. Capitalized terms used herein and not defined herein have the meanings ascribed to such terms in the Base Indenture.
Section 1.2 Supplemental Definitions. The following definitions supplement, and, to the extent inconsistent with, replace the definitions in Section 101 of the Base Indenture:
“Acquired Debt” means Debt of a Person (i) existing at the time such Person becomes a Subsidiary or (ii) assumed in connection with the acquisition of assets from such Person, in each case, other than Debt incurred in connection with, or in contemplation of, such Person becoming a Subsidiary or such acquisition. Acquired Debt shall be deemed to be incurred on the date of the related acquisition of assets from any Person or the date the acquired Person becomes a Subsidiary.
“Adjusted Total Assets” has the meaning provided in clause (i) of Section 3.1(a) of this Supplemental Indenture.
“Annual Debt Service” as of any date means the maximum amount which is expensed in any 12-month period for interest on Debt of the Company and its Subsidiaries, excluding amortization of debt discounts and deferred financing costs.
“Applicable Premium” means with respect to any Note on any Redemption Date, the greater of
(a) 1.0% of the principal amount of such note on such Redemption Date; and
(b) the excess, if any, of (x) the present value at such Redemption Date of (A) the redemption price of such Note at June 15, 2027 (such redemption price being set forth in the table appearing in paragraph 2 on the reverse side of the form of Note attached as Exhibit A hereto), plus (B) all required interest payments due on such Note through June 15, 2027 (excluding accrued but unpaid interest to the Redemption Date), computed using a discount rate equal to the applicable Treasury Rate as of such Redemption Date plus 50 basis points; over (y) the principal amount of such Note.
The Company shall determine the Applicable Premium and, prior to the Redemption Date, file an Officer’s Certificate with the Trustee setting forth the Treasury Rate and Applicable Premium and showing the calculation of each in reasonable detail.
“Business Day” means any day other than a Saturday or Sunday or a day on which banking institutions in The City of New York or in the city in which the corporate trust office of the Trustee is located are required or authorized to close.
“Capital Stock” means, with respect to any Person, any capital stock (including preferred stock), shares, interests, participation or other ownership interests (however designated) of such Person and any rights (other than debt securities convertible into or exchangeable for capital stock), warrants or options to purchase any thereof.
“Cash Equivalents” means demand deposits, certificates of deposit or repurchase agreements with banks or other financial institutions, marketable obligations issued or directly and fully guaranteed as to timely payment by the United States of America or any of its agencies or instrumentalities, or any commercial paper or other obligation rated, at time of purchase, “P-2” (or its equivalent) or better by Moody’s or “A-2” (or its equivalent) or better by Standard & Poor’s.
2
“Change of Control” means the occurrence of any of the following:
(1) the Company consolidates with, or merges with or into, another Person, or the Company, directly or indirectly, sells, leases or transfers all or substantially all of the properties or assets of the Company and its Subsidiaries, taken as a whole (other than by way of merger or consolidation or to the Company or any Subsidiary), in one or a series of related transactions, or any Person consolidates with, or merges with or into, the Company, in any such event other than pursuant to a transaction (a “Permitted Holdco Transaction”) in which the Persons that beneficially owned the shares of the Voting Stock of the Company immediately prior to such transaction beneficially own at least a majority of the total voting power of all outstanding Voting Stock (other than Disqualified Stock) of the surviving or transferee Person; or
(2) the Company becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act or any successor provision), in a single transaction or in a related series of transactions, by way of merger, consolidation or other business combination or purchase, of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) of more than 50% of the total voting power of the Voting Stock of the Company.
For purposes of this definition, (x) any direct or indirect holding company of the Company shall not itself be considered a “Person” or “group” for purposes of clause (2) above; provided that no “Person” or “group” beneficially owns, directly or indirectly, more than 50% of the total voting power of the Voting Stock of such holding company and (y) for the avoidance of doubt, any Permitted Holdco Transaction shall not constitute a “Change of Control” pursuant to any clause of this definition.
Notwithstanding the preceding or any provision of Section 13d-3 of the Exchange Act, (i) a Person or group shall not be deemed to beneficially own Voting Stock subject to a stock or asset purchase agreement, merger agreement, option agreement, warrant agreement or similar agreement (or voting or option or similar agreement related thereto) until the consummation of the acquisition of the Voting Stock in connection with the transactions contemplated by such agreement, (ii) a Person or group will not be deemed to beneficially own the Voting Stock of another Person as a result of its ownership of Voting Stock or other securities of such other Person’s parent entity (or related contractual rights) unless it owns 50% or more of the total voting power of the Voting Stock entitled to vote for the election of directors of such parent entity having a majority of the aggregate votes on the board of directors (or similar body) of such parent entity and (iii) the right to acquire Voting Stock (so long as such Person does not have the right to direct the voting of the Voting Stock subject to such right) or any veto power in connection with the acquisition or disposition of Voting Stock will not cause a party to be a beneficial owner.
“Change of Control Repurchase Event” means the occurrence of both a Change of Control and a Rating Decline.
“Consolidated Income Available for Debt Service” for any period means Earnings from Operations of the Company and its Subsidiaries plus amounts which have been deducted, and minus amounts which have been added, for the following (without duplication): (i) interest on Debt of the Company and its Subsidiaries, (ii) cash reserves made by lessees as required by the Company’s leases for periodic replacement and refurbishment of the Company’s assets, (iii) provision for taxes of the Company and its Subsidiaries based on income, (iv) amortization of debt premiums/discounts and deferred debt issuance costs, (v) provisions for gains and losses on properties and property depreciation and amortization, (vi) the effect of any noncash charge resulting from a change in accounting principles in determining Earnings from Operations for such period and (vii) amortization of deferred charges.
3
“Debt” of the Company or any Subsidiary means, without duplication, any indebtedness of the Company or any Subsidiary, whether or not contingent, in respect of:
(i) borrowed money or evidenced by bonds, notes, debentures or similar instruments;
(ii) borrowed money secured by any Encumbrance existing on property owned by the Company or any Subsidiary, to the extent of the lesser of (x) the amount of indebtedness so secured or (y) the fair market value of the property subject to such Encumbrance;
(iii) the reimbursement obligations, contingent or otherwise, in connection with any letters of credit actually issued (other than letters of credit issued to provide credit enhancement or support with respect to other indebtedness of the Company or any Subsidiary otherwise reflected as Debt hereunder) or amounts representing the balance deferred and unpaid of the purchase price of any property or services, except any such balance that constitutes an accrued expense or trade payable, or all conditional sale obligations or obligations under any title retention agreement;
(iv) the principal amount of all obligations of the Company or any Subsidiary with respect to the redemption, repayment or other repurchase of any Disqualified Stock; or
(v) any lease of property by the Company or any Subsidiary as lessee which is reflected on the Company’s consolidated balance sheet as a capitalized lease in accordance with generally accepted accounting principles,
to the extent, in the case of items of indebtedness under (i) through (iv) above, that any such items (other than letters of credit) would be properly classified as a liability on the Company’s consolidated balance sheet in accordance with generally accepted accounting principles. Debt also (1) excludes any indebtedness (A) with respect to which a defeasance or covenant defeasance or discharge has been effected (or an irrevocable deposit is made with a trustee in an amount at least equal to the outstanding principal amount of such indebtedness, the remaining scheduled payments of interest thereon to, but not including, the applicable maturity date or redemption date, and any premium or otherwise as provided in the terms of such indebtedness) in accordance with the terms thereof or which has been repurchased, retired, repaid, redeemed, irrevocably called for redemption (and an irrevocable deposit is made with a trustee in an amount at least equal to the outstanding principal amount of such indebtedness, the remaining scheduled payments of interest thereon to, but not including, such redemption date, and any premium) or otherwise satisfied or (B) that is secured by cash or Cash Equivalents irrevocably deposited with a trustee in an amount, in the case of this clause (B), at least equal to the outstanding principal amount of such indebtedness and the remaining scheduled payments of interest thereon and (2) includes, to the extent not otherwise included, any obligation by the Company or any Subsidiary to be liable for, or to pay, as obligor, guarantor or otherwise (other than for purposes of collection in the ordinary course of business), Debt of another Person (other than the Company or any Subsidiary) (it being understood that Debt shall be deemed to be incurred by the Company or any Subsidiary whenever the Company or such Subsidiary shall create, assume, guarantee or otherwise become liable in respect thereof).
“Depositary” has the meaning provided in Section 2.1(d) of this Supplemental Indenture.
“Disqualified Stock” means, with respect to any Person, any Capital Stock of such Person which by the terms of such Capital Stock (or by the terms of any security into which it is convertible or for which it is exchangeable or exercisable), upon the happening of any event or otherwise (i) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than Capital Stock which is redeemable solely in exchange for Capital Stock which is not Disqualified Stock or for Subordinated Debt), (ii) is convertible into or exchangeable or exercisable for Debt, other than Subordinated Debt, or Disqualified Stock, or (iii) is redeemable at the option of the holder thereof, in whole or in part (other than Capital Stock which is redeemable solely in exchange for Capital Stock which is not Disqualified Stock or for Subordinated Debt), in each case on or prior to the Stated Maturity of the principal of the Notes.
“Domestic Subsidiary” means any Subsidiary of the Company that was organized under the laws of the United States or any state of the United States or the District of Columbia (excluding, for the avoidance of doubt, any Subsidiary organized under U.S. possessions such as Puerto Rico).
4
“Earnings from Operations” for any period means net earnings excluding gains and losses on sales of investments, extraordinary items, gains and losses from early extinguishment of debt and property valuation losses, in each case as reflected in the financial statements of the Company and its Subsidiaries for such period, determined on a consolidated basis in accordance with generally accepted accounting principles.
“Encumbrance” means any mortgage, lien, charge, pledge, security interest or other encumbrance of any kind.
“Equity Offering” means any public or private sale of equity of the Company or any direct or indirect parent of the Company (provided that, in the case of a sale of such stock by such parent, the cash proceeds therefrom are contributed to the equity capital of the Company).
“Excluded Subsidiary” means any Subsidiary of the Company (i) that is a Pledged Subsidiary, (ii) that is not a Wholly Owned Subsidiary or that holds no material assets other than the Capital Stock of one or more Subsidiaries that are not Wholly Owned Subsidiaries or (iii)(a) holding title to or beneficially owning Properties which are subject to an Encumbrance securing Debt of such Subsidiary, or being a beneficial owner of a Subsidiary of the Company holding title to or beneficially owning such Properties (but having no material assets other than such beneficial ownership interests or the Capital Stock of a Subsidiary of the Company having no material assets other than such beneficial ownership interests) and (b) which (x) is, or is expected to be, prohibited from Guaranteeing the indebtedness of any other Person pursuant to any document, instrument or agreement evidencing such Secured Debt or (y) is prohibited from Guaranteeing the indebtedness of any other Person pursuant to a provision of such Subsidiary’s organizational documents which provision was included in such Subsidiary’s organizational documents as a condition or anticipated condition to the extension of such Secured Debt; for purposes of this subsection (iii), any Subsidiary which is a lessee under a lease with a Subsidiary which is an Excluded Subsidiary under this subsection (iii) shall also be deemed to be an Excluded Subsidiary. In addition, (i) Candlewood Jersey City-Urban Renewal, L.L.C., a New Jersey limited liability company, and (ii) any Subsidiary that is an “Excluded Subsidiary” as defined under the Existing Credit Agreement or the indenture for the Secured 2031 Notes shall be deemed to be an Excluded Subsidiary for purposes of this definition.
“Existing Credit Agreement” means that certain Third Amended and Restated Credit Agreement, dated June 29, 2023, by and among the Company, Wells Fargo Bank, National Association, as administrative agent, and the lenders and the other parties thereto, as amended by the First Amendment thereto, dated November 3, 2023, and as may be further amended, restated, supplemented, modified, renewed, refunded, increased, extended, replaced in any manner (whether upon or after termination or otherwise) or refinanced in whole or in part from time to time.
“Foreign Subsidiary” means (a) any Real Foreign Subsidiary, (b) any Domestic Subsidiary that has no material assets (with the determination of materiality to be made in good faith by the Company) other than Capital Stock of one or more Real Foreign Subsidiaries, and (c) any Subsidiary (including any Subsidiary that would otherwise be a Domestic Subsidiary) of the Company that owns any Capital Stock of a Real Foreign Subsidiary if the provision of a subsidiary guarantee by such Subsidiary could reasonably be expected, in the good faith judgment of the Company, cause any earnings of such Real Foreign Subsidiary, as determined for U.S. federal income tax purposes, to be treated as a deemed dividend to such Real Foreign Subsidiary’s United States parent for U.S. federal income tax purposes.
“generally accepted accounting principles” means generally accepted accounting principles in the United States of America, which were in effect on February 3, 2016.
“Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any indebtedness of any other Person and any obligation, direct or indirect, contingent or otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds for the purchase or payment of) such indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise); or
5
(2) entered into for purposes of assuring in any other manner the obligee of such indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part);
provided, however, that the term “Guarantee” will not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.
“Interest Payment Date” with respect to the Notes is defined in Section 101 of the Base Indenture and Section 2.1(e) of this Supplemental Indenture.
“Issue Date” means June 3, 2024.
“Joint Venture Interests” means assets of the Company and its Subsidiaries constituting an equity investment in real estate assets or other properties, or in an entity holding real estate assets or other properties, jointly owned by the Company and its Subsidiaries, on the one hand, and one or more other Persons not constituting Affiliates of the Company, on the other hand, excluding any entity or properties (i) which is a Subsidiary or are properties if the co-ownership thereof (if in a separate entity) would constitute or would have constituted a Subsidiary, or (ii) to which, at the time of determination, the Company’s manager at such time or an Affiliate of the Company’s manager at such time provides management services. In no event shall Joint Venture Interests include equity securities that are part of a class of equity securities that are traded on a national or regional securities exchange or a recognized over-the-counter market or any investments in debt securities, mortgages or other Debt.
“Mid-BBB Investment Grade Rating” means a rating equal to or higher than Baa2 (or the equivalent) by Moody’s or BBB (or the equivalent) by Standard & Poor’s, or if Moody’s or Standard & Poor’s ceases to rate the Notes for reasons outside of the Company’s control, the equivalent investment grade rating from any other Rating Agency.
“Moody’s” means Moody’s Investors Service, Inc., or any successor thereof.
“Notes” means the Company’s 8.875% Senior Guaranteed Unsecured Notes due 2032, issued under this Supplemental Indenture and the Indenture, as amended or supplemented from time to time.
“Pledged Subsidiary” means a Subsidiary the Capital Stock of which has been pledged as collateral to secure amounts outstanding under the Existing Credit Agreement or the indenture for the Secured 2031 Notes.
“Property” means any parcel of real property, together with all improvements thereon.
“Rating Agencies” means (1) each of Moody’s and Standard & Poor’s; and (2) if either Moody’s or Standard & Poor’s ceases to rate the Notes or fails to make a rating of the Notes publicly available for reasons outside of the Company’s control, a “nationally recognized statistical rating organization” as such term is defined in Section 3(a)(62) of the Exchange Act, selected by the Company as a replacement agency for Moody’s or Standard & Poor’s, or either of them, as the case may be.
“Rating Category” means (a) with respect to Standard & Poor’s, any of the following categories: BB, B, CCC, CC, C and D (or equivalent successor categories); (b) with respect to Moody’s, any of the following categories: Ba, B, Caa, Ca, C and D (or equivalent successor categories); and (c) the equivalent of any such category of Standard & Poor’s or Moody’s used by another Rating Agency selected by the Company. In determining whether the rating of the Notes has decreased by one or more gradations, gradations within Rating Categories ((i) + and-for Standard & Poor’s; (ii) 1, 2 and 3 for Moody’s; and (iii) the equivalent gradations for another Rating Agency selected by the Company) shall be taken into account (e.g., with respect to Standard & Poor’s, a decline in a rating from BB+ to BB, or from BB− to B+, will constitute a decrease of one gradation).
“Rating Date” means the date which is ninety (90) days prior to the earlier of (a) a Change of Control or (b) public notice of the occurrence of a Change of Control or of the intention by the Company to effect a Change of Control.
6
“Rating Decline” with respect to the Notes shall be deemed to occur if, within sixty (60) days after public notice of the occurrence of a Change of Control (which period shall be extended so long as the rating of such notes is under publicly announced consideration for possible downgrade by either of the Rating Agencies with respect to a Rating Category), the rating of the Notes by each Rating Agency shall be decreased by one or more gradations to or within a Rating Category (including gradations within Rating Categories as well as between Rating Categories) as compared to the rating of the Notes on the Rating Date; provided that each Rating Agency indicates that such downgrade is as a result of such Change of Control.
“Real Foreign Subsidiary” means a Subsidiary of the Company that is not a Domestic Subsidiary.
“Redemption Date” means the date of redemption of any Notes in accordance with this Supplemental Indenture.
“Regular Record Date” with respect to the Notes is defined in Section 101 of the Base Indenture and Section 2.1(e) of this Supplemental Indenture.
“Secured Debt” means Debt of the Company or its Subsidiaries secured by an Encumbrance on the property of the Company or its Subsidiaries.
“Secured 2031 Notes” means the $1,000,000,000 aggregate principal amount of 8.625% senior secured notes due 2031 issued by that certain Indenture, dated as of November 16, 2023, among the Company, certain subsidiaries of the Company named therein as guarantors and the Trustee.
“Significant Subsidiary” means any Subsidiary which is a “significant subsidiary” (within the meaning of Regulation S-X, promulgated by the Commission under the Securities Act) of the Company.
“Standard & Poor’s” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, or any successor thereof.
“Stated Maturity” means June 15, 2032.
“Subordinated Debt” means Debt which by the terms of such Debt is subordinated in right of payment to the principal of and interest and premium, if any, on the Notes.
“Subsidiary” means any corporation or other Person of which a majority of (i) the voting power of the voting equity securities or (ii) the outstanding equity interests of which are owned, directly or indirectly, by the Company or one or more other Subsidiaries of the Company, and which is required to be consolidated in accordance with generally accepted accounting principles. For the purposes of this definition, “voting equity securities” means equity securities having voting power for the election of directors or persons serving comparable functions as directors, whether at all times or only so long as no senior class of security has such voting power by reason of any contingency.
“Subsidiary Guarantee” means, individually, any Guarantee of payment of the Notes by a Subsidiary Guarantor pursuant to the terms of Article 6 of this Supplemental Indenture.
“Subsidiary Guarantor” means each Initial Subsidiary Guarantor and any other Subsidiary of the Company that provides a Subsidiary Guarantee of the Notes in accordance with the Indenture; provided that upon the release or discharge of such Person from its Subsidiary Guarantee in accordance with the Indenture, such Person ceases to be a Subsidiary Guarantor.
“Total Assets” as of any date means the sum of (i) the Undepreciated Real Estate Assets and (ii) all other assets of the Company and its Subsidiaries determined in accordance with generally accepted accounting principles (but excluding accounts receivable and intangibles).
“Total Senior Guaranteed Unsecured Debt” shall mean (1) $450,000,000 aggregate principal amount of the Company’s outstanding 5.500% senior guaranteed unsecured notes due 2027; (2) the Notes; (3) $700,000,000 aggregate principal amount of the Company’s outstanding 8.375% senior guaranteed unsecured notes due 2029; and (4) any future subsidiary guaranteed unsecured Debt, but shall not include (x) the Secured 2031 Notes, (y) amounts outstanding under the Existing Credit Agreement or (z) any future secured Debt.
7
“Total Unencumbered Assets” as of any date means the sum of (i) Undepreciated Real Estate Assets not securing any portion of Secured Debt and (ii) the amount of all other assets of the Company and its Subsidiaries not securing any portion of Secured Debt, in each case on such date determined on a consolidated basis in accordance with generally accepted accounting principles (but excluding accounts receivable and intangibles); provided that, in determining Total Unencumbered Assets as a percentage of the aggregate outstanding principal amount of the Unsecured Debt of the Company and its Subsidiaries on a consolidated basis for purposes of the covenant set forth in Section 3.1(b) of this Supplemental Indenture, Joint Venture Interests shall be excluded from Total Unencumbered Assets to the extent such Joint Venture Interests would otherwise be included therein.
“Total Unencumbered Assets in Guarantor Subsidiaries” as of any date means Total Unencumbered Assets less the portion of Total Unencumbered Assets of Subsidiaries that are not guarantors of the Notes.
“Treasury Rate” means, as of any Redemption Date, the yield to maturity as of such Redemption Date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two (2) Business Days prior to the Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the Redemption Date to June 15, 2027; provided, however, that if the period from the Redemption Date to June 15, 2027 is less than one year, the weekly average yield on actively traded United States Treasury securities adjusted to a constant maturity of one year will be used.
“Undepreciated Real Estate Assets” as of any date means the cost (original cost plus capital improvements) of real estate and associated tangible personal property used in connection with the real estate assets of the Company and its Subsidiaries on such date, before depreciation and amortization determined on a consolidated basis in accordance with generally accepted accounting principles.
“Unsecured Debt” means any Debt of the Company or its Subsidiaries which is not Secured Debt.
“Voting Stock” means with respect to any Person, Capital Stock of any class or kind ordinarily having the power to vote for the election of directors, trustees, managers or other voting members of the governing body of such Person.
“Wholly Owned Subsidiary” means any Subsidiary of the Company of which all the outstanding Voting Stock of such Subsidiary (other than directors’ qualifying shares and other than an immaterial amount of Voting Stock required to be owned by other Persons pursuant to applicable law or regulation) is owned by the Company and/or one or more Subsidiaries of the Company.
ARTICLE 2
TERMS OF THE NOTES
Section 2.1 Terms of the Notes. Pursuant to Section 301 of the Base Indenture, the Notes shall have the following terms and conditions:
(a) Title. The Notes shall be in registered form under the Indenture and shall be known as the Company’s “8.875% Senior Guaranteed Unsecured Notes due 2032.”
(b) Aggregate Principal Amount. Except (i) as provided in this Section and (ii) for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section 304, 305, 306, 906 or 1107 of the Base Indenture and except for any Notes which, pursuant to Section 303 of the Base Indenture, are deemed never to have been authenticated and delivered hereunder, the Notes will be limited to an aggregate principal amount of $500,000,000, subject to the right of the Company to reopen such series for issuances of additional Notes having the same terms and conditions as the Notes issued on the Issue Date except for issue date, issue price and, if applicable, the first Interest Payment Date thereon and related interest accrual date.
8
(c) Form of Notes. The Notes (together with the Trustee’s certificate of authentication) shall be substantially in the form of Exhibit A hereto, which is hereby incorporated in and made a part of this Supplemental Indenture.
(d) Registered Securities in Book Entry Form. The Notes shall be initially issued in the form of one or more registered Global Securities without coupons (each, a “Global Note”) and shall be deposited with, or on behalf of, The Depository Trust Company (“DTC” and, together with any successor depositary with respect to the Global Notes appointed under the Indenture, the “Depositary”) and registered in the name of DTC’s nominee, Cede & Co. Unless and until it is exchanged in whole or in part for the individual Notes represented thereby under the circumstances described below, a Global Note may not be transferred except as a whole by a Depositary to its nominee, by a nominee of a Depositary to such Depositary or another nominee of such Depositary, or by a Depositary or its nominee to a successor Depositary or a nominee of such successor.
So long as a Depositary or its nominee is the Holder of a Global Note, such Depositary or its nominee, as the case may be, will be considered the sole owner or Holder of the Notes represented by such Global Note for all purposes under the Indenture. Except as provided below, owners of a beneficial interest in Notes evidenced by a Global Note will not be entitled to have any of the individual Notes represented by such Global Note registered in their names, will not receive or be entitled to receive physical delivery of any such Notes in definitive form and will not be considered the owners or Holders thereof under the Indenture for any purpose, including with respect to giving of any direction, instructions or approvals to the Trustee hereunder.
A Global Note may be exchanged in whole or in part for individual Notes represented thereby only if (i) the Depositary (A) has notified the Company that it is unwilling or unable to continue as a depositary for such Global Note or (B) has ceased to be a clearing agency registered under the Exchange Act, and in either case a successor depositary shall not have been appointed by the Company within ninety (90) days after such notice is received by the Company or the Company becomes aware of such cessation, respectively, or (ii) there shall have occurred and be continuing an Event of Default with respect to such Global Note and the Security Registrar has received a written request from an owner of beneficial interest in such Global Note to receive registered Notes. In any such case, the Company will issue individual Notes in exchange for such Global Note representing such Notes in authorized denominations.
Notwithstanding any provisions of Section 2.1(c) or Section 2.1(f) of this Supplemental Indenture to the contrary, payments of principal, premium, if any, and interest on any Global Note shall be made in accordance with the procedures of the Depositary and its participants in effect from time to time.
(e) Interest and Interest Rate. The Notes will bear interest at a rate of 8.875% per annum, from June 3, 2024 (or, in the case of Notes issued after June 3, 2024, from the date designated by the Company in connection with such issuance), or from the immediately preceding Interest Payment Date to which interest has been paid or duly provided for, payable semi-annually in arrears on June 1 and December 1 of each year, commencing December 1, 2024 (each of which shall be an “Interest Payment Date”), or if such day is not a Business Day, on the next succeeding Business Day, to the Persons in whose names the Notes are registered in the Security Register at the close of business on the Regular Record Date for such interest, which shall be May 15 or November 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date (each, a “Regular Record Date”).
(f) Principal Repayment; Currency. The Stated Maturity of the principal of the Notes is June 15, 2032; provided, however, the Notes may be earlier redeemed at the option of the Company as provided in Section 2.1(g)(vii) of this Supplemental Indenture. The principal of each Note payable at its Maturity shall be paid against presentation and surrender thereof at the Corporate Trust Office, in such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public or private debts.
9
(g) Redemption
(i) Notices to Trustee. If the Company elects to redeem Notes pursuant to Section 2.1(g)(vii) hereof, it shall furnish to the Trustee, at least two (2) Business Days before notice of redemption is transmitted or caused to be transmitted to the applicable Holders pursuant to Section 2.1(g)(iii), an Officer’s Certificate setting forth (i) the paragraph or subparagraph of such Note and/or Section of this Supplemental Indenture pursuant to which the redemption shall occur, (ii) the Redemption Date, (iii) the principal amount of the Notes to be redeemed and (iv) the redemption price.
(ii) Selection of Notes to Be Redeemed or Purchased. If the Company is redeeming or repurchasing less than all of the Notes at any time, the Trustee shall select the Notes to be redeemed or purchased (a) if the Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the Notes are listed, (b) on a pro rata basis to the extent practicable or (c) by lot or such other similar method in accordance with the procedures of DTC; provided that no Notes of $2,000 or less shall be redeemed or repurchased in part. In the event of partial redemption or purchase by lot, the particular Notes to be redeemed or purchased shall be selected, unless otherwise provided herein, not less than fifteen (15) nor more than sixty (60) days prior to the Redemption Date by the Trustee from the outstanding Notes not previously called for redemption or purchase.
The Trustee shall promptly notify the Company in writing of the Notes selected for redemption or purchase and, in the case of any Note selected for partial redemption or purchase, the principal amount thereof to be redeemed or purchased. Notes and portions of Notes selected shall be in amounts of $2,000 or whole multiples of $1,000 in excess thereof; no Notes of $2,000 or less can be redeemed in part, except that if all of the Notes of a Holder are to be redeemed or purchased, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed or purchased. Except as provided in the preceding sentence, provisions of this Supplemental Indenture that apply to Notes called for redemption or purchase also apply to portions of Notes called for redemption or purchase.
(iii) Notice of Purchase or Redemption. Notices of purchase or redemption shall be electronically delivered or sent at least fifteen (15) days but not more than sixty (60) days before the purchase or Redemption Date to each Holder of Notes to be redeemed at such Holder’s registered address, except that redemption notices may be transmitted more than sixty (60) days prior to a Redemption Date if the notice is issued in connection with satisfaction and discharge of the Indenture or Defeasance or Covenant Defeasance of the Notes in accordance with Article Four or Article Thirteen of the Base Indenture subject to Section 5.7 and Section 5.8 hereof.
The notice shall identify the Notes (including the CUSIP or ISIN number) to be purchased or redeemed and shall state:
| 1. | the purchase or Redemption Date; |
| 2. | the purchase or redemption price; |
| 3. | if any Note is to be redeemed in part only, the portion of the principal amount of that Note that has been or is to be purchased or redeemed and that, after the Redemption Date upon surrender of such Note, the Company will issue a new Note or Notes in principal amount equal to the unredeemed portion of the original Note in the name of the Holder upon cancellation of the original Note; |
| 4. | the name and address of the paying agent; |
| 5. | that Notes called for redemption must be surrendered to the paying agent to collect the redemption price; |
| 6. | that, unless the Company default in making such redemption payment, and subject to any conditions specified in such notice, interest on Notes called for redemption ceases to accrue on and after the Redemption Date; |
10
| 7. | the paragraph or subparagraph of the Notes and/or Section of this Supplemental Indenture pursuant to which the Notes called for purchase or redemption are being redeemed; |
| 8. | that no representation is made as to the correctness or accuracy of the CUSIP or ISIN number, as applicable, if any, listed in such notice or printed on the Notes; and |
| 9. | any condition to such redemption. |
Notice of redemption may, at the Company’s option and discretion, be subject to one or more conditions precedent. If any such redemption or notice is subject to satisfaction of one or more conditions precedent, such notice shall state that, in the Company’s discretion, the Redemption Date may be delayed until such time as any or all such conditions shall be satisfied, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the Redemption Date, or by the Redemption Date so delayed. The Company shall provide notice to the Trustee of the satisfaction of the conditions precedent.
At the Company’s request, the Trustee shall give the notice of purchase or redemption in the Company’s names and at their expense; provided that the Company shall have delivered to the Trustee, at least two (2) Business Days before notice of redemption is required to be transmitted or caused to be transmitted to Holders pursuant to this Section 2.1(g)(iii) (unless a shorter notice shall be agreed to by the Trustee), an Officer’s Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.
(iv) Effect of Notice of Redemption. Once notice of redemption is transmitted in accordance with Section 2.1(g)(iii) hereof, Notes called for redemption become irrevocably due and payable on the Redemption Date at the redemption price (subject to satisfaction of any conditions specified in the applicable notice). The notice, if transmitted in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. In any case, failure to give such notice or any defect in the notice to the Holder of any Note designated for redemption in whole or in part shall not affect the validity of the proceedings for the redemption of any other Note. Subject to Section 2.1(g)(v) hereof, on and after the Redemption Date, interest ceases to accrue on Notes or portions of Notes called for redemption.
(v) Deposit of Redemption of Purchase Price. Prior to 11:00 a.m. (New York City time) on the redemption or purchase date, the Company shall deposit with the paying agent money sufficient to pay the redemption or purchase price of and accrued and unpaid interest on all Notes to be redeemed or purchased on that date. The paying agent shall promptly return to the Company any money deposited with the paying agent by the Company in excess of the amounts necessary to pay the redemption price of, and accrued and unpaid interest on, all Notes to be redeemed or purchased.
If the Company complies with the provisions of the preceding paragraph, on and after the redemption or purchase date, interest shall cease to accrue on the Notes, or the portions of Notes called for redemption or purchase. If a Note is redeemed or purchased on or after a record date but on or prior to the related Interest Payment Date, then any accrued and unpaid interest to the redemption or purchase date shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for redemption or purchase shall not be so paid upon surrender for redemption or purchase because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption or purchase date until such principal is paid, and to the extent lawful on any interest accrued to the redemption or purchase date not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 2.1(e) hereof.
(vi) Notes Redeemed or Purchased in Part. Upon surrender of a Note that is redeemed or purchased in part, the Company shall issue and the Trustee shall authenticate for the Holder at the expense of the Company a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered representing the same indebtedness to the extent not redeemed or purchased; provided that each new Note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. It is understood that, notwithstanding anything in this Supplemental Indenture to the contrary, only an Authentication Order and not an Opinion of Counsel or Officer’s Certificate is required for the Trustee to authenticate such new Note.
11
(vii) Optional Redemption. The Notes may be redeemed, at any time in whole, or from time to time in part, subject to the conditions and at the redemption prices set forth in Paragraph 2 of the form of Note set forth in Exhibit A hereto, which is hereby incorporated by reference and made a part of this Supplemental Indenture, together with accrued and unpaid interest, if any, to the Redemption Date.
(h) Notices. Notices to the Company or any Subsidiary Guarantor shall be directed to it at Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458-1634, fax number (617) 796-8349, Attention: President; notices to the Trustee shall be directed to it at One Federal Street, 3rd Floor, Boston, Massachusetts 02110, email david.doucette@usbank.com, fax number (617) 603-6683, Attention: Corporate Trust Department, Re: Service Properties Trust 8.875% Senior Guaranteed Unsecured Notes due 2032, or as to any party, at such other address as shall be designated by such party in a written notice to the other parties. All notices and communications (other than those sent to Holders of the Notes) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five (5) calendar days after mailing if sent by registered or certified mail, postage prepaid (except that a notice of change of address shall not be deemed to have been given until actually received by the addressee); when receipt is acknowledged, if sent by e-mail or facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.
(i) Legal Holidays. If any Interest Payment Date, Redemption Date or the Stated Maturity for the principal of the Notes falls on a day that is not a Business Day, the payment otherwise payable on such day will be due and payable on the next succeeding Business Day, and no interest will accrue thereon for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be, through such next succeeding Business Day. The provisions of this Section 2.1(i) shall supersede and replace Section 113 of the Base Indenture with respect to the Notes.
ARTICLE 3
ADDITIONAL COVENANTS
Section 3.1 Additional Covenants. In addition to the covenants of the Company set forth in Article Eight and Article Ten of the Base Indenture, the Holders of the Notes shall have the benefit of the following covenants:
(a) Limitations on Incurrence of Debt.
(i) The Company will not, and will not permit any Subsidiary to, incur any Debt if, immediately after giving effect to the incurrence of such additional Debt and the application of the proceeds therefrom, the aggregate principal amount of all outstanding Debt of the Company and its Subsidiaries on a consolidated basis determined in accordance with generally accepted accounting principles is greater than 60% of the sum of (without duplication):
(A) the Total Assets of the Company and its Subsidiaries as of the end of the fiscal quarter covered by the Company’s Annual Report on Form 10-K, or its Quarterly Report on Form 10-Q, as the case may be, most recently filed with the Commission (or, if such filing is not permitted or required under the Exchange Act, with the Trustee) prior to the incurrence of such additional Debt; and
(B) the purchase price of any real estate assets or mortgages receivable acquired, and the amount of any securities offering proceeds received (to the extent that such proceeds were not used to acquire real estate assets or mortgages receivable or used to reduce Debt), by the Company or any Subsidiary since the end of such fiscal quarter, including those proceeds obtained in connection with the incurrence of such additional Debt.
12
For purposes of this Supplemental Indenture, “Adjusted Total Assets” means the sum of (A) and (B) above.
(ii) The Company will not, and will not permit any Subsidiary to, incur any Secured Debt if, immediately after giving effect to the incurrence of such additional Secured Debt and the application of the proceeds therefrom, the aggregate principal amount of all outstanding Secured Debt of the Company and its Subsidiaries on a consolidated basis determined in accordance with generally accepted accounting principles is greater than 40% of Adjusted Total Assets.
(iii) The Company will not, and will not permit any Subsidiary to, incur any Debt if, immediately after giving effect to the incurrence of such additional Debt and on a pro forma basis, including the application of the proceeds therefrom, the ratio of Consolidated Income Available for Debt Service to the Annual Debt Service for the four consecutive fiscal quarters most recently ended prior to the date on which such additional Debt is to be incurred is less than 1.5 to 1.0, calculated on the assumptions that:
(A) such Debt and any other Debt incurred by the Company and its Subsidiaries on a consolidated basis since the first day of such four-quarter period and the application of the proceeds therefrom, including to refinance other Debt, had occurred at the beginning of such period;
(B) the repayment, retirement or other discharge of any other Debt by the Company and its Subsidiaries on a consolidated basis since the first day of such four-quarter period had occurred at the beginning of such period (except that, in making such computation, the amount of Debt under any revolving credit facility shall be computed based upon the average daily balance of such Debt during such period);
(C) in the case of Acquired Debt or Debt incurred in connection with or in contemplation of any acquisition, including any Person becoming a Subsidiary, since the first day of such four-quarter period, the related acquisition had occurred as of the first day of such period with appropriate adjustments with respect to such acquisition being included in such pro forma calculation; and
(D) in the case of any acquisition or disposition by the Company and its Subsidiaries of any asset or group of assets since the first day of such four-quarter period, whether by merger, stock purchase or sale, or asset purchase or sale, such acquisition or disposition or any related repayment of Debt had occurred as of the first day of such period with the appropriate adjustments with respect to such acquisition or disposition being included in such pro forma calculation.
If the Debt giving rise to the need to make the foregoing calculation or any other Debt incurred after the first day of the relevant four-quarter period bears interest at a floating interest rate, then, for purposes of calculating the Annual Debt Service, the interest rate on such Debt shall be computed on a pro forma basis as if the average interest rate which would have been in effect during the entirety of such four-quarter period had been the applicable rate for the entirety of such period.
None of the foregoing paragraphs described in this Section 3.1(a) shall apply to any incurrence of Debt, including Secured Debt (such Debt or Secured Debt, as the case may be, “Refinancing Debt”), by the Company or any of its Subsidiaries to refinance any Debt; provided that the principal amount of any Refinancing Debt shall not exceed the principal amount of the Debt being refinanced plus any amounts necessary to pay premiums (including tender premiums), accrued interest, defeasance costs and reasonable expenses in connection therewith; provided, further, that notwithstanding compliance with this Section 3.1(a), the Company will not, and will not permit any Subsidiary to, incur additional guaranteed Debt that is “pari” to the Notes if such additional Debt would cause the ratio of the Company’s Total Unencumbered Assets in Guarantor Subsidiaries to the Company’s Total Senior Guaranteed Unsecured Debt to be less than 2.2 to 1.0.
13
(b) Maintenance of Total Unencumbered Assets. The Company and its Subsidiaries will at all times maintain Total Unencumbered Assets of not less than 150% of the aggregate outstanding principal amount of the Unsecured Debt of the Company and its Subsidiaries on a consolidated basis in accordance with generally accepted accounting principles.
(c) Provision of Financial Information. Whether or not the Company is subject to Section 13 or 15(d) of the Exchange Act, it will, within fifteen (15) days after each of the respective dates by which it would have been required to file annual reports, quarterly reports and other documents with the Commission if it were so subject, (1) transmit by mail to all Holders, as their names and addresses appear in the Security Register, without cost to such Holders, copies of the annual reports, quarterly and other reports, financial statements and other documents which it would have been required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act, if it were subject to such Sections, (2) file with the Trustee copies of the annual reports, quarterly or other reports, financial statements and other documents which it would have been required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act, if it was subject to such Sections, and (3) promptly upon written request and payment of the reasonable cost of duplication and delivery, supply copies of such documents to any prospective Holder; provided that, the foregoing requirements shall be deemed satisfied if the foregoing materials are available on the Commission’s EDGAR system or on the Company’s website within the applicable time period. The Trustee shall have no liability or responsibility for the filing, timeliness or content of any such reports, financial statements, documents or information filed by the Company and delivery of such reports, financial statements, documents or information to the Trustee is for informational purposes only and receipt of such shall not constitute constructive notice thereof or any information contained therein.
Notwithstanding the foregoing, if at any time the Notes are guaranteed by any direct or indirect parent company of the Company, the Company may satisfy its obligations under this Section 3.1(c) with respect to financial information relating to the Company by furnishing financial information relating to such direct or indirect parent company; provided, however, that the same is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to such direct or indirect parent company and any of its Subsidiaries other than the Company and its Subsidiaries, on the one hand, and the information relating to the Company and its Subsidiaries on a standalone basis, on the other hand.
(d) Additional Subsidiary Guarantees. If at any time (i) any Subsidiary (whether existing at the Issue Date or acquired or created after the Issue Date) becomes (including on the date of acquisition or creation) a Subsidiary that is not an Excluded Subsidiary or a Foreign Subsidiary or (ii) any Subsidiary ceases to be an Excluded Subsidiary or a Foreign Subsidiary, then the Company will cause such Subsidiary to execute and deliver to the Trustee, within thirty (30) days from the date such Subsidiary became a Subsidiary that is not an Excluded Subsidiary or a Foreign Subsidiary or ceased to be an Excluded Subsidiary or a Foreign Subsidiary, as the case may be, a supplemental indenture in a form reasonably satisfactory to the Trustee pursuant to which such Subsidiary will fully and unconditionally guarantee the Notes, jointly and severally with all other Subsidiary Guarantors, and deliver an Officer’s Certificate and Opinion of Counsel reasonably satisfactory to the Trustee.
The covenant in this Section 3.1(d) will automatically and permanently terminate and the Company will be automatically and permanently released from all its obligations under this Section 3.1(d) on and after the date on which (a) the Notes have received a Mid-BBB Investment Grade Rating from both Rating Agencies; and (b) no Default or Event of Default has occurred and is continuing.
(e) Subsidiary Guarantor May Consolidate, Etc., Only on Certain Terms; Successor Substituted. A Subsidiary Guarantor may not consolidate with or merge into any other Person or convey, transfer or lease all or substantially all of its properties and assets to any other Person (other than the Company or another Subsidiary Guarantor), and a Subsidiary Guarantor may not permit any other Person (other than the Company or another Subsidiary Guarantor) to consolidate with or merge into it, unless:
(i) either (1) the Subsidiary Guarantor is the surviving entity or (2) the Person formed by or surviving any such consolidation or merger (if other than the Subsidiary Guarantor) or to which such conveyance, transfer or lease has been made is an entity organized and validly existing under the laws of the United States, any state thereof or the District of Columbia and expressly assumes, by a supplemental indenture executed and delivered to the Trustee, in form satisfactory to the Trustee, the Subsidiary Guarantor’s obligations under its Subsidiary Guarantee and the Indenture;
14
(ii) immediately after giving effect to such transaction, and treating any indebtedness which becomes an obligation of the Subsidiary Guarantor, any other Subsidiary or the Company as a result of such transaction as having been incurred by the Subsidiary Guarantor, such Subsidiary or the Company at the time of such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default shall have happened and be continuing; and
(iii) the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Section 3.1(e) and that all conditions precedent provided for in the Indenture relating to such transaction have been complied with;
provided that this Section 3.1(e) shall not apply to a transaction pursuant to which such Subsidiary Guarantor shall be released from its obligations under its Subsidiary Guarantee and the Indenture in accordance with Section 6.4 of this Supplemental Indenture.
Upon any consolidation of a Subsidiary Guarantor with, or merger of a Subsidiary Guarantor into, any other Person or any conveyance, transfer or lease all or substantially all of the properties and assets of a Subsidiary Guarantor in accordance with this Section 3.1(e), the successor Person formed by such consolidation or into which such Subsidiary Guarantor is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, such Subsidiary Guarantor under the Indenture with the same effect as if such successor Person had been named as a Subsidiary Guarantor in the Indenture, and thereafter, except in the case of a lease, the predecessor Subsidiary Guarantor shall be relieved of all obligations and covenants under the Indenture and its Subsidiary Guarantee.
(f) Offers to Repurchase upon Change of Control.
(i) If a Change of Control Repurchase Event occurs after the Issue Date, unless the Company has previously or concurrently transmitted a redemption notice with respect to all the outstanding Notes pursuant to Section 2.1(g)(vii) hereof, the Company shall make an offer to purchase all of the Notes pursuant to the offer described below (the “Change of Control Offer”) at a price in cash (the “Change of Control Payment”) equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to, but excluding, the date of purchase, subject to the right of Holders of the Notes of record on the relevant record date to receive interest due on the relevant Interest Payment Date. Within thirty (30) days following any Change of Control Repurchase Event, unless the Company has previously or concurrently transmitted a redemption notice with respect to all the outstanding Notes pursuant to Section 2.1(g)(vii) hereof, the Company shall send notice of such Change of Control Offer, with a copy to the Trustee, to each Holder of Notes to the address of such Holder appearing in the security register or otherwise in accordance with the procedures of DTC, with the following information:
(A) that a Change of Control Offer is being made pursuant to this Section 3.1(f) and that all Notes properly tendered pursuant to such Change of Control Offer will be accepted for payment by the Company;
(B) the purchase price and the purchase date, which will, subject to clause (G) of this Section 3.1(f)(i), be no earlier than thirty (30) days nor later than sixty (60) days from the date such notice is transmitted (the “Change of Control Payment Date”);
(C) that any Note not properly tendered will remain outstanding and continue to accrue interest;
15
(D) that unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest on the Change of Control Payment Date;
(E) that Holders will be entitled to withdraw their tendered Notes and their election to require the Company to purchase such Notes, provided that the paying agent receives, not later than the close of business on the 30th day following the date of the Change of Control Repurchase Event notice, facsimile transmission or letter setting forth the name of the Holder of the Notes, the principal amount of Notes tendered for purchase, and a statement that such Holder is withdrawing its tendered Notes and its election to have such Notes purchased;
(F) that if the Holders tender less than all of the Notes, the Holders of the remaining Notes will be issued new Notes and such new Notes will be equal in principal amount to the unpurchased portion of the Notes surrendered. The unpurchased portion of the Notes must be equal to $2,000 or an integral multiple of $1,000 in excess thereof;
(G) if such notice is delivered prior to the occurrence of a Change of Control, stating that the Change of Control Offer is conditional on the occurrence of such Change of Control, and if applicable, shall state that, in the Company’s discretion, the Change of Control Payment Date may be delayed until such time as the Change of Control shall occur, or that such redemption may not occur and such notice may be rescinded in the event that the Company shall determine that such condition will not be satisfied by the Change of Control Payment Date or by the Change of Control Payment Date as so delayed; and
(H) the other instructions, as determined by the Company, consistent with this Section 3.1(f), that a Holder must follow.
The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Supplemental Indenture, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached their obligations under this Supplemental Indenture by virtue thereof.
(ii) On the Change of Control Payment Date, the Company will, to the extent permitted by law,
(A) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer,
(B) deposit with the paying agent an amount equal to the aggregate Change of Control Payment in respect of all Notes or portions thereof so tendered, and
(C) deliver, or cause to be delivered, to the Trustee for cancellation the Notes so accepted together with an Officer’s Certificate to the Trustee stating that such Notes or portions thereof have been tendered to and purchased by the Company.
(iii) The Company shall not be required to make a Change of Control Offer following a Change of Control Repurchase Event if (1) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Supplemental Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer or (2) notice of redemption has been given pursuant to this Supplemental Indenture with respect to all of the outstanding Notes pursuant to Section 2.1(g)(vii), unless and until there is a default in payment of the applicable redemption price. Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.
16
(iv) In the event that Holders of not less than 90% in aggregate principal amount of the then outstanding Notes accept a Change of Control Offer and the Company (or any third party making such Change of Control Offer in lieu of the Company as described above) purchase all of the Notes tendered by such Holders, the Company (or any such third party) will have the right, upon not less than ten (10) nor more than sixty (60) days’ prior notice, given not more than thirty (30) days following the purchase pursuant to such Change of Control Offer described above, to redeem all of such Notes that remain outstanding following such purchase at a redemption price equal to the Change of Control Payment, plus, to the extent not included in the Change of Control Payment, accrued and unpaid interest on the Notes that remain outstanding, to, but excluding, the date of purchase.
(v) Notes repurchased by the Company pursuant to a Change of Control Offer will have the status of Notes issued but not outstanding or will be retired and canceled at the option of the Company. Notes purchased by a third party pursuant to Section 3.1(f)(iv) will have the status of Notes issued and outstanding unless transferred to the Company.
(vi) Other than as specifically provided in this Section 3.1(f), any purchase pursuant to this Section 3.1(f) shall be made pursuant to the provisions of Sections 2.1(g)(ii), 2.1(g)(v) and 2.1(g)(vi), hereof.
ARTICLE 4
SUPPLEMENTAL INDENTURES
Section 4.1 Restatement of Section 901 of the Base Indenture. The provisions of Section 901 of the Base Indenture, as applied to the Notes, are restated in their entirety and shall be deemed to read as follows in lieu of the provisions set forth therein:
“Section 901 Supplemental Indentures Without Consent of Holders
Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the Company or a Subsidiary Guarantor and the assumption by any such successor of the covenants of the Company herein and in the Securities or the covenants of such Subsidiary Guarantor herein and in its Subsidiary Guarantee; or
(b) to add to the covenants of the Company or any Subsidiary Guarantor for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company or any Subsidiary Guarantor; or
(c) to add any additional Events of Default for the benefit of the Holders of all or any series of Securities (and if such additional Events of Default are to be for the benefit of less than all series of Securities, stating that such additional Events of Default are expressly being included solely for the benefit of such series); or
(d) to add to or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of Securities of any series in bearer form, registrable or not registrable as to principal, and with or without interest coupons, or to permit or facilitate the issuance of any series of Securities in uncertificated form; or
17
(e) to add to, change or eliminate any of the provisions of this Indenture in respect of one or more series of Securities, provided that any such addition, change or elimination (i) shall neither (A) apply to any Security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (B) modify the rights of the Holder of any such Security with respect to such provision or (ii) shall become effective only when there is no such Security Outstanding; or
(f) to add guarantees of or to secure all or any series of the Securities or any guarantees thereof; or
(g) to evidence the release of any Subsidiary Guarantor or any guarantor of the Securities of any series; or
(h) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 611; or
(i) to establish the forms or terms of Securities of any series as permitted by Sections 201 and 301 or to provide for the issuance of additional Securities of any series; or
(j) to cure any ambiguity, to correct or supplement any provision contained herein or in any indenture supplemental hereto which may be defective or inconsistent with any other provision contained herein or in any supplemental indenture or to conform the terms hereof, as amended and supplemented, that are applicable to the Securities of any series to the description of the terms of such Securities in the offering memorandum, prospectus supplement or other offering document applicable to such Securities at the time of initial sale thereof; or
(k) to supplement any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the defeasance (whether legal or covenant defeasance) or satisfaction and discharge of any series of Securities; provided that any such action shall not adversely affect the interests of the Holders of Securities of such series or any other series of Securities in any material respect; or
(l) to prohibit the authentication and delivery of additional series of Securities; or
(m) to add to or change or eliminate any provision of this Indenture as shall be necessary or desirable in accordance with any amendments to the Trust Indenture Act;
(n) to comply with the rules of any applicable Depositary; or
(o) to make any other provisions with respect to matters or questions arising under the Indenture, provided that such action pursuant to this clause (o) shall not adversely affect the interests of the Holders of Securities of any series in any material respect.”
Section 4.2 Restatement of Section 902 of the Base Indenture. The provisions of Section 902 of the Base Indenture, as applied to the Notes, are restated in their entirety and shall be deemed to read as follows in lieu of the provisions set forth therein:
“Section 902 Supplemental Indentures With Consent of Holders
With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities of each series affected by such supplemental indenture, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby,
18
(a) change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon, or reduce the amount (including the amount of any premium) due upon the redemption thereof, or reduce the amount of the principal of a Security which would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502, or change the date on which any Security may be subject to redemption, or change any Place of Payment where, or the coin or currency in which, any Security or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or
(b) reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or
(c) release any Subsidiary Guarantor from any of its obligations under its Subsidiary Guarantee or this Indenture except in accordance with the terms of this Indenture; or
(d) modify any of the provisions of this Section, Section 513 or Section 1006, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby; provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to “the Trustee” and concomitant changes in this Section and Section 1006, or the deletion of this proviso, in accordance with the requirements of Section 611 and clause (h) of Section 901.
A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.”
ARTICLE 5
OTHER PROVISIONS
Section 5.1 Restatement of Section 101 of the Base Indenture.
(a) The provisions of Section 101(a) of the Base Indenture, as applied to the Notes, are restated in their entirety and shall be deemed to read as follows in lieu of the provisions set forth therein:
“(a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular, and the terms “Notes,” “Subsidiary Guarantee” and “Subsidiary Guarantor” have the meanings assigned to them in the Supplemental Indenture and include the plural as well as the singular;”
(b) Section 101 of the Base Indenture, as applied to the Notes, is further amended by adding the following defined term in its appropriate alphabetical position:
“Supplemental Indenture” means the Twelfth Supplemental Indenture to this Indenture, dated as of June 3, 2024, by and among the Company, the subsidiary guarantors named therein, and the Trustee, as the same may be amended or supplemented from time to time.”
19
Section 5.2 Sinking Funds not Applicable. Section 501(c) of the Base Indenture shall not be applicable to the Notes.
Section 5.3 Restatement of Section 501(d) of the Base Indenture. The provisions of Section 501(d) of the Base Indenture, as applied to the Notes, are restated in their entirety and shall be deemed to read as follows in lieu of the provisions set forth therein:
“(d) default in the performance of, or breach of, any covenant of the Company or any Subsidiary Guarantor in this Indenture (other than a default under Section 501(a) or Section 501(b) or which has been expressly included in this Indenture solely for the benefit of a series of Securities other than that series), and continuance of such default or breach for a period of sixty (60) days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of more than 25% in principal amount of the Outstanding Securities of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or”
Section 5.4 Restatement of Section 501(e) of Base Indenture. The provisions of Section 501(e) of the Base Indenture, as applied to the Notes, are restated in their entirety and shall be deemed to read as follows in lieu of the provisions set forth therein:
“(e) the Company or one of its Significant Subsidiaries, if any, pursuant to or within the meaning of any Bankruptcy Law (i) commences a voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary case, or (iii) consents to the appointment of a Custodian of it or for all or substantially all of its property; or”
Section 5.5 Restatement of Section 501(f) of Base Indenture. The provisions of Section 501(f) of the Base Indenture, as applied to the Notes, are restated in their entirety and shall be deemed to read as follows in lieu of the provisions set forth therein:
“(f) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (i) is for relief against the Company or one of its Significant Subsidiaries in an involuntary case, (ii) appoints a Custodian of the Company or such Significant Subsidiary or for all or substantially all of its property, or (iii) orders the liquidation of the Company or such Significant Subsidiary, and the order or decree remains unstayed and in effect for ninety (90) days; or”
Section 5.6 Additional Events of Default. In accordance with Section 501(g) of the Base Indenture, each of the following shall also constitute an “Event of Default” with respect to the Notes:
(a) default under any bond, debenture, note or other evidence of indebtedness of the Company, or under any mortgage, indenture or other instrument of the Company (including a default with respect to Securities issued under the Indenture other than the Notes) under which there may be issued or by which there may be secured any indebtedness of the Company (or by any Subsidiary, the repayment of which the Company has guaranteed or for which the Company is directly responsible or liable as obligor or guarantor), whether such indebtedness now exists or shall hereafter be created, which default shall constitute a failure to pay an aggregate principal amount exceeding $50,000,000 of such indebtedness when due and payable after the expiration of any applicable grace period with respect thereto and shall have resulted in such indebtedness in an aggregate principal amount exceeding $50,000,000 becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, without such indebtedness having been discharged, or such acceleration having been rescinded or annulled, within a period of ten (10) days after there shall have been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of more than 25% in aggregate principal amount of the Outstanding Notes, a written notice specifying such default and requiring the Company to cause such indebtedness to be discharged or cause such acceleration to be rescinded or annulled and stating that such notice is a “Notice of Default” under the Indenture; and
20
(b) any Subsidiary Guarantee of a Subsidiary Guarantor that is a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms of the Indenture) or is declared null and void in a judicial proceeding or any Subsidiary Guarantor that is a Significant Subsidiary or group of Subsidiary Guarantors that taken together would constitute a Significant Subsidiary denies or disaffirms its or their, as the case may be, obligations under the Indenture or its or their Subsidiary Guarantees, as the case may be.
Section 5.7 Applicability of Satisfaction and Discharge. Article Four of the Base Indenture applies to the Notes, except for the proviso at the end of Section 401(a). For the avoidance of doubt, upon satisfaction and discharge of the Indenture with respect to the Notes pursuant to Article Four of the Base Indenture, the Subsidiary Guarantees will automatically terminate, all other obligations of the Subsidiary Guarantors under the Indenture will automatically terminate and the Subsidiary Guarantors will be automatically released from their obligations under their Subsidiary Guarantees and their other obligations under the Indenture.
Section 5.8 Applicability of Defeasance and Covenant Defeasance Provisions. Article Thirteen of the Base Indenture, including provisions for Defeasance and Covenant Defeasance, applies to the Notes, except for the proviso at the end of the first sentence of Section 1304(a). For the avoidance of doubt, upon Defeasance or Covenant Defeasance with respect to the Notes, the Subsidiary Guarantees will automatically terminate, all other obligations of the Subsidiary Guarantors under the Indenture will automatically terminate and the Subsidiary Guarantors will be automatically released from their obligations under their Subsidiary Guarantees and their obligations under the Indenture.
Section 5.9 Restatement of Section 608 of Base Indenture. The provisions of Section 608 of the Base Indenture, as applied to the Notes, shall be deemed to read as follows in lieu of the provisions set forth therein:
“If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. To the extent permitted by such Act, the Trustee shall not be deemed to have a conflicting interest by virtue of being a trustee under this Indenture with respect to Securities of more than one series or a trustee under that certain Indenture, dated as of February 25, 1998, between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association).”
ARTICLE 6
SUBSIDIARY GUARANTEES
Section 6.1 Subsidiary Guarantee. Subject to this Article 6, each of the Subsidiary Guarantors hereby, jointly and severally, unconditionally guarantees on a senior unsecured basis to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Notes or the obligations of the Company under the Indenture or the Notes, that: (a) the principal of and interest on the Notes shall be promptly paid in full when due, whether at Stated Maturity, upon redemption, by acceleration or otherwise, and interest on the overdue principal of, and overdue premium and interest on, the Notes, if any, if lawful, and all other obligations of the Company to Holders of the Notes or the Trustee under the Indenture or the Notes shall be promptly paid in full or promptly performed, as the case may be, all in accordance with the terms of the Indenture and the Notes; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, upon redemption, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or failing performance of any other obligation so guaranteed for whatever reason, each Subsidiary Guarantor shall be obligated to pay, or to perform or cause the performance of, the same immediately. Each Subsidiary Guarantor agrees that this is a guarantee of payment and not a guarantee of collection.
Each of the Subsidiary Guarantors hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions of the Indenture or the Notes, the release of any other Subsidiary Guarantor, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a Subsidiary Guarantor. Each Subsidiary Guarantor hereby waives, to the extent permitted by applicable law, diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenant that this Subsidiary Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and the Indenture.
21
Unless and until released with respect to any Subsidiary Guarantor in accordance with Section 6.4 of this Supplemental Indenture, this Subsidiary Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Company for liquidation or reorganization, should the Company become insolvent or make an assignment for the benefit of creditors or should a custodian, trustee, liquidator or other similar official be appointed for all or any part of the Company’s assets. If any Holder of the Notes or the Trustee is required by any court or governmental authority or is otherwise required to return to the Company, any Subsidiary Guarantor or any custodian, trustee, liquidator or other similar official acting in relation to the Company or such Subsidiary Guarantor, any amount paid by the Company or such Subsidiary Guarantor to the Trustee or such Holder, the Notes and this Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Subsidiary Guarantor further agrees (to the fullest extent permitted by law) that, as between it, on the one hand, and the Holders of the Notes and the Trustee, on the other hand, (a) subject to this Article 6, the maturity of the obligations guaranteed hereby may be accelerated as provided in Article Five of the Base Indenture, as supplemented by this Supplemental Indenture, for the purposes of this Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (b) in the event of any acceleration of such obligations as provided in such Article Five, such obligations (whether or not due and payable) shall forthwith become due and payable by the Subsidiary Guarantors for the purpose of this Subsidiary Guarantee.
Section 6.2 Limitation on Subsidiary Guarantor Liability. Each Subsidiary Guarantor, and by its acceptance of Notes, each Holder of the Notes, hereby confirms that it is the intention of all such parties that the Subsidiary Guarantee of such Subsidiary Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar Federal or state law to the extent applicable to any Subsidiary Guarantee. To effectuate the foregoing intention, the Trustee, the Holders of the Notes and the Subsidiary Guarantors hereby irrevocably agree that the obligations of each Subsidiary Guarantor under its Subsidiary Guarantee will be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Subsidiary Guarantor that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Subsidiary Guarantor in respect of the obligations of such other Subsidiary Guarantor under this Article 6, result in the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee and the Indenture not constituting a fraudulent transfer or conveyance under such laws. Each Subsidiary Guarantor that makes a payment under its Subsidiary Guarantee is entitled to a contribution from each other Subsidiary Guarantor in a pro rata amount based on the adjusted net assets of each Subsidiary Guarantor, so long as the exercise of such right does not impair the rights of the Holders of the Notes under this Subsidiary Guarantee.
Section 6.3 Execution and Delivery of Subsidiary Guarantee. To evidence its Subsidiary Guarantee set forth in Section 6.1 of this Supplemental Indenture, each Subsidiary Guarantor hereby agrees that this Supplemental Indenture or a supplemental indenture entered into by such Subsidiary Guarantor pursuant to Section 3.1(d) of this Supplemental Indenture, as the case may be, shall be executed on behalf of such Subsidiary Guarantor by an officer or other authorized signatory of such Subsidiary Guarantor.
Each Subsidiary Guarantor hereby agrees that its Subsidiary Guarantee set forth in Section 6.1 of this Supplemental Indenture shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Subsidiary Guarantee on the Notes.
If an officer or other authorized signatory of any Subsidiary Guarantor whose signature is on this Supplemental Indenture or a supplemental indenture entered into by such Subsidiary Guarantor pursuant to Section 3.1(d) of this Supplemental Indenture, as the case may be, no longer holds that office or is no longer such an authorized signatory at the time the Trustee authenticates any Note, the Subsidiary Guarantee of such Subsidiary Guarantor shall be valid nevertheless with respect to such Note.
22
The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee set forth in the Indenture on behalf of the Subsidiary Guarantors.
Section 6.4 Release of a Subsidiary Guarantor. The Subsidiary Guarantee of a Subsidiary Guarantor will automatically terminate and be released, all other obligations of such Subsidiary Guarantor under the Indenture will automatically terminate and such Subsidiary Guarantor will be automatically released from its obligations under its Subsidiary Guarantee and its other obligations under the Indenture:
(a) in the event of a sale or other disposition of all or substantially all of the properties or assets of such Subsidiary Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) the Company or a Subsidiary;
(b) in the event of a sale or other disposition (including through merger or consolidation) of Capital Stock of such Subsidiary Guarantor to a Person that is not (either before or after giving effect to such transaction) the Company or a Subsidiary and such Subsidiary Guarantor ceases to be a Subsidiary as a result of the sale or other disposition;
(c) upon such Subsidiary Guarantor becoming an Excluded Subsidiary or a Foreign Subsidiary;
(d) upon the satisfaction and discharge, Defeasance or Covenant Defeasance of the Notes in accordance with Article Four or Article Thirteen of the Base Indenture;
(e) upon the liquidation or dissolution of such Subsidiary Guarantor, provided no Default or Event of Default has occurred that is continuing;
(f) upon the merger of such Subsidiary Guarantor into, or the consolidation of such Subsidiary Guarantor with, (a) a Subsidiary if the surviving or resulting entity is an Excluded Subsidiary or a Foreign Subsidiary or (b) the Company or another Subsidiary Guarantor; or
(g) on and after the date on which (a) the Notes have received a Mid-BBB Investment Grade Rating from both Rating Agencies; and (b) no Default or Event of Default has occurred and is continuing.
At the request of the Company, and upon delivery to the Trustee of an Officers’ Certificate and an Opinion of Counsel each stating that all conditions provided for in this Supplemental Indenture to the release of a Subsidiary Guarantor from its Subsidiary Guarantee have been complied with (provided that the legal counsel delivering such Opinion of Counsel may rely as to matters of fact on one or more Officer’s Certificates of the Company), the Trustee shall execute and deliver an appropriate instrument evidencing such release (it being understood that the failure to obtain any such instrument shall not impair any release pursuant to this Section 6.4).
Section 6.5 Benefits Acknowledged. Each Subsidiary Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Supplemental Indenture and that the guarantee and waivers made by it pursuant to its Subsidiary Guarantee are knowingly made in contemplation of such benefits.
Section 6.6 Waiver of Subrogation. Until all of the Notes are discharged and paid in full, each Subsidiary Guarantor hereby irrevocably waives and agrees not to exercise any claim or other rights which it may now or hereafter acquire against the Company that arise from the existence, payment, performance or enforcement of the Company’s obligations under the Notes or the Indenture and such Subsidiary Guarantor’s obligations under this Subsidiary Guarantee and the Indenture, in any such instance including, without limitation, any right of subrogation, reimbursement, exoneration, contribution, indemnification, and any right to participate in any claim or remedy of the Holders of the Notes against the Company, whether or not such claim, remedy or right arises in equity, or under contract, statute or common law, including, without limitation, the right to take or receive from the Company, directly or indirectly, in cash or other assets or by set off or in any other manner, payment or security on account of such claim or other rights. If any amount shall be paid to any Subsidiary Guarantor in violation of the preceding sentence and any amounts owing to the Trustee or the Holders of the Notes under the Notes or the Indenture, shall not have been paid in full, such amount shall have been deemed to have been paid to such Subsidiary Guarantor for the benefit of, and held in trust for the benefit of, the Trustee or the Holders of the Notes and shall forthwith be paid to the Trustee for the benefit of itself or such Holders to be credited and applied to the obligations in favor of the Trustee or such Holders, as the case may be, whether matured or unmatured, in accordance with the terms of the Indenture.
23
Section 6.7 Same Currency; No Set Off. Each payment to be made by a Subsidiary Guarantor under its Subsidiary Guarantee shall be payable in the currency in which corresponding payment obligations of the Company under the Notes or the Indenture are denominated, and shall be made without set off, counterclaim, reduction or diminution of any kind or nature.
Section 6.8 Guarantee Obligations Continuing. The obligations of each Subsidiary Guarantor under the Indenture shall be continuing and shall remain in full force and effect until all such obligations have been paid and satisfied in full. Each Subsidiary Guarantor agrees with the Trustee that, to the fullest extent permitted by applicable law, it will from time to time deliver to the Trustee suitable acknowledgments of this continued liability in such form as counsel to the Trustee may reasonably request and as will prevent any action brought against it in respect of any default under the Indenture being barred by any statute of limitations now or hereafter in force and, in the event of the failure of a Subsidiary Guarantor so to do, it hereby irrevocably appoints the Trustee the attorney and agent of such Subsidiary Guarantor to make, execute and deliver such written acknowledgment or acknowledgments or other instruments as may from time to time become necessary or reasonably advisable, in the judgment of the Trustee on the advice of counsel, to fully maintain and keep in force the liability of such Subsidiary Guarantor under the Indenture.
Section 6.9 No Merger or Waiver; Cumulative Remedies. To the fullest extent permitted by applicable law, no Subsidiary Guarantee shall operate by way of merger of any of the obligations of a Subsidiary Guarantor under any other agreement. To the fullest extent permitted by applicable law, no failure to exercise and no delay in exercising, on the part of the Trustee or the Holders of the Notes, any right, remedy, power or privilege under the Indenture or the Notes, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or under the Indenture or the Notes preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. To the fullest extent permitted by applicable law, the rights, remedies, powers and privileges in the Indenture, the Notes and any other document or instrument between a Subsidiary Guarantor and/or the Company and the Trustee and the Holders of the Notes are cumulative and not exclusive of any rights, remedies, powers and privilege provided by law.
Section 6.10 Dealing with the Company and Others. The Holders and the Trustee, without releasing, discharging, limiting or otherwise affecting in whole or in part the obligations and liabilities of any Subsidiary Guarantor under the Indenture and without the consent of or notice to any Subsidiary Guarantor, may to the fullest extent permitted by applicable law:
(a) grant time, renewals, extensions, compromises, concessions, waivers, releases, discharges and other indulgences to the Company or any other Person;
(b) take or abstain from taking security or collateral from the Company or from perfecting security or collateral of the Company;
(c) release, discharge, compromise, realize, enforce or otherwise deal with or do any act or thing in respect of (with or without consideration) any and all collateral, mortgages or other security given by the Company or any third party with respect to the obligations or matters contemplated by the Indenture or the Notes
(d) accept compromises or arrangements from the Company;
(e) apply all monies at any time received from the Company or from any security upon such part of the obligations of the Subsidiary Guarantors under Section 6.1 of this Supplemental Indenture as the Holders may see fit or change any such application in whole or in part from time to time as the Holders may see fit; and
24
(f) otherwise deal with, or waive or modify their right to deal with, the Company and all other Persons and any security as the Holders or the Trustee may see fit.
Section 6.11 Enforcement; Expenses. If any Subsidiary Guarantor defaults in performing any of its obligations under the Indenture, the Trustee may proceed in its name as trustee under the Indenture in the enforcement of such obligations against such Subsidiary Guarantor by any remedy provided by law, whether by legal proceedings or otherwise. Each of the Subsidiary Guarantors, jointly and severally, agree to pay all costs, fees and expenses (including, without limitation, reasonable fees and expenses of legal counsel) incurred by the Trustee, any Holder of the Notes, or the agent, advisor or counsel of the Trustee or any Holder, in enforcing the performance by any Subsidiary Guarantor of its obligations under the Indenture.
ARTICLE 7
EFFECTIVENESS
This Supplemental Indenture shall be effective for all purposes as of the date and time this Supplemental Indenture has been executed and delivered by the Company, the Initial Subsidiary Guarantors and the Trustee in accordance with Article Nine of the Base Indenture. As supplemented hereby, the Base Indenture is hereby confirmed as being in full force and effect.
ARTICLE 8
MISCELLANEOUS
Section 8.1 Separability. In the event any provision of this Supplemental Indenture shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof or any provision of the Indenture.
Section 8.2 Construction of Terms. To the extent that any terms of this Supplemental Indenture or the Notes are inconsistent with the terms of the Base Indenture, the terms of this Supplemental Indenture or the Notes shall govern and supersede such inconsistent terms.
Section 8.3 Effect of Headings. The section headings herein are for convenience only and shall not affect the construction hereof.
Section 8.4 Governing Law. This Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York.
Section 8.5 Counterparts. This Supplemental Indenture may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. The words “execution,” “signed,” “signature,” and words of like import in this Supplemental Indenture or in any other certificate, agreement or document related to this Supplemental Indenture or the Notes shall include images of manually executed signatures transmitted by facsimile or other electronic format (including, without limitation, “pdf”, “tif” or “jpg”) and other electronic signatures (including, DocuSign, Orbit, AdobeSign and any other electronic signature provider identified by the Company and the Subsidiary Guarantors that is acceptable to the Trustee). The use of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based recordkeeping system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act or the Uniform Commercial Code. The Trustee shall have the right to accept and act upon any communication, including any funds transfer instruction received pursuant to this Indenture by electronic transmission (including by e-mail, facsimile transmission, web portal or other electronic methods) and shall not have any duty to confirm that the person sending such communication is, in fact, a person authorized to do so. The Company and the Subsidiary Guarantors agree to assume all risks arising out of the use of electronic signatures and electronic methods to submit communications to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties. Notwithstanding the foregoing, the Trustee may in any instance and in its sole discretion require that communication in the form of an original document bearing a manually executed signature be delivered to the Trustee in lieu of, or in addition to, any such electronic communication.
[Signature Page Follows]
25
IN WITNESS WHEREOF, the Company, the Initial Subsidiary Guarantors and the Trustee have caused this Supplemental Indenture to be executed as an instrument under seal in their respective corporate names as of the date first above written.
| COMPANY: | |
| SERVICE PROPERTIES TRUST |
| By: | /s/ Brian E. Donley | |
| Name: Brian E. Donley | ||
| Title: Chief Financial Officer and Treasurer |
| INITIAL SUBSIDIARY GUARANTORS: | |
| Cambridge TRS, Inc. | |
| Harbor Court Associates, LLC | |
| Highway Ventures Borrower LLC | |
|
Highway Ventures LLC HIGHWAY VENTURES PROPERTIES LLC HIGHWAY VENTURES PROPERTIES TRUST | |
| HPT Clift TRS LLC | |
| HPT CW MA Realty LLC | |
| HPT CY TRS, Inc. | |
| HPT Geary ABC Holdings LLC | |
| HPT Geary Properties Trust | |
| HPT IHG Chicago Property LLC | |
| HPT IHG GA Properties LLC | |
| HPT IHG-2 Properties Trust | |
| HPT IHG-3 Properties LLC | |
| HPT SN Holding, Inc. | |
| HPT State Street TRS LLC | |
| HPT TA PROPERTIES LLC | |
| HPT TA Properties Trust | |
| HPT TRS IHG-2, Inc. | |
| HPT TRS Inc. | |
| HPT TRS MRP, Inc. | |
| HPT TRS SPES II, Inc. | |
| HPT TRS WYN, Inc. | |
| HPT Wacker Drive TRS LLC | |
| HPTCY Properties Trust | |
| HPTWN PROPERTIES TRUST | |
| SVC GATEHALL DRIVE TRS LLC | |
| SVC HIGGINS ROAD TRS LLC | |
| SVC Holdings LLC | |
| SVC jersey city trs llc | |
| SVC MANNHEIM ROAD TRS LLC | |
| SVC MINNEAPOLIS TRS LLC | |
| svc morris plains trs llc | |
| svc nanuet trs llc | |
| svc nj trs llc | |
| svc randolph street trs llc | |
| svc redondo beach trs llc | |
| SVCN 1 LLC | |
| SVCN 2 LLC | |
| svcn 3 llc | |
| SVCN 4 LLC | |
| SVCN 5 LLC |
[Signature Page to Twelfth Supplemental Indenture]
| By: | /s/ Brian E. Donley | |
| Name: Brian E. Donley | ||
| Title: Chief Financial Officer and Treasurer |
| HPT CW MA REALTY TRUST | ||
| By: | /s/ Brian E. Donley | |
| Brian E. Donley | ||
| as Trustee and not individually | ||
| TRUSTEE: | |
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee |
| By: | /s/ David W. Doucette | |
| Name: David W. Doucette | ||
| Title: Vice President |
[Signature Page to Twelfth Supplemental Indenture]
EXHIBIT A
FORM OF NOTE
[Form of Face of Security]
[Insert Applicable Legends]
SERVICE PROPERTIES TRUST
8.875% Senior Guaranteed Unsecured Notes due 2032
| No. | $ |
Service Properties Trust, a real estate investment trust duly organized and existing under the laws of Maryland (herein called the “Company”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to , or registered assigns, the principal sum of Dollars ($ ) [(as the same may be revised from time to time on the Schedule of Exchanges of Interests in the Global Security attached hereto)] on June 15, 2032, and to pay interest thereon from , 20 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on June 1 and December 1 in each year, commencing December 1, 2024 at the rate of 8.875% per annum, until the principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be May 15 or November 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and any such interest on this Security will be made at the office or agency of the Company maintained for that purpose in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts or, in the case of any Note that is a Global Security, in accordance with the procedures of The Depository Trust Company (“DTC”), or any successor depositary with respect to the Global Notes appointed under the Indenture, the “Depositary”), and its participants in effect from time to time; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.
Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
THE AMENDED AND RESTATED DECLARATION OF TRUST ESTABLISHING SERVICE PROPERTIES TRUST, DATED AUGUST 21, 1995, AS AMENDED AND SUPPLEMENTED, AS FILED WITH THE STATE DEPARTMENT OF ASSESSMENTS AND TAXATION OF MARYLAND, PROVIDES THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF SERVICE PROPERTIES TRUST SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, SERVICE PROPERTIES TRUST. ALL PERSONS DEALING WITH SERVICE PROPERTIES TRUST IN ANY WAY SHALL LOOK ONLY TO THE ASSETS OF SERVICE PROPERTIES TRUST FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
A-1
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
| Dated: | SERVICE PROPERTIES TRUST | ||
| By: | |||
| Name: | |||
| Title: | |||
CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee | |||
| By: | |||
| Name: | |||
| Title: | |||
[Form of Reverse of Security]
1. General. This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of February 3, 2016 (the “Base Indenture”), between the Company and U.S. Bank Trust Company, National Association (herein called the “Trustee”, which term includes any successor trustee under the Base Indenture), as supplemented by an Twelfth Supplemental Indenture, dated as of June 3, 2024 (as amended, supplemented or otherwise modified from time to time, the “Supplemental Indenture” and the Base Indenture, as supplemented by such Supplemental Indenture, the “Indenture”), among the Company, the Initial Subsidiary Guarantors and the Trustee, and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Subsidiary Guarantors, the Trustee, and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof (such series, the “Notes”).
2. Optional Redemption. Except as set forth below, the Company will not be entitled to redeem the Notes at its option prior to June 15, 2027.
At any time prior to June 15, 2027, the Company may, at its option, redeem all or a part of the Notes upon notice as described in Section 2.1(g)(iii) of the Indenture on one or more occasions, at a redemption price equal to 100% of the principal amount of Notes redeemed plus the Applicable Premium as of the Redemption Date, and, without duplication, accrued and unpaid interest, if any, to, but excluding, the Redemption Date, subject to the rights of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date.
On and after June 15, 2027, the Company may, at its option, redeem the Notes, in whole or in part, upon notice as described in Section 2.1(g)(iii) of the Indenture on one or more occasions, at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon, if any, to, but excluding, the applicable Redemption Date, subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on June 15 of each of the years indicated below:
| Year | Percentage |
| 2027 | 104.438% |
| 2028 | 102.219% |
| 2029 and thereafter | 100.000% |
A-2
The Notes will be subject to redemption in whole at any time or in part from time to time prior to their maturity at the option of the Company upon not less than fifteen (15) nor more than sixty (60) days’ notice to each Holder of Notes to be redeemed at its address appearing in the Security Register or, in the case of any Note that is a Global Security, in accordance with the procedures of the Depositary and its participants in effect from time to time. In the event the Company elects to redeem less than all of the Notes, the particular Notes to be redeemed will be selected by the Trustee by such method as the Trustee shall deem appropriate and in accordance with the procedures of DTC and its participants in effect from time to time.
The Company shall not be required to make sinking fund or redemption payments with respect to the Notes.
In addition, at any time prior to June 15, 2027, the Company may, at its option, upon notice as described in Section 2.1(g)(iii) of the Indenture on one or more occasions, redeem up to 40% of the aggregate principal amount of Notes issued by them (including any additional Notes) at a redemption price equal to 108.875% of the aggregate principal amount thereof plus accrued and unpaid interest thereon, if any, to, but excluding, the applicable Redemption Date, with the net cash proceeds of one or more Equity Offerings; provided that each such redemption occurs within one hundred and twenty (120) days of the date of closing of each such Equity Offering. Notice of any redemption upon any Equity Offering may be given prior to such Equity Offering, and any redemption or notice may, at the Company’s discretion, be subject to conditions, including completion of the related Equity Offering. If any such redemption or notice is subject to satisfaction of one or more conditions precedent, such notice shall state that, in the Company’s discretion, the Redemption Date may be delayed until such time as any or all such conditions shall be satisfied, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the Redemption Date, or by the Redemption Date so delayed. The Company shall provide notice to the Trustee of the satisfaction of the condition precedent by the close of business on the Business Day prior to the Redemption Date.
Notwithstanding the foregoing, in connection with any tender offer for the Notes, in the event that Holders of not less than 90% in aggregate principal amount of the then outstanding Notes accept a tender offer and the Company (or any third party making such offer) purchase all of the Notes tendered by such Holders, the Company (or any such third party) will have the right, upon not less than ten (10) nor more than sixty (60) days’ prior notice, given not more than thirty (30) days following the purchase pursuant to the tender offer described above, to redeem all of such Notes that remain outstanding following such purchase at a redemption price equal to the highest price paid in such tender offer, plus, without duplication, accrued and unpaid interest on the Notes that remain outstanding, to, but excluding, the date of purchase.
In the event that Holders of not less than 90% in aggregate principal amount of the then outstanding Notes accept a Change of Control Offer and the Company (or any third party making such Change of Control Offer in lieu of the Company as described in the terms of the Indenture) purchase all of the Notes tendered by such Holders, the Company (or any such third party) will have the right, upon not less than ten (10) nor more than sixty (60) days’ prior notice, given not more than thirty (30) days following the purchase pursuant to such Change of Control Offer, to redeem all of such Notes that remain outstanding following such purchase at a redemption price equal to the Change of Control Payment, plus, to the extent not included in the Change of Control Payment, accrued and unpaid interest on the Notes that remain outstanding, to, but excluding, the date of purchase.
In the event of redemption of this Security in part only, a new Note or Notes and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.
3. Discharge and Defeasance. The Indenture contains provisions for discharge or defeasance at any time of the entire indebtedness of this Security or certain restrictive covenants and Events of Default with respect to this Security, in each case upon compliance with certain conditions set forth in the Indenture.
A-3
4. Defaults and Remedies. If an Event of Default with respect to the Notes shall occur and be continuing, the principal of the Notes, plus accrued and unpaid interest thereon, may be declared due and payable in the manner and with the effect provided in the Indenture.
5. Actions of Holders. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or this Security or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Notes, the Holders of not less than a majority in principal amount of the Notes at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not have received from the Holders of a majority in principal amount of Notes at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for sixty (60) days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.
6. Payments Not Impaired. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.
7. Denominations, Transfer, Exchange. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Notes are exchangeable for a like aggregate principal amount of Notes and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
8. Persons Deemed Owners. Prior to due presentment of this Security for registration of transfer, the Company, the Subsidiary Guarantors, the Trustee and any agent of the Company, any Subsidiary Guarantor or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Subsidiary Guarantors, the Trustee nor any such agent shall be affected by notice to the contrary.
A-4
9. Subsidiary Guarantees. The Notes will be entitled to the benefits of certain Subsidiary Guarantees made for the benefit of the Holders of the Notes. Reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and obligations thereunder of the Subsidiary Guarantors, the Trustee and the Holders.
10. Defined Terms. All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.
A-5
[ASSIGNMENT FORM]
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:
| TEN COM | -- | as tenants in common | UNIF GIFT MIN ACT |
-- | Custodian |
| TEN ENT | -- | as tenants by the entireties | (Cust) | (Minor) | |
| JT TEN | -- | as joint tenants with right of survivorship | Under Uniform Gifts to Minors | ||
| and not as tenants in common | Act | ||||
| (State) |
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned registered Holder hereby sell(s), assign(s) and transfer(s) unto
Please Insert Social Security Or Other Identifying Number of Assignee
|
|
| Please Print Or Typewrite Name And Address Of Assignee |
| the within security and all rights thereunder, hereby irrevocably constituting and appointing |
| Attorney | |
| to transfer said security on the books of the Company with full power of substitution in the premises. | |
| Dated: | Signed: |
| Notice: The signature to this assignment must correspond with the name as it appears upon the face of the within security in every particular, without alteration or enlargement or any change whatever. | ||
| Signature Guarantee*: | ||
| * Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). | ||
A-6
[Include this Schedule only for a Global Security]
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL SECURITY
The initial principal amount of this Global Security is $[●].
The following exchanges, transfers or cancellations of this Global Security have been made:
| Date of Exchange | Amount of Decrease in Principal Amount of this Global Security |
Amount of Increase in Principal Amount of this Global Security |
Principal Amount of this Global Security Following Such Decrease (or Increase) |
Signature of Authorized Officer of Trustee |
A-7
Exhibit 4.4
This SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”) made and entered into as of June 3, 2024 between SERVICE PROPERTIES TRUST (formerly known as HOSPITALITY PROPERTIES TRUST), a Maryland real estate investment trust (the “Company”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association (as successor in interest to U.S. Bank, National Association (as successor trustee to State Street Bank and Trust Company)), as Trustee (the “Trustee”).
WITNESSETH THAT:
WHEREAS, the Company and the Trustee are parties to an Indenture, dated as of February 25, 1998 (the “Indenture”), relating to the Company’s issuance, from time to time, of various series of debt securities; and
WHEREAS, the Company and the Trustee have agreed to amend the Indenture as set forth herein.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
ARTICLE 1
DEFINED TERMS
Section 1.1 Terms Defined in Indenture. Capitalized terms used herein and not defined herein have the meanings ascribed to such terms in the Indenture.
Section 1.2 Supplemental Definition. The following definition supplements the definitions in Section 101 of the Indenture:
“Government Securities” means direct obligations of, or obligations guaranteed by, the United States of America for the payment of which guarantee or obligations the full faith and credit of the United States of America is pledged.”
ARTICLE 2
AMENDMENTS
Section 2.1 The following amendments will be made to the Indenture:
(a) The text underlined below will be added to the last sentence of clause (1) of Section 401 of the Indenture so that such sentence reads as follows:
“and the Company, in the case of (i), (ii) or (iii) above, has irrevocably deposited or caused to be deposited with the Trustee as funds in trust for such purpose an amount in cash (in the currency or currencies, currency unit or units or composite currency or currencies in which the Securities of such series are payable), non-callable Government Securities maturing as to principal and interest at such times and in such amounts as will insure the availability of cash, or a combination thereof, sufficient to pay and discharge the entire indebtedness on such Securities and such coupons not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any) and interest, and any Additional Amounts with respect thereto, to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be;”
(b) The text underlined below will be added to the last sentence of Section 401 of the Indenture so that such sentence reads as follows:
“The obligations of the Company to the Trustee and any predecessor Trustee under Section 606, the obligations of the Company to any Authenticating Agent under Section 611 and, if money or non-callable Government Securities shall have been deposited with and held by the Trustee pursuant to subclause (B) of clause (1) of this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003 shall survive the satisfaction and discharge of this Indenture.”
(c) The text underlined below will be added to Section 402 of the Indenture so that such section reads as follows:
“SECTION 402. Application of Trust Funds. Subject to the provisions of the last paragraph of Section 1003, all money or non-callable Government Securities deposited with the Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the provisions of the Securities, the coupons and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any), and any interest and Additional Amounts for whose payment such money has been deposited with or received by the Trustee, but such money need not be segregated from other funds except to the extent required by law.”
ARTICLE 3
EFFECTIVENESS
This Supplemental Indenture shall be effective for all purposes as of the date and time this Supplemental Indenture has been executed and delivered by the Company and the Trustee.
ARTICLE 4
MISCELLANEOUS
Section 4.1 Separability. In the event any provision of this Supplemental Indenture shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof or any provision of the Indenture.
2
Section 4.2 Construction of Terms. To the extent that any terms of this Supplemental Indenture are inconsistent with the terms of the Indenture, the terms of this Supplemental Indenture shall govern and supersede such inconsistent terms.
Section 4.3 Effect of Headings. The section headings herein are for convenience only and shall not affect the construction hereof.
Section 4.4 Governing Law. This Supplemental Indenture shall be governed by and construed in accordance with the laws of The Commonwealth of Massachusetts.
Section 4.5 Counterparts. This Supplemental Indenture may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
[Signature Page Follows]
3
IN WITNESS WHEREOF, the Company and the Trustee have caused this Supplemental Indenture to be executed as an instrument under seal in their respective corporate names as of the date first above written.
| SERVICE PROPERTIES TRUST | ||
| By: | /s/ Brian E. Donley | |
| Name: Brian E. Donley | ||
| Title: Chief Financial Officer & Treasurer | ||
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee | ||
| By: | /s/ David W. Doucette | |
| Name: David W. Doucette | ||
| Title: Vice President | ||
[Signature Page to Supplemental Indenture]
Exhibit 5.1
June 3, 2024
Service Properties Trust
Two Newton Place
255 Washington Street, Suite 300
Newton, Massachusetts 02458
| Re: | Service Properties Trust |
8.375% Senior Guaranteed Unsecured Notes due 2029 and 8.875% Senior Guaranteed Unsecured Notes due 2032
Ladies and Gentlemen:
We have acted as counsel to Service Properties Trust, a Maryland real estate investment trust (the “Company”), and each of the subsidiaries of the Company listed on Schedule I hereto (the “Guarantors”) in connection with the Company’s authorization for the issuance and sale of an aggregate of $700,000,000 in principal amount of the Company’s 8.375% Senior Guaranteed Unsecured Notes due 2029 (the “2029 Notes’’) and an aggregate of $500,000,000 in principal amount of the Company’s 8.875% Senior Guaranteed Unsecured Notes due 2032 (the “2032 Notes” and together with the 2029 Notes, the “Notes”), each of which will be guaranteed by the Guarantors (the “Guarantees”), to be issued pursuant to an Indenture, dated as of February 3, 2016 (the “Base Indenture”), between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as Trustee (the “Trustee”), to be supplemented by the Eleventh Supplemental Indenture and the Twelfth Supplemental Indenture, each to be dated on or about June 3, 2024 (the “Supplemental Indentures”), among the Company, the Guarantors and the Trustee (the Base Indenture, as so supplemented by the Supplemental Indentures, the “Indenture”). We understand that the Notes are to be offered and sold under the Company’s Registration Statement on Form S-3, No. 333-258975, as amended (the “Registration Statement”).
In connection with this opinion, we have examined and relied upon copies of (i) the Declaration of Trust, Certificate of Incorporation or Certificate of Formation, as applicable, and bylaws or limited liability company agreement, as applicable, of each of the Guarantors set forth on Schedule II hereto (the “Opinion Guarantors”), (ii) the Registration Statement, (iii) the final Prospectus dated August 20, 2021 (the “Base Prospectus”) relating to the Registration Statement, (iv) the final Prospectus Supplement to the Base Prospectus dated May 17, 2024, relating to the Notes and the Guarantees (the “Prospectus Supplement” and the Base Prospectus, as supplemented thereby, the “Prospectus”), (v) the Indenture, (vi) resolutions adopted by the Board of Trustees of the Company on May 13, 2024, and resolutions adopted by an Ad Hoc Pricing Committee of the Board of Trustees of the Company on May 17, 2024, each relating to the Notes and the Guarantees, (vii) and resolutions adopted by the board of directors or comparable governing body of the Opinion Guarantors. We have also examined and relied upon originals or copies of such records, agreements and instruments of the Company and the Guarantors, certificates of public officials and of officers of the Company and the Guarantors and such other documents and records, and such matters of law, as we have deemed necessary as a basis for the opinions hereinafter expressed. In rendering this opinion, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals and the conformity to the authentic original documents of all documents submitted to us as copies. As to any facts material to the opinions expressed herein, we have relied without independent verification upon certificates of public officials, upon statements of officers or other representatives of the Company and statements of fact contained in documents we have examined.
Service Properties Trust
June 3, 2024
Page 2
We have assumed for purposes of this opinion that the Trustee is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and is duly qualified to engage in the activities contemplated by, and has the requisite organizational and legal power and authority to perform its obligations under, the Indenture, that the Trustee is in compliance, generally with respect to acting as a trustee under the Indenture, with all applicable laws and regulations, and that the Indenture is and will be the valid and binding agreement of the Trustee, enforceable against the Trustee in accordance with its terms.
We express no opinion herein as to any laws other than the laws of Commonwealth of Massachusetts, the State of New York, the Limited Liability Company Act of the State of Delaware (the “Delaware LLC Act”) and the federal laws of the United States. In connection with our opinions herein relating to the Delaware LLC Act, we call to your attention that such opinions are based solely upon our examination of the Delaware LLC Act as currently in effect (without regard to judicial interpretations thereof or rules or regulations promulgated thereunder). We are not admitted to practice law in the State of Delaware, and we expressly disclaim any opinions regarding Delaware contract law or general Delaware law that may be incorporated expressly or by operation of law into the Delaware LLC Act or into any limited liability company operating agreement or other document entered into pursuant thereto. Insofar as this opinion involves matters of Maryland law we have, with the Company’s permission, relied solely upon the opinion of even date herewith of Venable LLP, a copy of which we understand the Company is filing as Exhibit 5.2 to its Current Report on Form 8-K, to be dated on or about June 3, 2024 (the “Current Report”), and with respect to matters involving Maryland law our opinion is subject to the exceptions, limitations and qualifications set forth in such opinion.
Our opinion set forth below with respect to the good standing of the Opinion Guarantors in certain jurisdictions, other than HPT CW MA Realty Trust, is based solely upon certificates, dated various dates, to such effect issued by the Secretary of State (or comparable official) of such jurisdictions. Our opinion set forth below with respect to the existence of HPT CW MA Realty Trust is based solely on a certificate to such effect from its trustees.
Our opinion set forth below with respect to the validity or binding effect of the Notes or any obligations may be limited by (i) bankruptcy, insolvency, reorganization, fraudulent conveyance, marshaling, moratorium or other similar laws affecting the enforcement generally of the rights and remedies of creditors and secured parties or the obligations of debtors, (ii) general principles of equity (whether considered in a proceeding in equity or at law), including but not limited to principles limiting the availability of specific performance or injunctive relief, and concepts of materiality, reasonableness, good faith and fair dealing, (iii) the possible unenforceability under certain circumstances of provisions providing for indemnification, contribution, exculpation, release or waiver that may be contrary to public policy or violative of federal or state securities laws, rules or regulations, and (iv) the effect of course of dealing, course of performance, oral agreements or the like that would modify the terms of an agreement or the respective rights or obligations of the parties under an agreement.
Service Properties Trust
June 3, 2024
Page 3
Based on and subject to the foregoing, we are of the opinion that, as of the date hereof, (1) each of the Opinion Guarantors which, as set forth on Schedule II hereto, is a Delaware or New York corporation or limited liability company, has been duly formed, is validly existing as a limited liability company or corporation and is in good standing under Delaware or New York law, as applicable, (2) HPT CW MA Realty Trust exists as a trust under the laws of the Commonwealth of Massachusetts and (3) the Guarantees by the Opinion Guarantors have been duly authorized by the Opinion Guarantors, and, when the Notes have been (A) duly executed and delivered by the Company and authenticated by the Trustee as provided in the Indenture, and (B) duly delivered to the purchasers thereof against payment of the agreed consideration therefor, as provided in the Registration Statement, the Notes and the Guarantees will constitute valid and binding obligations of the Company and the Guarantors, as applicable, enforceable against the Company and the Guarantors, as the case may be, in accordance with their respective terms.
The opinions set forth herein are rendered as of the date hereof, and we assume no obligation to update such opinions to reflect any facts or circumstances which may hereafter come to our attention or any changes in the law which may hereafter occur. This opinion is rendered to you in connection with the offering of the Notes and the Guarantees under the Prospectus. We hereby consent to the filing of a copy of this opinion as Exhibit 5.1 to the Current Report, which is incorporated by reference into the Registration Statement and the Prospectus, and to references to our firm under the caption “Legal Matters” in the Base Prospectus and in the Prospectus Supplement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or under the rules and regulations of the Securities and Exchange Commission promulgated thereunder.
Very truly yours,
/s/ Sullivan & Worcester LLP
SULLIVAN & WORCESTER LLP
Schedule I
Guarantors
Cambridge TRS, Inc., a Maryland corporation
Harbor Court Associates, LLC, a Maryland limited liability company
Highway Ventures Borrower LLC, a Delaware limited liability company
Highway Ventures LLC, a Delaware limited liability company
Highway Ventures Properties LLC, a Maryland limited liability company
Highway Ventures Properties Trust, a Maryland real estate investment trust
HPT Clift TRS LLC, a Maryland limited liability company
HPT CW MA Realty LLC, a Maryland limited liability company
HPT CW MA Realty Trust, a Massachusetts nominee trust
HPT CY TRS, Inc., a Maryland corporation
HPT Geary ABC Holdings LLC, a Maryland limited liability company
HPT Geary Properties Trust, a Maryland real estate investment trust
HPT IHG Chicago Property LLC, a Maryland limited liability company
HPT IHG GA Properties LLC, a Maryland limited liability company
HPT IHG-2 Properties Trust, a Maryland real estate investment trust
HPT IHG-3 Properties LLC, a Maryland limited liability company
HPT SN Holding, Inc., a New York corporation
HPT State Street TRS LLC, a Maryland limited liability company
HPT TA Properties LLC, a Maryland limited liability company
HPT TA Properties Trust, a Maryland real estate investment trust
HPT TRS IHG-2, Inc., a Maryland corporation
HPT TRS Inc., a Maryland corporation
HPT TRS MRP, Inc., a Maryland corporation
HPT TRS SPES II, Inc., a Maryland corporation
HPT TRS WYN, Inc., a Maryland corporation
HPT Wacker Drive TRS LLC, a Maryland limited liability company
HPTCY Properties Trust, a Maryland real estate investment trust
HPTWN Properties Trust, a Maryland real estate investment trust
SVC Gatehall Drive TRS LLC, a Maryland limited liability company
SVC Higgins Road TRS LLC, a Maryland limited liability company
SVC Holdings LLC, a Maryland limited liability company
SVC Jersey City TRS LLC, a Maryland limited liability company
SVC Mannheim Road TRS LLC, a Maryland limited liability company
SVC Minneapolis TRS LLC, a Maryland limited liability company
SVC Morris Plains TRS LLC, a Maryland limited liability company
SVC Nanuet TRS LLC, a Maryland limited liability company
SVC NJ TRS LLC, a Maryland limited liability company
SVC Randolph Street TRS LLC, a Maryland limited liability company
SVC Redondo Beach TRS LLC, a Maryland limited liability company
SVCN 1 LLC, a Delaware limited liability company
SVCN 2 LLC, a Delaware limited liability company
SVCN 3 LLC, a Delaware limited liability company
SVCN 4 LLC, a Delaware limited liability company
SVCN 5 LLC, a Delaware limited liability company
Schedule II
Opinion Guarantors
Highway Ventures Borrower LLC, a Delaware limited liability company
Highway Ventures LLC, a Delaware limited liability company
HPT CW MA Realty Trust, a Massachusetts nominee trust
HPT SN Holding, Inc., a New York corporation
SVCN 1 LLC, a Delaware limited liability company
SVCN 2 LLC, a Delaware limited liability company
SVCN 3 LLC, a Delaware limited liability company
SVCN 4 LLC, a Delaware limited liability company
SVCN 5 LLC, a Delaware limited liability company
Exhibit 5.2
June 3, 2024
Service Properties Trust
Two Newton Place
255 Washington Street, Suite 300
Newton, Massachusetts 02458-1634
| Re: | Registration Statement on Form S-3 (File No. 333-258975) |
Ladies and Gentlemen:
We have served as Maryland counsel to Service Properties Trust, a Maryland real estate investment trust (the “Company”), and the Company’s subsidiaries identified on Schedule I hereto (the “Subsidiaries”), in connection with certain matters of Maryland law arising out of the sale and issuance of $700,000,000 aggregate principal amount of the Company’s 8.375% Senior Guaranteed Unsecured Notes due 2029 (the “2029 Notes”), and $500,000,000 aggregate principal amount of the Company’s 8.875% Senior Guaranteed Unsecured Notes due 2032 (the “2032 Notes” and, together with the 2029 Notes, the “Notes”), and the guarantees by the Subsidiaries (the “Guarantees”) of the obligations of the Company under the Notes, in an underwritten public offering, covered by the above-referenced Registration Statement, and all amendments thereto (the “Registration Statement”), filed by the Company with the United States Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “1933 Act”).
In connection with our representation of the Company, and as a basis for the opinion hereinafter set forth, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents (collectively, the “Documents”):
1. The Registration Statement and the Prospectus included therein;
2. The Prospectus Supplement, dated May 17, 2024, in the form to be filed by the Company with the Commission pursuant to Rule 424(b) under the 1933 Act;
3. The Amended and Restated Declaration of Trust of the Company, as amended and supplemented, certified by the State Department of Assessments and Taxation of Maryland (the “SDAT”);
4. The Second Amended and Restated Bylaws of the Company certified as of the date hereof by an officer of the Company;
5. The Declarations of Trust of each of the Trust Subsidiaries (as defined on Schedule I), certified by the SDAT;
Service Properties Trust
June 3, 2024
Page 2
6. The Bylaws of each of the Trust Subsidiaries, certified as of the date hereof by an officer of each of the Trust Subsidiaries;
7. The Articles of Organization of each of the LLC Subsidiaries (as defined on Schedule I), certified by the SDAT;
8. The Operating Agreements of each of the LLC Subsidiaries, certified as of the date hereof by an officer of each of the LLC Subsidiaries;
9. The Charters of each of the Corporate Subsidiaries (as defined on Schedule I), certified by the SDAT;
10. The Bylaws of each of the Corporate Subsidiaries, certified as of the date hereof by an officer of each of the Corporate Subsidiaries;
11. A certificate of the SDAT as to the good standing of the Company, dated as of a recent date;
12. Resolutions adopted by the Board of Trustees of the Company, and a duly authorized committee thereof, relating to the authorization of the issuance of the Notes (the “Company Resolutions”), certified as of the date hereof by an officer of the Company;
13. Resolutions adopted by the Board of Trustees, Managing Members or the Board of Directors, as the case may be, of the Subsidiaries, relating to the Guarantees, certified as of the date hereof by an officer of each of the Subsidiaries;
14. A certificate executed by an officer of the Company and each of the Subsidiaries, dated as of the date hereof; and
15. Such other documents and matters as we have deemed necessary or appropriate to express the opinion set forth below, subject to the assumptions, limitations and qualifications stated herein.
In expressing the opinion set forth below, we have assumed the following:
1. Each individual executing any of the Documents, whether on behalf of such individual or another person, is legally competent to do so.
2. Each individual executing any of the Documents on behalf of a party (other than the Company and the Subsidiaries) is duly authorized to do so.
Service Properties Trust
June 3, 2024
Page 3
3. Each of the parties (other than the Company and the Subsidiaries) executing any of the Documents has duly and validly executed and delivered each of the Documents to which such party is a signatory, and such party's obligations set forth therein are legal, valid and binding and are enforceable in accordance with all stated terms.
4. All Documents submitted to us as originals are authentic. The form and content of all Documents submitted to us as unexecuted drafts do not differ in any respect relevant to this opinion from the form and content of such Documents as executed and delivered. All Documents submitted to us as certified or photostatic copies conform to the original documents. All signatures on all Documents are genuine. All public records reviewed or relied upon by us or on our behalf are true and complete. All representations, warranties, statements and information contained in the Documents are true and complete. There has been no oral or written modification of or amendment to any of the Documents, and there has been no waiver of any provision of any of the Documents, by action or omission of the parties or otherwise.
Based upon the foregoing, and subject to the assumptions, limitations and qualifications stated herein, it is our opinion that:
1. The Company is a real estate investment trust duly formed and existing under and by virtue of the laws of the State of Maryland and is in good standing with the SDAT.
2. Each of the Trust Subsidiaries is a real estate investment trust duly formed and existing under and by virtue of the laws of the State of Maryland. Each of the LLC Subsidiaries is a limited liability company duly formed and existing under and by virtue of the laws of the State of Maryland. Each of the Corporate Subsidiaries is a corporation duly incorporated and existing under and by virtue of the laws of the State of Maryland.
3. The issuance of the Notes has been duly authorized and, when issued and delivered by the Company against payment therefor pursuant to the Company Resolutions and otherwise in accordance with the Registration Statement, the Notes will be validly issued.
4. The execution, delivery and performance of the Guarantees by the Subsidiaries have been duly authorized by the Subsidiaries.
The foregoing opinion is limited to the laws of the State of Maryland and we do not express any opinion herein concerning any other law. We express no opinion as to compliance with, or the applicability of, federal or state securities laws, including the securities laws of the State of Maryland.
The opinion expressed herein is limited to the matters specifically set forth herein and no other opinion shall be inferred beyond the matters expressly stated. We assume no obligation to supplement this opinion if any applicable law changes after the date hereof or if we become aware of any fact that might change the opinion expressed herein after the date hereof.
Service Properties Trust
June 3, 2024
Page 4
This opinion is being furnished to you for submission to the Commission as an exhibit to the Company’s Current Report on Form 8-K relating to the issuance of the Notes (the “Current Report”), which is incorporated by reference in the Registration Statement. We hereby consent to the filing of this opinion as an exhibit to the Current Report and the said incorporation by reference and to the use of the name of our firm therein. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the 1933 Act.
| Very truly yours, | |
| /s/ Venable LLP |
SCHEDULE I
Trust Subsidiaries
Subsidiaries that are Maryland real estate investment trusts (the “Trust Subsidiaries”)
| 1. | Highway Ventures Properties Trust |
| 2. | HPT Geary Properties Trust |
| 3. | HPT IHG-2 Properties Trust |
| 4. | HPT TA Properties Trust |
| 5. | HPTCY Properties Trust |
| 6. | HPTWN Properties Trust |
LLC Subsidiaries
Subsidiaries that are Maryland limited liability companies (the “LLC Subsidiaries”)
| 7. | Harbor Court Associates, LLC |
| 8. | Highway Ventures Properties LLC |
| 9. | HPT Clift TRS LLC |
| 10. | HPT CW MA Realty LLC |
| 11. | HPT Geary ABC Holdings LLC |
| 12. | HPT IHG Chicago Property LLC |
| 13. | HPT IHG GA Properties LLC |
| 14. | HPT IHG-3 Properties LLC |
| 15. | HPT State Street TRS LLC |
| 16. | HPT TA Properties LLC |
| 17. | HPT Wacker Drive TRS LLC |
| 18. | SVC Gatehall Drive TRS LLC |
| 19. | SVC Higgins Road TRS LLC |
| 20. | SVC Holdings LLC |
| 21. | SVC Jersey City TRS LLC |
| 22. | SVC Mannheim Road TRS LLC |
| 23. | SVC Minneapolis TRS LLC |
| 24. | SVC Morris Plains TRS LLC |
| 25. | SVC Nanuet TRS LLC |
| 26. | SVC NJ TRS LLC |
| 27. | SVC Randolph Street TRS LLC |
| 28. | SVC Redondo Beach TRS LLC |
Corporate Subsidiaries
Subsidiaries that are Maryland corporations (the “Corporate Subsidiaries”)
| 29. | Cambridge TRS, Inc. |
| 30. | HPT CY TRS, Inc. |
| 31. | HPT TRS IHG-2, Inc. |
| 32. | HPT TRS Inc. |
| 33. | HPT TRS MRP, Inc. |
| 34. | HPT TRS SPES II, Inc. |
| 35. | HPT TRS WYN, Inc. |
Exhibit 8.1
 |
 |
 |
June 3, 2024
Service Properties Trust
Two Newton Place
255 Washington Street, Suite 300
Newton, Massachusetts 02458
Ladies and Gentlemen:
The following opinion is furnished to Service Properties Trust, a Maryland real estate investment trust (the “Company”), to be filed with the Securities and Exchange Commission (the “SEC”) as Exhibit 8.1 to the Company’s Current Report on Form 8-K to be filed on the date hereof (the “Form 8-K”) under the Securities Exchange Act of 1934, as amended.
We have acted as counsel for the Company in connection with its Registration Statement on Form S-3, File No. 333-258975, as amended (the “Registration Statement”), under the Securities Act of 1933, as amended (the “Securities Act”). We have reviewed originals or copies of the Registration Statement, such corporate records, such certificates and statements of officers of the Company and of public officials, and such other documents as we have considered relevant and necessary in order to furnish the opinion hereinafter set forth. In doing so, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as copies, and the authenticity of the originals of such documents. Specifically, and without limiting the generality of the foregoing, we have reviewed: (i) the Company’s amended and restated declaration of trust, as amended and supplemented, and its second amended and restated bylaws; (ii) the prospectus supplement dated May 15, 2024 (the “Prospectus Supplement”) to the final prospectus dated August 20, 2021 (as supplemented by the Prospectus Supplement, the “Prospectus”), which forms a part of the Registration Statement, relating to, inter alia, the Company’s offering of 8.375% senior guaranteed unsecured notes due 2029 and 8.875% senior guaranteed unsecured notes due 2032, and guarantees of each thereof by certain of the Company’s subsidiaries (collectively, the “Offered Securities”); (iii) the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2023 (the “Form 10-K”); and (iv) the Company’s Quarterly Report on Form 10-Q for its quarterly period ended March 31, 2024 (the “Form 10-Q”). For purposes of the opinion set forth below, we have assumed that any documents (other than documents which have been executed, delivered, adopted or filed, as applicable, by the Company prior to the date hereof) that have been provided to us in draft form will be executed, delivered, adopted and filed, as applicable, without material modification.
Service Properties Trust
June 3, 2024
Page 2
The opinion set forth below is based upon the Internal Revenue Code of 1986, as amended, the Treasury regulations issued thereunder, published administrative interpretations thereof, and judicial decisions with respect thereto, all as of the date hereof (collectively, “Tax Laws”), and upon the Employee Retirement Income Security Act of 1974, as amended, the Department of Labor regulations issued thereunder, published administrative interpretations thereof, and judicial decisions with respect thereto, all as of the date hereof (collectively, “ERISA Laws”). No assurance can be given that Tax Laws or ERISA Laws will not change. In the discussions with respect to Tax Laws matters and ERISA Laws matters in the sections of Item 1 of the Form 10-K captioned “Material United States Federal Income Tax Considerations” and “ERISA Plans, Keogh Plans and Individual Retirement Accounts”, as supplemented by the discussion in the section of the Prospectus Supplement captioned “Material United States Federal Income Tax Considerations”, certain assumptions have been made therein and certain conditions and qualifications have been expressed therein, all of which assumptions, conditions and qualifications are incorporated herein by reference. With respect to all questions of fact on which our opinion is based, we have assumed the initial and continuing truth, accuracy and completeness of: (i) the information set forth in the Form 10-K, in the Form 10-Q, in the Prospectus and in the Registration Statement and the documents incorporated therein by reference, and in the exhibits to the Form 10-K, the Form 10-Q and the Registration Statement; and (ii) representations made to us by officers of the Company or contained in the Form 10-K, in the Form 10-Q, in the Prospectus and in the Registration Statement and the documents incorporated therein by reference, and in the exhibits to the Form 10-K, the Form 10-Q and the Registration Statement, in each such instance without regard to qualifications such as “to the best knowledge of” or “in the belief of”. We have not independently verified such information.
We have relied upon, but not independently verified, the foregoing assumptions. If any of the foregoing assumptions are inaccurate or incomplete for any reason, or if the transactions described in the Form 10-K, in the Form 10-Q, in the Prospectus, or in the Registration Statement, or in any exhibits thereto or any documents incorporated therein by reference, have been or are consummated in a manner that is inconsistent with the manner contemplated therein, our opinion as expressed below may be adversely affected and may not be relied upon.
Based upon and subject to the foregoing: (i) we are of the opinion that the discussions with respect to Tax Laws matters and ERISA Laws matters in the sections of Item 1 of the Form 10-K captioned “Material United States Federal Income Tax Considerations” and “ERISA Plans, Keogh Plans and Individual Retirement Accounts”, as supplemented by the discussion in the section of the Prospectus Supplement captioned “Material United States Federal Income Tax Considerations”, in all material respects are, subject to the limitations set forth therein, the material Tax Laws considerations and the material ERISA Laws considerations relevant to holders of the Offered Securities; and (ii) we hereby confirm that the opinions of counsel referred to in said sections represent our opinions on the subject matters thereof.
Our opinion above is limited to the matters specifically covered hereby, and we have not been asked to address, nor have we addressed, any other matters or any other transactions. Further, we disclaim any undertaking to advise you of any subsequent changes of the matters stated, represented or assumed herein or any subsequent changes in Tax Laws or ERISA Laws.
Service Properties Trust
June 3, 2024
Page 3
This opinion is rendered to you in connection with the offering of the Offered Securities under the Prospectus. Purchasers and holders of the Offered Securities are urged to consult their own tax advisors or counsel, particularly with respect to their particular tax consequences of acquiring, holding and disposing of the Offered Securities, which may vary for investors in different tax situations. We hereby consent to the filing of a copy of this opinion as an exhibit to the Form 8-K, which is incorporated by reference in the Registration Statement, and to the references to our firm in the Prospectus Supplement and the Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act or under the rules and regulations of the SEC promulgated thereunder.
| Very truly yours, | |
| /s/ Sullivan & Worcester LLP | |
| SULLIVAN & WORCESTER LLP |