Document:

EX-4.2

 Exhibit 4.2
  

 
 FIRST SUPPLEMENTAL INDENTURE

 $25,000,000 

7.25% SENIOR UNSECURED NOTES DUE 2021 
  

 
 dated 

FEBRUARY 12, 2018 
 by 

SOTHERLY HOTELS LP 
 Issuer

 and 
 SOTHERLY HOTELS INC.

 Guarantor 
 and 

WILMINGTON TRUST, NATIONAL ASSOCIATION 

Trustee 

 Table of Contents 

 

							
	 Article 1 RELATION TO BASE INDENTURE
	  	 	1	 
			
	 1.1
	 	 Relation to Base Indenture
	  	 	1	 
		
	 Article 2 DEFINITIONS
	  	 	2	 
			
	 2.1
	 	 Definitions
	  	 	2	 
		
	 Article 3 THE SERIES OF NOTES
	  	 	6	 
			
	 3.1
	 	 Title of the Securities
	  	 	6	 
	 3.2
	 	 Price
	  	 	6	 
	 3.3
	 	 Issuance
	  	 	6	 
	 3.4
	 	 Limitation on Aggregate Principal Amount
	  	 	6	 
	 3.5
	 	 Interest and Interest Rates; Maturity Date of Notes
	  	 	6	 
	 3.6
	 	 Method of Payment
	  	 	7	 
	 3.7
	 	 Currency
	  	 	8	 
	 3.8
	 	 No Sinking Fund
	  	 	8	 
	 3.9
	 	 No Conversion or Exchange Rights
	  	 	8	 
	 3.10
	 	 No Personal Liability of Directors, Officers, Employers and Equityholders
	  	 	8	 
	 3.11
	 	 Registered Securities; Global Form
	  	 	8	 
	 3.12
	 	 Transfer and Exchange
	  	 	9	 
	 3.13
	 	 General Provisions Relating to Transfers and Exchanges
	  	 	12	 
		
	 Article 4 REDEMPTION
	  	 	13	 
			
	 4.1
	 	 Optional Redemption
	  	 	13	 
	 4.2
	 	 Notice of Optional Redemption
	  	 	13	 
	 4.3
	 	 Payment of Notes Called for Redemption by the Partnership
	  	 	14	 
		
	 Article 5 GUARANTEE
	  	 	15	 
			
	 5.1
	 	 Guarantee
	  	 	15	 
	 5.2
	 	 Execution and Delivery of Guarantee
	  	 	16	 
	 5.3
	 	 Limitation of Guarantor’s Liability; Certain Bankruptcy Events
	  	 	16	 
	 5.4
	 	 Application of Certain Terms and Provisions to the Guarantor
	  	 	17	 
		
	 Article 6 ADDITIONAL COVENANTS
	  	 	17	 
			
	 6.1
	 	 Maintenance of Office or Agency
	  	 	17	 
	 6.2
	 	 Change of Control Repurchase Event
	  	 	18	 
	 6.3
	 	 Limitations on Incurrence of Debt
	  	 	19	 
	 6.4
	 	 Maintenance of Properties
	  	 	20	 
	 6.5
	 	 Insurance
	  	 	20	 
	 6.6
	 	 Payment of Taxes and Other Claims
	  	 	20	 

  
 i 

							
	 Article 7 DEFAULTS AND REMEDIES
	  	 	21	 
			
	 7.1
	 	 Events of Default
	  	 	21	 
	 7.2
	 	 Acceleration of Maturity; Rescission and Annulment
	  	 	23	 
	 7.3
	 	 Limitation on Suits
	  	 	23	 
		
	 Article 8 [RESERVED]
	  	 	24	 
		
	 Article 9 MISCELLANEOUS PROVISIONS
	  	 	24	 
			
	 9.1
	 	 Ratification of Indenture
	  	 	24	 
	 9.2
	 	 Governing Law
	  	 	24	 
	 9.3
	 	 Counterparts
	  	 	25	 
	 9.4
	 	 Calculations in Respect of the Notes
	  	 	25	 
	 9.5
	 	 Successors and Assigns
	  	 	25	 
	 9.6
	 	 Rights of Holders Limited
	  	 	25	 
	 9.7
	 	 Rights and Duties of Trustee
	  	 	25	 
	 9.8
	 	 Notices
	  	 	25	 
	 9.9
	 	 Headings, etc.
	  	 	26	 
	 9.10
	 	 Conflicts
	  	 	26	 
	 9.11
	 	 Trust Indenture Act Controls
	  	 	27	 
	 9.12
	 	 Force Majeure
	  	 	27	 
	 9.13
	 	 U.S.A. Patriot Act
	  	 	27	 
		
	 EXHIBIT A: Form of Note
	  			
	 EXHIBIT B: Form of Notation of Guarantee
	  			

  
 ii 

 FIRST SUPPLEMENTAL INDENTURE 

FIRST SUPPLEMENTAL INDENTURE, dated as of February 12, 2018 (this “Supplemental Indenture”), by and among SOTHERLY HOTELS LP,
a Delaware limited partnership (the “Partnership”), SOTHERLY HOTELS INC., a Maryland corporation (the “Guarantor” or the “REIT”), and WILMINGTON TRUST, NATIONAL ASSOCIATION, a national banking
association organized under the laws of the United States of America (the “Trustee”).  
 RECITALS 

A. The Partnership, the Guarantor and the Trustee have heretofore entered into an Indenture dated as of February 12, 2018 (the “Base
Indenture”), providing for the issuance from time to time of debt securities of the Partnership in one or more Series. 
 B. Section 2.2 of
the Base Indenture permits the Partnership, the Guarantor and the Trustee to enter into a supplemental indenture to the Base Indenture to establish the form, terms and conditions of Securities of any Series as permitted by the Base Indenture. 

C. Each of the Partnership and the Guarantor desires to execute this Supplemental Indenture to establish the form and to provide for the issuance of a Series
of the Partnership’s senior unsecured notes designated as its 7.25% Senior Unsecured Notes due 2021 (the “Notes”) in an initial aggregate principal amount of $25,000,000. 

D. The Guarantor will guarantee the due and punctual payment of the principal and interest on the Notes pursuant to Article 5 of this Supplemental Indenture.

 E. The Board of Directors of the Guarantor, as the sole general partner of the Partnership, has duly adopted resolutions authorizing the Partnership to
execute and deliver this Supplemental Indenture and the Board of Directors of the Guarantor has duly adopted resolutions authorizing such Guarantor to execute and deliver this Supplemental Indenture. 

F. All other conditions and requirements necessary to make this Supplemental Indenture, when duly executed and delivered, a valid and binding agreement in
accordance with its terms and for the purposes herein expressed, have been performed and fulfilled. 
 NOW, THEREFORE, THIS INDENTURE
WITNESSETH: 
 For and in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, each of the Partnership and the Guarantor agrees as follows: 
 ARTICLE 1 

RELATION TO BASE INDENTURE 
 1.1
Relation to Base Indenture 
 This Supplemental Indenture constitutes an integral part of the Base Indenture. Notwithstanding any other
provision of this Supplemental Indenture, all provisions of this Supplemental Indenture are expressly and solely for the benefit of the Holders of the Notes and any such provisions shall not be deemed to apply to any other Securities issued under
the Base Indenture and shall not be deemed to amend, modify or supplement the Base Indenture for any purpose other than with respect to the Notes. 

  
 1 

 ARTICLE 2 

DEFINITIONS 
 2.1 Definitions 

For all purposes of this Supplemental Indenture, except as otherwise expressly provided for or unless the context otherwise requires: 

 

	 	(a)	capitalized terms used but not defined herein shall have the respective meanings assigned to them in the Base Indenture; 

  

	 	(b)	all references herein to Articles and Sections, unless otherwise specified, refer to the corresponding Articles and Sections of this Supplemental Indenture; and 

 

	 	(c)	as used herein the following terms have the following meanings: 

 “Additional
Notes” means additional Notes (other than the Initial Notes) issued under the Indenture in accordance with Section 3.4 hereof, as part of the same series as the Initial Notes. 

“Adjusted Total Asset Value” as of any date means the sum of (i) Stabilized Asset Value,
(ii) Non-Stabilized Asset Value and (iii) total cash and cash equivalents of the Partnership and its Subsidiaries on a consolidated basis determined in accordance with GAAP. 

“Applicable Procedures” means, with respect to any transfer, exchange, payment, redemption, offer, or communications
delivered of or for beneficial interests in any Global Note, the rules and procedures of the Depository that apply to such transfer, exchange, payment, redemption, offer, or communications delivered. 

“Asset Under Renovation” means as of any date any hotel asset directly or indirectly owned by the Partnership, any Subsidiary
or any Unconsolidated Entity, that is designated by the Partnership in its discretion as the recipient or beneficiary of capital expenditures in an amount greater than 4% of such hotel asset’s total revenues for the preceding 12 months. 

“Authentication Order” means a Partnership Order to the Trustee to authenticate and deliver the Notes. 

“Bankruptcy Law” means title 11, U.S. Code or any similar Federal or State law for the relief of debtors. 

“Benefited Party” has the meaning set forth in Section 5.1 hereof. 

“Business Day” means a day other than a Saturday, Sunday or any other day on which banking institutions in New York City or
the location of the corporate trust office of the Trustee are authorized or required by law, regulation or executive order to close. 

“Capital Stock” means, with respect to any entity, any and all shares, interests, participations or other equivalents
(however designated, whether voting or non-voting), including partnership or limited liability company interests, whether general or limited, in the equity of such entity (including without limitation all
warrants, options, derivative instruments, or rights of subscription or conversion relating to or affecting Capital Stock), whether outstanding on the issue date of the notes or issued thereafter, including without limitation, in the case of the
REIT, all common stock and preferred stock of REIT outstanding from time to time. 
 “Capitalization Rate” means 7.5%. 

  
 2 

 “Change of Control Offer” has the meaning set forth in Section 6.2 hereof.

 “Change of Control Payment” has the meaning set forth in Section 6.2 hereof. 

“Change of Control Payment Date” has the meaning set forth in Section 6.2 hereof. 

“Change of Control Repurchase Event” means (A) the acquisition by any person, including any syndicate or group deemed to
be a “person” under Section 13(d)(3) of the Exchange Act, of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions
of the Capital Stock entitling that person to exercise more than 50% of the total voting power of all the Capital Stock entitled to vote generally in the election of the REIT’s directors (except that such person will be deemed to have
beneficial ownership of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition); and (B) following the closing of any
transaction referred to in subsection (A), neither the Partnership, the REIT nor the acquiring or surviving entity has a class of common securities (or American Depositary Receipts representing such securities) listed on the New York Stock Exchange
(“NYSE”), the NYSE Amex Equities (“NYSE Amex”), or the Nasdaq Stock Market, or listed or quoted on an exchange or quotation system that is a successor to the NYSE, the NYSE Amex or the Nasdaq Stock Market. 

“Consolidated Income Available for Debt Service” means, for the four complete calendar quarters preceding the date of
determination, Consolidated Net Income of the Partnership and its Subsidiaries plus amounts that have been deducted for but minus amounts that have been added for (a) Consolidated Interest Expense plus dividends on mandatorily redeemable or
mandatorily convertible preferred stock and prepayment penalties included in GAAP interest expense, (b) provision for taxes of the Partnership and its Subsidiaries based on income, (c) depreciation and amortization and all other non-cash items deducted for purposes of calculating Consolidated Net Income, (d) provision for gains and losses on sales or other dispositions of properties and other investments, (e) extraordinary items, (f) non-recurring or other unusual items, as determined by the Partnership in good faith and (g) corporate, general and administrative expenses. 

“Consolidated Interest Expense” means, for the four complete calendar quarters preceding the date of determination, the
aggregate amount of interest expense for the Partnership and its Subsidiaries for such period determined accordance with GAAP, excluding any interest that is (i) payable in respect of Capital Stock, (ii) capitalized or (iii) payable
in a form other than cash. 
 “Consolidated Net Income” means, for the four complete calendar quarters preceding the date
of determination, the amount of net income (or loss) of the Partnership and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP. 

“Debt” means, as of any date, without duplication, any indebtedness of the Partnership or any Subsidiary, whether or not
contingent, solely in respect of (i) borrowed money evidenced by bonds, notes, debentures or similar instruments, (ii) indebtedness secured by a mortgage, pledge, lien, charge, encumbrance or any security interest existing on property
owned by the Partnership or any Subsidiary or (iii) reimbursement obligations in connection with any letters of credit actually issued or amounts representing the balance deferred and unpaid of the purchase price of any property except any such
balance that constitutes an accrued expense or trade payable; but in the case of items of indebtedness incurred under (i) through (iii) above only to the extent that any such items (other than letters of credit) would appear as a liability on
the Partnership’s consolidated balance sheet in accordance with GAAP; and also includes, to the extent not otherwise included, any obligation of the Partnership 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), indebtedness of another person (other than the Partnership or any Subsidiary). Notwithstanding anything to the contrary in the foregoing, “Debt” shall exclude all
Capital Stock of the REIT, the Partnership or any Subsidiary. 

  
 3 

 “Default” means any event that is, or after notice or passage of time or both
would be, an Event of Default.  
 “Defaulted Interest” has the meaning set forth in Section 3.6 hereof.

 “Definitive Note” means a certificated Note registered in the name of the Holder thereof and issued in accordance with
Section 3.12 hereof, substantially in the form of Exhibit A hereof except that such Note shall not bear the Global Note legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto.

 “Depository” means, with respect to the Global Notes, the Depository Trust Company and any successor thereto. 

“Event of Default” has the meaning set forth in Section 7.1 hereof. 

“GAAP” means generally accepted accounting principles, as in effect from time to time, as used in the United States of
America, applied on a consistent basis; provided, that solely for purposes of any calculation required by the financial covenants contained herein, “GAAP” shall mean generally accepted accounting principles as used in the United States of
America, on the date hereof, applied on a consistent basis.  
 “Global Note” means, individually and
collectively, each of the Notes in the form of a Global Security issued to the Depository or its nominee, substantially in the form of Exhibit A. 

“Guarantee” and “Guarantees” mean, with respect to any Notes that are guaranteed by the Guarantor pursuant
to Section 5.1 hereof, the full and unconditional guarantee provided by the Guarantor in respect of such Notes as set forth in Article 5 hereof and the guarantees endorsed on the certificates evidencing such Notes, or both, as the context shall
require. 
 “Guarantee Obligations” has the meaning set forth in Section 5.1 hereof. 

“Indenture” means the Base Indenture, as supplemented by this Supplemental Indenture, as further supplemented, amended or
restated. 
 “Indirect Participant” means a person who holds a beneficial interest in a Global Note through a Participant.

 “Initial Notes” means the first $25,000,000 aggregate principal amount of Notes issued under this Supplemental Indenture
on the date hereof. 
 “Initial Original Principal Amount” has the meaning set forth in Section 3.4 hereof. 

“Intercompany Debt” means Debt to which the only parties are the REIT, any of its subsidiaries, the Partnership and any
Subsidiary, or Debt owed to the REIT arising from routine cash management practices, but only so long as such Debt is held solely by any of the REIT, any of its subsidiaries, the Partnership and any Subsidiary.  

“Interest Payment Date” has the meaning set forth in Section 3.5 hereof. 

“Maturity Date” has the meaning set forth in Section 3.5 hereof. 

  
 4 

 “Non-Stabilized Asset” means, as of any
date, any hotel asset owned by the Partnership, any Subsidiary or any Unconsolidated Entity that (i) is, or within the preceding 24 months has been, an Asset Under Renovation, or (ii) has, within the preceding 24 months, (A) completed
a brand change, (B) been subject to an event, or a series of events, giving rise to a material casualty or (C) is in, or has completed, condemnation proceedings in respect of all or any part of such hotel asset.  

“Non-Stabilized Asset Value” as of any date means the total “as-stabilized” value of all Non-Stabilized Assets as determined by an appraisal of each such Non-Stabilized Asset
commissioned by the Partnership from a certified MAI appraiser in December of each year during which any Notes remain outstanding.  

“Notes” has the meaning specified in Recital C hereof. The Initial Notes and the Additional Notes shall be treated as a
single class for all purposes under the Indenture, and unless the context otherwise requires, all references to the Notes shall include the Initial Notes and any Additional Notes. 

“Participant” means a person who has an account with the Depository. 

“Prospectus” means the prospectus dated September 20, 2017 and the prospectus supplement dated February 8, 2018,
relating to the original issuance of the Notes. 
 “Record Date” has the meaning set forth in Section 3.5 hereof. 

“Redemption Date” means, with respect to any Note or portion thereof to be redeemed in accordance with the provisions of
Section 4.1 hereof, the date fixed for such redemption in accordance with the provisions of Section 4.1 hereof. 

“Redemption Price” has the meaning specified in Section 4.1 hereof. 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, as in
effect from time to time. 
 “Significant Subsidiary” with respect to any person, means any Subsidiary of such person that
satisfies the criteria for a “significant subsidiary” set forth in Rule 1-02(w) of Regulation S-X under the Exchange Act.  

“Stabilized Asset” means, as of any date, any hotel asset owned by the Partnership, any Subsidiary or any Unconsolidated
Entity that does not constitute a Non-Stabilized Asset. 
 “Stabilized Asset Value”
as of any date means the total value of all Stabilized Assets determined by dividing (i) Stabilized Consolidated Income Available for Debt Service by (ii) the Capitalization Rate. 

“Stabilized Consolidated Income Available for Debt Service” as of any date means Consolidated Income Available for Debt
Service of the Partnership and its Subsidiaries, excluding any portion of Consolidated Income Available for Debt Service attributable to a Non-Stabilized Asset. 

“Stabilized Consolidated Interest Expense” as of any date means Consolidated Interest Expense of the Partnership and its
Subsidiaries, excluding any portion of Consolidated Interest Expense relating to Debt that is secured by a Non-Stabilized Asset. 

“Subsidiary” means a corporation, partnership or limited liability company, a majority of the outstanding Voting Stock of
which is owned or controlled, directly or indirectly, by the Partnership or by one or more Subsidiaries of the Partnership.  

  
 5 

 “Unconsolidated Entity” means a person, other than a Subsidiary, in which the
Partnership holds a direct or indirect ownership interest that is accounted for under the equity method of accounting or the cost method of accounting.  

“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, managers or other voting members of the governing body of such person  
 ARTICLE 3 

THE SERIES OF NOTES 
 3.1 Title of the
Securities 
 There shall be a Series of Securities designated the 7.25% Senior Unsecured Notes due 2021. 

3.2 Price 
 The Initial Notes shall be
issued at a public offering price of $25.00 per note, other than any offering discounts pursuant to the initial offering and resale of the Notes. 
 3.3
Issuance 
 The Notes will be issued only in fully registered, book-entry form, in minimum denominations of $25.00 and integral multiples
of $25.00 in excess thereof. The principal amount of the Notes will be reflected in units with each unit being worth $25.00. The registered Holder of a Note will be treated as its owner for all purposes. 

3.4 Limitation on Aggregate Principal Amount 

The aggregate principal amount of the Notes shall initially be limited to $25,000,000 (the “Initial Original Principal
Amount”). Notwithstanding the foregoing, the Partnership, without notice to or the consent of the Holders of the Notes, by resolutions of the Board of Directors of the Guarantor or indentures supplemental to the Base Indenture from time to
time may increase the principal amount of the Notes by issuing Additional Notes in the future on the same terms and conditions as the Initial Notes except for any difference in the issue date, issue price, interest accrued prior to the issue date
and, if applicable, the first interest payment date of the Additional Notes, and with the same CUSIP number as the Initial Notes so long as such Additional Notes are fungible for U.S. income tax purposes with the Initial Notes. 

Except as provided in this Section 3.4, any such resolutions of the Board of Directors of the Guarantor or indentures supplemental to the
Base Indenture and in Section 2.8 of the Base Indenture, the Partnership shall not execute and the Trustee shall not authenticate or deliver Notes in excess of the Initial Original Principal Amount. 

Nothing contained in this Section 3.4 or elsewhere in this Supplemental Indenture, or in the Notes, is intended to or shall limit
execution by the Partnership or authentication or delivery by the Trustee of the Notes under the circumstances contemplated in Sections 2.3, 2.8, 2.11 and 3.6 of the Base Indenture. 

3.5 Interest and Interest Rates; Maturity Date of Notes 

The Notes will bear interest at a rate of 7.25% per annum from February 12, 2018 or from the immediately preceding Interest Payment Date to
which interest has been paid or duly provided for, payable quarterly in arrears on February 15, May 15, August 15 and November 15 of each year, 

  
 6 

 
commencing May 15, 2018 (each, an “Interest Payment Date”), to the person in whose name such Note is registered at the close of business on February 1, May 1, August 1 or
November 1 (whether or not a Business Day), as the case may be, immediately preceding such Interest Payment Date (each, a “Record Date”). Interest will be computed on the basis of a 360-day
year composed of twelve 30-day months. 
 If any Interest Payment Date, Maturity Date or Redemption
Date falls on a day that is not a Business Day, the required payment shall be made on the next Business Day as if it were made on the date such payment was due and no interest shall accrue on the amount so payable for the period from and after such
Interest Payment Date, Maturity Date or Redemption Date, as the case may be. 
 The Notes will mature on February 15, 2021 (the
“Maturity Date”). 
 3.6 Method of Payment 

The Partnership covenants and agrees that it will duly and punctually pay or cause to be paid when due the principal of (including the
Redemption Price upon redemption pursuant to Article 4 hereof, if applicable), and interest on each of the Notes at the places, at the respective times and in the manner provided herein and in the Notes; provided that the Partnership may withhold
from payments of interest and upon redemption pursuant to Article 4 hereof, if applicable, maturity or otherwise, any amounts the Partnership is required to withhold by law. Interest shall be payable at the office of the Partnership maintained by
the Partnership for such purposes, which shall initially be an office or agency of the Trustee. The Partnership shall pay or cause the Paying Agent to pay interest (i) on any Notes in certificated form by wire transfer of immediately available
funds to the account specified by the Holder thereof in writing, or if no such account is specified, by mailing a check to each such Holder’s registered address, or (ii) on any Global Note by wire transfer of immediately available funds to
the account of the Depository or its nominee. Any interest on any Note which is payable, but is not punctually paid or duly provided for, on the date such interest is due (subject to any applicable grace periods) (herein called “Defaulted
Interest”) shall forthwith cease to be payable to the Holder registered as such on the relevant Record Date, and such Defaulted Interest shall be paid by the Partnership, at its election in each case, as provided in clause (1) or (2)
below: 
 (1) The Partnership may elect to make payment of any Defaulted Interest to the persons in whose names the Notes are registered at
5:00 p.m., New York City time, on a special record date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Partnership shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be
paid on each Note and the date of the proposed payment (which shall be not less than twenty-five (25) calendar days after the receipt by the Trustee of such notice, unless the Trustee shall consent to an earlier date), and at the same time the
Partnership shall deposit with the Trustee an amount of monies equal to the aggregate amount to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit on or prior to the date of the
proposed payment, such monies when deposited to be held in trust for the benefit of the persons entitled to such Defaulted Interest as in this clause provided. The Partnership shall also fix a special record date for the payment of such Defaulted
Interest which shall be not more than fifteen (15) calendar days and not less than ten (10) calendar days prior to the date of the proposed payment, and not less than ten (10) calendar days after the receipt by the Trustee of the
notice of the proposed payment (unless, the Trustee shall consent to an earlier date). The Partnership shall promptly notify the Trustee of such special record date and, in the name and at the expense of the Partnership, the Trustee shall cause
notice of the proposed payment of such Defaulted Interest and the special record date therefor to be mailed (or sent by electronic transmission), first-class postage prepaid, to each Holder at its address as it appears in the register, not less than
ten (10) calendar days prior to such special record date. Notice of the proposed payment of such Defaulted Interest and the 

  
 7 

 
special record date therefor having been so sent, such Defaulted Interest shall be paid to the persons in whose names the Notes are registered at 5:00 p.m., New York City time, on such special
record date and shall no longer be payable pursuant to the following clause (2) of this Section 3.6. 
 (2) The Partnership may
make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system on which the Notes may be listed or designated for issuance, and upon such notice as
may be required by such exchange or automated quotation system, if, after notice given by the Partnership to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee. 

3.7 Currency 
 Principal and interest on
the Notes shall be payable in Dollars. 
 3.8 No Sinking Fund 

The provisions of Article XI of the Base Indenture shall not be applicable to the Notes. 

3.9 No Conversion or Exchange Rights 
 The
Notes will not be convertible into or exchangeable for any capital stock or other equity securities of the Partnership or the Guarantor. 
 3.10 No
Personal Liability of Directors, Officers, Employers and Equityholders 
 No director, officer, employee, or equityholder (past or
present) of the Partnership or the Guarantor, as such, will have any liability for any of the Partnership’s or the Guarantor’s obligations under the Notes, the Guarantee or the Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes and the Guarantee. 

3.11 Registered Securities; Global Form 

The Notes will be issued in the form of one or more fully-registered Global Notes in book-entry form, which will be deposited with, or on
behalf of, the Depository. The Notes shall not be issuable in Definitive Notes except as provided in Section 3.12 of this Supplemental Indenture. The Notes and the Trustee’s certificate of authentication shall be substantially in the form
attached as Exhibit A hereto. The Partnership shall execute each Global Note and each Definitive Note, if any. The Trustee shall, in accordance with Section 2.3 of the Base Indenture, authenticate and hold each Global Note as
custodian for the Depository, and authenticate each Definitive Note, if any. Each Global Note will represent such of the outstanding Notes as will be specified therein and each shall provide that it represents the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any
endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby will be made by the Trustee or a custodian at the direction of the Trustee. The terms and
provisions contained in the form of Note attached as Exhibit A hereto shall constitute, and are hereby expressly made, a part of the Indenture and, to the extent applicable, the Partnership and the Trustee, by their execution and delivery of
this Supplemental Indenture, expressly agree to such terms and provisions and to be bound thereby. 

  
 8 

 3.12 Transfer and Exchange 
  

	 	(a)	Transfer and Exchange of Global Notes. A Global Note may not be transferred except as a whole by the Depository to a nominee of the Depository, by a nominee of the Depository to the Depository or to another
nominee of the Depository, or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository. All Global Notes will be exchanged by the Partnership for Definitive Notes if: 

 

	 	(i)	the Partnership delivers to the Trustee notice from the Depository that it is unwilling or unable to continue to act as Depository or that it is no longer a clearing agency registered under the Exchange Act and, in
either case, a successor Depository is not appointed by the Partnership within ninety (90) days after the date of such notice from the Depository; 

  

	 	(ii)	the Partnership in its sole discretion determines that the Global Notes (in whole but not in part) should be exchanged for Definitive Notes and delivers a written notice to such effect to the Trustee; or

  

	 	(iii)	an Event of Default has occurred and is continuing with respect to the Notes and the Depository or the Partnership requests such exchange. 

Upon the occurrence of any of the preceding events in (i), (ii) or (iii) above, Definitive Notes shall be issued in such names as the
Depository shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.8 and 2.11 of the Base Indenture. 

A Global Note may not be exchanged for another Note other than as provided in this Section 3.12(a), however, beneficial interests in a
Global Note may be transferred and exchanged as provided in Section 3.12(c) or (d) hereof. 
  

	 	(b)	Legend. Any Global Note issued under this Supplemental Indenture shall bear a legend in substantially the following form: 

“THIS GLOBAL NOTE IS HELD BY THE DEPOSITORY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF
THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 3.12 OF THE FIRST SUPPLEMENTAL INDENTURE,
(2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 3.12 OF THE FIRST SUPPLEMENTAL INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.12 OF THE BASE
INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITORY WITH THE PRIOR WRITTEN CONSENT OF THE PARTNERSHIP. 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS
THIS 

  
 9 

 
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK 10041) (“DTC”) TO THE PARTNERSHIP OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.” 
  

	 	(c)	Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and exchange of beneficial interests in the Global Notes will be effected through the Depository, in accordance with the provisions
of the Indenture and the Applicable Procedures. Transfers of beneficial interests in the Global Notes will require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following
subparagraphs, as applicable: 

  

	 	(i)	Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Global Note may be transferred to persons who take delivery thereof in the form of a beneficial interest in a Global Note. No
written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 3.12(c)(i). 

  

	 	(ii)	All Other Transfers of Beneficial Interests in Global Notes. In connection with all transfers of beneficial interests that are not subject to Section 3.12(c)(i) above, the transferor of such beneficial
interest must deliver to the Registrar both: 

  

	 	(A)	a written order from a Participant or an Indirect Participant given to the Depository in accordance with the Applicable Procedures directing the Depository to credit or cause to be credited a beneficial interest in
another Global Note in an amount equal to the beneficial interest to be transferred or exchanged; and 

  

	 	(B)	instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase. 

Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in the Indenture and
the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 3.12(g) hereof. 

 

	 	(d)	 Transfer and Exchange of Beneficial Interests in Global Notes for Definitive Notes. If any holder of a
beneficial interest in a Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the
conditions set forth in Section 3.12(c)(ii) hereof, the Trustee will cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 3.12(g) hereof, and the Partnership will execute and the
Trustee will authenticate and deliver to the person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial

  
 10 

	 	
interest pursuant to this Section 3.12(d) will be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest requests
through instructions to the Registrar from or through the Depository and the Participant or Indirect Participant. The Trustee will deliver such Definitive Notes to the persons in whose names such Notes are so registered. 

 

	 	(e)	Transfer and Exchange of Definitive Notes for Beneficial Interests in Global Notes. A Holder of a Definitive Note may exchange such Note for a beneficial interest in a Global Note or transfer such Definitive
Notes to a person who takes delivery thereof in the form of a beneficial interest in a Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee will cancel the applicable Definitive Note and increase or cause
to be increased the aggregate principal amount of one of the Global Notes. 

 If any such exchange or transfer from a
Definitive Note to a beneficial interest is effected pursuant to the previous paragraph at a time when a Global Note has not yet been issued, the Partnership will issue and, upon receipt of an Authentication Order in accordance with
Section 3.12 hereof, the Trustee will authenticate one or more Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred. 

 

	 	(f)	Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 3.12(f), the Registrar will
register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder will present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or by his attorney, duly authorized in writing. A Holder of Definitive Notes may transfer such Notes to a person who takes delivery thereof in the form of a Definitive Note.
Upon receipt of a request to register such a transfer, the Registrar shall register the Definitive Notes pursuant to the instructions from the Holder thereof. 

  

	 	(g)	Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed,
repurchased or canceled in whole and not in part, each such Global Note will be returned to or retained and canceled by the Trustee in accordance with Section 2.12 of the Base Indenture. At any time prior to such cancellation, if any beneficial
interest in a Global Note is exchanged for or transferred to a person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note
will be reduced accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depository at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a
person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note will be increased accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depository at the
direction of the Trustee to reflect such increase. 

  
 11 

 3.13 General Provisions Relating to Transfers and Exchanges 

 

	 	(a)	To permit registrations of transfers and exchanges, the Partnership will execute and the Trustee will authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with
Section 3.12 hereof or at the Registrar’s request. 

  

	 	(b)	No service charge will be made to a Holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Partnership may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.11 and 9.6 of the Base
Indenture). 

  

	 	(c)	The Registrar will not be required to register the transfer or exchange of any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part. 

 

	 	(d)	All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes will be the valid obligations of the Partnership, evidencing the same debt, and entitled to
the same benefits under the Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange. 

  

	 	(e)	Neither the Registrar nor the Partnership will be required: 

  

	 	(i)	to issue, register the transfer of or to exchange any Note during a period beginning at the opening of business fifteen (15) days before any selection of Notes for redemption under Article 4 hereof and ending at
the close of business on the earliest date on which the relevant notice of redemption is deemed to have been given to all Holders of Notes to be so redeemed; 

  

	 	(ii)	to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part; or 

 

	 	(iii)	to register the transfer of or to exchange a Note between a Record Date and the next succeeding Interest Payment Date. 

  

	 	(f)	Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Partnership may deem and treat the person in whose name any Note is registered as the absolute owner of such Note
for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Partnership shall be affected by notice to the contrary. 

 

	 	(g)	The Trustee will authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.3 of the Base Indenture. 

 

	 	(h)	All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 3.13 to effect a registration of transfer or exchange may be submitted by facsimile.

  

	 	(i)	 The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or
a participant in the Depository or any other person with respect to 

  
 12 

	 	
the accuracy of the records of the Depository or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any
participant, member, beneficial owner or other person (other than the Depository) of any notice (including any notice of redemption or repurchase) or the payment of any amount, under or with respect to such Notes. All notices and communications to
be given to the Holders and all payments to be made to the Holders under the Notes shall be given or made only to the registered Holders (which shall be the Depository or its nominee in the case of a Global Note). The rights of beneficial owners in
any Global Note shall be exercised only through the Depository subject to the Applicable Procedures of the Depository. The Trustee may conclusively rely and shall be fully protected in so relying upon information furnished by the Depository with
respect to its members, participants and any beneficial owners. 

  

	 	(j)	(ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under the Indenture or under applicable law with respect to any transfer of
any interest in any Notes (including any transfers between or among Depository participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by, the terms of the Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof. 

ARTICLE 4 
 REDEMPTION

 4.1 Optional Redemption 
  

	 	(a)	On or after February 15, 2019, the Partnership shall have the right to redeem the Notes at its option at the Redemption Price (as defined below) and in its sole discretion, in whole or from time to time in part. The
redemption price (“Redemption Price”) will equal 101% of the principal amount of the Notes to be redeemed plus unpaid interest, if any, accrued thereon to, but excluding, the Redemption Date. 

 

	 	(b)	The Partnership shall not redeem the Notes pursuant to Section 4.1(a) on any date if the principal amount of the Notes has been accelerated, and such an acceleration has not been rescinded or cured on or prior to
such date (except in the case of an acceleration resulting from a default by the Partnership in the payment of the Redemption Price with respect to the Notes to be redeemed). 

4.2 Notice of Optional Redemption 
 In
case the Partnership shall desire to exercise the right to redeem all or, as the case may be, any part of the Notes pursuant to Section 4.1 hereof, it shall fix a date for redemption and it or, at its written request received by the Trustee in
the form of an Officer’s Certificate not fewer than five (5) Business Days prior (or such shorter period of time as may be acceptable to the Trustee) to the date the notice of redemption is to be sent, the Trustee in the name of and at the
expense of the Partnership, shall send or cause to be sent a notice of such redemption not fewer than thirty (30) calendar days nor more than sixty (60) calendar days prior to the Redemption Date to each Holder of Notes so to be redeemed
in whole or in part at its last address as the same appears on the register maintained by the Registrar; provided that if the Partnership makes such request of the Trustee, it shall, together with such request, also give written notice of the
Redemption Date to the Trustee; provided further that the text of the notice shall be prepared by the Partnership. Such notice shall be sent by first-class mail or, for Global Notes, through electronic delivery

  
 13 

 
in PDF format. The notice, if sent in the manner herein provided, shall be conclusively presumed to have been duly 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 as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Note. 

Each such notice of redemption shall specify: (i) the aggregate principal amount of Notes to be redeemed, (ii) the CUSIP number or
numbers, if any, of the Notes being redeemed, (iii) the Redemption Date (which shall be a Business Day), (iv) the Redemption Price at which Notes are to be redeemed, (v) the place or places of payment and that payment will be made upon
presentation and surrender of such Notes and (vi) that interest accrued and unpaid to, but excluding, the Redemption Date will be paid as specified in said notice, and that on and after said date interest thereon or on the portion thereof to be
redeemed will cease to accrue. If fewer than all the Notes are to be redeemed, the notice of redemption shall identify the Notes to be redeemed (including CUSIP numbers, if any). In case any Note is to be redeemed in part only, the notice of
redemption shall state the portion of the principal amount thereof to be redeemed and shall state that, on and after the Redemption Date, upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion thereof
will be issued. 
 Whenever any Notes are to be redeemed, the Partnership will give the Trustee written notice of the Redemption Date as to
the aggregate principal amount of Notes to be redeemed not fewer than thirty (30) calendar days (or such shorter period of time as may be acceptable to the Trustee) prior to the Redemption Date. 

On or prior to the Redemption Date specified in the notice of redemption given as provided in this Section 4.2, the Partnership will
deposit with the Paying Agent an amount of monies in immediately available funds sufficient to redeem on the Redemption Date all the Notes (or portions thereof) so called for redemption at the appropriate Redemption Price; provided that if such
payment is made on the Redemption Date, it must be received by the Paying Agent, by 10:00 a.m., New York City time, on such date. 
 If less
than all of the outstanding Notes are to be redeemed, the Trustee shall select the Notes or portions thereof of the Global Note or the Notes in certificated form to be redeemed (in minimum principal amounts of $25.00 and integral multiples of $25.00
in excess thereof), on a pro rata basis or such other method the Trustee deems fair and appropriate and as is required by the Depository pursuant to the Applicable Procedures. The Notes (or portions thereof) so selected for redemption shall be
deemed duly selected for redemption for all purposes hereof. 
 4.3 Payment of Notes Called for Redemption by the Partnership 

If notice of redemption has been given as provided in Section 4.2, the Notes or portion of Notes with respect to which such notice has
been given shall become due and payable on the Redemption Date and at the place or places stated in such notice at the Redemption Price, and unless the Partnership shall default in the payment of such Notes at the Redemption Price, so long as the
Paying Agent holds funds sufficient to pay the Redemption Price of the Notes to be redeemed on the Redemption Date, then (a) such Notes will cease to be outstanding on and after the Redemption Date, (b) interest on the Notes or portion of
Notes so called for redemption shall cease to accrue on and after the Redemption Date, (c) on and after the Redemption Date (unless the Partnership shall default in the payment of the Redemption Price), such Notes will cease to be entitled to
any benefit or security under the Indenture, and (d) the Holders of the Notes shall have no right in respect of such Notes except the right to receive the Redemption Price thereof. On presentation and surrender of such Notes at a place of
payment in said notice specified, the said Notes or the specified portions thereof shall be paid and redeemed by the Partnership at the Redemption Price. 

  
 14 

 Upon presentation of any Note redeemed in part only, the Partnership shall execute and the
Trustee shall upon receipt of an Authentication Order, authenticate and make available for delivery to the Holder thereof, at the expense of the Partnership, a new Note or Notes, of authorized denominations, in principal amount equal to the
unredeemed portion of the Notes so presented. 
 ARTICLE 5 

GUARANTEE 
 This Article V
shall replace Article XII of the Base Indenture in its entirety with respect to the Notes only. 
 5.1 Guarantee 

By its execution hereof, the Guarantor acknowledges and agrees that the Notes shall be entitled to the benefits of a Guarantee. Accordingly,
subject to the provisions of this Article, the Guarantor hereby unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee and its successors and assigns that: (i) the principal of (including the Redemption
Price upon redemption pursuant to Article 4 hereof), and any premium and interest on, the Notes shall be duly and punctually paid in full when due, whether at the Maturity, upon acceleration, upon redemption or otherwise, and interest on overdue
principal of, and any premium and (to the extent permitted by law) interest on, the Notes and all other obligations of the Partnership to the Holders or the Trustee hereunder or under the Notes (including fees, expenses or other) shall be promptly
paid in full or performed, all in accordance with the terms hereof; and (ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, the same shall be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether on the Maturity Date, by acceleration, call for redemption or otherwise, subject, however, in the case of clauses (i) and (ii) above, to the limitations set forth in this Article
(collectively, the “Guarantee Obligations”). 
 Subject to the provisions of this Article, the Guarantor hereby agrees that
its Guarantee 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 term thereof, the entry of any judgment against the Partnership, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of the Guarantor. The Guarantor hereby waives
and relinquishes: (a) any right to require the Trustee, the Holders or the Partnership (each, a “Benefited Party”) to proceed against the Partnership or any other person or to proceed against or exhaust any security held by a
Benefited Party at any time or to pursue any other remedy in any secured party’s power before proceeding against the Guarantor; (b) any defense that may arise by reason of the incapacity, lack of authority, death or disability of any other
person or persons or the failure of a Benefited Party to file or enforce a claim against the estate (in administration, bankruptcy or any other proceeding) of any other person or persons; (c) demand, protest and notice of any kind (except as
expressly required by the Indenture), including but not limited to notice of the existence, creation or incurring of any new or additional indebtedness or obligation or of any action or non-action on the part
of the Guarantor, the Partnership, any other Benefited Party, any creditor of the Guarantor or the Partnership or on the part of any other person whomsoever in connection with any obligations the performance of which are hereby guaranteed;
(d) any defense based upon an election of remedies by a Benefited Party, including but not limited to an election to proceed against the Guarantor for reimbursement; (e) any defense based upon any statute or rule of law which provides that
the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; (f) any defense arising because of a Benefited Party’s election, in any proceeding instituted under the
Bankruptcy Law, of the application of Section 1111(b)(2) of the Bankruptcy Law; and (g) any defense based on any borrowing or grant of a security interest under Section 364 of the Bankruptcy Law.

  
 15 

 
The Guarantor hereby covenants that, except as otherwise provided therein, the Guarantee shall not be discharged except by payment in full of all Guarantee Obligations, including the principal
of, and any premium and interest on, the Notes and all other costs provided for under the Indenture. 
 If any Holder or the Trustee is
required by any court or otherwise to return to either the Partnership or the Guarantor, or any trustee or similar official acting in relation to either the Partnership or the Guarantor, any amount paid by the Partnership or the Guarantor to the
Trustee or such Holder, the Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. The Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any
Guarantee Obligations hereby until payment in full of all such obligations guaranteed hereby. The Guarantor agrees that, as between it, on the one hand, and the Holders of Notes and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article VI of the Base Indenture for the purposes hereof, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guarantee Obligations,
and (y) in the event of any acceleration of such obligations as provided in Article VI of the Base Indenture, such Guarantee Obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantor for the purpose of
the Guarantee. 
 5.2 Execution and Delivery of Guarantee 
  

	 	(a)	To evidence the Guarantee set forth in Section 5.1 hereof, the Guarantor agrees that a Notation of Guarantee substantially in the form included in Exhibit B hereto shall be endorsed on each Note
authenticated and delivered by the Trustee and that this First Supplemental Indenture shall be executed on behalf of the Guarantor by an Officer of the Guarantor. 

 

	 	(b)	The Guarantor agrees that the Guarantee set forth in this Article 5 shall remain in full force and effect and apply to all the Notes notwithstanding any failure to endorse on each Note a Notation of the Guarantee.

  

	 	(c)	If an Officer whose facsimile signature is on a Note or a Notation of Guarantee no longer holds that office at the time the Trustee authenticates the Note on which the Guarantee is endorsed, the Guarantee shall be valid
nevertheless. 

  

	 	(d)	The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantee set forth in this First Supplemental Indenture on behalf of the Guarantor.

 5.3 Limitation of Guarantor’s Liability; Certain Bankruptcy Events 

 

	 	(a)	The Guarantor, and by its acceptance hereof each Holder, hereby confirms that it is the intention of all such parties that the Guarantee Obligations of the Guarantor pursuant to its Guarantee not constitute a fraudulent
transfer or conveyance for purposes of any Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law. To effectuate the foregoing intention, the Holders and the Guarantor hereby
irrevocably agree that the Guarantee Obligations of the Guarantor under this Article 5 shall be limited to the maximum amount as shall, after giving effect to all other contingent and fixed liabilities of the Guarantor, result in the Guarantee
Obligations of the Guarantor under the Guarantee not constituting a fraudulent transfer or conveyance. 

  

	 	(b)	The Guarantor hereby covenants and agrees, to the fullest extent that it may do so under applicable law, that in the event of the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Partnership,
the Guarantor shall not file (or join in any filing of), or otherwise seek to participate in the filing of, any motion or request seeking to stay or to prohibit (even temporarily) execution on the Guarantee and hereby waives and agrees not to take
the benefit of any such stay of execution, whether under Section 362 or 105 of the Bankruptcy Law or otherwise. 

  
 16 

 5.4 Application of Certain Terms and Provisions to the Guarantor 

 

	 	(a)	For purposes of any provision of the Indenture which provides for the delivery by the Guarantor of an Officer’s Certificate and/or an Opinion of Counsel, the definitions of such terms in Section 2.1 hereof
shall apply to the Guarantor as if references therein to the Partnership or the Guarantor, as applicable, were references to the Guarantor. 

  

	 	(b)	Upon any demand, request or application by the Guarantor to the Trustee to take any action under the Indenture, the Guarantor shall furnish to the Trustee such certificates and opinions as are required in Sections 10.4
and 10.5 of the Base Indenture, as if all references therein to the Partnership were references to the Guarantor. 

 ARTICLE
6 
 ADDITIONAL COVENANTS 

The following additional covenants shall apply with respect to the Notes so long as any of the Notes remain outstanding. 

6.1 Maintenance of Office or Agency 
 The
Partnership will maintain an office or agency in the United States where the Notes may be surrendered for registration of transfer or exchange or for presentation for payment or redemption and where notices and demands in respect of the Notes and
the Indenture may be served. As of the date of the Indenture, such office shall be the Corporate Trust Office and, at any other time, at such other address as the Trustee may designate from time to time by notice to the Partnership. The Partnership
will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency not designated or appointed by the Trustee. If at any time the Partnership shall fail to maintain any such required office or
agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office; provided, however, no service of legal process on the Partnership may be
made at any office of the Trustee. 
 The Partnership may also from time to time designate
co-registrars and one or more offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations. The Partnership will give
prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. 

The Partnership hereby initially designates the Trustee as Paying Agent, Registrar and Custodian and the Corporate Trust Office shall be
considered as one such office or agency of the Partnership for each of the aforesaid purposes. 

  
 17 

 6.2 Change of Control Repurchase Event 

 

	 	(a)	If a Change of Control Repurchase Event occurs, unless the Partnership has provided notice of the redemption of the Notes pursuant to Section 4.2 hereof, each holder of Notes will have the right to require the
Partnership to purchase some or all (in minimum principal amounts of $25.00 or an integral multiple of $25.00 in excess thereof) of such Holder’s Notes pursuant to the offer described below (the “Change of Control Offer”).

  

	 	(b)	Any Change of Control Offer will include a cash offer price of 102% of the principal amount of any Notes purchased plus accrued and unpaid interest to the date of purchase (the “Change of Control
Payment”). If a Change of Control Offer is required, within 30 days following a Change of Control Repurchase Event or at the Partnership’s option, prior to any Change of Control Repurchase Event, but after the public announcement of a
Change of Control Repurchase Event, the Partnership will deliver a notice in a manner provided in Section 4.2 herein to each Holder (with a copy to the Trustee and the Paying Agent, if other than the Trustee) describing the Change of Control
Repurchase Event and offering to repurchase Notes on a specified date (the “Change of Control Payment Date”). The Change of Control Payment Date will be no earlier than 30 days and no later than 60 days from the date the notice is
sent. The Change of Control Offer shall, if given prior to the date of consummation of the Change of Control Repurchase Event, state that the offer to purchase is conditioned on the Change of Control Repurchase Event occurring on or prior to the
Change of Control Payment Date specified in the Change of Control Offer. 

  

	 	(c)	On the Change of Control Payment Date, the Partnership will, to the extent lawful: 

  

	 	(i)	accept for payment all Notes properly tendered and not withdrawn pursuant to the Change of Control Offer; 

  

	 	(ii)	deposit the Change of Control Payment with the Paying Agent in respect of all Notes so accepted; and 

  

	 	(iii)	deliver to the Trustee the Notes accepted and an Officer’s Certificate stating the aggregate principal amount of all Notes purchased by the Partnership and requesting that such Notes be cancelled.

  

	 	(d)	The Paying Agent will promptly send to each Holder of Notes properly tendered the Change of Control Payment for such Notes, and the Trustee will promptly authenticate and send, or cause to be transferred by book entry,
to each Holder a new Note in principal amount equal to any unpurchased portion of the Notes surrendered; provided that each new Note will be in a minimum principal amount of $25.00 and integral multiples of $25.00 in excess thereof.

  

	 	(e)	 The Partnership will comply with the requirements of Section 14(e) of the Exchange Act and any other
securities laws or regulations to the extent those laws and regulations are applicable to any Change of Control Offer. If the provisions of any of the applicable 

  
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securities laws or securities regulations conflict with the provisions of this Section 6.2, the Partnership will comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under the covenant described above by virtue of that compliance. 

  

	 	(f)	The Partnership shall not be required to make a Change of Control Offer upon a Change of Control Repurchase Event if 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 the Indenture applicable to a Change of Control Offer made by the Partnership and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer or if notice of redemption has
been given pursuant to Section 4.2 hereof (and all of the Notes are redeemed on or prior to the Redemption Date specified in such notice). Notwithstanding anything to the contrary contained herein, a Change of Control Offer may be made in
advance of a Change of Control Repurchase Event, subject to one or more conditions precedent, including, but not limited to, the consummation of such Change of Control, if a definitive agreement is in place for the transaction that will give rise to
a Change of Control Repurchase Event at the time the Change of Control Offer is made. 

 6.3 Limitations on Incurrence of Debt 

 

	 	(a)	The Partnership will not, and will not permit any Subsidiary to, incur any Debt, other than Intercompany Debt, including that which is subordinate in right of payment to the Notes, if, immediately after giving effect to
the incurrence of such Debt and the application of the proceeds thereof, the ratio of the aggregate principal amount of all outstanding Debt to Adjusted Total Asset Value would be greater than 0.65 to 1.0. 

 

	 	(b)	The Partnership will not, and will not permit any Subsidiary to, incur any Debt if the ratio of Stabilized Consolidated Income Available for Debt Service to Stabilized Consolidated Interest Expense on the date on which
such additional Debt is to be incurred, on a pro forma basis, after giving effect to the incurrence of such Debt and to the application of the proceeds thereof, would be less than 1.5 to 1.0. 

  
 19 

 6.4 Maintenance of Properties 

The Partnership will, and will cause each of its Subsidiaries to, keep all of its material properties used or useful in the conduct of its
business or the business of any Subsidiary to be maintained and kept in good condition, repair and working order supplied with all necessary equipment and will cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in judgment of the Partnership may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times; provided, however, that the Partnership and its
Subsidiaries shall not be prevented from selling or otherwise disposing of for value their respective properties in the ordinary course of their respective businesses. 

6.5 Insurance 
 The Partnership will, and
will cause each of its Subsidiaries to, keep all of its insurable properties insured against loss or damage at least equal to their then full insurable value with insurers of recognized responsibility and having an A.M. Best policy holder’s
rating of not less than A-V. 
 6.6 Payment of Taxes and Other Claims 

The Partnership will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (1) all taxes,
assessments and governmental charges levied or imposed upon it or any Subsidiary or upon the income, profits or property of the Partnership or any Subsidiary, and (2) all lawful claims for labor, materials and supplies which, if unpaid, might
by law become a lien upon the property of the Partnership or any Subsidiary; provided, however, that the Partnership shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate proceedings or for which the Partnership has set apart and maintains an adequate reserve. Neither the Trustee, nor any Agent, shall be responsible or have liability for the
payment of tax, assessment, charge or levy, other than such as may be required under the normal course of the Trustee’s or Agent’s business. 

  
 20 

 ARTICLE 7 

DEFAULTS AND REMEDIES 

Sections 7.1, 7.2 and 7.3 hereof shall replace Sections 6.1, 6.2 and 6.7, respectively, of the Base Indenture with respect to the Notes only.

 7.1 Events of Default 

“Event of Default,” wherever used herein or in the Base Indenture with respect to the Notes, means any one of the following
events: 
  

	 	(a)	default in the payment of principal of, or premium, if any, on any Note, or the Redemption Price due with respect to any Note, when they are due and payable at maturity, upon acceleration, redemption or otherwise;

  

	 	(b)	default in the payment of interest on any Note when they are due and payable, and such default continues for a period of 30 days; 

  

	 	(c)	the Partnership or its Subsidiaries do not comply with their obligations under Article V of the Base Indenture; 

  

	 	(d)	the Partnership fails to tender payment for the Notes upon a Change of Control Repurchase Event when required under Section 6.2 hereof, when such payment remains unpaid 60 consecutive days after issuance of
requisite notice; 

  

	 	(e)	the Guarantee of the REIT is not (or is claimed by the REIT not to be) in full force in effect; 

  

	 	(f)	the REIT, the Partnership or its Subsidiaries default in the performance of or breach any other covenant or agreement of the REIT, the Partnership or the Subsidiaries in the Indenture or under the Notes or the
Guarantee, as applicable (other than a default specified in clause (a), (b), (c) or (d) above), and such default or breach continues for 90 consecutive days after written notice by the Trustee or the Holders of 25% or more in aggregate
principal amount of the Notes; 

  
 21 

	 	(g)	there occurs with respect to any issue or issues of Debt of the REIT, the Partnership or any Significant Subsidiary of the Partnership having an outstanding principal amount in excess of $35,000,000 singly or in
aggregate principal amount for all such issues of all such persons, whether such Debt now exists or shall hereafter be created, 

  

	 	(i)	an event of default that has caused the Holder thereof to declare such Debt to be due and payable prior to its stated maturity and such Debt has not been discharged in full or such acceleration has not been rescinded or
annulled within 30 days of such acceleration; and/or 

  

	 	(ii)	the failure to make a principal payment at the final (but not any interim) fixed maturity and such defaulted payment shall not have been made, waived or extended within 30 days of such payment default;

 provided, however, that in the case of either (i) or (ii) above, if such event of default, acceleration or payment
default is contested by the Partnership, a final and non-appealable judgment or order confirming the existence of the default and/or the lawfulness of the acceleration, as the case may be, shall have been
entered; 
  

	 	(h)	any final and non-appealable judgment or order for the payment of money in excess of $35,000,000 singly or in the aggregate for all such final judgments or orders against all such
persons: 

  

	 	(i)	shall be rendered against the REIT, the Partnership or any Significant Subsidiary of the Partnership and shall not be paid or discharged and 

 

	 	(ii)	there shall be any period of 60 consecutive days following entry of the final judgment or order that causes the aggregate amount for all such final judgments or orders outstanding and not paid or discharged against all
such persons to exceed $35,000,000 during which a stay of enforcement of such final judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; 

 

	 	(i)	a court of competent jurisdiction enters a decree or order for: 

  

	 	(i)	relief in respect of the REIT, the Partnership or any Significant Subsidiary of the Partnership in an involuntary case under any applicable Bankruptcy Law now or hereafter in effect, 

 

	 	(ii)	appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the REIT, the Partnership or any Significant Subsidiary of the Partnership or for all or substantially all of the
property and assets of the REIT, the Partnership or any Significant Subsidiary of the Partnership or 

  

	 	(iii)	the winding up or liquidation of the affairs of the REIT, the Partnership or any Significant Subsidiary of the Partnership 

and, in each case, such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or 

  
 22 

	 	(j)	the REIT, the Partnership or any Significant Subsidiary of the Partnership: 

  

	 	(i)	commences a voluntary case under any applicable Bankruptcy Law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case under such law, 

 

	 	(ii)	consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Partnership or such Significant Subsidiary or for all or substantially
all of the property and assets of the REIT, the Partnership or such Significant Subsidiary of the Partnership, or 

  

	 	(iii)	effects any general assignment for the benefit of its creditors. 

 7.2 Acceleration of Maturity; Rescission
and Annulment 
 If an Event of Default with respect to the Notes at the time outstanding occurs and is continuing (other than an Event
of Default referred to in Section 7.1(i) or (j) hereof), then in every such case the Trustee or the Holders of not less than 25% in principal amount of the outstanding Notes may, by a notice in writing to the Partnership (and to the
Trustee if given by the Holders), declare to be due and payable immediately the principal of, and accrued and unpaid interest, if any, on all of the Notes, and upon any such declaration such principal amount (or specified amount) and accrued and
unpaid interest, if any, shall become immediately due and payable. If an Event of Default specified in Section 7.1(i) or (j) hereof shall occur, the principal amount (or specified amount) of and accrued and unpaid interest, if any, on all
outstanding Notes will automatically become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder of outstanding Notes. 

At any time after a declaration of acceleration with respect to Notes has been made, but before a judgment or decree for payment of the money
due has been obtained by the Trustee, the Holders of a majority in principal amount of the outstanding Notes, by written notice to the Partnership and the Trustee, may rescind and annul such declaration and the acceleration if all Events of Default,
other than the non-payment of accelerated principal and interest, if any, with respect to the Notes, have been cured or waived as provided in Section 6.13 of the Base Indenture. No such rescission and
annulment shall extend to or shall affect any subsequent default or Event of Default, or shall impair any right consequent thereon. 
 7.3 Limitation on
Suits 
 No Holder of the Notes shall have any right to institute any proceeding, judicial or otherwise, with respect to the Indenture or
for the appointment of a receiver or trustee, or for any remedy under the Indenture, unless: 
  

	 	(a)	such Holder has previously given to the Trustee written notice of a continuing Event of Default with respect to the Notes; 

  

	 	(b)	the Holders of at least 25% in principal amount of the outstanding Notes shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

  

	 	(c)	such Holder or Holders shall have offered to the Trustee indemnity or security reasonably satisfactory to the Trustee, against the costs, expenses and liabilities to be incurred in compliance with such request;

  

	 	(d)	the Trustee for sixty (60) days after its receipt of such notice, request and offer of indemnity or security reasonably satisfactory to the Trustee, has failed to institute any such proceeding; and

  

	 	(e)	no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of at least a majority in principal amount of the
outstanding Notes. 

  
 23 

 ARTICLE 8 

[RESERVED] 
 ARTICLE 9

 MISCELLANEOUS PROVISIONS 
 9.1
Ratification of Indenture 
 Except as expressly modified or amended hereby, the Indenture continues in full force and effect and is in
all respects confirmed and preserved. 
 9.2 Governing Law 

THIS SUPPLEMENTAL INDENTURE AND THE SECURITIES, INCLUDING ANY CLAIM OR CONTROVERSY ARISING OUT OF OR RELATING TO THE SUPPLEMENTAL INDENTURE OR
THE SECURITIES, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS THEREOF OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW). EACH OF THE PARTIES
HERETO IRREVOCABLY WAIVES, 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 SUPPLEMENTAL INDENTURE AND THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.

  
 24 

 9.3 Counterparts 

This Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all
such counterparts shall together constitute but one and the same instrument. 
 9.4 Calculations in Respect of the Notes 

Except as explicitly specified otherwise herein, the Partnership will be responsible for making all calculations required under the Indenture
and the Notes. The Partnership will make all these calculations in good faith and, absent manifest error, the Partnership’s calculations will be final and binding on the Holders. The Partnership will provide a schedule of its calculations to
the Trustee, and the Trustee is entitled to rely upon the accuracy of the Partnership’s calculations without independent verification. The Trustee will forward the Partnership’s calculations to any Holder upon written request. 

9.5 Successors and Assigns 
 This
Supplemental Indenture shall be binding upon the Partnership and the Guarantor, and their respective successors and assigns, and inure to the benefit of the respective successors and assigns of the Trustee and the Holders. 

9.6 Rights of Holders Limited 

Notwithstanding anything herein to the contrary, the rights of Holders with respect to this Supplemental Indenture and the Guarantee shall be
limited in the manner and to the extent the rights of Holders are limited under the Indenture with respect to the Indenture and the Securities. 
 9.7
Rights and Duties of Trustee 
 The rights and duties of the Trustee shall be determined by the express provisions of the Base Indenture
and, except as expressly set forth in this Supplemental Indenture, nothing in this Supplemental Indenture shall in any way modify or otherwise affect the Trustee’s rights and duties thereunder. The Trustee makes no representation or warranty,
express or implied, as to the validity of this Supplemental Indenture and, except insofar as relates to the validity hereof with respect to the Trustee specifically, the Trustee shall not be liable in connection therewith. The Trustee makes no
representation or warranty, express or implied, as to the accuracy or completeness of any information contained in any offering or disclosure document related to the sale of the Notes, except for such information that specifically pertains to the
Trustee itself, or any information incorporated therein by reference as it relates specifically to the Trustee. If and when the Trustee shall be or become a creditor of the Partnership (or any other obligor upon the Notes), excluding any creditor
relationship listed in TIA Section 311(b), the Trustee shall be subject to the provisions of the TIA regarding the collection of claims against the Partnership (or any such other obligor). If the Trustee has or shall acquire a conflicting
interest within the meaning of the TIA, 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 TIA and the Indenture. 

9.8 Notices 
 Any notice or communication
by the Partnership, the Guarantor or the Trustee to the other, or by a Holder of the Notes to the Partnership, the Guarantor or the Trustee, is duly given if in writing and delivered in person, sent electronically in PDF format or mailed by
first-class mail: 
 If to the Partnership or the Guarantor: 

Sotherly Hotels Inc. 

410 W. Francis Street 

Williamsburg, Virginia 23185 

Facsimile:    (757) 229-8801 

Attention:    Andrew M. Sims, Chief Executive Officer 

  
 25 

 With a copy (which will not constitute notice) to: 

Baker & McKenzie LLP 

815 Connecticut Avenue, N.W. 

Washington, D.C. 20006 

Facsimile:    (202) 452-7074 

Attention:     Thomas J. Egan, Jr., Esq. 

If to the Trustee: 
 Wilmington
Trust, National Association 
 Rodney Square North 

1100 N. Market Street 

Wilmington, DE 19890 

Facsimile:    (302) 636-4145 

Attention:    W. Thomas Morris II 

The Partnership, the Guarantor or the Trustee by written notice to the others may designate additional or different addresses for subsequent
notices or communications. 
 Except as otherwise provided in the Indenture, any notice or communication to a Holder of the Notes shall be
mailed by first-class mail to his address shown on the register kept by the Registrar, provided that notices given to Holders holding Notes in book-entry form may be given through the facilities of the
Depository or any successor depository. Failure to mail a notice or communication to a Holder of the Notes or any defect in it shall not affect its sufficiency with respect to other Holders of the Notes or any other Series. 

If a notice or communication is mailed or published in the manner provided above, within the time prescribed, it is duly given, whether or not
the Securityholder receives it. If a notice or communication is delivered in person, by courier, telexed or by facsimile transmission (with confirmation of receipt) within the time prescribed, it is duly given. 

9.9 Headings, etc. 
 The headings of the
Articles and Sections of this Supplemental Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof. 

9.10 Conflicts 
 In the event of any
conflict between the terms of this Supplemental Indenture and the terms of the Indenture, the terms of this Supplemental Indenture shall control. 

  
 26 

 9.11 Trust Indenture Act Controls 

If any provision of this Supplemental Indenture limits, qualifies, or conflicts with another provision which is required or deemed to be
included in this Supplemental Indenture by the TIA, such required or deemed provision shall control. 
 9.12 Force Majeure 

In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of
or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and
interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to
resume performance as soon as practicable under the circumstances. 
 9.13 U.S.A. Patriot Act 

The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions
and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. 

[SIGNATURE PAGE FOLLOWS] 

  
 27 

 EXECUTION 

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed all as of the date first written above. 

 

					
	SOTHERLY HOTELS LP, as issuer of the Notes
	
	By: Sotherly Hotels Inc., its general partner
		
	By:	 	 /s/ David R. Folsom

		 	Name:	 	David R. Folsom
		 	Title:	 	President and Chief Operating Officer
	
	SOTHERLY HOTELS INC., as Guarantor
		
	By:	 	 /s/ David R. Folsom

		 	Name:	 	David R. Folsom
		 	Title:	 	President and Chief Operating Officer
	
	WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee
		
	By:	 	 /s/ W. Thomas Morris II

		 	Name:	 	W. Thomas Morris, II
		 	Title:	 	Vice President

 Exhibit A 

Form of Global Note 

[see attached] 

 EXHIBIT A 

THIS GLOBAL NOTE IS HELD BY THE DEPOSITORY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 3.12 OF THE SUPPLEMENTAL INDENTURE (AS DEFINED BELOW), (2) THIS
GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 3.12 OF THE FIRST SUPPLEMENTAL INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.12 OF THE BASE INDENTURE AND (4) THIS
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITORY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUER. 
 UNLESS AND UNTIL IT IS EXCHANGED
IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE
DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK 10041)
(“DTC”) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
 SOTHERLY HOTELS LP 7.25% Senior Unsecured Notes due 2021 

CUSIP No. 83600E 307 
 ISIN
US83600E3071 
  

					
	 No. 1
	  	 	$25,000,000	 
		  	 	1,000,000 Units	 

 SOTHERLY HOTELS LP, a Delaware limited partnership (the “Issuer”), for value received, promises to
pay to Cede & Co., or its registered assigns, the principal sum of TWENTY FIVE MILLION AND 00/100 DOLLARS or such other amount as is provided in a schedule attached hereto on February 15, 2021. 

Interest Payment Dates: February 15, May 15, August 15 and November 15, commencing May 15, 2018. 

Record Dates: February 1, May 1, August 1 and November 1. 

Reference is made to the further provisions of this Note contained herein, which will for all purposes have the same effect as if set forth at
this place. 

 IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by facsimile by its
duly authorized officer. 
 Dated: February 12, 2018 
  

					
	SOTHERLY HOTELS LP, as Issuer,
		
	By:	 	Sotherly Hotels Inc., its general partner
			
		 	By:	 	  

		 	Name:	 	
		 	Title:	 	

 TRUSTEE’S CERTIFICATE OF AUTHENTICATION 

This is one of the 7.25% Senior Unsecured Notes due 2021 described in the within-mentioned Indenture. 

Dated: February 12, 2018 
  

					
	WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee,
			
		 	By:	 	
                     
                                         
       

		 	 Authorized Signatory 

 7.25% Senior Unsecured Notes due 2021 

This Note is one of the series designated on the face hereof as 7.25% Senior Unsecured Notes due 2021 (the “Notes”), which was
issued under the Supplemental Indenture (as defined below). Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated. 

SECTION 1. Interest. Sotherly Hotels LP, a Delaware limited partnership (the “Issuer”), promises to pay interest on
the principal amount of this Note at 7.25% per annum from February 12, 2018, until maturity. The Issuer will pay interest quarterly on each Interest Payment Date, or if any such day is not a Business Day, on the next succeeding Business Day (as if
it were made on the date such payment was due, and no interest shall accrue on the amount so payable for the period from and after such Interest Payment Date). Interest on the Notes will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from February 12, 2018. The Issuer shall pay any Defaulted Interest as provided in Section 3.6 of the Supplemental Indenture (as defined below). Interest will be computed on the basis of a 360-day year of
twelve 30-day months. 
 SECTION 2. Method of Payment. The Issuer will pay interest on the Notes to the persons who are registered
Holders at the close of business on the Record Date next preceding the Interest Payment Date, except as provided in Section 3.6 of the Supplemental Indenture (as defined below) with respect to defaulted interest. The Issuer shall pay principal,
premium, if any, and interest on the Notes 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 (“U.S. Legal Tender”). The Issuer shall pay or
cause the Paying Agent to pay interest on this Note by wire transfer of immediately available funds to the account of the Depository or its nominee. Until otherwise designated by the Issuer, the Issuer’s office or agency will be the Corporate
Trust Office. 
 SECTION 3. Paying Agent and Registrar. Initially, Wilmington Trust, National Association, the Trustee under the
Indenture, will act as Paying Agent and Registrar. The Issuer may change any Paying Agent or Registrar without notice to any Holder. Except as provided in the Indenture, the Issuer or any of its Subsidiaries may act in any such capacity. 

SECTION 4. Indenture. The Issuer issued the Notes under (i) that certain First Supplemental Indenture dated as of February 12, 2018
(“Supplemental Indenture”) by and among the Issuer, the Guarantor and the Trustee and (ii) that certain Indenture dated as of February 12, 2018 (the “Base Indenture,” and together with the Supplemental Indenture,
the “Indenture”). Subject to the terms of the Indenture, the Issuer shall be entitled to issue Additional Notes pursuant to Section 3.4 of the Supplemental Indenture. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb) (the “Trust Indenture Act”). The Notes are subject to all such terms, and Holders are referred to
the Indenture and the Trust Indenture Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. 

SECTION 5. Optional Redemption. At any time on or after February 15, 2019, the Issuer will be entitled at its option to redeem all or
any portion of the Notes at a Redemption Price equal to 101% of the principal amount of such Notes plus any accrued and unpaid interest to, but not including, the Redemption Date (subject to the right of each Holder on the relevant Record Date to
receive interest due on the relevant Interest Payment Date falling prior to or on the redemption date). 
 SECTION 6. Notice of
Redemption. Subject to Section 4.2 of the Supplemental Indenture, notice of any optional redemption of any Notes will be delivered to Holders (with a copy to the Trustee) at their addresses, as shown in the Notes register, not more than 60 nor
less than 30 days prior to the date fixed for redemption. The notice of redemption will specify, among other items, the redemption price and the principal amount of the Notes held by the holder to be redeemed. No Notes of $25 or less shall be
redeemed in part. On and after the Redemption Date interest ceases to accrue on Notes or portions thereof called for redemption subject to Section 4.3 of the Supplemental Indenture. 

SECTION 7. Mandatory Redemption or Sinking Fund Payment. The Issuer shall not be required to make mandatory redemption or sinking fund
payments with respect to the Notes. 
 SECTION 8. Repurchase at Option of Holder. Upon the occurrence of a Change of Control
Repurchase Event, and subject to certain conditions set forth in the Indenture, the Issuer will be required to offer to purchase all of the outstanding Notes at a purchase price equal to 102% of the principal amount thereof, plus accrued and unpaid
interest, if any, thereon to the date of repurchase. 

  
 3 

 SECTION 9. Denominations, Transfer Exchange. The Notes are issued in registered form
without coupons in minimum denominations of $25 and integral multiples of $25 in excess thereof. The principal amount of the Notes will be reflected in units with each unit being worth $25. The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents, and the Issuer may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Issuer and the Registrar are not required to transfer or exchange any Note selected for redemption. Also, the Issuer and the Registrar are not required to transfer or exchange any Notes for a period of 15 days
before a selection of Notes is to be redeemed. 
 SECTION 10. Persons Deemed Owners. The registered Holder of a Note may be treated
as its owner for all purposes. 
 SECTION 11. Amendment, Supplement and Waiver. Subject to certain exceptions set forth in the
Indenture, the Indenture and the Notes may be amended or supplemented with the written consent of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding, and any existing Default or compliance with any
provision may be waived with the consent of the Holders of a majority in aggregate principal amount of the Notes then outstanding. Without notice to or consent of any Holder, the parties thereto may amend or supplement the Indenture and the Notes as
provided in the Indenture. 
 SECTION 12. Defaults and Remedies. The Trustee and the Holders of the Notes will have the remedies
following the occurrence and during the continuance of an Event of Default as set forth in the Indenture. 
 SECTION 13. Restrictive
Covenants. The Indenture contains certain covenants, including as set forth in Article 6 of the Supplemental Indenture. 
 SECTION 14.
No Recourse Against Others. No recourse for the payment of the principal of, premium, if any, or interest on any of the Notes or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation,
covenant or agreement of the Issuer in the Indenture, or in any of the Notes or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer, director, employee or controlling person of
the Issuer or of any successor person thereof. Each Holder, by accepting the Notes, waives and releases all such liability. Such waiver and release are part of the consideration for issuance of the Notes. 

SECTION 15. Authentication. This Note shall not be valid until authenticated by the manual signature of the Trustee or an
authenticating agent. 
 SECTION 16. Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee, such
as: TEN COM (= tenants in common), TEN ENT (= tenants by the entirety), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 

SECTION 17. CUSIP and ISIN Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Issuer has caused CUSIP and ISIN numbers to be printed on the Notes, and the Trustee may use CUSIP or ISIN numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers
either as printed on the Notes or as contained in any notice of redemption, and reliance may be placed only on the other identification numbers placed thereon. 

SECTION 18. Registered Form. The Notes are in registered form within the meaning of Treasury Regulations Section 1.871-14(c)(1)(i) for
U.S. federal income and withholding tax purposes. 
 SECTION 19. Governing Law. This Note shall be governed by, and construed in
accordance with, the laws of the State of New York. 
 The Issuer will furnish to any Holder upon written request and without charge a copy
of the Indenture. 

  
 4 

 ASSIGNMENT FORM 

I or we assign and transfer this Note to 
  

                          
                                         
                                         
                                         
                                         
           
  

                          
                                         
                                         
                                         
                                         
           
       Print or type name, address and zip
code of assignee or transferee) 
  

                          
                                         
                                         
                                         
                                         
           
       (Insert Social Security or other
identifying number of assignee or transferee) 
 and irrevocably appoint an agent to transfer this Note on the books of the Issuer. The
agent may substitute another to act for him. 
  

							
	Dated:	 		 		 	Signed:
				
		 		 		 	  

		 		 		 	(Sign exactly as name appears on the other side of this Note)
				
		 		 		 	  

	Signature Guarantee:	 		 		 	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor program reasonably acceptable to the Trustee)

  
 5 

 OPTION OF HOLDER TO ELECT PURCHASE 

This undersigned Holder elects to have this Note purchased by the Issuer pursuant to Section 6.2 of the Supplemental Indenture: 

If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 6.2 of the Supplemental Indenture, state
the amount (in minimum denominations of $25 and integral multiples of $25 in excess thereof): $ 
  

							
	Dated:	 		 		 	Signed:
				
		 		 		 	  

		 		 		 	(Sign exactly as name appears on the other side of this Note)
				
		 		 		 	  

	Signature Guarantee:	 		 		 	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor program reasonably acceptable to the Trustee)

  
 6 

 SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTES 

The following exchanges of a part of this Global Note for an interest in another Global Note or for a Physical Note, or exchanges of a part of
another Global Note or Physical Note for an interest in this Global Note, have been made: 
  

																	
	 Date of Exchange
	  	Amount
of
decrease
in
Principal
Amount
of The
Global
Note	 	  	Amount
of
increase
in
Principal
Amount
of this
Global
Note	 	  	Principal
Amount
of this
Global
Note
following
such
decrease
(or
increase)	 	  	Signature
of
authorized
signatory of
Trustee of
Note
custodian	 
		  				  				  				  			
		  				  				  				  			
		  				  				  				  			

  
 7 

 Exhibit B 

Form of Notation of Guarantee 

[see attached] 

 EXHIBIT B 

NOTATION OF GUARANTEE 
 For value
received, the Guarantor (which term includes any successor person under the Indenture (as defined below)), jointly and severally, unconditionally guarantees, to the extent set forth in the Indenture and subject to the provisions in the Indenture,
dated as of February 12, 2018 (the “Base Indenture”) among Sotherly Hotels LP, as issuer (the “Company”), Sotherly Hotels Inc., as guarantor (the “Guarantor”) and Wilmington
Trust, National Association, as trustee (the “Trustee”), as amended and supplemented by the First Supplemental Indenture, dated as of February 12, 2018, (the “Supplemental Indenture” and, together with
the Base Indenture, the “Indenture”) among the Company, the Guarantor and the Trustee (a) the due and punctual payment of the principal of, premium, if any, and interest on the Notes, whether at maturity, by
acceleration, redemption or otherwise, the due and punctual payment of interest on overdue principal and premium, if any, and, to the extent permitted by law, interest, and the due and punctual performance of all other obligations of the Company to
the Holders or the Trustee all in accordance with the terms of the Indenture and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. The obligations of the Guarantor to the Holders of the Notes and to the Trustee pursuant to the Guarantee and the Indenture
are expressly set forth in Article 5 of the Supplemental Indenture and reference is hereby made to the Indenture for the precise terms of the Guarantee. This Guarantee is subject to release as and to the extent set forth in Section 5.1 of the
Supplemental Indenture and Section 12.4 of the Base Indenture. Each Holder of a Note, by accepting the same, agrees to and shall be bound by such provisions. Capitalized terms used herein and not defined are used herein as so defined in the
Indenture. 
 [Signature page follows.] 

 
			
	SOTHERLY HOTELS INC.
		
	By:	 	
                     

	Name:	 	
	Title:	 	

 [Signature page to Notation of Guarantee]Exhibit 4.1

	
 
    

 

SECOND SUPPLEMENTAL INDENTURE

 

between

 

SENIOR HOUSING PROPERTIES TRUST

 

and

 

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

 

Dated as of February 12, 2018

 

SUPPLEMENTAL TO THE INDENTURE DATED AS OF FEBRUARY 18, 2016

 

 

SENIOR HOUSING PROPERTIES TRUST

 

4.750% Senior Notes due 2028

 

	
 
    

 

 

This SECOND SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”) dated as of February 12, 2018 between Senior Housing 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, and U.S. Bank 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 and the Trustee are parties to an Indenture, dated as of February 18, 2016 (as from time to time hereafter amended, supplemented or otherwise modified, 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; 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 4.750% Senior Notes due 2028, the form and substance of such Securities and the terms, provisions and conditions thereof 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 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) hereof.

 

“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.

 

 

“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 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.

 

“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 or distributions on Debt of the Company and its Subsidiaries, (ii) provision for taxes of the Company and its Subsidiaries based on income, (iii) amortization of debt discounts and deferred financing costs, (iv) provisions for gains and losses on properties and property depreciation and amortization, (v) the effect of any noncash charge resulting from a change in accounting principles in determining Earnings from Operations for such period and (vi) amortization of deferred charges.

 

“Debt” of the Company or any Subsidiary means, without duplication, any indebtedness of the Company or any Subsidiary, whether or not contingent, in respect of:

 

(i)            borrowed money or evidenced by bonds, notes, debentures or similar instruments;

 

(ii)           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 redemption, repayment or other repurchase of any Disqualified Stock; or

 

2

 

(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 (v) 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) hereof.

 

“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.

 

“Earnings from Operations” for any period means net earnings excluding gains and losses on sales of investments, gains or losses on early extinguishment of debt, extraordinary items 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.

 

3

 

“Encumbrance” means any mortgage, lien, charge, pledge, security interest or other encumbrance of any kind.

 

“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.

 

“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.

 

“Make-Whole Amount” means, in connection with any optional redemption of any Notes prior to August 15, 2027, the excess, if any, of (i) the aggregate present value as of the date of such redemption of each dollar of principal being redeemed and the amount of interest (exclusive of interest accrued to the date of redemption) that would have been payable in respect of such dollar if such redemption had been made on August 15, 2027, determined by discounting, on a semiannual basis, such principal and interest at the Reinvestment Rate (determined on the third Business Day preceding the date such notice of redemption is given) from the respective dates on which such principal and interest would have been payable if such redemption had been made on August 15, 2027, over (ii) the aggregate principal amount of the Notes being redeemed.  In the case of any redemption of the Notes on or after August 15, 2027, the Make-Whole Amount means zero.  The Make-Whole Amount shall be calculated by the Company and set forth in an Officer’s Certificate delivered to the Trustee, and the Trustee shall be entitled to rely on said Officer’s Certificate.

 

“Moody’s” means Moody’s Investors Service, Inc., or any successor thereof.

 

“Notes” means the Company’s 4.750% Senior Notes due 2028, issued under this Supplemental Indenture and the Indenture, as amended or supplemented from time to time.

 

“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.

 

“Reinvestment Rate” means a rate per annum equal to the sum of 0.35% (thirty-five one hundredths of one percent) plus the yield on treasury securities at constant maturity under the heading “Week Ending” published in the Statistical Release under the caption “Treasury Constant Maturities” for the maturity (rounded to the nearest month) corresponding to the remaining life to maturity (which, in the case of maturities corresponding to the principal and interest due on the Notes at their maturity, shall be deemed to be August 15, 2027), as of the payment date of the principal being redeemed.  If no maturity exactly corresponds to such 

 

4

 

maturity, yields for the two published maturities most closely corresponding to such maturity shall be calculated pursuant to the immediately preceding sentence and the Reinvestment Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding in each of such relevant periods to the nearest month.  For purposes of calculating the Reinvestment Rate, the most recent Statistical Release published prior to the date of determination of the Make-Whole Amount shall be used.

 

“Secured Debt” means Debt of the Company or its Subsidiaries secured by an Encumbrance on the property of the Company or its Subsidiaries.

 

“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.

 

“Statistical Release” means the statistical release designated “H.15(519)” or any successor publication which is published weekly by the Federal Reserve System and which establishes yields on actively traded United States government securities adjusted to constant maturities or, if such statistical release is not published at the time of any determination under this Supplemental Indenture, then any publicly available source of similar market data which shall be designated by the Company.

 

“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.  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.

 

“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 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 

 

5

 

be excluded from Total Unencumbered Assets to the extent such Joint Venture Interests would otherwise be included therein.

 

“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.

 

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 “4.750% Senior Notes due 2028.”

 

(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 first issued except for issue date, issue price and, if applicable, the first Interest Payment Date thereon and related interest accrual date.

 

(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.

 

6

 

So long as a Depositary or its nominee is the registered owner 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 this Supplemental 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 90 days of such notice or (ii) there shall have occurred and be continuing an Event of Default with respect to such Global Note and the Security Register has received a written request from an owner of beneficial interest in such Global Note.  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(e) 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 4.750% per annum, from February 12, 2018 (or, in the case of Notes issued upon the reopening of this series of Notes, from the date designated by the Company in connection with such reopening), or from the immediately preceding Interest Payment Date to which interest has been paid or duly provided for, payable semi-annually in arrears on February 15 and August 15 of each year, commencing August 15, 2018, or if such day is not a Business Day, on the next succeeding Business Day (each of which shall be an “Interest Payment Date”), 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 February 1 or August 1 (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 February 15, 2028; provided, however, the Notes may be earlier redeemed at the option of the Company as provided in Section 2.1(g) below.  The principal of each Note payable on its maturity date shall be paid against presentation and surrender thereof at the Corporate Trust Office of the Trustee, 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.

 

(g)           Redemption at the Option of the Company. The Notes will be subject to redemption in whole at any time or in part from time to time before they mature at the option of the Company upon not less than 30 nor more than 60 days’ notice to each Holder of Notes to be 

 

7

 

redeemed at its address appearing in the Security Register, or, in the case of any Global Note, in accordance with the procedures of the Depositary and its participants in effect from time to time, at a redemption price equal to the sum of (i) the principal amount of the Notes being redeemed, plus accrued and unpaid interest, if any, from the date of initial issuance, or the most recent date to which interest has been paid or provided for, whichever is later, to, but not including, the applicable Redemption Date, plus (ii) the Make-Whole Amount, if any (it being understood that if the Notes are redeemed on or after August 15, 2027, the Make-Whole Amount equals zero).

 

(h)           Notices.  Notices to the Company 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, fax number (617) 603-6683, Attention: Corporate Trust Department, re: Senior Housing Properties Trust 4.750% Senior Notes due 2028, or as to either party, at such other address as shall be designated by such party in a written notice to the other party.

 

(i)            Legal Holidays.  If any Interest Payment Date, Stated Maturity date or Redemption Date for 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, Stated Maturity date or Redemption Date, 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 of the Company.  In addition to the covenants of the Company set forth in Article Eight and Article Ten of the Base Indenture, Holders 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 in 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 Securities and Exchange 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

 

8

 

(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.

 

For purposes of this Supplemental Indenture, the sum of (A) and (B) above is the Company’s “Adjusted Total Assets.”

 

(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 on a consolidated basis 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 

 

9

 

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.

 

(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 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 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 reports 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, documents or information filed by the Company and delivery of such reports, 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.

 

10

 

ARTICLE 4

 

OTHER PROVISIONS

 

Section 4.1                                    Sinking Funds not Applicable.  Section 501(c) of the Base Indenture shall not be applicable to the Notes.

 

Section 4.2                                    Restatement of Section 501(d) of the Base Indenture. The provisions of Section 501(d) of the Base Indenture, as applied to the Notes, 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 in this Indenture (other than a covenant a default in whose performance or whose breach is elsewhere in this Section specifically dealt with 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 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 4.3                                    Restatement of Section 501(e) of Base Indenture. The provisions of Section 501(e) of the Base Indenture, as applied to the Notes, 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 4.4                                    Restatement of Section 501(f) of Base Indenture. The provisions of Section 501(f) of the Base Indenture, as applied to the Notes, 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 90 days; or

 

Section 4.5                                    Additional Event of Default.  In accordance with Section 501(g) of the Base Indenture, the following shall constitute an “Event of Default” with respect to the Notes:  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 debt securities issued under the Indenture other than the Notes) under which there may

 

11

 

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 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 Securities, 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.

 

Section 4.6                                    No Make-Whole Amount Upon Acceleration.  Notwithstanding any provisions to the contrary in the Base Indenture, upon any acceleration of the Notes under Section 502 of the Base Indenture, the amount immediately due and payable in respect of the Notes shall equal the outstanding principal amount thereof, plus accrued and unpaid interest thereon.

 

Section 4.7                                    Satisfaction and Discharge.  Article Four of the Base Indenture applies to the Notes, except for the proviso at the end of Section 401(a).

 

Section 4.8                                    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).

 

ARTICLE 5

 

EFFECTIVENESS

 

This Supplemental Indenture shall be effective for all purposes as of the date and time this Supplemental Indenture has been executed and delivered by the Company and the Trustee in accordance with Article Nine of the Base Indenture.  As supplemented hereby, the Base Indenture is hereby confirmed as being in full force and effect.

 

ARTICLE 6

 

MISCELLANEOUS

 

Section 6.1                                    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.

 

12

 

Section 6.2                                    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 6.3                                    Effect of Headings. The section headings herein are for convenience only and shall not affect the construction hereof.

 

Section 6.4                                    Governing Law.  This Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York.

 

Section 6.5                                    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]

 

13

 

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.

 

	
 
    	
SENIOR HOUSING   PROPERTIES TRUST
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name: 
    	
Richard W.   Siedel, Jr.
    
	
 
    	
 
    	
Title: 
    	
Chief Financial Officer   and Treasurer
    
	
 
    	
 
    	
 
    
	
 
    	
U.S. BANK NATIONAL   ASSOCIATION, as
    
	
 
    	
Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name: 
    	
David W. Doucette
    
	
 
    	
 
    	
Title: 
    	
Vice President
    

 

[Signature Page to Second Supplemental Indenture]

 

 

EXHIBIT A

 

FORM OF NOTE

 

[Form of Face of Security]

 

[Insert Applicable Legends]

 

SENIOR HOUSING PROPERTIES TRUST

 

4.750% Senior Notes due 2028

 

	
No.     
    	
$              
    

 

Senior Housing 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 ($             ) on February 15, 2028, and to pay interest thereon from February 12, 2018 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on February 15 and August 15 in each year, commencing August 15, 2018 at the rate of 4.750% 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 February 1 or August 1 (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 SENIOR HOUSING PROPERTIES TRUST, DATED SEPTEMBER 20, 1999, 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 SENIOR HOUSING PROPERTIES TRUST SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, SENIOR HOUSING PROPERTIES

 

A-1

 

TRUST. ALL PERSONS DEALING WITH SENIOR HOUSING PROPERTIES TRUST IN ANY WAY SHALL LOOK ONLY TO THE ASSETS OF SENIOR HOUSING PROPERTIES TRUST FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

 

	
Dated:
    	
SENIOR HOUSING 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 NATIONAL ASSOCIATION, as Trustee
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

A-2

 

[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 18, 2016 (the “Base Indenture”), between the Company and U.S. Bank National Association (herein called the “Trustee”, which term includes any successor trustee under the Base Indenture), as supplemented by a Second Supplemental Indenture, dated as of February 12, 2018 (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”), between the Company 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 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.  The Notes will be subject to redemption in whole at any time or in part from time to time before they mature at the option of the Company upon not less than 30 nor more than 60 days’ notice by mail 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, at a redemption price equal to the sum of (i) the principal amount of the Notes being redeemed plus accrued interest and unpaid interest, if any, from the date of initial issuance, or the most recent date to which interest has been paid or provided for, whichever is later, to, but not including, the applicable Redemption Date and (ii) the Make-Whole Amount, if any (it being understood that if the Notes are redeemed on or after August 15, 2027, the Make-Whole Amount equals zero).

 

As used herein the term “Make-Whole Amount” means, in connection with any optional redemption of any Notes prior to August 15, 2027, the excess, if any, of (i) the aggregate present value as of the date of redemption of each dollar of principal being redeemed and the amount of interest (exclusive of interest accrued to the date of redemption) that would have been payable in respect of such dollar if such redemption had been made on August 15, 2027, determined by discounting, on a semi-annual basis, such principal and interest at the Reinvestment Rate (determined on the third Business Day preceding the date such notice of redemption is given) from the respective dates on which such principal and interest would have been payable if such redemption had been made on August 15, 2027, over (ii) the aggregate principal amount of the Notes being redeemed.  In the case of any redemption of the Notes on or after August 15, 2027, the Make-Whole Amount will equal zero.  The Make-Whole Amount shall be calculated by the Company and set forth in an Officers’ Certificate delivered to the Trustee, and the Trustee shall be entitled to rely on said Officers’ Certificate.

 

As used herein the term “Reinvestment Rate” means a rate per annum equal to the sum of 0.35% (thirty-five one hundredths of one percent) plus the yield on treasury securities at constant maturity under the heading “Week Ending” published in the Statistical Release under the caption “Treasury Constant Maturities” for the maturity (rounded to the nearest month) corresponding to the remaining life to maturity (which, in the case of maturities corresponding to the principal and interest due on the Notes at their maturity, shall be deemed to be August 15, 2027), as of the payment date of the principal being redeemed.  If no maturity exactly corresponds to such maturity, yields for the two published maturities most closely corresponding to such maturity shall be calculated pursuant to the immediately preceding sentence and the Reinvestment Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding in each of such relevant periods to the nearest month. For purposes of calculating the Reinvestment Rate, the most recent Statistical Release published prior to the date of determination of the Make-Whole Amount shall be used.

 

As used herein the term “Statistical Release” means the statistical release designated “H.15(519)” or any successor publication which is published weekly by the Federal Reserve System and which establishes yields on actively traded United States government securities adjusted to constant maturities or, if such statistical release is not published at the time of any determination under the Supplemental Indenture, then any publicly available source of similar market data which shall be designated by the Company.

 

The Company shall not be required to make sinking fund or redemption payments with respect to the Notes.

 

A-3

 

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.

 

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 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.

 

A-4

 

8.                                      Persons Deemed Owners.  Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company 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 Trustee nor any such agent shall be affected by notice to the contrary.

 

9.                                      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

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