Document:

Exhibit 4.2

	
 
    	
 
    

 

FIRST SUPPLEMENTAL INDENTURE

 

between

 

SENIOR HOUSING PROPERTIES TRUST

 

and

 

U.S. BANK NATIONAL ASSOCIATION

 

Dated as of February 18, 2016

 

SUPPLEMENTAL TO THE INDENTURE DATED AS OF FEBRUARY 18, 2016

 

 

SENIOR HOUSING PROPERTIES TRUST

 

6.25% Senior Notes due 2046

 

	
 
    	
 
    

 

 

FIRST SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”) dated as of February 18, 2016 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 6.25% Senior Notes due 2046, 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            Capitalized terms used herein and not defined herein have the meanings ascribed to such terms in the Indenture.

 

Section 1.2            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” is defined in clause (i) of Section 3.1(a).

 

“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 discount 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:

 

(i)            demand deposits, certificates of deposit or repurchase agreements with banks or other financial institutions;

 

(ii)           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

 

(iii)          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 discount and deferred financing costs, (iv) provisions for gains and losses on properties and property depreciation and amortization, (v) the effect of any noncash charge resulting from a change in accounting principles in determining Earnings from Operations for such period and (vi) amortization of deferred charges.

 

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

 

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

 

(ii)           indebtedness for borrowed money secured by any Encumbrance existing on property owned by the Company or any Subsidiary, 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

 

(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

 

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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.

 

“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.

 

“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(b) 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, 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.

 

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

 

“Notes” means the series of Securities titled 6.25% Senior Notes due 2046, issued under the Indenture.

 

“Regular Record Date” with respect to the Notes is defined in Section 101 of the Base Indenture and Section 2.1(b) of this Supplemental Indenture.

 

“Secured Debt” means Debt 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.

 

“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) the amount of Undepreciated Real Estate Assets of the Company and its Subsidiaries not securing any portion of Secured Debt, and (ii) the amount of all other assets, including accounts receivable and intangibles, 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; provided that, in determining Total Unencumbered Assets as a percentage of the aggregate outstanding principal amount of Unsecured Debt of the Company and its Subsidiaries on a consolidated basis for purposes of the covenant set forth in Section 3.1(b), Joint Venture Interests shall 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 less adjustments to carrying value in accordance with generally accepted accounting principles made prior to January 1, 2001) 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.

 

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ARTICLE 2

 

TERMS OF THE NOTES

 

Section 2.1            Pursuant to Section 301 of the Base Indenture, the Notes shall have the following terms and conditions:

 

(a)           Title; Aggregate Principal Amount; Form of Notes; Denomination.  The Notes shall be in registered form under the Indenture and shall be known as the Company’s “6.25% Senior Notes due 2046.”  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 $250,000,000, 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. 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.

 

The Notes will initially be issued in the form of one or more registered Global Securities without coupons (“Global Notes”) that will be deposited with, or on behalf of, The Depository Trust Company (“DTC”), 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 DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC or by DTC or any nominee of DTC to a successor depositary or any nominee of such successor.

 

So long as DTC or its nominee is the registered owner of a Global Note, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the Notes represented by such Global Note for all purposes under this Supplemental Indenture. Except as described below, owners of 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 the 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) DTC or its successor (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.  Individual Notes so issued will be issued in denominations of $25.00 and integral multiples thereof.

 

Notwithstanding any provisions of Section 2.1(b) or Section 2.1(c) to the contrary, payments of principal, premium, if any, and interest on any Global Note shall be made in accordance with the procedures of DTC and its participants in effect from time to time.

 

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(b)           Interest and Interest Rate.  The Notes will bear interest at a rate of 6.25% per annum, from February 18, 2016 (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 quarterly in arrears on each March 1, June 1, September 1 and December 1, commencing June 1, 2016 (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 February 15, May 15, August 15 or November 15, as the case may be (whether or not a Business Day), immediately before the corresponding Interest Payment Date (each, a “Regular Record Date”).

 

(c)           Principal Repayment; Currency.  The Stated Maturity of the principal of the Notes is February 1, 2046, provided, however, the Notes may be earlier redeemed at the option of the Company as provided in Section 2.1(d) below.  The principal of each Note payable at its Stated Maturity 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.

 

(d)           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 at any time after February 18, 2021 at the option of the Company upon not less than 30 nor more than 60 days’ notice to each Holder of Notes to be redeemed at its address appearing in the Security Register, or, in the case of any Global Note, in accordance with the procedures of DTC and its participants in effect from time to time, at a redemption price equal to 100% of the outstanding principal amount of the Notes being redeemed, plus accrued and unpaid interest, if any, to but excluding the applicable Redemption Date.

 

(e)           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 6.25% Senior Notes due 2046; or as to either party, at such other address as shall be designated by such party in a written notice to the other party.

 

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

 

(g)           Defeasance and Covenant Defeasance.  Article Thirteen of the Base Indenture, including the 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).

 

(h)           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(h) shall supersede and replace Section 113 of the Base Indenture with respect to the Notes.

 

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ARTICLE 3

 

ADDITIONAL COVENANTS

 

Section 3.1            Holders of the Notes shall have the benefit of the following covenants, in addition to the covenants of the Company set forth in Article Eight and Article Ten of the Base Indenture:

 

(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 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 Debt; and

 

(B)          the purchase price of any real estate assets or mortgages receivable acquired, and the amount of any securities offering proceeds received (to the extent that such proceeds were not used to acquire real estate assets or mortgages receivable or used to reduce Debt), by the Company or any Subsidiary since the end of such fiscal quarter, including those proceeds obtained in connection with the incurrence of such 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 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 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 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

 

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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 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 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 entire 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.

 

ARTICLE 4

 

ADDITIONAL EVENTS OF DEFAULT

 

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

 

Section 4.2            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            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:

 

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(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            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            In accordance with Section 501(g) of the Base Indenture, the following shall constitute an Event of Default 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 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 Notes a written notice specifying such default and requiring the Company to cause such indebtedness to be discharged or cause such acceleration to be rescinded or annulled and stating that such notice is a “Notice of Default” under the Indenture.

 

Section 4.6            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.

 

ARTICLE 5

 

EFFECTIVENESS

 

Section 5.1            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.

 

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ARTICLE 6

 

MISCELLANEOUS

 

Section 6.1                                    In the event any provision of this Supplemental Indenture shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof or any provision of the Indenture.

 

Section 6.2                                    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                                    This Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York.

 

Section 6.4                                    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.

 

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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:
    	
/s/ Richard W. Siedel, Jr.
    
	
 
    	
 
    	
Name:
    	
Richard W. Siedel, Jr.
    
	
 
    	
 
    	
Title:
    	
Treasurer and Chief Financial Officer
    

 

 

	
 
    	
U.S. BANK NATIONAL ASSOCIATION, as Trustee
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ David W. Doucette
    
	
 
    	
 
    	
Name:
    	
David W. Doucette
    
	
 
    	
 
    	
Title:
    	
Vice President
    

 

[Signature Page to First Supplemental Indenture]

 

 

EXHIBIT A

 

FORM OF NOTE

 

[Form of Face of Security]

 

[Insert Applicable Legends]

 

SENIOR HOUSING PROPERTIES TRUST

 

6.25% Senior Notes due 2046

 

	
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 1, 2046, and to pay interest thereon from February 18, 2016 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly on March 1, June 1, September 1 and December 1 in each year, commencing June 1, 2016 at the rate of 6.25% 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 15, May 15, August 15 and November 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.

 

Payment of the principal of (and premium, if any) and any such interest on this Security will be made at the office or agency of the Company maintained for that purpose in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts or, in the case of any Note that is a Global Security, in accordance with the procedures of The Depository Trust Company (“DTC”) 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 First Supplemental Indenture, dated as of February 18, 2016 (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 on or after February 18, 2021 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 DTC and its participants in effect from time to time, at a redemption price equal to 100% the principal amount of the Notes being redeemed plus accrued interest and unpaid interest, if any, to but excluding the applicable Redemption Date.

 

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

 

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

 

A-3

 

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 $25.00 and integral multiples of $25.00 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Notes are exchangeable for a like aggregate principal amount of Notes and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

 

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

8.                                      Persons Deemed Owners.  Prior to due presentment of this Security for registration of transfer, the Company, the 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.

 

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[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
   and not as tenants in common
    	
 
    	
Under Uniform Gifts to Minors 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-5Exhibit

    
EXECUTION COPY
AMENDMENT NO. 1
TO
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDMENT NO. 1 TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT (the “Amendment”) is made as of February 17, 2016 by and among Churchill Downs Incorporated, a Kentucky corporation (the “Borrower”), the Guarantors, the financial institutions listed on the signature pages hereto as the “Lenders” referred to below and JPMorgan Chase Bank, N.A., as the agent (the “Agent”) and the collateral agent (the “Collateral Agent” and collectively with the Agent, the “Agents”) for the Lenders.  Capitalized terms used but not otherwise defined herein shall have the respective meanings given to them in the “Credit Agreement” referred to below.
W I T N E S S E T H:
WHEREAS, the signatories hereto are parties to that certain Fourth Amended and Restated Credit Agreement, dated as of May 17, 2013, as amended and restated as of December 1, 2014, by and among the Borrower, the Guarantors from time to time parties thereto, the financial institutions from time to time parties thereto (the “Lenders”) and the Agent (as the same may from time to time be amended, restated, supplemented or otherwise modified, the “Credit Agreement”);
WHEREAS, the parties hereto have agreed to amend the Credit Agreement on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Guarantors, the Lenders party hereto and the Agents have agreed to the following amendments to the Credit Agreement.
1.  Amendments.  Effective as of the date hereof and subject to the satisfaction of the conditions precedent set forth in Section 4 below, the Credit Agreement is hereby amended as follows:

(a)  Section 1.1 of the Credit Agreement is hereby amended to (i) delete the definition of “Amendment No. 2 Effective Date” appearing therein in its entirety and (ii) add the following definitions thereto in the appropriate alphabetical order and, where applicable, replace the corresponding previously existing definitions:

“Alternate Base Rate” means, for any day, a rate of interest per annum equal to the highest of (a) the Prime Rate in effect for such date, (b) the sum of the NYFRB Rate in effect for such day plus 1/2% per annum and (c) the sum of (i) the quotient of (x) the Eurodollar Base Rate for a one month Interest Period in U.S. dollars on such day (or if such day is not a Business Day, the immediately preceding Business Day), divided by (y) one minus the Reserve Requirement (expressed as a decimal) applicable to such one month Interest Period, plus (ii) 1% per annum; provided that, for the avoidance of doubt, the Eurodollar Base Rate for any day shall be based on the Eurodollar Base Rate at approximately 11:00 a.m. (London time) on such day, subject to the interest rate floors set forth in the definition of Eurodollar Base Rate.  Any change in the Alternate Base Rate due to a change in the Prime Rate, the NYFRB Rate or the Eurodollar Base Rate shall be effective from and including the effective date of such change in the Prime Rate, the NYFRB Rate or the Eurodollar Base Rate, respectively.

“Amendment No. 1 Effective Date” means February 17, 2016.

“Consolidated Adjusted EBITDA” for any Reference Period (as defined in the definition of “Adjusted EBITDA”) means the consolidated Adjusted EBITDA of all of the Loan Parties for that period, consolidated in accordance with Agreement Accounting Principles.  The EBITDA of the Excluded Subsidiaries shall not be included in Consolidated Adjusted EBITDA; provided that, for the avoidance of doubt, this sentence shall not exclude from Consolidated Adjusted EBITDA of any Loan Party the income of an Excluded Subsidiary (to the extent constituting cash dividends or distributions actually received by such Loan Party) that is permitted to be included in Consolidated Net Income pursuant to the definition of Consolidated Net Income.

“Federal Funds Effective Rate” means, for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositary institutions (as determined in such manner as the NYFRB shall set forth on its public website from time to time) and published on the next succeeding Business Day by the NYFRB as the federal funds effective rate.

“NYFRB” means the Federal Reserve Bank of New York.

“NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day (or for any day that is not a Business Day, for the immediately preceding Business Day); provided that if none of such rates are published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted at 11:00 a.m., New York City time, on such day received by the Administrative Agent from a Federal funds broker of recognized standing selected by it; provided, further, that if any of the aforesaid rates shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

“Overnight Bank Funding Rate” means, for any day, the rate comprised of both overnight federal funds and overnight eurodollar borrowings by U.S.-managed banking offices of depository institutions (as such composite rate shall be determined by the NYFRB as set forth on its public website from time to time) and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate (from and after such date as the NYFRB shall commence to publish such composite rate).

“Revolving Facility Termination Date” means February 17, 2021, or any earlier date on which the aggregate Revolving Commitments are reduced to zero or otherwise terminated pursuant to the terms hereof.

“Sanctioned Country” means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, Cuba, Crimea, Iran, North Korea, Sudan and Syria).

“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by OFAC, the U.S. Department of State, the United Nations Security Council, the European Union, any EU member state, Her Majesty’s Treasury of the United Kingdom or other relevant sanctions authority, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b).

“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by OFAC or the U.S. Department of State or (b) the United Nations Security Council, the European Union, any European Union member state, Her Majesty’s Treasury of the United Kingdom or other relevant sanctions authority.

“Specified Acquisition” means the acquisition by a joint venture Subsidiary of certain entities and businesses, all as more fully described to the Lenders in the lender presentation for Amendment No. 1 to this Agreement.

“Term Loan Facility Termination Date” means February 17, 2021.

(b)  Section 2.4.1 of the Credit Agreement is hereby amended to restate the table set forth therein in its entirety as follows:
	
		
	Date
	Amount

	March 31, 2016
	$2,359,375.00

	June 30, 2016
	$2,359,375.00

	September 30, 2016
	$2,359,375.00

	December 31,2016
	$2,359,375.00

	March 31, 2017
	$3,539,062.50

	June 30, 2017
	$3,539,062.50

	September 30, 2017
	$3,539,062.50

	December 31,2017
	$3,539,062.50

	March 31, 2018
	$4,718,750.00

	June 30, 2018
	$4,718,750.00

	September 30, 2018
	$4,718,750.00

	December 31,2018
	$4,718,750.00

	March 31, 2019
	$5,898,437.50

	June 30, 2019
	$5,898,437.50

	September 30, 2019
	$5,898,437.50

	December 31, 2019
	$5,898,437.50

	March 31, 2020
	$7,078,125.00

	June 30, 2020
	$7,078,125.00

	September 30, 2020
	$7,078,125.00

	December 31, 2020
	$7,078,125.00

(c)  Section 5.8 of the Credit Agreement is hereby amended to delete the phrase “Amendment No. 2 Effective Date” appearing therein and replace such phrase with “Amendment No. 1 Effective Date”.
(d)  Section 6.13(ii) of the Credit Agreement is hereby amended to (i) delete each reference to “the Amendment No. 2 Effective Date” appearing therein and replace each such reference with “the Amendment No. 1 Effective Date”.
(e)  Section 6.13(ii) of the Credit Agreement is hereby further amended to insert the following proviso immediately at the end thereof:
“; provided that it is understood and agreed that an Investment by one or more Loan Parties in the applicable acquiror joint venture Subsidiary solely for the purpose of providing the funds to pay the acquisition consideration in respect of the Specified Acquisition shall not be counted against such foregoing 25% of Consolidated Net Worth limitation”

(f)  Section 6.13(iii)(e) of the Credit Agreement is hereby amended to insert the following parenthetical immediately at the end thereof:
“(provided that no such consent shall be required for the applicable acquiror joint venture Subsidiary being used to effect, and the entities being acquired pursuant to, the Specified Acquisition)”

(g)  Section 6.13(iii)(g) of the Credit Agreement is hereby amended to insert the following proviso immediately at the end thereof:
“; provided that it is understood and agreed that any consideration paid by the Loan Parties or any of their Subsidiaries in respect of the Specified Acquisition shall not be counted against such foregoing 25% of Consolidated Net Worth limitation”

(h)  Section 9.11 of the Credit Agreement is hereby amended to delete the phrase “on a nonconfidential basis prior to disclosure by the Borrower” appearing therein and replace such phrase with “on a nonconfidential basis prior to disclosure by the Borrower and other than information pertaining to this 

Agreement routinely provided by arrangers to data service providers, including league table providers, that serve the lending industry”.
(i)  Schedule 1 to the Credit Agreement is hereby amended and restated in its entirety in the form of Annex A attached hereto.
(j)  The Commitment Schedule to the Credit Agreement is hereby amended and restated in its entirety in the form of Annex B attached hereto.
(k)  The aggregate outstanding principal amounts of the Term Loans as of the Amendment No. 1 Effective Date are set forth on Annex B attached hereto.  The outstanding Term Loans held by certain of the Lenders immediately prior to the effectiveness of this Amendment are hereby deemed reallocated, sold, assigned and transferred to the applicable Lenders as individually set forth on Annex B attached hereto, and, accordingly, such applicable Lenders’ holding of the Term Loans, on the Amendment No. 1 Effective Date and upon the effectiveness of this Amendment, are set forth on Annex B attached hereto.
(l)  The Pricing Schedule to the Credit Agreement is hereby amended and restated in its entirety in the form of Annex C attached hereto.
(m)  U.S. Bank National Association is hereby designated as (i) a Syndication Agent in respect of the credit facilities evidenced by the Credit Agreement as amended hereby and (ii) a Joint Lead Arranger and a Joint Book Runner in respect of the revolving credit facility evidenced by the Credit Agreement as amended hereby.  Accordingly, the cover page of the Credit Agreement is amended to (x) add a reference to U.S. Bank National Association as a Syndication Agent as well as a Joint Lead Arranger and a Joint Book Runner in respect of the revolving credit facility and (y) delete the reference to U.S. Bank National Association as a Documentation Agent.

2.  Departing Lender.

(a)  Branch Banking and Trust Company (the “Departing Lender”) is entering into this Amendment solely to evidence its exit from the Credit Agreement and shall have absolutely no obligation hereunder.  Upon the effectiveness hereof and the payment described in Section 2(b)(ii), each Departing Lender shall no longer (i) constitute a “Lender” for any purpose under the Loan Documents, (ii) be a party to the Credit Agreement and (iii) have any obligations under any of the Loan Documents, in each case, without further action required on the part of any Person; and
(b)  Upon the effectiveness hereof: (i) the Departing Lender’s “Commitment” under the Credit Agreement shall be terminated, (ii) the Departing Lender shall have received payment in full in immediately available funds of all of its Loans, all interest thereon and all other amounts payable to it under the Credit Agreement, (iii) the Departing Lender shall not be a Lender hereunder as evidenced by its execution and delivery of its signature page hereto (provided, however, that the Departing Lender shall continue to be entitled to the benefits of Sections 3.1, 3.2, 3.4, 3.5 and 9.6) and (iv) the defined term “Lenders” in the Credit Agreement shall exclude the Departing Lender.

3.  New Lenders.

(a)  Each of the undersigned financial institutions that is not a party to the Credit Agreement prior to the Amendment No. 1 Effective Date (each, an “New Lender”) agrees to be bound by the provisions of the Credit Agreement and agrees that it shall, on the Amendment No. 1 Effective Date, become a Lender for all purposes of the Credit Agreement, with Commitments and outstanding Loans, as applicable, as set forth on the amended and restated Commitment Schedule in the form of Annex B attached hereto.
(b)  Each undersigned New Lender (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Amendment and to consummate the transactions contemplated hereby and by the Credit Agreement and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied by it in order to become a Lender, (iii) from and after the Amendment No. 1 Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and shall have the obligations of a Lender thereunder, and (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 6.1 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement on the basis of which it has made such analysis and decision independently and without reliance on the Agent, any Lender or any LC Issuer; and (b) agrees that (i) it will, 

independently and without reliance on the Agent, any Lender or any LC Issuer, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement and the other Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement and the other Loan Documents are required to be performed by it as a Lender.

4.  Conditions of Effectiveness.  This Amendment shall become effective and be deemed effective as of the date hereof, if, and only if:

(a)  the Agent shall have received counterparts of this Amendment duly executed by the Borrower, the Lenders (including the New Lenders and the Departing Lender) and the Agent;
(b)  The Agent shall have received a favorable written opinion (addressed to the Agent and the Lenders (but not the Departing Lenders) and dated the Amendment No. 1 Effective Date) of Stites & Harbison PLLC, counsel for the Loan Parties in form and substance reasonably satisfactory to the Agent and its counsel and covering such matters relating to the Loan Parties, the Loan Documents, this Amendment or the transactions contemplated by the Credit Agreement as the Agent shall reasonably request.  The Borrower hereby requests such counsel to deliver such opinion;
(c)  The Agent shall have received such documents and certificates as the Agent or its counsel may reasonably request relating to the organization, existence and good standing of the Loan Parties, the authorization of the transactions contemplated by the Credit Agreement (as modified hereby) and any other legal matters relating to such Loan Parties, the Loan Documents or the transactions contemplated by the Credit Agreement (as modified hereby), all in form and substance reasonably satisfactory to the Administrative Agent and its counsel;
(d)  the Borrower shall have paid, and the Agent shall have received, (i) for the account of each Lender (including each New Lender but excluding the Departing Lender) that executes and delivers its signature page hereto by such time as is requested by the Agent, an upfront fee in an amount equal to the amount previously disclosed to the Lenders and (ii) all of the fees and expenses of the Agents and their Affiliates (including, to the extent invoiced, reasonable attorneys’ fees and expenses of the Agents) in connection with this Amendment and the other Loan Documents; and
(e)  The Administrative Agent shall have administered such reallocations, sales, assignments, transfers (or other relevant actions in respect) of each Lender’s Pro Rata Share of the relevant Class of Outstanding Credit Exposure under the Credit Agreement (including the New Lenders) as are necessary in order that each relevant Class of Outstanding Credit Exposure with respect to such Lender reflects such Lender’s Pro Rata Share of such Class of Outstanding Credit Exposure under the Credit Agreement as amended hereby.  The Borrower hereby agrees to compensate each Lender for any and all losses, costs and expenses incurred by such Lender in connection with the sale and assignment of Eurodollar Loans and the reallocation described in this clause (e), in each case on the terms and in the manner set forth in Section 3.4 of the Credit Agreement unless such compensation is waived by the applicable Lender in its sole discretion.

5.  Representations and Warranties of the Loan Parties.  The Loan Parties jointly and severally hereby  represent and warrant as follows:

(a)  Each Loan Party has the power and authority and legal right to execute and deliver this Amendment and the Credit Agreement (as modified hereby) and to perform its obligations hereunder and thereunder.  The execution and delivery by each Loan Party of this Amendment and the performance of its obligations hereunder and under the Credit Agreement (as modified hereby) have been duly authorized by proper corporate proceedings, and this Amendment and the Credit Agreement (as modified hereby) constitute legal, valid and binding obligations of such Loan Party, enforceable against such Loan Party in accordance with its terms except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting creditors’ rights generally.
(b)  As of the date hereof and giving effect to the terms of this Amendment, (i) no Default or Unmatured Default has occurred and is continuing and (ii) the representations and warranties of the Loan Parties set forth in the Credit Agreement (as modified hereby) and the other Loan Documents are true and correct in all material respects (or, in the case of any representation or warranty qualified by materiality or Material Adverse Effect, in all 

respects) except to the extent any such representation or warranty is stated to relate solely to an earlier date, in which case such representation or warranty shall have been true and correct on and as of such earlier date.

6.  Reference to and Effect on the Credit Agreement and Loan Documents.

(a)  Upon the effectiveness of this Amendment, each reference to the Credit Agreement in the Credit Agreement or any other Loan Document shall mean and be a reference to the Credit Agreement as modified hereby.  This Amendment is a Loan Document pursuant to the Credit Agreement and shall (unless expressly indicated herein or therein) be construed, administered, and applied, in accordance with all of the terms and provisions of the Credit Agreement.
(b)  Each Loan Party, by its signature below, hereby (i) agrees that this Amendment and the transactions contemplated hereby shall not limit or diminish the obligations of such Loan Party arising under or pursuant to the Credit Agreement and the other Loan Documents to which it is a party, (ii) reaffirms all of its obligations under the Credit Agreement and each and every other Loan Document to which it is a party (including, without limitation, each applicable Collateral Document), (iii) reaffirms all Liens on the Collateral which have been granted by it in favor of the Collateral Agent (for itself and the Lenders) pursuant to any of the Loan Documents, and (iv) acknowledges and agrees that, except as specifically modified above, the Credit Agreement and all other Loan Documents executed and/or delivered in connection therewith shall remain in full force and effect and are hereby reaffirmed, ratified and confirmed.
(c)  The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Agents or the Lenders, nor constitute a waiver of or consent to any modification of any provision of the Credit Agreement or any other Loan Documents executed and/or delivered in connection therewith.
(d)  This Amendment is a Loan Document.

7.  GOVERNING LAW.  THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE COMMONWEALTH OF KENTUCKY, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

8.  Headings.  Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

9.  Counterparts.  This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts (including by means of facsimile or electronic transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

*******

IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first above written.

CHURCHILL DOWNS INCORPORATED,
as the Borrower

By:      ____________________________________                    
Name:
Title:

GUARANTORS:

CHURCHILL DOWNS MANAGEMENT COMPANY, LLC, as a Guarantor 

By      _____________________________                

Name: 
Title:

CALDER RACE COURSE, INC., as a Guarantor 

By  ____________________________                        
Name: 
Title: 

TROPICAL PARK, LLC, as a Guarantor 

By  ____________________________                        
Name: 
Title: 

ARLINGTON PARK RACECOURSE, LLC, as a Guarantor 

By _______________________________                         
Name: 
Title: 

ARLINGTON OTB CORP., as a Guarantor 

By  _______________________________                        
Name: 
Title: 

QUAD CITY DOWNS, INC., as a Guarantor 

By  ________________________________                        
Name: 
Title: 

CHURCHILL DOWNS LOUISIANA HORSERACING COMPANY, L.L.C., as a Guarantor 

By  _______________________________                        
Name: 
Title: 

CHURCHILL DOWNS LOUISIANA VIDEO POKER COMPANY, L.L.C., as a Guarantor 

By  __________________________________                        
Name: 
Title: 

VIDEO SERVICES, L.L.C., as a Guarantor 

By  ____________________________________                        
Name: 
Title: 

CHURCHILL DOWNS TECHNOLOGY INITIATIVES COMPANY, as a Guarantor 

By  ________________________________________                        
Name: 
Title: 

HCRH, LLC, as a Guarantor 

By  __________________________________________                        
Name: 
Title: 

SW GAMING LLC, as a Guarantor 

By  ___________________________________________                        
Name: 
Title: 

UNITED TOTE COMPANY, as a Guarantor 

By  ___________________________________________                        
Name: 
Title: 

YOUBET.COM, LLC, as a Guarantor 

By  ___________________________________________                        
Name: 
Title: 

MAGNOLIA HILL, LLC, as a Guarantor 

By  ___________________________________________                        
Name: 
Title: 

CHURCHILL DOWNS RACETRACK, LLC, as a Guarantor 

By  ____________________________________________                        
Name: 
Title:

CDTC LLC, as a Guarantor 

By  ______________________________________________                        
Name: 
Title:

MVGR, LLC, as a Guarantor 

By  _______________________________________________                        
Name: 
Title:

BB DEVELOPMENT LLC, as a Guarantor 

By  ________________________________________________                        
Name: 
Title:

BIG FISH GAMES, INC., as a Guarantor 

By  _______________________________________________                        
Name: 
Title:

BFG HOLDING LLC, as a Guarantor 

By  ___________________________________________                        
Name: 
Title:

3 MINUTE GAMES LLC, as a Guarantor 

By  _____________________________________________                        
Name: 
Title:

SLOTS, SLOT MACHINES AND SLOTS TOURNAMENTS LLC, as a Guarantor 

By  _____________________________________________                        
Name: 
Title:

	
		
	 
	JPMORGAN CHASE BANK, N.A.,
individually as a Lender, as an LC Issuer and as Agent

By:  
Name:
Title:

	
		
	 
	PNC BANK, NATIONAL ASSOCIATION,
individually as a Lender, as an LC Issuer and as Swing Line Lender

By:  
Name:
Title:

	
		
	 
	U.S. BANK NATIONAL ASSOCIATION,
as a Lender 

By:  
Name:
Title:

	
		
	 
	FIFTH THIRD BANK,
as a Lender 

By:  
Name:
Title:

	
		
	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION,
as a Lender 

By:  
Name:
Title:

	
		
	 
	CITIZENS BANK OF PENNSYLVANIA,
as a Lender 

By:  
Name:
Title:

	
		
	 
	The undersigned Departing Lender hereby acknowledges and agrees that, from and after the Amendment No. 1 Effective Date, it is no longer a party to the Credit Agreement 

BRANCH BANKING AND TRUST COMPANY,
as a Departing Lender 

By:  
Name:
Title:

ANNEX A
SCHEDULE 1
SUBSIDIARIES AND OTHER INVESTMENTS

Attached

ANNEX B

COMMITMENT SCHEDULE

	
			
	LENDER
	REVOLVING
COMMITMENT
	OUTSTANDING PRINCIPAL AMOUNT OF TERM LOANS
AS OF AMENDMENT NO. 1 EFFECTIVE DATE

	 
	 
	 

	JPMORGAN CHASE BANK, N.A.
	$119,782,214.15
	$45,217,785.85

	 
	 
	 

	U.S. BANK, NATIONAL ASSOCIATION
	$101,633,393.83
	$38,366,606.17

	 
	 
	 

	PNC BANK, NATIONAL ASSOCIATION
	$93,647,912.89
	$35,352,087.11

	 
	 
	 

	FIFTH THIRD BANK
	$90,562,613.43
	$34,187,386.57

	 
	 
	 

	WELLS FARGO BANK, NATIONAL ASSOCIATION
	$79,854,809.44
	$30,145,190.56

	 
	 
	 

	CITIZENS BANK OF PENNSYLVANIA
	$14,519,056.26
	$5,480,943.74

	 
	 
	 

	TOTALS
	$500,000,000.00
	$188,750,000.00

	 
	 
	 

ANNEX C

PRICING SCHEDULE

	
							
	Applicable Margin
	Level I Status
	Level II Status
	Level III Status
	Level IV Status
	Level V Status
	Level VI Status

	Eurodollar Rate
	1.125%
	1.25%
	1.50%
	1.875%
	2.25%
	2.50%

	Floating Rate
	0.125%
	0.25%
	0.50%
	0.875%
	1.25%
	1.50%

	
							
	Applicable Fee Rate
	Level I Status
	Level II Status
	Level III Status
	Level IV Status
	Level V Status
	Level VI Status

	Commitment Fee
	0.15%
	0.175%
	0.20%
	0.25%
	0.30%
	0.35%

For the purposes of this Schedule, the following terms have the following meanings, subject to the final paragraph of this Schedule:

“Financials” means the annual or quarterly financial statements of the Borrower delivered pursuant to Section 6.1(i) or (ii).

“Level I Status” exists at any date if, as of the last day of the fiscal quarter of the Borrower referred to in the most recent Financials, the Total Leverage Ratio is less than 1.00 to 1.00.

“Level II Status” exists at any date if, as of the last day of the fiscal quarter of the Borrower referred to in the most recent Financials, (i) the Borrower has not qualified for Level I Status and (ii) the Total Leverage Ratio is greater than or equal to 1.00 to 1.00 and less than 1.75 to 1.00.

“Level III Status” exists at any date if, as of the last day of the fiscal quarter of the Borrower referred to in the most recent Financials, (i) the Borrower has not qualified for Level I Status or Level II Status and (ii) the Total Leverage Ratio is greater than or equal to 1.75 to 1.00 and less than 2.50 to 1.00.

“Level IV Status” exists at any date if, as of the last day of the fiscal quarter of the Borrower referred to in the most recent Financials, (i) the Borrower has not qualified for Level I Status, Level II Status or Level III Status and (ii) the Total Leverage Ratio is greater than or equal to 2.50 to 1.00 and less than 3.25 to 1.00.

“Level V Status” exists at any date if, as of the last day of the fiscal quarter of the Borrower referred to in the most recent Financials, (i) the Borrower has not qualified for Level I Status, Level II Status, Level III Status or Level IV Status and (ii) the Total Leverage Ratio is greater than or equal to 3.25 to 1.00 and less than 4.00 to 1.00.

“Level VI Status” exists at any date if the Borrower has not qualified for Level I Status, Level II Status, Level III Status, Level IV Status or Level V Status.

“Status” means either Level I Status, Level II Status, Level III Status, Level IV Status, Level V Status and Level VI Status.

  If at any time the Borrower fails to deliver the Financials to the Agent on or before the date such statements or certificates are due, Level VI Status shall be deemed applicable for the period commencing five (5) business days after such required date of delivery and ending on the date which is five (5) business days after such statements or 

certificates are actually delivered, after which the Status shall be determined in accordance with the table above as applicable.

Except as otherwise provided in the paragraph below, adjustments, if any, to the Status then in effect shall be effective five (5) business days after the Agent has received the applicable financial statements and certificates (it being understood and agreed that each change in Status shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change).

Notwithstanding the foregoing, Level IV Status shall be deemed to be applicable as of the Amendment No. 1 Effective Date until the Agent’s receipt of the applicable financial statements for the Borrower’s fiscal year ending on or about December 31, 2015 (unless such financial statements demonstrate that Level V Status or Level VI Status should have been applicable during such period, in which case such other Status shall be deemed to be applicable during such period) and adjustments to the Status then in effect shall thereafter be effected in accordance with the preceding paragraphs.

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