-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DX9oV/JD/Pq8oBTIZ/9wroNATnJOh9ICE89YYMBenSNlLSVOumb6x7Fn95NiU79l 5CjVYBDOlzySXiIdf+navQ== 0000908737-97-000241.txt : 19970623 0000908737-97-000241.hdr.sgml : 19970623 ACCESSION NUMBER: 0000908737-97-000241 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19970620 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HEALTH & RETIREMENT PROPERTIES TRUST CENTRAL INDEX KEY: 0000803649 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 046558834 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-29675 FILM NUMBER: 97627440 BUSINESS ADDRESS: STREET 1: 400 CENTRE ST CITY: NEWTON STATE: MA ZIP: 02158 BUSINESS PHONE: 6173323990 MAIL ADDRESS: STREET 1: 400 CENTRE STREET CITY: NEWTON STATE: MA ZIP: 02158 FORMER COMPANY: FORMER CONFORMED NAME: HEALTH & REHABILITATION PROPERTIES TRUST DATE OF NAME CHANGE: 19920703 S-3 1 As filed with the Securities and Exchange Commission on June 20, 1997 Registration No. 333- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ----------------------- HEALTH AND RETIREMENT PROPERTIES TRUST (Exact name of registrant as specified in its charter) ----------------------- Maryland 04-6558834 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 400 Centre Street Newton, Massachusetts 02158 (617) 332-3990 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) --------------------- David J. Hegarty, President Health and Retirement Properties Trust 400 Centre Street Newton, Massachusetts 02158 (617) 332-3990 (Name, address, including zip code, telephone number, including area code, of agent for service) --------------------- Copy to: Alexander A. Notopoulos, Jr., Esq. Sullivan & Worcester LLP One Post Office Square Boston, Massachusetts 02109 (617) 338-2800 --------------------- Approximate date of commencement of proposed sale to the public: From time to time or at one time after the effective date of the Registration Statement as determined by the Selling Shareholders. All of the Shares offered hereby are for the respective accounts of the Selling Shareholders. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. |_| If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. |X| If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_| - ------------- If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_| _____________ If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. |_| -----------------------
CALCULATION OF REGISTRATION FEE Proposed Maximum Proposed Maximum Amount to Offering Price Aggregate Offering Amount of Title of Each Class of Securities to be Registered be Registered Per Unit Price Registration Fee Common Shares of Beneficial Interest, par value $.01 per share ................................. 3,898,840 $18.44(1) $71,894,609.60 $21,786.25 (1) Estimated pursuant to Rule 457(c) solely for purposes of calculation of the registration fee on the basis of the $18.44 average of the high and low sales prices for the Common Shares on the New York Stock Exchange on June 16, 1997.
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there by any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State. Subject to Completion Preliminary Prospectus Dated June 20, 1997 PROSPECTUS 3,898,840 Shares Health and Retirement Properties Trust Common Shares of Beneficial Interest ---------------------- This Prospectus relates to the reoffer and resale by certain selling shareholders described herein (the "Selling Shareholders") of common shares of beneficial interest, par value $.01 per share ("Common Shares"), of Health and Retirement Properties Trust (the "Company"). The Company is a real estate investment trust ("REIT") which invests primarily in retirement communities, assisted living centers, long-term care facilities and other income producing healthcare related properties and in office buildings leased to various agencies of the United States government. The Common Shares offered hereby (the "Offered Shares") are being reoffered and resold for the account of the Selling Shareholders, and the Company will not receive any of the proceeds from such reoffering and resale. The Selling Shareholders have advised the Company that the resale of the Offered Shares may be effected from time to time in one or more transactions on the New York Stock Exchange (the "NYSE"), in negotiated transactions or otherwise at market prices prevailing at the time of the sale or at prices otherwise negotiated. The Selling Shareholders may effect such transactions by selling the Offered Shares to or through broker-dealers who may receive compensation in the form of discounts, concessions or commissions from the Selling Shareholders and/or the purchasers of the Offered Shares for whom such broker-dealers may act as agent or to whom they sell as principal, or both (which compensation as to a particular broker-dealer may be in excess of customary commissions). Any broker-dealer acquiring the Offered Shares from the Selling Shareholders may sell such securities in its normal market making activities, through other brokers on a principal or agency basis, in negotiated transactions, to its customers or through a combination of such methods. See "Plan of Distribution." The Company will bear all expenses incurred by it in connection with the reoffering and resale of the Offered Shares, excluding any fees and disbursements of underwriters, brokers or dealers, underwriting discounts and commissions, broker or dealer discounts, concessions or commissions and certain expenses of the Selling Shareholders. The Company's estimated expenses aggregate $55,000, and the Selling Shareholders have advised the Company that their estimated expenses aggregate $5,000. The Common Shares are traded on the NYSE under the symbol "HRP." On June 19, 1997, the last sale price for the Common Shares on the NYSE was $18.50. ---------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COM- MISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ---------------------- The date of this Prospectus is______________, 1997. No person has been authorized to give any information or to make any representations other than those contained or incorporated by reference in this Prospectus in connection with the offer contained in this Prospectus and, if given or made, such information or representations must not be relied upon as having been authorized by the Company, the Selling Shareholders or any underwriters, agents or dealers. This Prospectus does not constitute an offer to sell or solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation. Neither the delivery of this Prospectus nor any sale made hereunder shall, under any circumstances, create an implication that there has been no change in the affairs of the Company and its subsidiaries since the date hereof or the information contained or incorporated by reference herein is correct at any time subsequent to the date hereof. AVAILABLE INFORMATION The Company has filed with the Securities and Exchange Commission (the "Commission") in Washington, D.C., a registration statement on Form S-3 (together with all exhibits, schedules and amendments thereto, the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), with respect to the Offered Shares. This Prospectus, which is a part of the Registration Statement, does not contain all of the information set forth in the Registration Statement. Statements in this Prospectus as to the contents of any contract or other document are not necessarily complete, and in each instance reference is made to the copy of such contract or other documents filed as an exhibit to the Registration Statement, each such statement being qualified in all respects by such reference and the exhibits and schedules thereto. For further information concerning the Company and the Offered Shares, reference is made to the Registration Statement. Copies of the Registration Statement may be obtained from the Commission at its principal office in Washington, D.C. upon payment of the prescribed fee. The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith, files reports and other information with the Commission. The Registration Statement, the exhibits and schedules forming a part thereof and the reports, proxy statements and other information filed by the Company with the Commission can be inspected and copies obtained at the public reference facilities maintained by the Commission at Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following regional offices of the Commission: Chicago Regional Office, Suite 1400, 500 West Madison Street, Chicago, Illinois 60661-2511; and New York Regional Office, Seven World Trade Center, New York, New York 10048. Copies of such material can be obtained at prescribed rates from the Public Reference Section of the Commission at its principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission maintains a World Wide Web site that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission. The address of the site is http://www.sec.gov. The Company's Common Shares are traded on the NYSE under the symbol "HRP," and similar information concerning the Company may be inspected at the office of the NYSE at 20 Broad Street, New York, New York 10005. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents, which have been filed with the Commission pursuant to the Exchange Act, are hereby incorporated in this Prospectus and specifically made a part hereof by reference: (i) the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1996 (the "Annual Report"), (ii) the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997, (iii) the information in Item 5, Other Events, under the caption "Legal Proceedings" contained in the Company's Current Report on Form 8-K dated February 13, 1997, (iv) the Company's Current Reports on Form 8-K dated February 17, 1997 and March 14, 1997, (v) the consolidated financial statements of Marriott International, Inc. ("MII"), at and for the fiscal year ended January 3, 1997, as contained in MII's Annual Report on Form 10-K for the year ended January 3, 1997 (Commission File No. 1-12188), and (vi) the description of the Company's Common Shares contained in the Company's Registration Statement on Form 8-A dated November 8, 1986, as amended by Form 8 dated July 30, 1991. All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act (i) subsequent to the date of this Prospectus and prior to the termination of the offering of the Offered Shares and (ii) subsequent to the date of filing of the registration statement of which this Prospectus forms a part and prior to -2- effectiveness of such registration statement shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the respective dates of filing of such documents. Any statement contained herein or in a document incorporated or deemed to be incorporated herein by reference shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein, or in any subsequently filed document that also is or is deemed to be incorporated herein by reference, modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company hereby undertakes to provide without charge to each person to whom this Prospectus is delivered, upon the written or oral request of such person, a copy of any and all of the information that has been incorporated by reference in this Prospectus (excluding exhibits unless such exhibits are specifically incorporated by reference into the information that this Prospectus incorporates). Requests for such copies should be made to the Company at its principal executive offices, 400 Centre Street, Newton, Massachusetts 02158, Attention: Investor Relations, telephone (617) 332-3990. -3- THE COMPANY The Company is a real estate investment trust ("REIT") which invests primarily in retirement communities, assisted living centers, long-term care facilities and other income producing healthcare related real estate and in office buildings leased to various agencies of the United States government. At June 1, 1997, the Company had investments totaling (at cost) over $1.8 billion, of which approximately 72% represented healthcare related properties, 22% represented U.S. Government-leased office buildings and 6% represented an equity investment in Hospitality Properties Trust ("HPT"), a New York Stock Exchange-listed REIT founded by the Company which invests in hotels. The Company's investments on such date were in over 220 properties located in 32 states. Additionally, on June 1, 1997, HPT owned and leased an aggregate of 93 hotels located in 29 states. The Company is organized as a Maryland real estate investment trust. The Company's principal place of business is 400 Centre Street, Newton, Massachusetts 02158 and its telephone number is (617) 332-3990. USE OF PROCEEDS The Company will receive no proceeds from the sale of the Offered Shares by the Selling Shareholders. All proceeds will be received by the Selling Shareholders. SELLING SHAREHOLDERS The following table sets forth certain information as of June 19, 1997 with respect to the number of Common Shares beneficially owned by each Selling Shareholder prior to the offering and the maximum number of Common Shares being offered hereby. Because the Selling Shareholders may offer all, a portion or none of the Common Shares offered pursuant to this Prospectus, no estimate can be given as to the number of Common Shares that will be held by each Selling Shareholder upon termination of the offering. See "Plan of Distribution." To the extent required, the names of any agent, dealer, broker or underwriter participating in any such sales and any applicable commission or discount with respect to the sale will be set forth in a supplement to this Prospectus. The Common Shares offered by means of this Prospectus may be offered from time to time by the Selling Shareholders named in the following table:
Number of Common Shares Beneficially Owned Prior to the Maximum Number of Common Name of Selling Shareholder Offering Shares Being Offered - ------------------------------------------------------- ------------------------------------ ------------------------------------ Government Property Investors, Inc. 1,416,348 1,416,348 ("GPI") (1) The 1818 Fund II, L.P. ("The 1818 Fund") 1,375,869 1,375,869 (1)(2) GovProp Sub-Debt Partners, L.P. 1,106,623 1,106,623 ("GovProp") (1)(3) (1) The 1818 Fund and Rosecliff Realty, L.P. ("RRLP"), an affiliate of GovProp, collectively, own substantially all of the outstanding capital stock of GPI. In addition, pursuant to GPI's Plan of Liquidation, designees of The 1818 Fund and RRLP are the liquidators of GPI. As a result, The 1818 Fund and GovProp may be deemed to have joint voting and investment power with respect to the Common Shares owned by GPI in addition to the Common Shares directly owned by each such entity. (2) The 1818 Fund is a Delaware limited partnership. The general and managing partner of The 1818 Fund is Brown Brothers Harriman & Co., a New York partnership, which has designated its partners T. Michael 4 Long and Lawrence C. Tucker as the sole and exclusive partners having voting power and investment power with respect to the Common Shares that are held by The 1818 Fund. (3) GovProp and RRLP are Delaware limited partnerships controlled by their general partner, Rosecliff- GovProp Holdings, Inc., which is 100% owned by Peter T. Joseph. Accordingly, Mr. Joseph may be deemed to beneficially own the Common Shares owned by GovProp.
THE MERGER The Merger and the Merger Agreement. The Offered Shares were originally issued by the Company to GPI in a private placement pursuant to an Agreement of Merger (as amended, the "Merger Agreement"), between the Company and GPI. The Merger Agreement provided for the merger (the "Merger") of Government Property Holdings Trust (together with its subsidiaries, except where the context otherwise requires, "GPH"), a Maryland real estate investment trust which was a wholly owned subsidiary of GPI, with and into a wholly owned subsidiary of the Company ("HRP Merger Sub"). As a result of the Merger, all of the outstanding shares of GPH converted into the right to receive the merger consideration described below. Through the Merger and pursuant to provisions of the Merger Agreement contemplating additional acquisitions by the Company, the Company acquired or agreed to acquire up to 30 office buildings containing approximately 3.4 million square feet, substantially all of which is leased to various agencies of the United States government. The consideration to be paid under the Merger Agreement was payable in two portions, the "First Closing Consideration" and the "Second Closing Consideration." The First Closing Consideration was payable in approximately 4.2 million Common Shares, subject to adjustment as provided in the Merger Agreement, issuable in part on the date of the Merger and in part on subsequent closing dates in respect of properties which GPH had a right to acquire or was developing at the time of the Merger; the assumption by the Company through subsidiaries of approximately $28 million of debt secured by mortgages on four acquired properties and by the payment of approximately $337 million to retire other debt and pay certain obligations of GPI and its subsidiaries assumed by the Company's subsidiaries at the time of the Merger. The Merger occurred on March 25, 1997 (the "First Closing Date"), at which time the Company issued to GPI 3,862,716 Common Shares. GovProp and The 1818 Fund received their Common Shares from GPI in repayment of certain indebtedness owed to them by GPI. A subsequent closing in respect of a property occurred on May 15, 1997, on which date the Company issued to GPI an aggregate of 36,124 Common Shares (which amount includes Common Shares issued for certain post-closing adjustments). The 3,898,840 Common Shares issued on the First Closing Date and such subsequent closing date constitute the Offered Shares. In addition to the First Closing Consideration, the Company has agreed to pay the Second Closing Consideration in an amount equal to the greater of $8 million or 3% of the aggregate cost of certain additional properties acquired by the Company from GPI as described in the Merger Agreement prior to the first anniversary of the First Closing Date (the "Second Closing Date") by the issuance of Common Shares valued at the arithmetic average of the closing sales prices for the Common Shares as reported by the NYSE for the 20 trading days immediately prior to the Second Closing Date. The Second Closing Consideration payable in Common Shares will be adjusted (i) if the amounts paid to GPI or its successor pursuant to the Service Contract (as hereafter defined) (the "Service Contract Payment") are less than the amounts actually paid by GPI or its successor for office expenses, salaries and other operating expenses through July 31, 1997, by the addition of an amount of up to the difference between such amounts, provided that such amount shall not exceed the difference between $974,935 and the Service Contract Payment; (ii) if the aggregate amount funded or anticipated to be funded by the Company subsequent to the consummation of the Merger to complete one of the GPI properties located in Golden, Colorado (including interest thereon) exceeds $9,046,823, by the deduction of one-half of such excess; and (iii) if the aggregate amount funded or anticipated to be funded by the Company subsequent to the consummation of the Merger to complete one of the GPI properties located in San Diego, California (including interest thereon) exceeds $1,063,264, by the deduction of one-half of such excess. 5 A copy of the Merger Agreement is filed as an exhibit to the Registration Statement of which this Prospectus forms a part. The description of the Merger set forth herein describes certain provisions of the Merger Agreement, but does not purport to be complete and is subject to, and qualified in its entirety by reference to, all of the provisions of the Merger Agreement, including the definition of certain terms therein. Pursuant to the Merger Agreement, the agreements described below (the "Additional Agreements") were also entered into by certain parties to the Merger Agreement and others. A copy of the form of each Additional Agreement and each of certain other related agreements is filed as a schedule to the Merger Agreement. The descriptions of the Additional Agreements describe the material provisions of each of the Additional Agreements, but do not purport to be complete and are subject to, and qualified in their entirety by reference to, all of the provisions of each of the Additional Agreements, including the definition of certain terms therein. Registration Rights Agreement. Pursuant to an investment and registration rights agreement between the Company and GPI (the "Registration Rights Agreement"), the Company agreed to file with the Securities and Exchange Commission a registration statement relating to the offer and sale of Common Shares delivered on the First Closing Date to GPI pursuant to the Merger Agreement by the holders thereof. The Company has also agreed to amend such registration statement from time to time to include additional Common Shares delivered after the First Closing Date to GPI and its successors pursuant to the Merger Agreement. The Company is required to use its best efforts to have such registration statement declared effective as soon as reasonably practicable after filing and to maintain the continuous effectiveness of such registration statement for three years from the First Closing Date or such shorter period as will terminate when all such Common Shares have been sold. The Company has filed the registration statement of which this Prospectus forms a part pursuant to the Registration Rights Agreement. The Registration Rights Agreement provides for suspension periods when the registration statement is not effective and for block out periods in connection with other offerings of the securities of the Company, each on customary terms and conditions. The Registration Rights Agreement also provides certain cross-indemnities between the Company and sellers of the Common Shares subject to the Registration Rights Agreement. Such indemnities may be unenforceable, in whole or in part, under federal or state securities laws or certain public policies. Indemnification Agreement. Pursuant to an indemnification agreement between the Company and GPI (the "Idemnification Agreement"), GPI will indemnify the Company and other related parties for certain losses arising out of any breach of any warranty or representation made by GPI in the Merger Agreement, the Registration Rights Agreement or the Indemnification Agreement; provided that, any claim for indemnification must be made by December 31, 1997. The Indemnification Agreement provides that GPI shall be liable only for losses in excess of $1,500,000 in the aggregate (except for certain losses related to the property located in College Park, Maryland) and that GPI shall have no liability for losses in excess of the Second Closing Consideration. Voting Agreement. At the time of the Merger, the Company and The 1818 Fund and RRLP (the "Principal Stockholders") entered into the voting agreement (the "Voting Agreement"), pursuant to which each Principal Stockholder agreed that it will not, until the occurrence of a Change in Management (as defined in the Voting Agreement) or until such Principal Stockholder, with its affiliates, owns less than 25% of the aggregate Common Shares issued pursuant to the Merger Agreement, unless otherwise approved by the Board of Trustees of the Company, (i) transfer any Common Shares held by Principal Stockholder to any person who, to the Principal Stockholders' knowledge, holds directly, or is an affiliate of a person who holds, 5% or more of the aggregate Common Shares at the time outstanding; (ii) make directly or indirectly or participate in an unsolicited offer to purchase any Common Shares; (iii) vote (or direct to be voted) any Common Shares or any other shares of equity interest in the Company as to which either has direct or indirect voting power or control in favor of any transaction that could result in a Change of Control (as defined in the Voting Agreement) of the Company; or (iv) present any shareholder proposal dealing with a Change of Control of the Company. Information Access Agreement. At the time of the Merger, the Company and the Principal Stockholders entered into an information access agreement pursuant to which the Company agreed upon request to permit the Principal Stockholders to inspect the Company's properties, provide certain financial information, make certain of the Company's officers available for consultation and inform the Principal Stockholders of significant corporate 6 actions. Each Principal Stockholder has agreed to hold all such information in confidence. Such information access agreement will terminate on the third anniversary of the First Closing Date. Service Contract. At the time of the Merger, GPI and M&P Partners Limited Partnership ("M&P"), an affiliate of HRPT Advisors, Inc. ("Advisors"), the Company's investment advisor, which is owned by Advisors and Messrs. Gerard M. Martin and Barry M. Portnoy, the Managing Trustees of the Company, entered into a service contract (the "Service Contract"), pursuant to which certain employees of GPI provide administrative and support services to HRP Merger Sub until July 31, 1997. HRP Merger Sub is required to reimburse GPI for such employees' compensation and for rent payments for GPI's office space in Washington, D.C. until July 31, 1997 in an amount not to exceed $700,000. DESCRIPTION OF SHARES The Declaration of Trust ("Declaration") authorizes the Company to issue an aggregate of 175,000,000 shares of beneficial interest in the Company ("Shares"), including (i) 125,000,000 Common Shares, par value $.01 per share, and (ii) 50,000,000 Preferred Shares, par value $.01 per share ("Preferred Shares"). The Declaration permits the Company's Board of Trustees (the "Trustees") to amend the Declaration to increase or decrease the authorized shares of beneficial interest of the Company without the requirement of shareholder approval. The Declaration authorizes the Trustees, without shareholder approval, from time to time to divide the Preferred Shares into classes or series and to set (or change, if the class or series has been previously established) the par value, if any, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications or terms and conditions of redemption of such Preferred Shares as are not prohibited by the Declaration or applicable law. In connection with the adoption of the Company's shareholders rights plan (see "Redemption; Business Combinations and Control Share Acquisitions -- Rights Plan," below), the Trustees established an authorized but unissued class of 1,250,000 Preferred Shares, par value $.01 per share (the "Junior Participating Preferred Shares"), described more fully below, and as of May 1, 1997 no other class or series of Preferred Shares had been established. As of June 16, 1997 there were 98,740,042 Shares outstanding, all of which were Common Shares. The Company also had outstanding as of such date $211.7 million aggregate principal amount convertible subordinated debentures of various series, all of which are convertible into Common Shares at an exercise price equal on such date to $18 per share. The following descriptions do not purport to be complete and are subject to, and qualified in their entirety by reference to, the more complete descriptions thereof set forth in the Declaration. Capitalized terms not defined herein are as defined in the Declaration. Except as otherwise determined by the Trustees with respect to any class or series of Preferred Shares, all Shares: (i) will participate equally in dividends payable to shareholders when, as and if declared by the Trustees and ratably in net assets available for distribution to shareholders on liquidation or dissolution; (ii) will have one vote per share on all matters submitted to a vote of the shareholders, (iii) will not have cumulative voting rights in the election of Trustees; and (iv) will have no preference, conversion, exchange, sinking fund, redemption rights or preemptive or similar rights. Upon issuance in accordance with the Declaration and applicable law, the Offered Shares will be fully paid and nonassessable. The holders of Shares do not have preemptive rights with respect to the issuance of additional Shares or other securities of the Company. The authorized but unissued Shares will be available for issuance from time to time by the Company at the sole discretion of its Board of Trustees for any proper trust purpose, which could include raising capital, providing compensation or benefits to employees and others, paying stock dividends or acquiring companies, businesses or properties. The issuance of such unissued Shares could have the effect of diluting the earnings per share and book value per share of currently outstanding Shares. 7 In connection with the adoption of the Company's shareholders rights plan, the Trustees established an authorized but unissued class of 1,250,000 Junior Participating Preferred Shares. See "Redemption; Business Combinations and Control Share Acquisitions" below. Certain powers, preferences and rights and certain qualifications, limitations and restrictions of the Junior Participating Preferred Shares, when and if issued, are as follows. The statements below with respect to the Junior Participating Preferred Shares are in all respects subject to and qualified in their entirety by reference to the applicable provisions of the Declaration (including the applicable articles supplementary) and By-Laws. The holder of each Junior Participating Preferred Share is entitled to quarterly dividends in the greater amount of $5.00 or 100 times the quarterly per share dividend, whether cash or otherwise, declared upon the Common Shares. Dividends on the Junior Participating Preferred Shares are cumulative. Whenever dividends on the Junior Participating Preferred Shares are in arrears, the Company, among other things, is prohibited from declaring or paying dividends, making other distributions on, or redeeming or repurchasing Common Shares or other Shares ranking junior to the Junior Participating Preferred Shares, and upon failure of the Company to pay such dividends for six quarters, the holders of the Junior Participating Preferred Shares will be entitled to elect two Trustees. The holder of each Junior Participating Preferred Share is entitled to 100 votes on all matters submitted to a vote of the shareholders, voting (unless otherwise provided in the Declaration or by law) together with holders of Common Shares as one class. Upon liquidation, dissolution or winding up of the Company, the holders of Junior Participating Preferred Shares are entitled to a liquidation preference of $100 per share plus the amount of any accrued and unpaid dividends and distributions thereon (the "Liquidation Preference"), prior to payment of any distribution in respect of the Common Shares or any other Shares ranking junior to the Junior Participating Preferred Shares. Following payment of the Liquidation Preference, the holders of Junior Participating Preferred Shares are not entitled to further distributions until the holders of Common Shares shall have received an amount per share (the "Common Share Adjustment") equal to the Liquidation Preference divided by 100 (adjusted to reflect events such as stock splits, stock dividends and recapitalizations affected the Common Shares) (the "Adjustment Number"). Following the payment of the full amount of the Liquidation Preference and the Common Share Adjustment, holders of Junior Participating Preferred Shares are entitled to participate proportionately on a per share basis with holders of Common Shares in the distribution of the remaining assets to be distributed in respect of Shares in the ratio of the Adjustment Number to one, respectively. The powers, preferences and rights of the Junior Participating Preferred Shares are subject to the superior powers, preferences and rights of any senior series or class of Preferred Shares which the Trustees shall, from time to time, authorize and issue. For certain other information with respect to the Shares, see "Limitation of Liability; Shareholder Liability" and "Redemption; Business Combinations and Control Share Acquisitions" below. LIMITATION OF LIABILITY; SHAREHOLDER LIABILITY Maryland law permits a REIT to provide, and the Declaration provides, that no trustee, officer, shareholder, employee or agent of the Company shall be held to any personal liability, jointly or severally, for any obligation of or claim against the Company, and that, as far as practicable, each written agreement of the Company is to contain a provision to that effect. Despite these facts, counsel has advised the Company that in some jurisdictions the possibility exists that shareholders of a non-corporate entity such as the Company may be held liable for acts or obligations of the Company. Counsel has advised the Company that the State of Texas may not give effect to the limitation of shareholder liability afforded by Maryland law, but that Texas law would likely recognize contractual limitations of liability such as those discussed above. The Company intends to conduct its business in a manner designed to minimize potential shareholder liability by, among other things, inserting appropriate provisions in written agreements of the Company; however, no assurance can be given that shareholders can avoid liability in all instances in all jurisdictions. The Declaration provides that, upon payment by a shareholder of any such liability, the shareholder will be entitled to indemnification by the Company. There can be no assurance that, at the time any such liability arises, there will be assets of the Company sufficient to satisfy the Company's indemnification obligation. The Trustees intend to conduct the operations of the Company, with the advice of counsel, in such a way as to minimize or avoid, 8 as far as practicable, the ultimate liability of the shareholders of the Company. The Trustees do not intend to provide insurance covering such risks to the shareholders. REDEMPTION; BUSINESS COMBINATIONS AND CONTROL SHARE ACQUISITIONS Redemption and Business Combinations For the Company to qualify as a REIT under the Code, in any taxable year, not more than 50% in value of its outstanding Shares may be owned, directly or indirectly, by five or fewer individuals during the last six months of such year, and the shares must be owned by 100 or more persons during at least 335 days of a taxable year or a proportionate part of a taxable year less than 12 months. In order to meet these and other requirements, the Trustees have the power to redeem or prohibit the transfer of a sufficient number of Shares to maintain or bring the ownership of the Shares into conformity with such requirements. In connection with the foregoing, if the Trustees shall, at any time and in good faith, be of the opinion that direct or indirect ownership of shares representing more than 8.5% in value of the total Shares outstanding (the "Excess Shares") has or may become concentrated in the hands of one beneficial owner, other than Excepted Persons, as defined in the Declaration, the Trustees shall have the power (i) to purchase from any shareholder of the Company such Excess Shares, and (ii) to refuse to transfer or issue Shares to any person whose acquisition of such Shares would, in the opinion of the Trustees, result in the direct or indirect beneficial ownership by any person of Shares representing more than 8.5% in value of the outstanding Shares. Any transfer of Shares, options, or other securities convertible into Shares that would create a beneficial owner (other than any of the Excepted Persons) of Shares representing more than 8.5% in value of the total Shares outstanding shall be deemed void ab initio, and the intended transferee shall be deemed never to have had an interest therein. Further the Declaration provides that transfers or purported acquisitions, directly, indirectly or by attribution, of Shares, or securities convertible into Shares, that could result in disqualification of the Company as a REIT are null and void and permits the Trustees to repurchase Shares or other securities to the extent necessary to maintain the Company's status as a REIT. The purchase price for any Shares so purchased shall be determined by the price of the Shares on the principal exchange on which they are then traded, or if no such price is available, then the purchase price shall be equal to the net asset value of such Shares as determined by the Trustees in accordance with applicable law. From and after the date fixed for purchase by the Trustees, and so long as payment of the purchase price for the Shares to be so redeemed shall have been made or duly provided for, the holder of any Excess Shares so called for purchase shall cease to be entitled to distributions, voting rights and any and all other benefits with respect to such Shares, except the right to payment of the purchase price for the Shares. The Declaration also requires that Business Combinations, as defined in the Declaration, between the Company and a beneficial holder of 10% or more of the outstanding Shares (a "Related Person") be approved by the affirmative vote of the holders of at least 75% of the Shares unless (1) the Trustees by unanimous vote or written consent shall have expressly approved in advance the acquisition of the outstanding Shares that caused the Related Person to become a Related Person or shall have approved the Business Combination prior to the Related Person involved in the Business Combination having become a Related Person; or (2) the Business Combination is solely between the Company and a 100% owned affiliate of the Company. As permitted by law, the Company has elected to be governed by such provisions rather than the provisions of Subtitle 6 of Title 3 of the Corporations and Associations Article of the Annotated Code of Maryland regarding business combinations. Under the Declaration the number of trustees may be fixed from time to time by two-thirds of the Trustees or by an amendment of the Declaration by the shareholders of the Company, with a minimum of three and a maximum of 12 trustees, a majority of whom must be Independent Trustees, as defined in the Declaration. The Declaration fixes the current number of trustees of the Company at five and divides the Trustees into three groups. Trustees in each group are elected to three-year terms. As the trustees' terms expire, replacements are elected by a majority of the outstanding Shares. The classified nature of the Trustees may make it more difficult for the shareholders to remove the management of the Company than if all trustees were elected on an annual basis. Vacancies may be filled by a majority of the remaining trustees, except that a vacancy among the Independent Trustees must be filled by a majority of the remaining Independent Trustees or by majority vote of the Company's 9 shareholders. Any trustee may be removed for cause by all the remaining trustees, or without cause by vote of two-thirds of the Shares then outstanding and entitled to vote thereon. The provisions regarding business combinations and the classified nature of the Trustees and certain other matters may not be repealed or amended without the affirmative vote of at least 75% of the shareholders of the Company, provided that the Trustees, by two-thirds vote, may, without the approval or consent of the shareholders, adopt any amendment that they in good faith determine to be necessary to permit the Company to qualify as a REIT under the Code. The foregoing provisions may have the effect of discouraging unilateral tender offers or other takeover proposals which certain shareholders might deem in their interests or pursuant to which they might receive a substantial premium for their Shares. The provisions could also have the effect of insulating current management against the possibility of removal and could, by possibly reducing temporary fluctuations in market price caused by accumulations of Shares, deprive shareholders of opportunities to sell at a temporarily higher market price. However, the Trustees believe that inclusion of the business combination provisions in the Declaration may help assure fair treatment of shareholders and preserve the assets of the Company. Control Share Acquisition Maryland law provides for a limitation of voting rights in a "control share acquisition." The Maryland statute defines a control share acquisition at the 20%, 33 1/3% and 50% acquisition levels, and requires a two-thirds vote (excluding shares owned by the acquiring person and certain members of management) to accord voting rights to shares acquired in a control share acquisition. The statute would require the target company to hold a special meeting at the request of an actual or proposed control share acquiror subject to compliance with certain conditions by such acquiror. In addition, unless the charter, declaration of trust or By-Laws provide otherwise, the statute gives the Company, within certain time limitations, various redemption rights if there is a shareholder vote on the issue and the grant of voting rights is not approved, or if an "acquiring person statement" is not delivered to the target company within 10 days following a control share acquisition. Moreover, unless the charter, declaration of trust or By-Laws provide otherwise, the statute provides that if, before a control share acquisition occurs, voting rights for control shares are approved at a shareholders' meeting and the acquiror becomes entitled to vote a majority of the shares entitled to vote, then all other shareholders may exercise appraisal rights. The statute does not apply to shares acquired in a merger, consolidation or share exchange if the company is a party to the transaction. An acquisition of shares may be exempted from the control share statute provided that a charter, declaration of trust or By-Law provision is adopted for such purpose prior to the control share acquisition. There are no such provisions in the Declaration or By-Laws of the Company. Rights Plan In October 1994 the Trustees adopted a shareholder rights plan (the "Rights Plan"). The Rights Plan provides for the distribution of one Junior Participating Preferred Share purchase right (a "Right") for each Common Share. Each Right entitles the holder to buy 1/100th of a Junior Participating Preferred Share (or, in certain circumstances, to receive cash, property, Common Shares or other securities of the Company) at an exercise price of $50 per 1/100th of a Junior Participating Preferred Share. Certain powers, preferences and rights and certain qualifications, limitations and restrictions of the Junior Participating Preferred Shares are summarized above under "Description of Shares." Initially, the Rights are attached to certificates representing Common Shares. The Rights will separate from such Common Shares and a "Distribution Date" will occur upon earlier of (1) 10 business days (or such later date as the Trustees may determine before a Distribution Date occurs) following a public announcement by the Company that a person or group affiliated or associated persons, with certain exceptions (an "Acquiring Person"), has acquired, or has obtained the right to acquire, beneficial ownership of 10% or more of the outstanding Common Shares (the date of such announcement being a "Share Acquisition Date") or (ii) 10 business days (or such later date as the Trustees may determine before a Distribution Date occurs) following the commencement of a tender offer or exchange offer that would result in a person becoming an Acquiring Person. 10 Until the Distribution Date, (i) the Rights will be evidenced by the certificates for Common Shares and will be transferred with and only with such Common Share certificates, (ii) Common Share certificates will contain a notation incorporating the rights agreement pursuant to which the Rights were issued (the "Rights Agreement") by reference and (iii) the surrender for transfer of any certificates for Common Shares outstanding will also constitute the transfer of the Rights associated with the Common Shares represented by such certificates. The Rights are not exercisable until the Distribution Date and will expire at the close of business on October 17, 2004, unless earlier redeemed or exchanged by the Company as described below. Until a Right is exercised, the holder thereof, as such, has no rights as a shareholder of the Company, including, without limitation, the right to vote or to receive dividends. In the event (a "Flip-In Event") a Person becomes an Acquiring Person (except pursuant to a tender or exchange offer for all outstanding Common Shares at a price and on terms which a majority of the Company's Outside Trustees (as defined in the Rights Agreement) determines to be fair to and otherwise in the best interests of the Company and its shareholders (a "fair offer")), each holder of a Right will thereafter have the right to receive, upon exercise of such Right, Common Shares (or, in certain circumstances, cash, property or other securities of the Company) having a Current Market Price (as defined in the Rights Agreement) equal to two times the exercise price of the Right. Notwithstanding the foregoing, following the occurrence of any Flip-In Event, all Rights that are, or (under certain circumstances specified in the Rights Agreement) were, beneficially owned by any Acquiring Person (or by certain related parties) will be null and void in the circumstances set forth in the Rights Agreement. However, Rights will not be exercisable following the occurrence of any Flip-In Event until such time as the Rights are no longer redeemable by the Company as set forth below. In the event (a "Flip-Over Event") that, at any time on or after the Share Acquisition Date, (i) the Company shall take part in a merger or other business combination transaction (other than certain mergers that follow a fair offer) and the Company shall not be the surviving entity or (ii) the Company shall take part in a merger or other business combination transaction in which the Common Shares are changed or exchanged (other than certain mergers that follow a fair offer) or (iii) 50% or more of the Company's assets or earning power is sold or transferred, each holder of a Right (except Rights which previously have been voided, as set forth above) shall thereafter have the right to receive, upon exercise, a number of shares of common stock of the acquiring company having a Current Market Price equal to two times the exercise price of the Right. Flip-In Events and Flip-Over Events are collectively referred to as "Triggering Events." The Purchase Price payable and the number of Junior Participating Preferred Shares (or the amount of cash, property or other securities) issuable upon exercise of the Rights are subject to adjustment from time to time to prevent dilution (i) in the event of a share dividend on, or a subdivision, combination or reclassification of, the Junior Participating Preferred Shares, (ii) if holders of the Junior Participating Preferred Shares are granted certain rights or warrants to subscribe for Junior Participating Preferred Shares or convertible securities at less than the Current Market Price of the Junior Participating Preferred Shares or (iii) upon the distribution to holders of the Junior Participating Preferred Shares of evidences of indebtedness or assets (excluding regular quarterly cash dividends) or of subscription rights or warrants (other than those referred to above). With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments amount to at least 1% of the Purchase Price. The Company is not required to issue fractional Shares upon the exercise of any Right, and in lieu thereof, a cash payment will be made. At any time until 10 business days following the Share Acquisition Date, the Company may redeem the Rights in whole, but not in part, at a price of $.01 per Right, payable, at the option of the Company, in cash, Common Shares or other consideration as the Trustees may determine. Immediately upon the effectiveness of the action of the Trustees ordering redemption of the Rights, the Rights will terminate and the only right of the holders of Rights will be to receive the $.01 per Right redemption price. The term of the Rights, other than key financial terms and the date on which the Rights expire, may be amended by the Trustees prior to the Distribution Date. Thereafter, the provisions of the Rights Agreement may 11 be amended by the Trustees only in order to cure any ambiguity, defect or inconsistency, to make changes which do not adversely affect the interests of holders of Rights (excluding the interests of any Acquiring Person and certain other related parties) or to shorten or lengthen any time period under the Rights Agreement; provided, however, that no amendment to lengthen the time period governing redemption is permitted to be made at such time as the Rights are not redeemable. PLAN OF DISTRIBUTION The Selling Shareholders have provided the Company with the following information concerning the reoffer and resale of the Offered Shares. Sales of the Offered Shares by the Selling Shareholders may be made from time to time in one or more transactions, including block transactions, on the NYSE or any other exchange or quotation system on which the Offered Shares may be listed or quoted pursuant to and in accordance with the applicable rules of the exchanges, or in the over the counter market, in negotiated transactions or in a combination of any such methods of sale, at fixed prices that may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. The Offered Shares may be offered directly, to or through agents designated from time to time, or to or through brokers or dealers, or through any combination of these methods of sale. Such agents, brokers or dealers may receive compensation in the form of discounts, concessions or commissions from the Selling Shareholders and/or the purchasers of the Offered Shares for whom such broker-dealers may act as agents or to whom they sell as principals, or both (which compensation as to a particular broker-dealer might be in excess of customary commissions). A member firm of an exchange may be engaged to act as an agent in the sale of Offered Shares by the Selling Shareholders. The Selling Shareholders and any underwriters, dealers or agents that participate in the distribution of the Offered Shares may be deemed to be underwriters, and any profit on the sale of such Offered Shares by them and any discounts, commissions or concessions received by any such underwriters, dealers or agents might be deemed to be underwriting discounts and commissions under the Securities Act. At the time a particular underwritten offer of Offered Shares is made, to the extent required, a supplement to this Prospectus will be distributed which will set forth the aggregate amount of Offered Shares being offered and the terms of the offering, including the name or names of any underwriters, dealers or agents, and discounts, commissions and other items constituting compensation from the Selling Shareholders and any discounts, commissions or concessions allowed or reallowed or paid to dealers. The Company and the Selling Shareholders entered into the Registration Rights Agreement, pursuant to which the Company agreed to register the Offered Shares held by the Selling Shareholders and maintain an effective registration statement for a period of time after the registration statement is declared effective by the Commission. The Offered Shares registered hereunder are being registered pursuant to the Registration Rights Agreement. The Company agreed in the Registration Rights Agreement to bear all expenses incurred by it in connection with the reoffering and resale of the Offered Shares, excluding any fees and disbursements of underwriters, brokers or dealers, underwriting discounts and commissions, broker or dealer discounts, concessions or commissions and certain expenses of the Selling Shareholders. Under the Registration Rights Agreement, the Selling Shareholders will be indemnified by the Company against certain civil liabilities, including liabilities under the Securities Act, and the Company will be indemnified by the Selling Shareholders against certain other civil liabilities, including liabilities under the Securities Act. LEGAL MATTERS Certain legal matters with respect to the Offered Shares offered hereby will be passed upon for the Company by Sullivan & Worcester LLP, Boston, Massachusetts. Sullivan & Worcester LLP, will rely, as to all matters of Maryland law, upon one or more opinions of Piper & Marbury L.L.P., Baltimore, Maryland. Barry M. Portnoy, a retired partner of the firm of Sullivan & Worcester LLP, is a Managing Trustee of the Company and HPT, a director and 50% shareholder of Advisors, and a director and/or significant shareholder of certain lessees and mortgagors of the Company. Sullivan & Worcester LLP represents Advisors, HPT, certain of such lessees and mortgagors and certain affiliates of each of the foregoing on various matters. 12 EXPERTS The respective consolidated financial statements of the Company and GPI included in the Company's Current Report on Form 8-K dated February 17, 1997, have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon included therein and incorporated herein by reference. Such report on the consolidated financial statements of the Company, as to the year 1996, is based in part on the report of Arthur Andersen LLP, independent public accountants. Such consolidated financial statements are incorporated herein by reference in reliance upon such reports given upon the authority of such firms as experts in accounting and auditing. The consolidated financial statements of Marriott International, Inc. incorporated by reference in this Prospectus and elsewhere in the registration statement to the extent and for the periods indicated in their reports, have been audited by Arthur Andersen LLP, independent public accountants, and are included herein in reliance upon the authority of said firm as experts in giving said reports. FORWARD LOOKING STATEMENTS THIS PROSPECTUS INCORPORATES FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE ANTICIPATED OR PROJECTED. PROSPECTIVE PURCHASERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS WHICH SPEAK ONLY AS OF THE DATE HEREOF. THE COMPANY UNDERTAKES NO OBLIGATION TO PUBLISH REVISED FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE HEREOF OR TO REFLECT THE OCCURRENCE OF PRESENTLY UNANTICIPATED EVENTS. ----------------- THE AMENDED AND RESTATED DECLARATION OF TRUST OF THE COMPANY, DATED JULY 1, 1994, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE "DECLARATION"), IS DULY FILED IN THE OFFICE OF THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF THE STATE OF MARYLAND, PROVIDES THAT THE NAME "HEALTH AND RETIREMENT PROPERTIES TRUST" REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF THE COMPANY SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, THE COMPANY. ALL PERSONS DEALING WITH THE COMPANY, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF THE COMPANY FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION. 13 No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this Prospectus in connection with the offer made by this Prospectus and, if given or made, such information or representations must not be relied upon as having been authorized by the Company or any of the Selling Shareholders. This Prospectus does not constitute an offer to sell or the solicitation of an offer to buy the Offered Shares by anyone in any jurisdiction in which such offer or solicitation is not authorized, or in which the person making such offer or solicitation is not qualified to do so, or to any person to whom it is unlawful to make such offer or solicitation. Neither the delivery of this Prospectus nor any sale made hereunder shall, under any circumstances, create an implication that the information contained herein is correct as of any time subsequent to the date hereof. TABLE OF CONTENTS Page Available Information....................... 2 Incorporation of Certain Documents By Reference............................. 2 The Company................................. 4 Use of Proceeds............................. 4 Selling Shareholders........................ 4 The Merger.................................. 5 Description of Shares....................... 7 Limitation of Liability; Shareholders Liability................................ 8 Redemption; Business Combinations and Control Share Acquisitions........... 9 Plan of Distribution........................ 12 Legal Matters............................... 12 Experts..................................... 13 Forward Looking Statements.................. 13 3,898,840 Shares HEALTH AND RETIREMENT PROPERTIES TRUST Common Shares of Beneficial Interest PROSPECTUS ____________, 1997 PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution Set forth below is an estimate (except in the case of the registration fee) of the amount of fees and expenses to be incurred in connection with the issuance and distribution of the Offered Shares registered hereby, other than underwriting discounts and commission, if any, incurred in connection with the sale of the Offered Shares. Pursuant to the Registration Rights Agreement, all such amounts (other than certain legal expenses estimated by the Selling Shareholders to be $5,000) will be borne by the Company. Registration Fee Under Securities Act $ 21,786.25 Blue Sky Fees and Expenses 1,000.00 Legal Fees and Expenses 20,000.00 Accounting Fees and Expenses 16,000.00 Printing and Engraving 1,000.00 Miscellaneous Fees and Expenses 213.75 ------------- Total: $ 60,000.00 Item 15. Indemnification of Directors and Officers Section 7.4 of the Company's Amended and Restated Declaration of Trust, filed as an Exhibit to the Company's Current Report on Form 8-K dated July 10, 1996, which provides for indemnification of Trustees and officers of the Company, is hereby incorporated by reference. Reference is made to the Registration Rights Agreement (included in Exhibit 10.1 hereto) which contains certain provisions for indemnification by the Selling Shareholders of the Company, Trustees, officers and controlling persons under certain circumstances. Item 16. Exhibits 3.1 Amended and Restated Declaration of Trust as amended by the amendment approved by the shareholders June 28, 1996 and filed with the Maryland Department of Assessments and Taxation on July 9, 1996 (Incorporated by reference to the Company's Current Report on Form 8-K, dated July 10, 1996) 3.2 Amendment, effective March 3, 1997, to Health and Retirement Properties Trust's Amended and Restated Declaration of Trust providing for an increase in the authorized common shares of beneficial interest, $.01 par value per share, from 100,000,000 to 125,000,000 (Incorporated by reference to the Company's Current Report on Form 8-K, dated March 3, 1997) 3.3 Amendment, effective May 14, 1997, to the Articles Supplementary to Health and Retirement Properties Trust's Amended and Restated Declaration of Trust providing for an increase in the authorized Junior Participating Preferred Shares, from 100,000 to 125,000 (Incorporated by reference to the Company's Quarterly Report on Form 10-Q, dated May 15, 1997) 3.3 Amended and Restated Bylaws (Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1995) 4.1 Rights Agreement dated October 17, 1994 between the Company and State Street Bank and Trust Company, as Rights Agent (including the form of Articles Supplementary relating to the Junior Participating Preferred Shares annexed as an exhibit thereto) (Incorporated by reference to the Company's Registration Statement on Form 8-A dated October 24, 1994) 5.1 Opinion of Sullivan & Worcester LLP 5.2 - Opinion of Piper & Marbury L.L.P. 8.1 Opinion of Sullivan and Worcester LLP re: certain tax matters (Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1996) II-1 10.1 Merger Agreement dated February 17, 1997 between the Company and Government Property Investors, Inc., including forms of Escrow Agreement, Investment and Registration Rights Agreement, Voting Agreement, Information Access Agreement, Indemnification Agreement, Service Contract and Non- Solicitation Agreement (Incorporated by reference to the Company's Current Report on Form 8-K dated February 17, 1997) 10.2 Amendment No. 1 to Agreement of Merger dated March 25, 1997 between the Company and Government Properties Investors, Inc. 23.1 Consents of Ernst & Young LLP 23.2 Consents of Arthur Andersen LLP 23.3 Consents of Sullivan & Worcester LLP (included in Exhibit 5.1) 23.4 Consent of Piper & Marbury L.L.P. (included in Exhibit 5.2) 24 Powers of Attorney (Contained on Page II-4) Item 17. Undertakings (a) The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) (Section 230.424(b) of 17 C.F.R.) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement; provided, however, that subparagraphs (i) and (ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in the periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Securities and Exchange Act of 1934 that are incorporated by reference in this registration statement. (2) That for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the Securities offered herein, and the offering of such Securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the Securities being registered which remain unsold at the termination of the offering. (b) The undersigned Registrant hereby further undertakes that, for the purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or II-2 Section 15(d) of the Securities Exchange of 1934 that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the Securities offered herein, and the offering of such Securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to trustees, officers and controlling persons of the Registrant pursuant to the provisions described under Item 15 of this registration statement, or otherwise (other than insurance), the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in such Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a trustee, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such trustee, officer or controlling person in connection with the Securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in such Act and will be governed by the final adjudication of such issue. II-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certificates that it has reasonable grounds to believe that it meets all of the requirements for being on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Newton, Commonwealth of Massachusetts, on June 20, 1997. HEALTH AND RETIREMENT PROPERTIES TRUST By: /s/ David J. Hegarty David J. Hegarty President and Chief Operating Officer Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement on Form S-3 relating to Common Shares has been signed below on June 20, 1997 by the following persons in the capacities and on the dates indicated; and each of the undersigned officers and trustees of Health and Retirement Properties Trust, hereby severally constitute and appoint David J. Hegarty, Ajay Saini, Gerard M. Martin and Barry M. Portnoy, and each of them, to sign for him, and in his name in the capacity indicated below, this Registration Statement for the purpose of registering such securities under the Securities Act of 1933, as amended, and any and all amendments thereto, and any other Registration Statement filed by Health and Retirement Properties Trust pursuant to Rule 462(b) which registers additional amounts of such securities for the offering or offerings contemplated by this Registration Statement (a "462(b) Registration Statement") hereby ratifying and confirming our signatures as they may be signed by our attorneys to this Registration Statement, any 462(b) Registration Statement and any and all amendments to either thereof.
Signature Title Date --------- ----- ---- /s/ David J. Hegarty President and Chief Operating June 20, 1997 David J. Hegarty Officer (principal executive officer) /s/ Ajay Saini Treasurer and Chief Financial June 20, 1997 Ajay Saini Officer /s/ Bruce M. Gans Trustee June 20, 1997 Bruce M. Gans, M.D. /s/ Justinian C. Manning Trustee June 20, 1997 Rev. Justinian Manning, C.P. /s/ Gerard M. Martin Managing Trustee June 20, 1997 Gerard M. Martin /s/ Barry M. Portnoy Managing Trustee June 20, 1997 Barry M. Portnoy /s/ Ralph J. Watts Trustee June 20, 1997 Ralph J. Watts
II-4 EX-5.1 2 Exhibit 5.1 SULLIVAN & WORCESTER LLP ONE POST OFFICE SQUARE BOSTON, MASSACHUSETTS 02109 (617) 338-2800 FAX NO. 617-338-2880 IN WASHINGTON, D.C. IN NEW YORK CITY 1025 CONNECTICUT AVENUE, N.W. 767 THIRD AVENUE WASHINGTON, D.C. 20036 NEW YORK, NEW YORK 10017 (202) 775-8190 (212) 486-8200 FAX NO. 202-293-2275 FAX NO. 212-758-2151 June 20, 1997 Health and Retirement Properties Trust 400 Centre Street Newton, Massachusetts 02158 Ladies and Gentlemen: In connection with the registration by Health and Retirement Properties Trust, a Maryland real estate investment trust (the "Company"), of 3,898,840 common shares of beneficial interest, par value $.01 per share (the "Offered Shares"), for reoffering and resale by the Selling Shareholders, as defined in the Registration Statement, as defined below, from time to time, as set forth in the prospectus which forms a part of the Registration Statement (the "Prospectus"), the following opinion is furnished to the Company to be filed with the Securities and Exchange Commission (the "Commission") as Exhibit 5.1 to the Company's Registration Statement on Form S-3, under the Securities Act of 1933, as amended (the "Securities Act"), to be filed on or about the date hereof. As used in this opinion, the term "Registration Statement" means, unless otherwise stated, such Registration Statement, as amended when declared effective by the Commission (including any necessary post-effective amendments thereto). In connection with this opinion, we have examined and relied upon a copy of the Registration Statement to be filed with the Commission on or about the date hereof. We have also examined and relied upon originals or copies of such records, agreements and instruments of the Company, certificates of public officials and of officers of the Company and such other documents and records, and such matters of law, as we have deemed necessary as a basis for the opinions hereinafter expressed. In making such examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals and the conformity to the originals of all documents submitted to us as copies, which facts we have not independently verified. We express no opinion herein as to the laws of any jurisdiction other than the Commonwealth of Massachusetts and the federal law of the United States, and we express no Health and Retirement Properties Trust June 20, 1997 Page 2 opinion as to state securities or blue sky laws. Insofar as this opinion involves matters of Maryland law we have, with your permission, relied solely on the opinion of Piper & Marbury L.L.P., a copy of which is being filed herewith as Exhibit 5.2 to the Registration Statement, and our opinion is subject to the exceptions, qualifications and limitations therein expressed. Based on and subject to the foregoing, we are of the opinion that, as of the date hereof, the Offered Shares have been duly and validly authorized by the Company and such Offered Shares are validly issued, fully paid and nonassessable by the Company. With respect to personal liability attaching to the holders of the Offered Shares, we note the matters described in the Company's Registration Statement on Form 8-A dated November 8, 1986, as amended by the Company's Form 8 dated July 30, 1991, with respect to the Company's common shares of beneficial interest and incorporated by reference into the Prospectus forming a part of the Registration Statement. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement, to the incorporation by reference from the Company's annual report on Form 10- K for the year ended December 31, 1996 in the Registration Statement of our opinion regarding certain tax matters and to the reference to our firm in the Prospectus forming a part of the Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Act or under the rules and regulations of the Commission promulgated thereunder. Very truly yours, /s/ SULLIVAN & WORCESTER LLP SULLIVAN & WORCESTER LLP EX-5.2 3 EXHIBIT 5.2 PIPER & MARBURY L.L.P. CHARLES CENTER SOUTH 36 SOUTH CHARLES STREET BALTIMORE, MARYLAND 21201-3018 410-539-2530 WASHINGTON FAX: 410-539-0489 NEW YORK PHILADELPHIA EASTON June 19, 1997 Health and Retirement Properties Trust 400 Centre Street Newton, Massachusetts 02158 Sullivan & Worcester LLP One Post Office Square Boston, Massachusetts 02109 Re: Registration Statement on Form S-3 of Health and Retirement Properties Trust Ladies and Gentlemen: We have acted as counsel to Health and Retirement Properties Trust, a Maryland real estate investment trust (the "Company"), in connection with the preparation of a Registration Statement on Form S-3 (the "Registration Statement") filed with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Securities Act"), relating to the registration of 3,898,840 common shares of beneficial interest, $.01 par value, of the Company (the "Shares") to be offered and sold by certain selling shareholders from time to time. In our capacity as Maryland counsel, we have reviewed the following: (a) The Declaration of Trust of the Company certified by an officer of the Company, as amended to date (the "Declaration of Trust"); (b) A copy of the By-laws of the Company certified by an officer of the Company, as in effect on the date hereof (the "By-laws"); (c) The Registration Statement; Piper & Marbury L.L.P. Health and Retirement Properties Trust Sullivan & Worcester LLP June 19, 1997 Page 2 (d) The Agreement of Merger between the Company and Government Property Investors, Inc. dated as of February 17, 1997, as amended by Amendment No. 1 to Agreement of Merger dated March 25, 1997; (e) Certified resolutions of the Board of Trustees of the Company authorizing the issuance of the Shares and the Registration Statement; (f) A good standing certificate for the Company, dated June 19, 1997, issued by the Maryland State Department of Assessments and Taxation; (g) An Officer's Certificate of the Company dated as of the date hereof as to certain factual matters (the "Officer's Certificate"); and (h) Such other documents as we have considered necessary to the rendering of the opinions expressed below. In such examination, we have assumed, without independent investigation, the genuineness of all signatures, the legal capacity of all individuals who have executed any of the aforesaid documents, the authenticity of all documents submitted to us as originals, the conformity with originals of all documents submitted to us as copies and that all public records received are accurate and complete. As to any facts material to this opinion which we did not independently establish or verify, we have relied solely upon the Officer's Certificate. In addition, this opinion is based upon the assumption that the Registration Statement and any required post-effective amendments thereto have become effective under the Securities Act. On the basis of the foregoing we are of the opinion that: 1. The Company has been duly formed and is validly existing in good standing as a real estate investment trust under the laws of the State of Maryland. 2. The Shares have been duly authorized and are validly issued, fully paid and nonassessable. The foregoing opinions are limited to the laws of the State of Maryland, exclusive of securities or "blue sky" laws. We assume no obligation to supplement this opinion if any applicable laws change after the date hereof or if we become aware of any facts that might change the opinions expressed herein after the date hereof. We hereby consent to Piper & Marbury L.L.P. Health and Retirement Properties Trust Sullivan & Worcester LLP June 19, 1997 Page 3 the filing of this opinion as Exhibit 5 to the Registration Statement and to the reference to our firm in the Registration Statement. Very truly yours, /s/ Piper & Marbury L.L.P. EX-10.2 4 EXHIBIT 10.2 AMENDMENT NO. 1 TO AGREEMENT OF MERGER THIS AMENDMENT NO. 1 TO AGREEMENT OF MERGER ("Amendment") is made and entered into March 25, 1997, between HEALTH AND RETIREMENT PROPERTIES TRUST ("HRPT"), a Maryland real estate investment trust, with its principal office located in Newton, Massachusetts and GOVERNMENT PROPERTY INVESTORS, INC. ("GPI"), a corporation organized and existing under the laws of the State of Delaware, with its principal office located in Washington, D.C. RECITAL HRPT and GPI entered into an Agreement of Merger dated February 17, 1997 ("Merger Agreement"). HRPT and GPI desire to amend the Merger Agreement. Capitalized terms not defined in this Agreement shall have the meanings given therefor in the Merger Agreement. NOW THEREFORE, it is agreed: 1. All references in Section 1.6 of the Merger Agreement to March 31, 1997 shall be references to March 25, 1997, and the penultimate sentence of Section 1.6 is deleted in its entirety and the following substituted therefor: "Any difference between the Pro Forma Balance Sheet and the consolidated balance sheet of GPI and its Subsidiaries as of March 25, 1996, confirmed by Ernst & Young LLP which would have affected the determination of the Aggregate Closing Consideration shall be an adjustment to the number of HRPT Common Shares first issued after the Closing Date pursuant to Section 8.3 or 8.4, or to the Second Closing Consideration if an insufficient number of HRPT Common Shares are issued pursuant to Section 8.3 or 8.4." 2. The last sentence of Section 1.80 of the Merger Agreement is deleted in its entirety and the following substituted therefor: "The Second Closing Consideration may be subject to adjustment as provided in Sections 1.6, 6.9, 8.3 and 8.10." 3. Section 6.9 of the Merger Agreement provides for the contribution of the contracts and agreements listed on Disclosure Schedule 6.9 to GPH. If, after the Closing Date, GPI is able to effect a reduction in the amounts GPH would be obliged to expend with respect to items 8 and 9 on Disclosure Schedule 6.9, and provides HRPT evidence of such reduction reasonably satisfactory to HRPT, the Second Closing Consideration will be increased by an amount equal to such reduction. 4. Section 6.12 of the Merger Agreement is deleted in its entirety and the following substituted therefor: "GPI will take all action required in connection with its liquidation and dissolution to ensure (i) that GPI will continue to be qualified as a "real estate investment trust" through December 31, 1997 and (ii) that each GPI Subsidiary will continue to be qualified as a "qualified REIT subsidiary" through the Effective Time, whether such action by GPI is required to be taken before or after December 31, 1997 or the Effective Time, as the case may be." 5. Section 6.17 of the Merger Agreement is deleted in its entirety and the following substituted therefor: "The Parties agree that any and all disputes and disagreements arising out of or relating to this Agreement, other than actions or claims for injunctive relief or claims raised in actions or proceedings brought by third parties, shall be resolved through negotiations or, if the dispute is not so resolved, through binding arbitration conducted in Boston, Massachusetts under the J.A.M.S./Endispute Comprehensive Arbitration Rules and Procedures, with the following amendments to those rules. First, the Parties agree that in no event shall the arbitration from commencement to issuance of an award take longer than 180 days. Second, the Parties agree that the arbitration tribunal shall consist of three arbitrators and that the Parties elect not to have the optional appeal procedure provided for in Rule 23. Third, in lieu of the depositions permitted in Rule 15(E) and (F) the Parties agree that the only depositions shall be (1) a single deposition to last no longer than one six-hour day that each Party may take of the opposing Party or an individual under the control of the opposing Party and (2) no more than three depositions by each Party limited to witnesses who will not be available to testify at the hearing, each such deposition to last no longer than one six- hour day. Judgment on the award rendered by the arbitrators may be entered in any court having jurisdiction thereof." 6. Section 8.3(b) of the Merger Agreement is deleted in its entirety and the following substituted therefor: "(b) San Diego Premises. If completion of the San Diego Premises in accordance with the plans and specifications therefor shall not have occurred and the obligations to pay rent of both tenants under the Development Property Leases in effect with respect to the San Diego Premises shall not have commenced by the Closing Date, the Aggregate Closing Consideration shall be reduced by $1,063,264. Upon (x) the 30th day after substantial completion of the San Diego Premises in accordance with the plans and specifications therefor, (y) the transfer to HRPT of the developer partner's interest and (z) the novation of the Development Property Leases in effect with respect to the San Diego Premises in favor of an HRPT Subsidiary, HRPT will issue GPI a number of HRPT Common Shares with an aggregate value (with each such HRPT Common Share valued at the Merger Price) equal to $1,063,264 less all amounts funded or anticipated to be funded in 2 connection with the punch list items by HRPT at or subsequent to Closing to complete the San Diego Premises in accordance with the plans and specifications therefor, including, without limitation, any amounts paid to retire indebtedness or to third party partners, together with interest thereon from the date advanced by HRPT through the date of issuance of the HRPT Common Shares pursuant to this Section 8.3(b) at an annual rate equal to 7.4%. If the aggregate amount so funded by HRPT (including the interest thereon) exceeds $1,063,264, one-half such excess shall be deducted from the Second Closing Consideration." 7. Schedule 9.2 to the Merger Agreement is deleted in its entirety and Schedule 9.2 attached to this Amendment is substituted therefor. 8. The first paragraph of Section 11.10 of the Merger Agreement is deleted in its entirety and the following substituted therefor: "The Merger shall be governed by Maryland Law and otherwise, this Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York. This Agreement supersedes all negotiations, agreements and understandings between the Parties with respect to the subject matter of this Agreement (including, without limitation, the Term Sheet dated January 7, 1997, between GPI and HRPT and the Confidentiality Agreement dated May 17, 1996, between GPI and HRPT) and constitutes the entire agreement between the Parties to this Agreement." 9. In all other respects the Merger Agreement continues in full force and effect and unmodified. 3 EXECUTED under seal as of the date first above written. HEALTH AND RETIREMENT PROPERTIES TRUST By: /s/ David J. Hegarty GOVERNMENT PROPERTY INVESTORS, INC. By:/s/ Mark Levin 4 EX-23.1 5 Exhibit 23.1 Consent of Independent Auditors We consent to the reference to our firm under the caption "Experts" in the Registration Statement (Form S-3) and related Prospectus of Health and Retirement Properties Trust for the registration of 3,898,840 Common Shares of Beneficial Interest and to the incorporation by reference therein of (i) our report dated February 6, 1997, with respect to the consolidated financial statements of Health and Retirement Properties Trust, and (ii) our report dated January 31, 1997 (except for the last paragraphs of Note 1 and Note 12, as to which the date is February 18, 1997), with respect to the consolidated financial statements of Government Property Investors, Inc., both included in the Current Report on Form 8-K of Health and Retirement Properties Trust dated February 17, 1997, filed with the Securities and Exchange Commission. /s/ Ernst & Young LLP ERNST & YOUNG LLP Boston, Massachusetts June 17, 1997 EX-23.2 6 Exhibit 23.2 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this registration statement of our report dated January 10, 1997, included in Health and Retirement Properties Trust's Form 10-K for the fiscal year ended December 31, 1996, and to all references to our firm included in this registration statement. /s/ Arthur Andersen LLP Washington, D.C. June 18, 1997 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in Health and Retirement Properties Trust's registration statement on Form S-3 of our report dated February 24, 1997 included in Marriott International, Inc.'s Form 10-K for the year ended January 3, 1997 (File No. 1-12188) and to all references to our Firm included in this registration statement. /s/ Arthur Andersen LLP Washington, D.C. June 16, 1997 -----END PRIVACY-ENHANCED MESSAGE-----