-----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, NgekKMQvf/ezAle0zLIuTlB+ZDMtwJZIH3HuwtkGVFVnxgOzdk+gGqUX/iUkroze Ico95ZIAJ+0tckHjex8mDQ== 0001047469-04-024678.txt : 20040729 0001047469-04-024678.hdr.sgml : 20040729 20040729140000 ACCESSION NUMBER: 0001047469-04-024678 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20040727 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040729 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HRPT 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09317 FILM NUMBER: 04938419 BUSINESS ADDRESS: STREET 1: 400 CENTRE ST CITY: NEWTON STATE: MA ZIP: 02458 BUSINESS PHONE: 6177968350 MAIL ADDRESS: STREET 1: 400 CENTRE STREET CITY: NEWTON STATE: MA ZIP: 02458 FORMER COMPANY: FORMER CONFORMED NAME: HEALTH & RETIREMENT PROPERTIES TRUST DATE OF NAME CHANGE: 19940811 FORMER COMPANY: FORMER CONFORMED NAME: HEALTH & REHABILITATION PROPERTIES TRUST DATE OF NAME CHANGE: 19920703 8-K 1 a2141044z8-k.txt 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): July 27, 2004 HRPT PROPERTIES TRUST (Exact name of registrant as specified in charter) MARYLAND 1-9317 04-6558834 (State or other jurisdiction (Commission (I.R.S. employer of organization) file number) identification number) 400 CENTRE STREET, NEWTON, MASSACHUSETTS 02458 (Address of principal executive offices) (Zip code) 617-332-3990 (Registrant's telephone number, including area code) ITEM 5. OTHER EVENTS. On July 27, 2004, HRPT Properties Trust (the "Company") agreed to sell $400,000,000 aggregate principal amount of its 6 1/4% Senior Notes Due August 15, 2016 (the "Notes") in a public offering. The notes are expected to be issued on August 5, 2004, and will be issued under a supplemental indenture to the Company's indenture dated July 9, 1997. The Notes will be senior unsecured obligations of the Company and will have substantially the same covenants as the Company's other outstanding senior unsecured notes issued under that indenture. The Company intends to use the estimated $392.2 million net proceeds of this offering to reduce amounts outstanding under its revolving credit facility. The underwriters for the offering are Merrill Lynch, Pierce, Fenner & Smith Incorporated; RBC Capital Markets Corporation; Wachovia Capital Markets, LLC; Advest, Inc.; BB&T Capital Markets, a division of Scott & Stringfellow, Inc.; BNY Capital Markets, Inc.; Banc of America Securities LLC; Comerica Securities, Inc.; Commerzbank Capital Markets Corp.; Ferris, Baker Watts, Incorporated; Harris Nesbitt Corp.; KeyBanc Capital Markets, a division of McDonald Investments Inc.; Legg Mason Wood Walker, Incorporated; Morgan Keegan & Company, Inc.; Piper Jaffray & Co.; PNC Capital Markets, Inc.; Raymond James & Associates, Inc.; Stifel, Nicolaus & Company, Incorporated; SunTrust Capital Markets, Inc.; Wedbush Morgan Securities Inc.; and Wells Fargo Brokerage Services, LLC. A prospectus supplement relating to the the Notes will be filed with the Securities and Exchange Commission. This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be 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. THIS REPORT CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND FEDERAL SECURITIES LAWS, INCLUDING WITH RESPECT TO THE COMPANY'S ISSUANCE OF THE NOTES AND ITS INTENDED USE OF THE PROCEEDS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON THE COMPANY'S PRESENT EXPECTATIONS, BUT THESE STATEMENTS AND THE IMPLICATIONS OF THESE STATEMENTS ARE NOT GUARANTEED. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. 1.1 Underwriting Agreement dated as of July 27, 2004 between HRPT Properties Trust and the underwriters named therein, pertaining to $400,000,000 in aggregate principal amount of 6 1/4% Senior Notes due August 15, 2016. 4.1 Form of Supplemental Indenture No. 14 dated as of August 5, 2004 between HRPT Properties Trust and U.S. Bank National Association, including the form of 6 1/4% Senior Note due August 15, 2016. 5.1 Opinion of Sullivan & Worcester LLP. 5.2 Opinion of Venable LLP. 8.1 Opinion of Sullivan & Worcester LLP re: tax matters. 23.1 Consents of Sullivan & Worcester LLP (contained in Exhibits 5.1 and 8.1). 23.2 Consent of Venable LLP (contained in Exhibit 5.2). SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. HRPT PROPERTIES TRUST By: /s/ John C. Popeo _________________________ John C. Popeo Treasurer and Chief Financial Officer Date: July 27, 2004 EX-1.1 2 a2141044zex-1_1.txt EXHIBIT 1.1 Exhibit 1.1 EXECUTION COPY HRPT PROPERTIES TRUST (a Maryland real estate investment trust) 6 1/4% Senior Notes due August 15, 2016 UNDERWRITING AGREEMENT July 27, 2004 Merrill Lynch, Pierce, Fenner & Smith Incorporated RBC Capital Markets Corporation Wachovia Capital Markets, LLC as Representatives of the several Underwriters c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated 4 World Financial Center New York, NY 10080 Ladies and Gentlemen: HRPT Properties Trust, a Maryland real estate investment trust (the "Company"), confirms its agreement with the underwriters named in Schedule A hereto (collectively, the "Underwriters" which term also includes any underwriter substituted as hereinafter provided in Section 10), for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated, RBC Capital Markets Corporation and Wachovia Capital Markets, LLC are acting as Representatives (the "Representatives"), with respect to the sale by the Company and the purchase by the Underwriters, severally, of $400,000,000 aggregate principal amount of the Company's 6 1/4% Senior Notes due August 15, 2016 (the "Notes"). The Notes are to be issued pursuant to an indenture dated as of July 9, 1997 and a supplemental indenture dated as of August 5, 2004 (together, the "Indenture"), each between the Company and U.S. Bank National Association (as successor trustee to State Street Bank and Trust Company) (the "Trustee"). The Company has filed with the Securities and Exchange Commission (the "Commission") registration statements on Form S-3 (Nos. 333-56051 and 333-114285) for the registration of debt securities, preferred shares of beneficial interest, depositary shares, common shares of beneficial interest and warrants under the Securities Act of 1933, as amended (the "1933 Act"), and has filed such amendments thereto, if any, as may have been required to the date hereof. Such registration statements have been declared effective under the 1933 Act. Such registration statements (as amended, if applicable) and the prospectus constituting a part thereof (the "Base Prospectus"), as supplemented by the prospectus supplement (the "Prospectus Supplement") relating to the Notes (including, in each case, all documents incorporated or deemed to be incorporated by reference therein), as from time to time amended or supplemented pursuant to the 1933 Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"), or otherwise, are hereinafter referred to as the "Registration Statement" and the "Prospectus", respectively. All references in this Agreement to financial statements and schedules and other information which is "contained", "included" or "stated" in the Registration Statement or the Prospectus (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is or is deemed to be incorporated by reference in the Registration Statement or in the Prospectus, as the case may be. Section 1. REPRESENTATIONS AND WARRANTIES. (a) The Company represents and warrants to each Underwriter as of the date hereof as follows: (i) At the respective times the Registration Statement and any post-effective amendment thereto (including the filing of the Company's most recent Annual Report on Form 10-K with the Commission) became effective, the Registration Statement complied in all material respects with the requirements of the 1933 Act and the rules and regulations under the 1933 Act (the "1933 Act Regulations") and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus, at the date hereof (unless the term "Prospectus" refers to a prospectus which has been provided to the Underwriters by the Company for use in connection with the offering of the Notes which differs from the Prospectus on file at the Commission at the date of effectiveness of the Registration Statement, in which case at the time it is first provided to the Underwriters for such use) and at Closing Time referred to in Section 2 hereof, does not and will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; PROVIDED, HOWEVER, that the representations and warranties in this subsection (i) shall not apply to statements or omissions in the Registration Statement or the Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by the Underwriters through the Representatives expressly for use in the Registration Statement or the Prospectus. (ii) The documents incorporated or deemed to be incorporated by reference in the Prospectus, at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission under the 1934 Act (the "1934 Act Regulations"), and, when read together with the other information in the Prospectus, at the time the Registration Statement became effective and at Closing Time, did not and will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (iii) The Company is a Maryland real estate investment trust duly organized, validly existing and in good standing under the laws of the State of Maryland. Each of its subsidiaries has been duly organized and is validly existing as a corporation, partnership, 2 limited liability company or trust in good standing under the laws of its jurisdiction of incorporation or organization, except where the failure to be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole. Each of the Company and its subsidiaries has full power and authority (corporate and other) to carry on its business as described in the Registration Statement and in the Prospectus and to own, lease and operate its properties. Each of the Company and its subsidiaries is duly qualified and is in good standing as a foreign corporation, partnership, limited liability company or trust, as the case may be, and is authorized to do business in each jurisdiction in which the nature of its business or its ownership or leasing of property requires such qualification, except where the failure to be so qualified would not have a material adverse effect on the Company and its subsidiaries, taken as a whole. (iv) The financial statements of the Company and its subsidiaries, together with the related schedules and notes thereto, included or incorporated by reference in the Registration Statement and in the Prospectus, comply as to form in all material respects with the requirements of the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations. Such financial statements of the Company, together with the related schedules and notes thereto, present fairly the consolidated financial position, results of operations, shareholders' equity and changes in financial position of the Company and its subsidiaries, at the dates or for the respective periods therein specified and have been prepared in accordance with generally accepted accounting principles ("GAAP") consistently applied throughout the periods involved. The pro forma financial statements and other pro forma financial information (including the notes thereto) included or incorporated by reference in the Registration Statement and in the Prospectus (i) present fairly the information shown therein, (ii) have been prepared in accordance with the Commission's rules and guidelines with respect to pro forma financial statements and (iii) have been properly compiled on the basis described therein and the assumptions used in the preparation of such pro forma financial statements and other pro forma financial information (including the notes thereto) are reasonable and the adjustments used therein are appropriate to give effect to the transactions or circumstances referred to therein. The adjusted pro forma financial statements and other adjusted pro forma financial information (including the notes thereto) included or incorporated by reference in the Registration Statement and in the Prospectus (i) present fairly the information shown therein and (ii) have been properly compiled on the basis described therein and the assumptions used in the preparation of such adjusted pro forma financial statements and other adjusted pro forma financial information (including the notes thereto) are reasonable and the adjustments used therein are appropriate to give effect to the transactions or circumstances referred to therein. (v) The accountants who have certified the financial statements of the Company and its subsidiaries included or incorporated by reference in the Registration Statement and in the Prospectus are independent certified public accountants as required by the 1933 Act; provided, however, the Company makes no representation or warranty with respect to Arthur Andersen LLP, who audited the financial statements of Hospitality Properties Trust for the year ended December 31, 2001 and was convicted of obstruction 3 of justice in June 2002 and ceased to practice before the Commission on August 31, 2002. (vi) This Agreement has been duly authorized, executed and delivered by the Company. (vii) The Indenture has been duly qualified under the Trust Indenture Act of 1939 (the "1939 Act") and has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company enforceable in accordance with its terms, except as limited by (a) the effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws relating to or affecting the rights or remedies of creditors or (b) the effect of general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). (viii) All of the issued and outstanding indebtedness of the Company is duly and validly authorized and issued; the Notes have been authorized by all necessary trust action and, when executed and authenticated in accordance with the provisions of the Indenture and delivered and paid for pursuant to this Agreement, will be valid and binding obligations of the Company enforceable in accordance with their terms, except as limited by (a) the effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws relating to or affecting the rights or remedies of creditors or (b) the effect of general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). (ix) The Notes and the Indenture conform to the descriptions thereof in the Registration Statement and in the Prospectus. (x) The authorized capital of the Company, including the Notes, conforms as to legal matters to the description thereof contained in the Prospectus. (xi) Since the respective dates as of which information is given in the Prospectus, and except as otherwise disclosed therein, (i) there has been no material adverse change in the business, operations, earnings, prospects, properties or condition (financial or otherwise) of the Company and its subsidiaries, taken as a whole, whether or not arising in the ordinary course of business, (ii) there have been no material transactions entered into by the Company and its subsidiaries, on a consolidated basis, other than transactions in the ordinary course of business, (iii) neither the Company nor its subsidiaries has incurred any material liabilities or obligations, direct or contingent, (iv) the Company and its subsidiaries, on a consolidated basis, have not, (A) other than regular quarterly dividends, declared, paid or made a dividend or distribution of any kind on any class of its shares of beneficial interest (other than dividends or distributions from wholly owned subsidiaries to the Company), (B) issued any shares of beneficial interest of the Company or any of its subsidiaries or any options, warrants, convertible securities or other rights to purchase the shares of beneficial interest of the Company or any of its subsidiaries (other than the issuance of common shares of beneficial interest ("Common Shares") pursuant to the Company's incentive share award plans) or (C) repurchased or redeemed shares of beneficial interest, and (v) there has not been (A) any material 4 decrease in the Company's net worth or (B) any material increase in the short-term or long-term debt (including capitalized lease obligations but excluding borrowings under existing bank lines of credit and under the term loan agreement) of the Company and its subsidiaries, on a consolidated basis. (xii) The Company and each of its subsidiaries maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. (xiii) Neither the Company nor any of its subsidiaries is in violation of its respective charter or by-laws or other organizational documents or in default in the performance of any obligation, agreement or condition contained in any bond, debenture, note or any other evidence of indebtedness or in any other agreement, indenture or instrument to which the Company or any of its subsidiaries is a party or by which any of their respective properties or assets may be bound or affected, except for any such violation that would not have a material adverse effect on the condition, financial or otherwise or in the earnings, business affairs or business prospects of the Company and its subsidiaries, taken as a whole. The Company is not in violation of any law, ordinance, governmental rule or regulation or court decree to which it is subject, except for any such violation that would not, individually or in the aggregate, have a material adverse effect on the business, operations, earnings, prospects, properties or condition (financial or otherwise) of the Company and its subsidiaries, taken as a whole. (xiv) Except as disclosed in the Registration Statement or in the Prospectus, there is not now pending or, to the knowledge of the Company, threatened, any litigation, action, suit or proceeding to which the Company is or will be a party before or by any court or governmental agency or body, which (A) might result in any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries, taken as a whole, or (B) might materially and adversely affect the property or assets of the Company and its subsidiaries, taken as a whole, or (C) concerns the Company and is required to be disclosed in the Registration Statement or the Prospectus, or (D) could adversely affect the consummation of this Agreement and the issuance, purchase and sale of the Notes. No contract or other document is required to be described in the Registration Statement or in the Prospectus or to be filed as an exhibit to the Registration Statement that is not described therein or filed as required. (xv) The execution, delivery and performance by the Company of this Agreement, the issuance, offering and sale by the Company of the Notes as contemplated by the Registration Statement and by the Prospectus and the consummation of the transactions contemplated hereby and compliance with the terms and provisions hereof, will not violate or conflict with or constitute a breach of any of the terms or provisions of, 5 or a default under, (i) the Third Amendment and Restatement of Declaration of Trust, as amended and supplemented (the "Declaration of Trust") or the Amended and Restated By-laws, as amended, of the Company or the charter or by-laws or other organizational documents of any subsidiary of the Company, (ii) any agreement, indenture or other instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries or their respective properties or assets is bound, or (iii) any laws, administrative regulations or rulings or decrees to which the Company or any of its subsidiaries or their respective properties or assets may be subject. (xvi) No consent, approval, authorization or order of, or registration, filing or qualification with, any governmental body or regulatory agency having jurisdiction over the Company or any of its subsidiaries or any of their respective properties or assets is required for the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including, without limitation, the issuance, sale and delivery of the Notes pursuant to this Agreement, except such as have been obtained or made and such as may be required under foreign and state securities or "Blue Sky" or real estate syndication laws. (xvii) Except as otherwise set forth in the Registration Statement or in the Prospectus, the Company and each of its subsidiaries have good and marketable title or ground leases to all real properties described in Registration Statement or in the Prospectus as being owned or leased by them, free and clear of all liens, claims, encumbrances and restrictions, except liens for taxes not yet due and payable and other liens, claims, encumbrances and restrictions which do not, either individually or in the aggregate, materially and adversely affect the current use or value thereof. Except as otherwise set forth in the Registration Statement or in the Prospectus, all leases to which the Company and each of its subsidiaries is a party which are material to the business of the Company and its subsidiaries, taken as a whole, are valid and binding. Except as otherwise set forth in the Registration Statement or in the Prospectus, no default under any such lease by the Company or any subsidiary of the Company or, to the Company's knowledge, any tenant has occurred and is continuing which default would, individually or in the aggregate, have a material adverse effect on the business, operations, earnings, prospects, properties or condition (financial or otherwise) of the Company and its subsidiaries, taken as a whole. With respect to all properties owned or leased by the Company and each of its subsidiaries, the Company or such subsidiary has such documents, instruments, certificates, opinions and assurances, including without limitation, fee, leasehold owners or mortgage title insurance policies (disclosing no encumbrances or title exceptions which are material to the Company and its subsidiaries considered as a whole, except as otherwise set forth in the Registration Statement and in the Prospectus), legal opinions and property insurance policies in each case in form and substance as are usual and customary in transactions involving the purchase of similar real estate and are appropriate for the Company or such subsidiary to have obtained. (xviii) The Company and each of its subsidiaries owns, or possesses adequate rights to use, all patents, trademarks, trade names, service marks, copyrights, licenses and other rights necessary for the conduct of their respective businesses as described in the Registration Statement and in the Prospectus, and neither the Company nor any of its 6 subsidiaries has received any notice of conflict with, or infringement of, the asserted rights of others with respect to any such patents, trademarks, trade names, service marks, copyrights, licenses and other such rights (other than conflicts or infringements that, if proven, would not have a material adverse effect on the business, operations, earnings, prospects, properties or condition (financial or otherwise) of the Company and its subsidiaries, taken as a whole), and neither the Company nor any of its subsidiaries knows of any basis therefor. (xix) All material tax returns required to be filed by the Company and each of its subsidiaries in any jurisdiction have been timely filed, other than those filings being contested in good faith, and all material taxes, including withholding taxes, penalties and interest, assessments, fees and other charges due pursuant to such returns or pursuant to any assessment received by the Company or any of its subsidiaries have been paid, other than those being contested in good faith and for which adequate reserves have been provided. (xx) Except as otherwise set forth in the Registration Statement or the Prospectus, to the Company's knowledge, after due investigation (i) the Company and its subsidiaries have been and are in compliance in all material respects with, and neither the Company nor its subsidiaries have any liability under, applicable Environmental Laws (as hereinafter defined) which is material to the Company and its subsidiaries, taken as a whole; (ii) neither the Company nor its subsidiaries has at any time released (as such term is defined in Section 101 (22) of CERCLA (as hereinafter defined)), or otherwise disposed of or handled, Hazardous Materials (as hereinafter defined) on, to or from the real properties or other assets owned by the Company or its subsidiaries, except for such releases, disposals and handlings as would not be reasonably likely to cause the Company or its subsidiaries to incur liability which is material to the Company and its subsidiaries, taken as a whole; (iii) neither the Company nor its subsidiaries intend to use the real properties or other assets owned by them other than in compliance in all material respects with applicable Environmental Laws, (iv) neither the Company nor any of its subsidiaries know of any seepage, leak, discharge, release, emission, spill, or dumping of Hazardous Materials into waters (including, but not limited to, groundwater and surface water) on, beneath or adjacent to the real properties or other assets owned by them, other than such matters as would not be reasonably likely to cause the Company or its subsidiaries to incur liability which is material to the Company and its subsidiaries, taken as a whole; (v) neither the Company nor any of its subsidiaries has received any written notice of, or has any knowledge of any occurrence or circumstance which, with notice or passage of time or both, would give rise to a claim under or pursuant to any Environmental Law by any governmental or quasi-governmental body or any third party with respect to the real properties or the assets of the Company or its subsidiaries or arising out of their conduct, except for such claims that would not be reasonably likely to cause the Company or its subsidiaries to incur liability which is material to the Company and its subsidiaries, taken as a whole and that would not be required to be disclosed in the Registration Statement or the Prospectus; (vi) none of the real properties owned by the Company or its subsidiaries is included or proposed for inclusion on the National Priorities List issued pursuant to CERCLA by the United States Environmental Protection Agency (the "EPA") or on any similar list or inventory issued by any other federal, state or local governmental authority 7 having or claiming jurisdiction over such properties pursuant to any other Environmental Law other than such inclusions or proposed inclusions as would not be reasonably likely to cause the Company or its subsidiaries to incur liability which is material to the Company and its subsidiaries taken as a whole. As used herein, "Hazardous Material" shall include, without limitation, any flammable explosives, radioactive materials, chemicals, hazardous materials, hazardous wastes, toxic substances, petroleum or petroleum products, asbestos-containing materials, mold or any hazardous material as defined by any federal, state or local law, ordinance, rule or regulation relating to the protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Secs. 9601-9675 ("CERCLA"), the Hazardous Materials Transportation Act, as amended, 49 U.S.C. Secs. 1801-1819, the Resource Conservation and Recovery Act, as amended, 42 U.S.C. Secs. 6901-6992K, the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Secs. 11001-11050, the Toxic Substances Control Act, 15 U.S.C. Secs. 2601-2671, the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Secs. 136-136y, the Clean Air Act, 42 U.S.C. Secs. 7401-7642, the Clean Water Act (Federal Water Pollution Control Act), 33 U.S.C. Secs. 1251-1387, and the Safe Drinking Water Act, 42 U.S.C. Secs. 300f-300j-26, as any of the above statutes may be amended from time to time, and the regulations promulgated pursuant to any of the foregoing (individually, an "Environmental Law" and collectively "Environmental Laws"). (xxi) Each of the Company and its subsidiaries has such permits, licenses, franchises and authorizations of governmental or regulatory authorities (together, "permits"), including, without limitation, under any applicable Environmental Law, as are necessary to own, lease and operate its properties and to engage in the business currently conducted by it, except such permits as to which the failure to own or possess will not in the aggregate have a material adverse effect on the business, operations, earnings, prospects, properties or condition (financial or otherwise) of the Company and its subsidiaries, taken as a whole. All such permits are in full force and effect and each of the Company and its subsidiaries are in compliance with the terms and conditions of all such permits, except where the invalidity of such permits or the failure of such permits to be in full force and effect or the failure to comply with such permits will not in the aggregate have a material adverse effect on the business, operations, earnings, prospects, properties or condition (financial or otherwise) of the Company and its subsidiaries, taken as a whole. Neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a material adverse effect on the business, operations, earnings, prospects, properties or condition (financial or otherwise) of the Company and its subsidiaries, taken as a whole. (xxii) To the knowledge of the Company, no labor problem exists or is imminent with employees of the Company or any of its subsidiaries that could have a material adverse effect on the business, operations, earnings, prospects, properties or condition (financial or otherwise) of the Company and its subsidiaries, taken as a whole. 8 (xxiii) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any officer, trustee or director purporting to act on behalf of the Company or any of its subsidiaries, has at any time: (i) made any contributions to any candidate for political office, or failed to disclose fully any such contributions, in violation of law; (ii) made any payment of funds to, or received or retained any funds from, any state, federal or foreign governmental officer or official, or other person charged with similar public or quasi-public duties, other than payments required or allowed by applicable law; or (iii) engaged in any transactions, maintained any bank accounts or used any corporate funds except for transactions, bank accounts and funds, which have been and are reflected in the normally maintained books and records of the Company and its subsidiaries. (xxiv) All of the outstanding shares of beneficial interest of, or other ownership interests in, each of the Company's subsidiaries have been duly authorized and validly issued and are fully paid and, except as to subsidiaries that are partnerships, nonassessable, and, except as disclosed in the Registration Statement or in the Prospectus and, except for the equity interests in Hallwood 95, L.P., are or will be owned by the Company free and clear of any security interest, claim, lien, encumbrance or adverse interest of any nature. (xxv) Except as referred to or described in the Registration Statement and in the Prospectus, none of the subsidiaries of the Company owns any shares of stock or any other securities of any corporation or has any equity interest in any firm, partnership, association or other entity other than the issued capital shares of or interests in its subsidiaries, and the Company does not own, directly or indirectly, any shares of stock or any other securities of any corporation or have any equity interest in any firm, partnership, association or other entity other than the issued capital shares of or interests in its subsidiaries, except in each case for non-controlling positions acquired in the ordinary course of business. (xxvi) Except as disclosed in the Registration Statement and in the Prospectus, there are no material outstanding loans or advances or material guarantees of indebtedness by the Company or any of its subsidiaries to or for the benefit of any of the officers, trustees or directors of the Company or any of its subsidiaries or any of the members of the families of any of them. (xxvii) The Company and each of its subsidiaries maintains insurance, duly in force, with insurers of recognized financial responsibility; such insurance insures against such losses and risks as are adequate in accordance with customary industry practice to protect the Company and its subsidiaries and their respective businesses; and neither the Company nor any such subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not materially and adversely affect the business, operations, earnings, prospects, properties or condition (financial or otherwise) of the Company and its subsidiaries, taken as a whole, except as disclosed in or contemplated by the Registration Statement and by the Prospectus. 9 (xxviii) Neither the Company nor any of its officers and directors (as defined in the 1933 Act Regulations) has taken or will take, directly or indirectly, prior to the termination of the offering contemplated by this Agreement, any action designed to stabilize or manipulate the price of any security of the Company, or which has caused or resulted in, or which might in the future reasonably be expected to cause or result in, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Notes. (xxix) Neither the Company nor any of its subsidiaries is an "investment company" or an "affiliated person" of, or "promoter" or "principal underwriter" for, an "investment company" as such terms are defined in the Investment Company Act of 1940, as amended (the "1940 Act"), or an "investment adviser" as such term is defined in the Investment Advisers Act of 1940, as amended. (xxx) The Company is organized in conformity with the requirements for qualification, and, as of the date hereof the Company operates, and as of Closing Time the Company will operate, in a manner that qualifies the Company as a "real estate investment trust" under the Internal Revenue Code of 1986, as amended (the "Code"), and the rules and regulations thereunder, for 2004 and subsequent years. The Company qualified as a real estate investment trust under the Code for each of its taxable years from 1987 through 2003. (xxxi) No default exists, and no event has occurred which, with notice or lapse of time or both, would constitute a default in the due performance and observance of any term, covenant or condition of any indenture, mortgage, deed of trust, lease or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries or any of their respective properties is bound or may be affected, except such defaults which, singly or in the aggregate, would not have a material adverse effect on the business, operations, earnings, prospects, properties or condition (financial or otherwise) of the Company and its subsidiaries, considered as a whole, except as disclosed in the Registration Statement and in the Prospectus. (xxxii) The Company has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-15 and 15d-15 under the 1934 Act) that (a) are designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the Company's Chief Executive Officer and its Chief Financial Officer (or persons performing similar functions) by others within those entities, particularly during the periods in which the filings made by the Company with the Commission which it may make under Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act are being prepared, (b) have been evaluated for effectiveness as of the end of the period covered by the Company's most recent Annual Report on Form 10-K filed with the Commission and (c) are effective to perform the functions for which they were established. The Company's accountants and the audit committee of the board of trustees of the Company have been advised of (x) any significant deficiencies in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize, and report 10 financial data and (y) any fraud, whether or not material, that involves management or other employees who have a role in the Company's internal control over financial reporting. Since the date of the most recent evaluation of such disclosure controls and procedures, there have been no significant changes in the Company's internal control over financial reporting or in other factors that have materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting. (xxxiii) Except as otherwise disclosed in the Prospectus, since the respective dates as of which information is given in the Prospectus, there has been no material adverse change in the business, operations, earnings, prospects, properties or condition (financial or otherwise) of Reit Management & Research LLC (the "Advisor"), whether or not arising in the ordinary course of business, that would have a material adverse effect on the Company and its subsidiaries, taken as a whole. The Advisory Agreement, dated as of January 1, 1998, as amended by Amendment No. 1 thereto, dated as of October 12, 1999, and Amendment No. 2 thereto, dated as of March 10, 2004 (the "Advisory Agreement"), between the Company and the Advisor, each has been duly authorized, executed and delivered by the parties thereto and constitutes the valid agreement of the parties thereto, enforceable in accordance with its terms, except as limited by (a) the effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws relating to or affecting the rights or remedies of creditors or (b) the effect of general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). (b) Any certificate signed by any officer of the Company or any of its subsidiaries and delivered to the Representatives or to counsel for the Underwriters shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby. Section 2. SALE AND DELIVERY TO THE UNDERWRITERS; CLOSING. (a) On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company agrees to sell to each Underwriter, severally, and each Underwriter, severally, agrees to purchase from the Company $400,000,000 aggregate principal amount of the Notes at a purchase price of 98.184% of the principal amount of the Notes, plus such additional principal amount of Notes which such Underwriter may become obligated to purchase pursuant to the provisions of Section 10 hereof. (b) Payment of the purchase price for and delivery of the Notes shall be made, subject to Section 9, at the offices of Sullivan & Worcester LLP, One Post Office Square, Boston, Massachusetts 02109, or at such other place as shall be agreed upon by the Representatives and the Company, at 9:00 A.M. on the seventh business day (unless postponed in accordance with the provisions of Section 10) following the date of this Agreement, or such other time not later than ten business days after such date as shall be agreed upon by the Representatives and the Company (such time and date of payment and delivery being herein called "Closing Time"). Payment shall be made by wire transfer of immediately available funds payable to the order of the Company against delivery to the Representatives of the Notes to be purchased by the Underwriters. It is understood that each Underwriter has authorized the Representatives, for its 11 account, to accept delivery of, receipt for, and make payment of the purchase price for, the Notes which it has severally agreed to purchase. The Representatives, individually, and not as representatives of the Underwriters may (but shall not be obligated to) make payment of the purchase price for the Notes to be purchased by any Underwriter whose funds have not been received by Closing Time, but such payment shall not relieve such Underwriter from its obligations hereunder. The Notes shall be in such authorized denominations and registered in such names as the Representatives may request in writing at least one business day before Closing Time. Section 3. COVENANTS OF THE COMPANY. The Company covenants with each Underwriter as follows: (a) Immediately following the execution of this Agreement, the Company will prepare the Prospectus Supplement setting forth the aggregate principal amount of Notes covered thereby and their terms not otherwise specified in the Prospectus, the names of the Underwriters, the price at which the Notes are to be purchased by the Underwriters from the Company, and such other information as the Representatives and the Company deem appropriate in connection with the offering of the Notes; and the Company will promptly transmit copies of the Prospectus Supplement to the Commission for filing pursuant to Rule 424(b) of the 1933 Act Regulations and will furnish to the Underwriters as many copies of the Prospectus (including the Prospectus Supplement) as the Underwriters shall reasonably request. (b) Until the termination of the initial offering of the Notes, the Company will notify the Representatives immediately, and confirm the notice in writing, (i) of the effectiveness of any amendment to the Registration Statement, (ii) of the transmittal to the Commission for filing of any supplement or amendment to the Prospectus or any document to be filed pursuant to the 1934 Act, (iii) of the receipt of any comments from the Commission with respect to the Notes, (iv) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus with respect to the Notes or for additional information relating thereto, and (v) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose. The Company will make every reasonable effort to prevent the issuance of any such stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment. (c) Until the termination of the initial offering of the Notes, the Company will give the Representatives notice of its intention to file or prepare any post-effective amendment to the Registration Statement or any amendment or supplement (including any document to be filed pursuant to the 1934 Act) to the Prospectus (including any revised prospectus which the Company proposes for use by the Underwriters in connection with the offering of the Notes which differs from the prospectus on file at the Commission at the time that the Registration Statement becomes effective, whether or not such revised prospectus is required to be filed pursuant to Rule 424(b) of the 1933 Act Regulations), will furnish each of the Representatives with copies of any such amendment or supplement a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file any such amendment or supplement or use any such prospectus to which counsel for the Underwriters shall reasonably object. 12 (d) The Company will deliver to each of the Representatives a conformed copy of the Registration Statement as originally filed and of each amendment thereto filed prior to the termination of the initial offering of the Notes (including exhibits filed therewith or incorporated by reference therein and the documents incorporated by reference into the Prospectus pursuant to Item 12 of Form S-3). (e) The Company will furnish to the Underwriters, from time to time during the period when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such number of copies of the Prospectus (as amended or supplemented) as the Underwriters may reasonably request for the purposes contemplated by the 1933 Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations. (f) If, at any time when a prospectus is required by the 1933 Act to be delivered in connection with the sale of the Notes, any event shall occur as a result of which it is necessary, in the opinion of counsel for the Underwriters, to amend or supplement the Prospectus in order to make the Prospectus not misleading in the light of the circumstances existing at the time it is delivered, the Company will either (i) forthwith prepare and furnish to the Underwriters an amendment of or supplement to the Prospectus or (ii) make an appropriate filing pursuant to Section 13, 14 or 15 of the 1934 Act, in form and substance reasonably satisfactory to counsel for the Underwriters, which will amend or supplement the Prospectus so that it will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time it is delivered, not misleading. (g) The Company will endeavor in good faith, in cooperation with the Representatives, to qualify the Notes for offering and sale under the applicable securities laws and real estate syndication laws of such states and other jurisdictions of the United States as the Representatives may designate; PROVIDED that, in connection therewith, the Company shall not be required to qualify as a foreign corporation or trust or to file any general consent to service of process. In each jurisdiction in which the Notes have been so qualified the Company will file such statements and reports as may be required by the laws of such jurisdiction to continue such qualification in effect for so long as required for the distribution of the Notes. (h) The Company will make generally available to its security holders as soon as reasonably practicable, but not later than 30 days after the close of the period covered thereby, an earnings statement of the Company (in form complying with the provisions of Rule 158 of the 1933 Act Regulations) covering a period of at least twelve months beginning not later than the first day of the Company's fiscal quarter next following the effective date of the Registration Statement. "Earnings statement", "make generally available" and "effective date" will have the meanings contained in Rule 158 of the 1933 Act Regulations. (i) The Company will use the net proceeds received by it from the sale of the Notes in the manner specified in the Prospectus under the caption "Use of Proceeds" in all material respects. 13 (j) The Company currently intends to continue to qualify as a "real estate investment trust" under the Code, and use its best efforts to continue to meet the requirements to qualify as a "real estate investment trust" under the Code. (k) The Company will timely file any document which it is required to file pursuant to the 1934 Act prior to the termination of the offering of the Notes. (l) The Company will not, between the date of this Agreement and the termination of any trading restrictions or Closing Time, whichever is later, with respect to the Notes, without your prior written consent, offer or sell, grant any option for the sale of, or enter into any agreement to sell, any debt securities of the Company with a maturity of more than one year (other than the Notes which are to be sold pursuant to this Agreement and additional or expanded commitments to participate in the Company's revolving line of credit or increases in the amount of the term loan) except as may otherwise be provided in this Agreement and as otherwise set forth in and contemplated by the Prospectus. Section 4. PAYMENT OF EXPENSES. The Company will pay all expenses incident to the performance of its obligations under this Agreement, including (i) the preparation and filing of the Registration Statement as originally filed and of each amendment thereto, (ii) the preparation and filing of this Agreement, (iii) the preparation, issuance and delivery of the Notes to the Underwriters, (iv) the fees and disbursements of counsel for the Company, referred to in Section 5(b) hereof, and the Company's accountants, (v) the qualification of the Notes under securities laws and real estate syndication laws in accordance with the provisions of Section 3(g) hereof, including filing fees and the fee and disbursements of counsel for the Company in connection therewith and in connection with the preparation of any Blue Sky Survey, (vi) the printing and delivery to the Underwriters of copies of the Registration Statement as originally filed and of each amendment thereto, and of the Prospectus and any amendments or supplements thereto, (vii) any fees charged by nationally recognized statistical rating organizations for the rating of the Notes, (viii) the cost of printing or reproducing and delivering to the Underwriters copies of any Blue Sky Survey, (ix) the cost of providing any CUSIP or other identification numbers for the Notes, (x) the fees and expenses of any depositary in connection with the Notes, and (xi) any transfer taxes imposed on the sale of the Notes to the Underwriters. If this Agreement is terminated by the Representatives in accordance with the provisions of Section 5 or Section 9(a)(i), the Company shall reimburse the Underwriters for all of their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters. Section 5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the Underwriters hereunder are subject to the accuracy of the representations and warranties of the Company herein contained, to the performance by the Company of its obligations hereunder, and to the following further conditions: (a) At Closing Time no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission. The price of the Notes and any other information previously omitted from the effective Registration Statement pursuant to Rule 415 of the 1933 Act 14 Regulations shall have been transmitted to the Commission for filing pursuant to Rule 424(b) of the 1933 Act Regulations within the prescribed time period, and prior to Closing Time the Company shall have provided evidence satisfactory to the Representatives of such timely filing, or a post-effective amendment providing such information shall have been filed and declared effective in accordance with the requirements of the 1933 Act Regulations. (b) At Closing Time the Underwriters shall have received the favorable opinion, dated as of Closing Time, of Sullivan & Worcester LLP, counsel for the Company, in form and substance satisfactory to counsel for the Underwriters, to the effect that: (i) The Company has been duly organized and is a Maryland real estate investment trust in good standing under the laws of the State of Maryland and has the trust power and authority to carry on its business and to own and lease its properties as described in the Registration Statement and the Prospectus; each Significant Subsidiary (as defined in Rule 1-02 of Regulation S-X under the 1933 Act) of the Company has been duly organized and is validly existing as a corporation, partnership, limited liability company, trust or real estate investment trust, as the case may be, in good standing under the laws of its jurisdiction of incorporation or organization; each Significant Subsidiary has the corporate, partnership, limited liability company or trust (as applicable) power and authority to carry on its business and to own and lease its properties as described in the Registration Statement and in the Prospectus; each of the Company and its Significant Subsidiaries is duly qualified and is in good standing as a foreign corporation, partnership, limited liability company or trust, as the case may be, authorized to do business in each jurisdiction in which its ownership or leasing of property requires such qualification, except where the failure to be so qualified would not have a material adverse effect on the Company and its subsidiaries, taken as a whole. (ii) All of the issued and outstanding shares of beneficial interest of, or other ownership interests in, each of the Company's material subsidiaries have been duly authorized and validly issued and are fully paid and, except as to subsidiaries that are partnerships or limited liability companies, non-assessable, and, to such counsel's knowledge, except for the equity interests in Hallwood 95, L.P., are owned by the Company free and clear of any security interest or other adverse claim (within the meaning of Article 8 of the Massachusetts Uniform Commercial Code). (iii) The Company has the requisite trust power and authority to execute, deliver and perform its obligations under this Agreement and to issue and deliver the Notes. (iv) This Agreement and the Indenture have been duly authorized, executed and delivered by the Company. (v) The Indenture is a valid and binding obligation of the Company enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors' rights generally and equitable principles; and the Indenture has been duly qualified under the 1939 Act. 15 (vi) The Notes have been duly authorized and, when executed and authenticated in accordance with the provisions of the Indenture and delivered and paid for in accordance with the terms of this Agreement, will be valid and binding obligations of the Company enforceable in accordance with their terms subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors' rights generally and equitable principles; and the holders of the Notes are entitled to the benefit of the Indenture. (vii) The execution, delivery and performance by the Company of this Agreement, and the consummation of the transactions herein contemplated will not conflict with or constitute a breach or violation of any of the terms or provisions of, or constitute a default under, (A) the Declaration of Trust or the By-laws of the Company or the charter or by-laws or other organizational documents of any Significant Subsidiary of the Company as in effect at Closing Time, (B) except as disclosed in the Prospectus, any material agreement, indenture or other instrument known to such counsel to which the Company, or any Significant Subsidiary of the Company is a party or by which any of their respective material properties is bound, or (C) any laws, administrative regulations or rulings or decrees known to such counsel to which the Company, any Significant Subsidiary of the Company or any of their material properties is subject. (viii) No consent, approval, authorization or order of, or qualification with any United States federal, Massachusetts or Maryland court or public, governmental or regulatory agency or body having jurisdiction over the Company, any of its Significant Subsidiaries or any of their respective material properties is required for the Company's execution, delivery and performance of it obligations under this Agreement and the consummation of the transactions contemplated hereby, including the issuance, sale and delivery of the Notes, except such as have been obtained and such as may be required under foreign and state securities or "Blue Sky" laws. (ix) The Registration Statement has become effective under the 1933 Act, and, to the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or threatened by the Commission; and any required filing of the Prospectus pursuant to Rule 424(b) under the 1933 Act has been made in accordance with said Rule 424(b). (x) To such counsel's knowledge, except as disclosed in the Registration Statement or in the Prospectus, there is not now pending or threatened, any litigation, action, suit or proceeding to which the Company or any of its subsidiaries is or will be a party before or by any court or governmental agency or body, which (A) might result in any material adverse change in the condition, financial or otherwise, or in the business, operations, earnings, prospects or properties of the Company and its subsidiaries, taken as a whole, or (B) might materially and adversely affect the property or assets of the Company and its subsidiaries, taken as a whole, or (C) concerns the Company or any of its subsidiaries and is required to be disclosed in the Prospectus, or (D) could adversely affect the consummation of the transactions contemplated by this Agreement and the issuance of the Notes; to such counsel's knowledge, no contract or other document is 16 required to be described in the Registration Statement or in the Prospectus that is not described therein or is required to be filed as an exhibit to the Registration Statement that is not so filed. (xi) Except as otherwise disclosed in the Prospectus, to such counsel's knowledge, neither the Company nor any of its subsidiaries is in violation of its respective charter or by-laws or other organizational documents, as in effect at Closing Time, or in default in the performance of any obligation, agreement or condition contained in any bond, debenture, note or any other evidence of indebtedness or in any other material agreement, indenture or instrument to which the Company or any of its subsidiaries is a party or by which any of their respective properties or assets is bound, except for any such violations or defaults that would not in the aggregate result in a material adverse effect on the business, operations, earnings, business prospects, properties or condition (financial or otherwise) of the Company and its subsidiaries taken as a whole. (xii) To such counsel's knowledge, each of the Company and its Significant Subsidiaries has such permits, licenses, franchises and authorizations of governmental or regulatory authorities (together, "permits"), including, without limitation, under any applicable Environmental Law, as are necessary to own, lease and operate its properties and to engage in the business currently conducted by it, except such permits as to which the failure to own or possess will not in the aggregate have a material adverse effect on the business, operations, earnings, business prospects, properties or condition (financial or otherwise) of the Company and its subsidiaries, taken as a whole. (xiii) The Registration Statement and the Prospectus and any supplements or amendments thereto (except for the financial statements and the notes thereto and the schedules and other financial data included or incorporated by reference therein and the part of the Registration Statement that constitutes the Statement of Eligibility (Form T-1) of the Trustee under the 1939 Act, as to which such counsel need not express any opinion) comply as to form in all material respects with the requirements of the 1933 Act. (xiv) Each document incorporated by reference in the Registration Statement and in the Prospectus (except for the financial statements and the notes thereto and the schedules and other financial data included or incorporated by reference therein, as to which such counsel need not express any opinion) complied as to form when filed with the Commission in all material respects with the requirements of the 1934 Act. (xv) To the extent required to be described therein, the Notes conform in all material respects to the descriptions in the Registration Statement and the Prospectus. (xvi) The statements (a) in the Base Prospectus under the captions "Description of Debt Securities", "Description of Common Shares", "Description of Certain Provisions of Maryland Law and of our Declaration of Trust and Bylaws" and (b) in the Prospectus Supplement under the captions "Description of the Notes" and "Material Federal Income Tax Considerations" and (c) in Item 1 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2003 under the captions "Federal 17 Income Tax Considerations" and "ERISA Plans, Keogh Plans and Individual Retirement Accounts" in each case insofar as they purport to summarize matters arising under Massachusetts or Maryland law or the federal law of the United States, or provisions of documents to which the Company is a party specifically referred to therein, are accurate summaries of such legal matters or provisions. (xvii) The Company has qualified to be taxed as a real estate investment trust pursuant to Sections 856-860 of the Code for each of the fiscal years ended December 31, 1987 through December 31, 2003, and the Company's current anticipated investments and its current plan of operation will enable it to continue to meet the requirements for qualification and taxation as a real estate investment trust under the Code; actual qualification of the Company as a real estate investment trust under the Code, however, will depend upon the Company's continued ability to meet, and its meeting, through actual annual operating results and distributions, the various qualification tests imposed under the Code. (xviii) The Company is not required to register as an "investment company" under the 1940 Act. (xix) The Advisor (A) is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, and (B) has the requisite limited liability company power and authority to conduct its business as described in the Prospectus and to own and operate its material properties. (xx) The Advisory Agreement has been duly authorized, executed and delivered by the parties thereto and constitutes the valid agreement of the parties thereto, enforceable in accordance with its terms, except (a) as limited by the effect of bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other similar laws relating to or affecting the rights or remedies of creditors, (b) as limited by the effect of general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law) and (c) insofar as the enforceability of the indemnity and contribution provisions contained in such agreement may be limited by federal or state securities laws and the public policy underlying such laws. (xxi) Although counsel has not undertaken, except as otherwise indicated in their opinion, to determine independently, and does not assume any responsibility for, the accuracy or completeness of the statements in the Registration Statement, such counsel has participated in the preparation of the Registration Statement and the Prospectus, including review and discussion of the contents thereof (including review and discussion of the contents of all documents incorporated by reference in the Registration Statement and the Prospectus), and nothing has come to the attention of such counsel that has caused them to believe that the Registration Statement (including the documents incorporated by reference therein) at the time the Registration Statement became effective, or the Prospectus, as of its date and as of Closing Time, as the case may be, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that any amendment or supplement to the Prospectus, as of its respective date, and as 18 of Closing Time, as the case may be, contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (it being understood that such counsel need express no view with respect to the financial statements and the notes thereto and the schedules and other financial data included or incorporated by reference in the Registration Statement or in the Prospectus or the part of the Registration Statement that constitutes the Statement of Eligibility (Form T-1) of the Trustee under the 1939 Act.) In rendering their opinion as aforesaid, Sullivan & Worcester LLP may rely upon an opinion, dated as of Closing Time, of Venable LLP as to matters governed by Maryland law, PROVIDED that such reliance is expressly authorized by such opinion and a copy of such opinion is delivered to the Underwriters and is, in form and substance, satisfactory to the Representatives and counsel for the Underwriters. In addition, in rendering such opinion, such counsel may state that their opinion as to laws of the State of Delaware is limited to the Delaware General Corporation Law, the Delaware Revised Uniform Limited Partnership Act and the Delaware Limited Liability Company Act and that their opinion with respect to the qualification of the Company and its subsidiaries to do business in jurisdictions other than their respective jurisdictions of organization is based solely upon certificates to such effect issued by an appropriate official of the applicable jurisdictions. The opinion of Venable LLP described in the paragraph above shall be rendered to the Underwriters at the request of the Company and shall so state therein. (c) The Underwriters shall have received at Closing Time an opinion, dated as of Closing Time, of Sidley Austin Brown & Wood LLP, counsel for the Underwriters, as to the matters referred to in clauses (iv), (v), (vi), (ix), (xiii), (xv) and (xxi) of the foregoing paragraph (b). In giving such opinion with respect to the matters covered by clause (xxi), such counsel may state that their opinion and belief are based upon their participation in the preparation of the Registration Statement and the Prospectus and any amendments or supplements thereto and review and discussion of the contents thereof, but are without independent check or verification except as specified. In rendering their opinion as aforesaid, Sidley Austin Brown & Wood LLP may rely upon an opinion, dated as of Closing Time, of Venable LLP as to matters governed by Maryland law, and the opinion of Sullivan & Worcester LLP referred to above as to matters governed by Massachusetts law. (d) At Closing Time (i) the Registration Statement and the Prospectus shall contain all statements which are required to be stated therein in accordance with the 1933 Act and the 1933 Act Regulations and in all material respects shall conform to the requirements of the 1933 Act and the 1933 Act Regulations, and neither the Registration Statement nor the Prospectus shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and no action, suit or proceeding at law or in equity shall be pending or to the knowledge of the Company threatened against the Company which would be required to be set forth in the Prospectus other than as set forth therein, (ii) there shall not have been, since the respective dates as of which 19 information is given in the Registration Statement and the Prospectus, any material adverse change in the condition, financial or otherwise, of the Company or in its earnings, business affairs or business prospects, whether or not arising in the ordinary course of business from that set forth in the Registration Statement, and (iii) no proceedings shall be pending or, to the knowledge of the Company, threatened against the Company before or by any federal, state or other commission, board or administrative agency wherein an unfavorable decision, ruling or finding would materially and adversely affect the business, property, financial condition or income of the Company other than as set forth in the Prospectus; and the Underwriters shall have received, at Closing Time, a certificate of the President and Chief Operating Officer and of the Chief Financial Officer of the Company, dated as of Closing Time, evidencing compliance with the provisions of this subsection (d) and stating that the representations and warranties set forth in Section 1(a) hereof are accurate as though expressly made at and as of Closing Time. (e) At Closing Time, there shall not have been, since the respective dates as of which information is given in the Registration Statement and the Prospectus, any material adverse change in the business, operations, earnings, prospects, properties or condition (financial or otherwise) of the Advisor, whether or not arising in the ordinary course of business; and the Representatives shall have received, at Closing Time, a certificate of the President of the Advisor evidencing compliance with this subsection (e). (f) Concurrently with the execution and delivery of this Agreement, and at Closing Time prior to payment and delivery of the Notes, Ernst & Young LLP shall have furnished to the Representatives a letter, dated the date of its delivery, addressed to the Underwriters and in form and substance satisfactory to the Representatives, confirming that they are independent accountants with respect to the Company as required by the 1933 Act and the 1933 Act Regulations and with respect to the financial and numerical information contained in the Registration Statement and the Prospectus or incorporated by reference therein. Each such letter shall contain information of the type customarily included in accountants' comfort letters to underwriters. (g) Concurrently with the execution and delivery of this Agreement, Deloitte & Touche LLP shall have furnished to the Representatives a letter, dated the date of its delivery, addressed to the Underwriters and in form and substance satisfactory to the Representatives, confirming that they are independent accountants with respect to Hallwood Realty Partners, L.P. as required by the 1933 Act and the 1933 Act Regulations and with respect to certain financial and numerical information contained in the Registration Statement and the Prospectus or incorporated by reference therein. Such letter shall contain information of the type customarily included in accountants' comfort letters to underwriters. (h) At Closing Time counsel for the Underwriters shall have been furnished with such documents and opinions as they may reasonably require for the purpose of enabling it to pass upon the issuance and sale of the Notes as herein contemplated and related proceedings, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Notes as herein contemplated shall be reasonably satisfactory in form and substance to the Representatives and counsel for the Underwriters. 20 (i) Subsequent to the execution and delivery of this Agreement and prior to Closing Time, there shall not have occurred any downgrading, nor shall any notice have been given of (i) any intended or potential downgrading or (ii) any review or possible change that indicates anything other than a stable outlook, in the rating accorded any securities of or guaranteed by the Company by any "nationally recognized statistical rating organization," as such term is defined for purposes of Rule 436(g)(2) under the 1933 Act. If any condition specified in this Section 5 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Representatives by notice to the Company at any time at or prior to Closing Time, and such termination shall be without liability of any party to any other party except as provided in Section 4 hereof. Section 6. INDEMNIFICATION. (a) The Company hereby agrees to indemnify and hold harmless each Underwriter, each Underwriter's officers and directors and each person, if any, who controls each Underwriter within the meaning of Section 15 of the 1933 Act as follows: (1) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact included in any preliminary prospectus or the Prospectus (or any amendment or supplement thereto), or the omission, or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading: (2) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Company; and (3) against any and all expense whatsoever, as incurred (including, subject to Section 6(c) hereof, the fees and disbursements of counsel chosen by the Representatives), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceedings by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under paragraph (1) or (2) above; PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information 21 furnished to the Company by any Underwriter through the Representatives expressly for use in the Registration Statement (or any amendment thereto) or the Prospectus (or any amendment or supplement thereto); and PROVIDED, FURTHER, that the foregoing indemnity agreement with respect to any preliminary prospectus shall not inure to the benefit of any Underwriter, or the benefit of any person controlling any Underwriter, if a copy of the Prospectus (as then amended or supplemented if the Company shall have furnished any amendments or supplements thereto and excluding documents incorporated or deemed to be incorporated by reference therein) was not sent or given by or on behalf of such Underwriter to such person asserting any such losses, claims, damages or liabilities at or prior to the written confirmation of the sale of such Notes to such person, if required by law so to have been delivered, and if the Prospectus (as so amended or supplemented) would have cured the defect giving rise to such loss, claim, damage or expense. (b) Each Underwriter agrees to indemnify and hold harmless the Company, each of the Company's trustees, each of the Company's officers who signed the Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section 6, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto) or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives expressly for use in the Registration Statement (or any amendment thereto) or the Prospectus (or any amendment or supplement thereto). (c) Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability which it may have otherwise than on account of this indemnity agreement. An indemnifying party may participate at its own expense in the defense of such action. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. 22 Section 7. CONTRIBUTION. In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in Section 6 hereof is for any reason held to be unenforceable by the indemnified parties although applicable in accordance with its terms, the Company and the Underwriters shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said indemnity agreement incurred by the Company and the Underwriters, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Notes pursuant to this Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and of the Underwriters on the other hand in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other hand in connection with the offering of the Notes pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Notes pursuant to this Agreement (before deducting expenses) received by the Company and the total discount received by the Underwriters, bear to the aggregate initial offering price of the Notes. The relative fault of the Company on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to above in this Section 7. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. Notwithstanding the provisions of this Section 7, the Underwriters shall not be required to contribute any amount in excess of the amount by which the total price at which the Notes purchased from the Company by the Underwriters and distributed to the public were offered to the public exceeds the amount of any damages which the Underwriters have otherwise been required to pay in respect of such losses, liabilities, claims, damages and expenses. For purposes of this Section 7, each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act shall have the same rights to contribution as 23 such Underwriter, and each trustee of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act shall have the same rights to contribution as the Company. Section 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Underwriters or any controlling person, or by or on behalf of the Company, and shall survive delivery of the Notes to the Underwriters. Section 9. TERMINATION OF AGREEMENT. (a) The Representatives may terminate this Agreement, by notice to the Company, at any time at or prior to Closing Time (i) if there has been, since the respective dates as of which information is given in the Registration Statement, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries, taken as a whole, or the Advisor, whether or not arising in the ordinary course of business, which would make it, in the Representatives' reasonable judgment, impracticable or inadvisable to market the Notes or enforce contracts for the sale of the Notes, (ii) if there has occurred any material adverse change in the financial markets in the United States or any outbreak of hostilities or escalation of existing hostilities or other calamity or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the Representatives' reasonable judgment, impracticable or inadvisable to market the Notes or enforce contracts for the sale of the Notes, or (iii) if trading in the Company's Common Shares has been suspended by the Commission, or if trading generally on either the New York Stock Exchange or the American Stock Exchange has been suspended, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities have been required, by either of said exchanges or by order of the Commission or any other governmental authority, or a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States, or (iv) if a banking moratorium has been declared by Federal or New York authorities. (b) If this Agreement is terminated pursuant to this Section 9, such termination shall be without liability of any party to any other party except as provided in Section 4, and PROVIDED, FURTHER, that Sections 6 and 7 hereof shall survive such termination. Section 10. DEFAULT. If one or more of the Underwriters shall fail at Closing Time to purchase the Notes which it or they are obligated to purchase under this Agreement (the "Defaulted Notes"), the Representatives shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Notes in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Representatives shall not have completed such arrangements within such 24-hour period, then: (i) if the principal amount of Defaulted Notes does not exceed 10% of the aggregate principal amount of the Notes, the non-defaulting Underwriters shall be obligated to purchase the full amount thereof in the proportions that their respective underwriting 24 obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or (ii) if the principal amount of Defaulted Notes exceeds 10% of the aggregate principal amount of the Notes, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter and the Company. No action taken pursuant to this Section 10 shall relieve any defaulting Underwriter from liability in respect of its default. In the event of any such default which does not result in a termination of this Agreement, either the Representatives or the Company shall have the right to postpone Closing Time for a period not exceeding seven days in order to effect any required changes in the Prospectus or in any other documents or arrangements. Section 11. NOTICES. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to the Underwriters c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated at 4 World Financial Center, New York, New York 10080, Attention: Jack Vissicchio, Managing Director; and notices to the Company shall be directed to it at 400 Centre Street, Newton, Massachusetts 02458, Attention: John C. Popeo, Treasurer, Chief Financial Officer and Secretary. Section 12. PARTIES. This Agreement shall inure to the benefit of and be binding upon the Underwriters and the Company and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than those referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the parties hereto and thereto and their respective successors and said controlling persons and officers, trustees and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Notes from any Underwriter shall be deemed to be a successor by reason merely of such purchase. Section 13. GOVERNING LAW AND TIME; MISCELLANEOUS. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed in said State. Specified times of day refer to New York City time. THE AMENDED AND RESTATED DECLARATION OF TRUST ESTABLISHING THE COMPANY, DATED JULY 1, 1994, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS AND SUPPLEMENTS THERETO (THE "DECLARATION"), IS DULY FILED IN THE OFFICE OF THE STATE DEPARTMENT OF ASSESSMENTS AND TAXATION OF MARYLAND, PROVIDES THAT THE NAME "HRPT PROPERTIES TRUST" REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO 25 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. 26 If the foregoing is in accordance with your understanding of our agreement, please sign and return to us a counterpart hereof, whereupon this instrument along with all counterparts will become a binding agreement between the Underwriters and the Company in accordance with its terms. Very truly yours, HRPT PROPERTIES TRUST By /s/ John C. Popeo ------------------------------------------ Name: John C. Popeo Title: Treasurer, Chief Financial Officer and Secretary CONFIRMED AND ACCEPTED, as of the date first above written: MERRILL LYNCH, PIERCE FENNER & SMITH INCORPORATED RBC CAPITAL MARKETS CORPORATION WACHOVIA CAPITAL MARKETS, LLC By: Merrill Lynch, Pierce Fenner & Smith Incorporated By /s/ Alexander Virtue --------------------------------------- Name: Alexander Virtue Title: Vice President, Investment Banking For themselves and as Representatives of the other Underwriters named in Schedule A hereto. 27 SCHEDULE A
NAME OF UNDERWRITER AMOUNT - ------------------- ------ Merrill Lynch, Pierce, Fenner & Smith Incorporated ...................................... $ 120,000,000 RBC Capital Markets Corporation................................ 60,000,000 Wachovia Capital Markets, LLC.................................. 60,000,000 Advest, Inc.................................................... 8,889,000 BB&T Capital Markets, a division of Scott & Stringfellow, Inc..................... 8,889,000 BNY Capital Markets, Inc....................................... 8,889,000 Banc of America Securities LLC................................. 8,889,000 Comerica Securities, Inc....................................... 8,889,000 Commerzbank Capital Markets Corp............................... 8,889,000 Ferris, Baker Watts, Incorporated.............................. 8,889,000 Harris Nesbitt Corp............................................ 8,889,000 KeyBanc Capital Markets, a division of McDonald Investments Inc....................... 8,889,000 Legg Mason Wood Walker, Incorporated........................... 8,889,000 Morgan Keegan & Company, Inc................................... 8,889,000 PNC Capital Markets, Inc....................................... 8,889,000 Piper Jaffray & Co. ........................................... 8,889,000 Raymond James & Associates, Inc................................ 8,889,000 Stifel, Nicolaus & Company, Incorporated....................... 8,889,000 SunTrust Capital Markets, Inc.................................. 8,889,000 Wedbush Morgan Securities Inc.................................. 8,888,000 Wells Fargo Brokerage Services, LLC............................ 8,888,000 Total....................................................... $ 400,000,000 =============
28 EX-4.1 3 a2141044zex-4_1.txt EXHIBIT 4.1 Exhibit 4.1 Form of SUPPLEMENTAL INDENTURE NO. 14 by and between HRPT PROPERTIES TRUST and U.S. BANK NATIONAL ASSOCIATION as of August 5, 2004 SUPPLEMENTAL TO THE INDENTURE DATED AS OF JULY 9, 1997 ------------------------- HRPT PROPERTIES TRUST 6 1/4% Senior Notes due August 15, 2016 ------------------------- This SUPPLEMENTAL INDENTURE NO. 14 (this "Supplemental Indenture") made and entered into as of August 5, 2004 between HRPT PROPERTIES TRUST, a Maryland real estate investment trust (the "Company"), and U.S. BANK NATIONAL ASSOCIATION, a national banking association (as successor to State Street Bank and Trust Company in its capacity as Trustee), as Trustee (the "Trustee"), WITNESSETH THAT: WHEREAS, the Company and the Trustee are parties to an Indenture, dated as of July 9, 1997 (the "Indenture"), relating to the Company's issuance, from time to time, of various series of debt securities; WHEREAS, the Company has determined to issue debt securities known as its 6 1/4% Senior Notes due August 15, 2016; and WHEREAS, the Indenture provides that certain terms and conditions for each series of debt securities issued by the Company thereunder may be set forth in an indenture supplemental to the Indenture; NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH: ARTICLE 1 DEFINED TERMS SECTION 1.1 The following definitions supplement, and, to the extent inconsistent with, replace the definitions in Section 101 of the Indenture: "Acquired Debt" means Debt of a Person or entity (i) existing at the time such Person or entity becomes a Subsidiary or (ii) assumed in connection with the acquisition of assets from such Person or entity, in each case, other than Debt incurred in connection with, or in contemplation of, such Person or entity 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 entity or the date the acquired Person or entity becomes a Subsidiary. "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. "Business Day" means any day other than a Saturday or Sunday or a day on which banking institutions in the City of New York or in the city in which the Corporate Trust Office of the Trustee is located, are required or authorized to close. "Capital Stock" means, with respect to any Person, any capital stock (including preferred stock), shares, interests, participation or other ownership interests (however designated) of such Person and any rights (other than debt securities convertible into or exchangeable for capital stock), warrants or options to purchase any thereof. "Consolidated Income Available for Debt Service" for any period means Earnings from Operations of the Company and its Subsidiaries plus amounts which have been deducted, and minus amounts which have been added, for the following (without duplication): (i) interest on Debt of the Company and its Subsidiaries, (ii) 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. "Corporate Trust Office" means the corporate trust office of the Trustee which it designates as the office at which the agreement in question will be administered (which it may change by notice from time to time), presently located at One Federal Street, 3rd Floor, Boston, Massachusetts 02110. "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 and (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 GAAP, to the extent, in the case of items of indebtedness under (i) through (iii) above, that any such items (other than letters of credit) would appear as a liability on the Company's consolidated balance sheet in accordance with GAAP, and also 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 common stock or shares), (ii) is convertible into or exchangeable or exercisable for 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 common stock or shares), in each case on or prior to the stated maturity of the Notes. - 2 - "Earnings from Operations" for any period means net earnings excluding gains and losses on sales of investments, extraordinary items, gains and losses on early extinguishment of debt and property valuation losses, as reflected in the financial statements of the Company and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP. "Encumbrance" means any mortgage, lien, charge, pledge or security interest of any kind. "Make-Whole Amount" means, in connection with any optional redemption or accelerated payment of any notes prior to February 15, 2016, the excess, if any, of (i) the aggregate present value as of the date of such redemption or accelerated payment of each dollar of principal being redeemed or paid and the amount of interest (exclusive of interest accrued to the date of redemption or accelerated payment) that would have been payable in respect of such dollar if such redemption or accelerated payment had been made on February 15, 2016, determined by discounting, on a semiannual basis, such principal and interest at the Reinvestment Rate (determined on the third Business Day preceding the date such notice of redemption is given or declaration of acceleration is made) from the respective dates on which such principal and interest would have been payable if such redemption or accelerated payment had been made on February 15, 2016, over (ii) the aggregate principal amount of the Notes being redeemed or paid. In the case of any redemption or accelerated payment of notes on or after February 15, 2016, the Make-Whole Amount means zero. For purposes of this Supplemental Indenture and the Notes, references in the Indenture to the payment of the principal (and premium, if any) and interest on the Notes shall be deemed to include the payment of the Make-Whole Amount, if any, due upon redemption with respect to the Notes. The Make-Whole Amount shall be calculated by the Company and set forth in an Officer's Certificate delivered to the Trustee, and the Trustee shall be entitled to rely on said Officer's Certificate. "Notes" means the Company's 6 1/4% Senior Notes due August 15, 2016, issued under this Supplemental Indenture and the Indenture, as amended or supplemented from time to time. "Reinvestment Rate" means a rate per annum equal to the sum of 0.30% (thirty one-hundredths of one percent) plus the yield on treasury securities at constant maturity under the heading "Week Ending" published in the Statistical Release under the caption "Treasury Constant Maturities" for the maturity (rounded to the nearest month) corresponding to the remaining life to maturity (which, in the case of maturities corresponding to the principal and interest due on the notes at their maturity, shall be deemed to be February 15, 2016), as of the payment date of the principal being redeemed or paid. If no maturity exactly corresponds to such maturity, yields for the two published maturities most closely corresponding to such maturity shall be calculated pursuant to the immediately preceding sentence and the Reinvestment Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding in each of such relevant periods to the nearest month For purposes of calculating the Reinvestment Rate, the most recent Statistical Release published prior to the date of determination of the Make-Whole Amount shall be used. "Secured Debt" means Debt secured by any mortgage, lien, charge, pledge or security interest of any kind. "Statistical Release" means the statistical release designated "H.15(519)" or any successor publication which is published weekly by the Federal Reserve System and which establishes yields - 3 - on actively traded United States government securities adjusted to constant maturities or, if such statistical release is not published at the time of any determination under this Supplemental Indenture, then any publicly available source of similar market data which shall be designated by the Company. "Subsidiary" means any corporation or other entity 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, 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 GAAP (but excluding accounts receivable and intangibles). "Total Unencumbered Assets" means the sum of (i) those Undepreciated Real Estate Assets not subject to an Encumbrance for borrowed money and (ii) all other assets of the Company and its Subsidiaries not subject to an Encumbrance for borrowed money determined in accordance with GAAP (but excluding accounts receivable and intangibles). "Undepreciated Real Estate Assets" as of any date means the cost (original cost plus capital improvements) of real estate assets of the Company and its Subsidiaries on such date, before depreciation and amortization, determined on a consolidated basis in accordance with GAAP. "Unsecured Debt" means Debt which is not secured by any of the properties of the Company or any Subsidiary. ARTICLE 2 TERMS OF THE NOTES SECTION 2.1 Pursuant to Section 301 of the Indenture, the Notes shall have the following terms and conditions: (a) TITLE; AGGREGATE PRINCIPAL AMOUNT; FORM OF NOTES. The Notes shall be Registered Securities under the Indenture and shall be known as the Company's "6 1/4% Senior Notes due August 15, 2016." The Notes will be limited to an aggregate principal amount of $400,000,000, subject to the right of the Company to reopen such series for issuances of additional securities of such series and except as provided in this Section or in Section 306 of the Indenture. 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 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. Except under the circumstance described below, the Notes will not be issuable in definitive form. Unless and until it is exchanged in whole or in part for the individual notes represented thereby, a Global Note may - 4 - 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 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 or this Supplemental Indenture. If DTC is at any time unwilling, unable or ineligible to continue as depositary and a successor depositary is not appointed by the Company within 90 days, the Company will issue individual Notes in exchange for the Global Note or Global Notes representing such Notes. In addition, the Company may at any time and in its sole discretion, subject to certain limitations set forth in the Indenture, determine not to have any of such Notes represented by one or more Global Notes and, in such event, will issue individual Notes in exchange for the Global Note or Global Notes representing the Notes. Individual Notes so issued will be issued in denominations of $1,000 and integral multiples thereof. (b) INTEREST AND INTEREST RATE. The Notes will bear interest at a rate of 6 1/4% per annum, from August 5, 2004 (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 semiannually on each February 15 and August 15, commencing February 15, 2005 (each of which shall be an "Interest Payment Date"), to the Persons in whose names the Notes are registered in the Security Register at the close of business on the day falling 14 calendar days (whether or not a Business Day) next preceding such Interest Payment Date (each, a "Regular Record Date"). (c) PRINCIPAL REPAYMENT; CURRENCY. The stated maturity of the Notes is August 15, 2016, provided, however, the Notes may be earlier redeemed at the option of the Company as provided in paragraph (d) below. The principal of each Note payable on its maturity date shall be paid against presentation and surrender thereof at the Corporate Trust Office of the Trustee in such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public or private debts. The Company will not pay Additional Amounts (as defined in the Indenture) on the Notes. (d) REDEMPTION AT THE OPTION OF THE COMPANY; ACCELERATION. The Notes will be subject to redemption at any time at the option of the Company, in whole or in part, 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, at a price equal to the sum of (i) the principal amount of the Notes being redeemed, plus accrued and unpaid interest to but excluding the applicable Redemption Date, plus (ii) the Make-Whole Amount, if any. If the notes are redeemed on or after February 15, 2016, the redemption price will not include the Make-Whole Amount. Upon the acceleration of the Notes in - 5 - accordance with Section 502 of the Indenture, the Company shall pay the amount specified in Section 4.2 of this Supplemental Indenture. (e) NOTICES. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Company shall be directed to it at 400 Centre Street, Newton, Massachusetts 02458, Attention: President; notices to the Trustee shall be directed to it at One Federal Street, 3rd Floor, Boston, Massachusetts 02110, Attention: Corporate Trust Department, Re: HRPT Properties Trust 6 1/4% Senior Notes due August 15, 2016; 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) GLOBAL NOTE LEGEND. Each Global Note shall bear the following legend on the face thereof: UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. (g) APPLICABILITY OF DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE PROVISIONS. The Discharge, Defeasance and Covenant Defeasance provisions in Article Fourteen of the Indenture will apply to the Notes. ARTICLE 3 ADDITIONAL COVENANTS SECTION 3.1 In addition to the covenants of the Company set forth in Article Ten of the Indenture, for the benefit of the holders of the Notes: (a) LIMITATIONS ON INCURRENCE OF DEBT. (i) The Company will not, and will not permit any Subsidiary to, incur any Debt if, immediately after giving effect to the incurrence of such additional Debt and the application of the proceeds thereof, the aggregate principal amount of all outstanding Debt of the Company and its Subsidiaries on a consolidated basis determined in accordance with GAAP is greater than 60% of the sum ("Adjusted Total Assets") of (without duplication) (A) the Total Assets of the Company and its Subsidiaries as of the end of the calendar quarter covered in the Company's Annual Report on Form 10-K, or the Quarterly Report on - 6 - Form 10-Q, as the case may be, most recently filed with the Securities and Exchange Commission (or, if such filing is not permitted under the Securities Exchange Act of 1934, as amended, with the Trustee) prior to the incurrence of such additional Debt and (B) the purchase price of any real estate assets or mortgages receivable acquired, and the amount of any securities offering proceeds received (to the extent that such proceeds were not used to acquire real estate assets or mortgages receivable or used to reduce Debt), by the Company or any Subsidiary since the end of such calendar quarter, including those proceeds obtained in connection with the incurrence of such additional Debt. (ii) In addition to the foregoing limitations on the incurrence of Debt, the Company will not, and will not permit any Subsidiary to, incur any Secured Debt if, immediately after giving effect to the incurrence of such additional Secured Debt and the application of the proceeds thereof, the aggregate principal amount of all outstanding Secured Debt of the Company and its Subsidiaries on a consolidated basis is greater than 40% of Adjusted Total Assets. (iii) In addition to the foregoing limitations on the incurrence of Debt, the Company will not, and will not permit any Subsidiary to, incur any Debt if the ratio of Consolidated Income Available for Debt Service to the Annual Debt Service for the four consecutive fiscal quarters most recently ended prior to the date on which such additional Debt is to be incurred shall have been less than 1.5 to 1.0, on a pro forma basis after giving effect thereto and to the application of the proceeds therefrom, and calculated on the assumption that (A) such Debt and any other Debt incurred by the Company and its Subsidiaries 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 or retirement of any other Debt by the Company and its Subsidiaries since the first date of such four-quarter period had been repaid or retired at the beginning of such period (except that, in making such computation, the amount of Debt under any revolving credit facility shall be computed based upon the average daily balance of such Debt during such period); (C) in the case of Acquired Debt or Debt incurred in connection with any acquisition 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 or its Subsidiaries of any asset or group of assets since the first day of such four-quarter period, whether by merger, stock purchase or sale, or asset purchase or sale, such acquisition or disposition or any related repayment of Debt had occurred as of the first day of such period with the appropriate adjustments with respect to such acquisition or disposition being included in such pro forma calculation. If the Debt giving rise to the need to make the foregoing calculation or any other Debt incurred after the first day of the relevant four-quarter period bears interest at a floating 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 entire 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 maintain at all times Total Unencumbered Assets of not less than 200% of the aggregate - 7 - outstanding principal amount of the Unsecured Debt of the Company and its Subsidiaries on a consolidated basis. ARTICLE 4 ADDITIONAL EVENTS OF DEFAULT SECTION 4.1 For purposes of this Supplemental Indenture and the Notes, in addition to the Events of Default set forth in Section 501 of the Indenture, it shall also constitute an "Event of Default" if a default under any bond, debenture, note or other evidence of indebtedness of the Company (including a default with respect to any other series of securities), or under any mortgage, indenture or other instrument of the Company under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed by 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) having an aggregate principal amount outstanding of at least $20,000,000, whether such indebtedness now exists or shall hereafter be incurred or created, which default shall have resulted in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, without such indebtedness having been discharged, or such acceleration having been rescinded or annulled, within a period of ten 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 at least 25% in 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" hereunder. SECTION 4.2 Notwithstanding any provisions to the contrary in the Indenture, upon any acceleration of the Notes under Section 502 of the 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, plus, if such acceleration occurs prior to February 15, 2016, the Make-Whole Amount. ARTICLE 5 EFFECTIVENESS This Supplemental Indenture shall be effective for all purposes as of the date and time this Supplemental Indenture has been executed and delivered by the Company and the Trustee in accordance with Article Nine of the Indenture. As supplemented hereby, the Indenture is hereby confirmed as being in full force and effect. 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. - 8 - SECTION 6.2 To the extent that any terms of this Supplemental Indenture or the Notes are inconsistent with the terms of the 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 Commonwealth of Massachusetts. 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. [Remainder of page intentionally left blank.] - 9 - 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. HRPT PROPERTIES TRUST By: ------------------ Name: Title: U.S. BANK NATIONAL ASSOCIATION, as Trustee By: ------------------ Name: Title: - 10 - EXHIBIT A FORM OF NOTE [FACE OF NOTE] 6 1/4% Senior Note due August 15, 2016 No. R-___ $________ HRPT PROPERTIES TRUST promises to pay to ________________________ or registered assigns, the principal sum of ________________________ ($_______) on August 15, 2016, subject to the terms set forth on the reverse of this Note and the terms of the Indenture referred to therein. Interest Payment Dates: each February 15 and August 15, commencing February 15, 2005. Record Dates: the day falling 14 calendar days prior to any Interest Payment Date. CUSIP No.: ______________ HRPT PROPERTIES TRUST By: ---------------------------- Name: Title: Attest: ---------------------------- [SEAL] CERTIFICATE OF AUTHENTICATION Dated: This is one of the Notes referred to in the within-mentioned Indenture: U.S. BANK NATIONAL ASSOCIATION, as Trustee By: ------------------------------- Authorized Officer [THE FOLLOWING CONSTITUTES THE REVERSE OF THE SECURITY] HRPT PROPERTIES TRUST 6 1/4 % Senior Note due August 15, 2016 Capitalized terms used herein have the meanings assigned to them in the Indenture (as defined below) unless otherwise indicated. 1. INTEREST. HRPT Properties Trust, a Maryland real estate investment trust (the "Company"), promises to pay interest on the principal amount of this Note at the rate and in the manner specified below. The Company shall pay in cash interest on the principal amount of this Note at the rate per annum of 6 1/4%. The Company will pay interest semiannually in arrears on each February 15 and August 15, commencing February 15, 2005, or, if any such day is not a Business Day (as defined in the Indenture), on the next succeeding Business Day (each an "Interest Payment Date"), to Holders of record on the day falling 14 calendar days immediately preceding such Interest Payment Date (whether or not a Business Day). Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months. Interest shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from August 5, 2004. 2. METHOD OF PAYMENT. The Company will pay interest on the Notes (except defaulted interest) to the Persons who are registered Holders of Notes at the close of business on the record date next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date. The Company will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. The Company, however, may pay principal, premium, if any, and interest by check payable in such money. It may mail an interest check to a Holder's registered address. 3. INDENTURE. The Company issued the Notes under an Indenture, dated as of July 9, 1997, and a Supplemental Indenture No. 14 thereto, dated as of August 5, 2004 (collectively, the "Indenture"), between the Company and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 as in effect on the date of the Indenture. The Notes are subject to all such terms, and Holders of the Notes are referred to the Indenture and such Act for a statement of such terms. The terms of the Indenture shall govern any inconsistencies between the Indenture and the Notes. The Notes are unsecured general obligations of the Company limited to $400,000,000 in aggregate principal amount, except as otherwise provided in the Indenture. 4. OPTIONAL REDEMPTION. The Notes will be subject to redemption at any time at the option of the Company, in whole or in part, upon not less than 30 nor more than 60 days' notice, at a redemption price equal to the sum of (i) the principal amount of the Notes being redeemed, plus accrued and unpaid interest to but excluding the applicable Redemption Date and (ii) the Make-Whole Amount, if any. If the Notes are redeemed on or after February 15, 2016, the redemption price will not include the Make-Whole Amount. A-2 As used herein the term "Make-Whole Amount" means, in connection with any optional redemption or accelerated payment of any notes prior to February 15, 2016, the excess, if any, of (i) the aggregate present value as of the date of such redemption or accelerated payment of each dollar of principal being redeemed or paid and the amount of interest (exclusive of interest accrued to the date of redemption or accelerated payment) that would have been payable in respect of such dollar if such redemption or accelerated payment had been made on February 15, 2016, determined by discounting, on a semiannual basis, such principal and interest at the Reinvestment Rate (determined on the third Business Day preceding the date such notice of redemption is given or declaration of acceleration is made) from the respective dates on which such principal and interest would have been payable if such redemption or accelerated payment had been made on February 15, 2016, over (ii) the aggregate principal amount of the Notes being redeemed or paid. In the case of any redemption or accelerated payment of notes on or after February 15, 2016, the Make-Whole Amount means zero. For purposes of the Indenture and the Notes, references in the Indenture to the payment of the principal (and premium, if any) and interest on the Notes shall be deemed to include the payment of the Make-Whole Amount, if any, due upon redemption with respect to the Notes. The Make-Whole Amount shall be calculated by the Company and set forth in an Officer's Certificate delivered to the Trustee, and the Trustee shall be entitled to rely on said Officer's Certificate. As used herein the term "Reinvestment Rate" means a rate per annum equal to the sum of 0.30% (thirty one-hundredths of a percent) plus the yield on treasury securities at constant maturity under the heading "Week Ending" published in the Statistical Release (as defined herein) under the caption "Treasury Constant Maturities" for the maturity (rounded to the nearest month) corresponding to the remaining life to maturity (which, in the case of maturities corresponding to the principal and interest due on the notes at their maturity, shall be deemed to be February 15, 2016), as of the payment date of the principal being redeemed or paid. If no maturity exactly corresponds to such maturity, yields for the two published maturities most closely corresponding to such maturity shall be calculated pursuant to the immediately preceding sentence and the Reinvestment Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding in each of such relevant periods to the nearest month. For purposes of calculating the Reinvestment Rate, the most recent Statistical Release published prior to the date of determination of the Make-Whole Amount shall be used. As used herein the term "Statistical Release" means the statistical release designated "H.15(519)" or any successor publication which is published weekly by the Federal Reserve System and which establishes yields on actively traded United States government securities adjusted to constant maturities or, if such statistical release is not published at the time of any determination under the Supplemental Indenture, then any publicly available source of similar market data which shall be designated by the Company. 5. MANDATORY REDEMPTION. The Company shall not be required to make sinking fund or redemption payments with respect to the Notes. 6. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder of Notes to be redeemed at its registered address. Notes may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date, interest A-3 ceases to accrue on Notes or portions of them called for redemption. 7. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000 in excess thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Security Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Security Registrar need not exchange or register the transfer of any Note or portion of a Note selected for redemption. Also, it need not exchange or register the transfer of any Notes for a period of 15 days before the mailing of a notice of redemption of Notes, or during the period between a record date and the corresponding Interest Payment Date. 8. DEFAULTS AND REMEDIES. In case an Event of Default (as defined in the Indenture) with respect to the Notes shall have occurred and be continuing, the principal hereof may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the provisions provided in the Indenture. 9. ACTIONS OF HOLDERS. The Indenture contains provisions permitting the holders of not less than a majority of the aggregate principal amount of the outstanding Notes, subject to certain exceptions as provided in the Indenture, on behalf of the holders of all such Notes at a meeting duly called and held as provided in the Indenture, to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other action provided in the Indenture to be made, given or taken by the holders of the Notes, including without limitation, waiving (a) compliance by the Company with certain provisions of the Indenture, and (b) certain past defaults under the Indenture and their consequences. Any resolution passed or decision taken at any meeting of the holders of the Notes in accordance with the provisions of the Indenture shall be conclusive and binding upon such holders and upon all future holders of this Note and other Notes issued upon the registration of transfer hereof or in exchange heretofore or in lieu hereof. 10. PERSONS DEEMED OWNERS. The Company, the Trustee, and any agent of the Company or the Trustee may deem and treat the Person in whose name this Note is registered on the Security Register as its absolute owner for all purposes. 11. AUTHENTICATION. This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 12. GOVERNING LAW. THE INTERNAL LAW OF THE COMMONWEALTH OF MASSACHUSETTS SHALL GOVERN AND BE USED TO CONSTRUE THE INDENTURE AND THE NOTES. 13. NO PERSONAL LIABILITY. THE AMENDED AND RESTATED DECLARATION OF TRUST OF THE COMPANY, DATED JULY 1, 1994, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS AND SUPPLEMENTS 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 "HRPT PROPERTIES TRUST" REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, A-4 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. The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Request may be made to: HRPT Properties Trust 400 Centre Street Newton, MA 02458 Telecopier No.: (617) 332-2261 Attention: President or such other address as the Company may specify pursuant to the Indenture. A-5 ASSIGNMENT FORM To assign this Note, fill in the form below: [I] [We] assign and transfer this Note to ___________________________________________________________________________ [PRINT OR TYPE ASSIGNEE'S NAME, ADDRESS AND ZIP CODE] __________________________________ [INSERT ASSIGNEE'S SOC. SEC. OR TAX I.D. NO.] and irrevocably appoint_________________________________________________________ to transfer this Note on the books of the Company. The agent may substitute another to act for him. Date: --------------- Your Signature: ----------------------------- [SIGN EXACTLY AS YOUR NAME APPEARS ON THE FACE OF THIS NOTE] Signature Guarantee: - -------------------------- [THE SIGNATURE MUST BE GUARANTEED BY AN OFFICER OF A PARTICIPANT IN A RECOGNIZED SIGNATURE GUARANTEE PROGRAM. NOTARIZED OR WITNESSED SIGNATURES ARE NOT ACCEPTABLE.] A-6 EX-5.1 4 a2141044zex-5_1.txt EXHIBIT 5.1 Exhibit 5.1 [LETTERHEAD OF SULLIVAN & WORCESTER LLP] July 27, 2004 HRPT Properties Trust 400 Centre Street Newton, Massachusetts 02458 Re: HRPT Properties Trust $400,000,000 6 1/4% Senior Notes Due August 15, 2016 ---------------------------------------------------- Ladies and Gentlemen: We have acted as counsel to HRPT Properties Trust, a Maryland real estate investment trust (the "Company"), in connection with the Company's authorization for issuance and sale of an aggregate of $400,000,000 in principal amount of the Company's 6 1/4% Senior Notes due August 15, 2016 (the "Senior Notes"), to be issued pursuant to the Indenture, dated as of July 9, 1997 (the "Base Indenture"), between the Company and U.S. Bank National Association, as successor trustee to State Street Bank and Trust Company, as Trustee (the "Trustee"), to be supplemented by Supplemental Indenture No. 14, to be dated on or about August 5, 2004 (in the form provided to us by the Company, the "Supplemental Indenture"), between the Company and the Trustee (the Base Indenture, as so supplemented, the "Indenture"). We understand that the Senior Notes are to be offered and sold under the Company's Registration Statement on Form S-3, No. 333-114285, as amended, and/or the Company's Registration Statement on Form S-3, No. 333-056051, as amended (collectively, the "Registration Statement"). In connection with this opinion, we have examined and relied upon copies of (i) the Registration Statement, (ii) the final Prospectus dated June 28, 2004 (the "Base Prospectus") relating to the Registration Statement, (iii) the final Prospectus Supplement to the Base Prospectus dated July 27, 2004 relating to the Senior Notes (the "Prospectus Supplement" and the Base Prospectus, as supplemented thereby, the "Prospectus"), (iv) the Indenture, and (iv) resolutions adopted by the Board of Trustees of the Company on July 26, 2004 and resolutions adopted by an Ad Hoc Pricing Committee of the Board of Trustees of the Company on July 27, 2004, each relating to the Senior Notes. 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 have assumed for purposes of this opinion that the Trustee is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and is duly qualified to engage in the activities contemplated by, and has the requisite organizational and legal power and authority to perform its obligations under, the Indenture, that the Trustee is in compliance, generally with respect to acting as a trustee HRPT Properties Trust July 27, 2004 Page 2 under the Indenture, with all applicable laws and regulations, and that the Indenture is and will be the valid and binding agreement of the Trustee, enforceable against the Trustee in accordance with its terms. We express no opinion herein as to any laws other than the laws of the Commonwealth of Massachusetts and the federal laws of the United States. Insofar as this opinion involves matters of Maryland law we have, with the Company's permission, relied solely upon the opinion of even date herewith of Venable LLP, a copy of which we understand the Company is filing as Exhibit 5.2 to its Current Report on Form 8-K, dated July 27, 2004 (the "Current Report"), and with respect to matters involving Maryland law our opinion is subject to the limitations and qualifications set forth in such opinion. Our opinion set forth below with respect to the validity or binding effect of the Senior Notes or any obligations is subject to (i) limitations arising under applicable bankruptcy, insolvency, reorganization, fraudulent transfer moratorium or other similar laws affecting the enforcement generally of the rights and remedies of creditors and secured parties or the obligations of debtors, (ii) general principles of equity (regardless of whether considered in a proceeding at law or in equity), including, without limitation, the discretion of any court of competent jurisdiction in granting specific performance or injunctive or other equitable relief, and (iii) an implied duty on the part of the party seeking to enforce rights or remedies to take action and make determinations on a reasonable basis and in good faith to the extent required by applicable law. Based on and subject to the foregoing, we are of the opinion that, as of the date hereof, the Senior Notes have been duly authorized and, when (i) the Supplemental Indenture shall have been duly executed and delivered by the parties thereto and (ii) the Senior Notes have been (A) duly executed and delivered by the Company and authenticated by the Trustee as provided in the Indenture, and (B) duly delivered to the purchasers thereof against payment of the agreed consideration therefor, as provided in the Registration Statement, the Prospectus and the Indenture, will constitute validly issued and binding obligations of the Company. The opinions set forth herein are rendered as of the date hereof, and we assume no obligation to update such opinions to reflect any facts or circumstances which may hereafter come to our attention or any changes in the law which may hereafter occur. We hereby consent to the filing of this opinion as Exhibit 5.1 to the Current Report, which is incorporated by reference into the Registration Statement and the Prospectus, and to references to this firm under the caption "Validity of the Offered Securities" in the Base Prospectus and "Legal Matters" in the Prospectus Supplement. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the Securities Act of 1933, as amended. Very truly yours, /s/ SULLIVAN & WORCESTER LLP SULLIVAN & WORCESTER LLP EX-5.2 5 a2141044zex-5_2.txt EXHIBIT 5.2 Exhibit 5.2 [LETTERHEAD OF VENABLE LLP] July 27, 2004 HRPT Properties Trust 400 Centre Street Newton, Massachusetts 02458 Re: Registration Statements on Form S-3 (File Nos. 333-114285 and 333-056051) --------------------------------------------------------- Ladies and Gentlemen: We have served as Maryland counsel to HRPT Properties Trust, a Maryland real estate investment trust (the "Company"), in connection with certain matters of Maryland law arising out of the issuance of $400,000,000 aggregate principal amount of 6 1/4% Senior Notes due 2016 (the "Notes") of the Company, covered by the above-referenced Registration Statements, and all amendments thereto (collectively, the "Registration Statement"), filed by the Company with the United States Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "1933 Act"). The Notes are to be issued in an underwritten public offering pursuant to a Prospectus Supplement, dated July 27, 2004 (the "Prospectus Supplement"), to be filed with the Commission on or about the date hereof. Unless otherwise defined herein, capitalized terms used but not defined herein shall have the meanings given to them in the Registration Statement. In connection with our representation of the Company, and as a basis for the opinion hereinafter set forth, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents (collectively, the "Documents"): 1. The Registration Statement and the related forms of prospectus included therein; 2. The Prospectus Supplement, substantially in the form to be filed with the Commission; 3. The Amended and Restated Declaration of Trust, as amended and supplemented, of the Company (the "Declaration of Trust"), certified as of a recent date by the State Department of Assessments and Taxation of Maryland (the "SDAT"); 4. The Bylaws of the Company, certified as of the date hereof by an officer of the Company; HRPT Properties Trust July 27, 2004 Page 2 5. A certificate of the SDAT as to the good standing of the Company, dated as of a recent date; 6. Resolutions adopted by the Board of Trustees of the Company relating to the authorization of the issuance of the Notes, certified as of the date hereof by an officer of the Company (the "Resolutions"); 7. A certificate executed by an officer of the Company, dated as of the date hereof; and 8. Such other documents and matters as we have deemed necessary or appropriate to express the opinion set forth below, subject to the assumptions, limitations and qualifications stated herein. In expressing the opinion set forth below, we have assumed the following: 1. Each individual executing any of the Documents, whether on behalf of such individual or another person, is legally competent to do so. 2. Each individual executing any of the Documents on behalf of a party (other than the Company) is duly authorized to do so. 3. Each of the parties (other than the Company) executing any of the Documents has duly and validly executed and delivered each of the Documents to which such party is a signatory, and such party's obligations set forth therein are legal, valid and binding and are enforceable in accordance with all stated terms. 4. All Documents submitted to us as originals are authentic. All Documents submitted to us as certified or photostatic copies conform to the original documents. All signatures on all such Documents are genuine. All public records reviewed or relied upon by us or on our behalf are true and complete. All representations, warranties, statements and information contained in the Documents are true and complete. There has been no oral or written modification of or amendment to any of the Documents, and there has been no waiver of any provision of any of the Documents, by action or omission of the parties or otherwise. Based upon the foregoing, and subject to the assumptions, limitations and qualifications stated herein, it is our opinion that: 1. The Company is a real estate investment trust duly formed and existing under and by virtue of the laws of the State of Maryland and is in good standing with the SDAT. HRPT Properties Trust July 27, 2004 Page 3 2. The issuance of the Notes has been duly authorized and, when issued and delivered by the Company pursuant to the Resolutions and the Registration Statement against payment of the consideration set forth therein, the Notes will be validly issued. The foregoing opinion is limited to the laws of the State of Maryland and we do not express any opinion herein concerning any other law. We express no opinion as to compliance with, or the applicability of, federal or state securities laws, including the securities laws of the State of Maryland. The opinion expressed herein is subject to the effect of judicial decisions which may permit the introduction of parol evidence to modify the terms or the interpretation of agreements. The opinion expressed herein is limited to the matters specifically set forth herein and no other opinion shall be inferred beyond the matters expressly stated. We assume no obligation to supplement this opinion if any applicable law changes after the date hereof or if we become aware of any fact that might change the opinion expressed herein after the date hereof. This opinion is being furnished to you solely for submission to the Commission as an exhibit to the Company's Current Report on Form 8-K, dated July 27, 2004 (the "Current Report"), which is incorporated by reference in the Registration Statement, and, accordingly, may not be relied upon by, quoted in any manner to, or delivered to any other person or entity without, in each instance, our prior written consent. We hereby consent to the filing of this opinion as an exhibit to the Current Report and the said incorporation by reference and to the use of the name of our firm therein. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the 1933 Act. Very truly yours, /s/ VENABLE LLP EX-8.1 6 a2141044zex-8_1.txt EXHIBIT 8.1 EXHIBIT 8.1 [LETTERHEAD OF SULLIVAN & WORCESTER LLP] July 27, 2004 HRPT Properties Trust 400 Centre Street Newton, Massachusetts 02458 Ladies and Gentlemen: The following opinion is furnished to HRPT Properties Trust, a Maryland real estate investment trust (the "Company"), to be filed with the Securities and Exchange Commission (the "SEC") as Exhibit 8.1 to the Company's Current Report on Form 8-K to be filed within one week of the date hereof (the "Form 8-K"), under the Securities Exchange Act of 1934, as amended. We have acted as counsel for the Company in connection with its Registration Statements on Forms S-3, File No. 333-56051 and File No. 333-114285 (the "Registration Statements"), under the Securities Act of 1933, as amended (the "Act"), and we have reviewed originals or copies, certified or otherwise identified to our satisfaction, of the Registration Statements, corporate records, certificates and statements of officers and accountants of the Company and of public officials, and such other documents as we have considered relevant and necessary in order to furnish the opinion hereinafter set forth. Specifically, and without limiting the generality of the foregoing, we have reviewed: (i) the Company's Third Amendment and Restatement of Declaration of Trust, as further amended and supplemented, and the by-laws of the Company, as amended and restated; (ii) the prospectus supplement dated July 27, 2004 (the "Prospectus Supplement") to the final prospectus dated June 28, 2004 (as supplemented by the Prospectus Supplement, the "Prospectus") which forms a part of the Registration Statements, relating to the Company's offering of $400,000,000 of its 6 1/4% Senior Notes due August 15, 2016; and (iii) the sections in Item 1 of the Company's Annual Report on Form 10-K for its fiscal year ended December 31, 2003 (the "Form 10-K") captioned "Federal Income Tax Considerations" and "ERISA Plans, Keogh Plans and Individual Retirement Accounts." With respect to all questions of fact on which the opinion set forth below is based, we have assumed the accuracy and completeness of and have relied on the information set forth in the Prospectus, the Form 10-K HRPT Properties Trust July 27, 2004 Page 2 and in the documents incorporated therein by reference, and on representations and certifications made to us by officers of the Company. We have not independently verified such information. The opinion set forth below is based upon the Internal Revenue Code of 1986, as amended, the Treasury Regulations issued thereunder, published administrative interpretations thereof, and judicial decisions with respect thereto, all as of the date hereof (collectively, the "Tax Laws"), and upon the Employee Retirement Income Security Act of 1974, as amended, the Department of Labor regulations issued thereunder, published administrative interpretations thereof, and judicial decisions with respect thereto, all as of the date hereof (collectively, the "ERISA Laws"). No assurance can be given that the Tax Laws or the ERISA Laws will not change. In preparing the discussions with respect to Tax Laws and ERISA Laws matters in the sections of Item 1 of the Form 10-K captioned "Federal Income Tax Considerations" and "ERISA Plans, Keogh Plans and Individual Retirement Accounts," we have made certain assumptions and expressed certain conditions and qualifications therein, all of which assumptions, conditions and qualifications are incorporated herein by reference. With respect to all questions of fact on which our opinion is based, we have assumed the initial and continuing truth, accuracy and completeness of: (i) the information set forth in the Form 10-K, the Prospectus and in the documents incorporated therein by reference; and (ii) representations made to us by officers of the Company or contained in the Form 10-K, the Prospectus and in the documents incorporated therein by reference, in each such instance without regard to qualifications such as "to the best knowledge of" or "in the belief of". We have relied upon, but not independently verified, the foregoing assumptions. If any of the foregoing assumptions are inaccurate or incomplete for any reason, or if the transactions described in the Form 10-K or the Prospectus, or the documents incorporated therein by reference, have been consummated in a manner that is inconsistent with the manner contemplated therein, our opinion as expressed below may be adversely affected and may not be relied upon. Based upon and subject to the foregoing, we are of the opinion that the discussions with respect to Tax Laws and ERISA Laws matters in the sections of Item 1 of the Form 10-K captioned "Federal Income Tax Considerations" and "ERISA Plans, Keogh Plans and Individual Retirement Accounts," as supplemented by the discussion in the section of the Prospectus Supplement captioned "Material Federal Income Tax Considerations," in all material respects are accurate and fairly summarize the Tax Laws issues and the ERISA Laws issues addressed therein, and hereby confirm that the opinions of counsel referred to in said sections represent our opinions on the subject matter thereof. Our opinion above is limited to the matters specifically covered hereby, and we have not been asked to address, nor have we addressed, any other matters or any other transactions. Further, we disclaim any undertaking to advise you of any subsequent changes of the matters stated, represented or assumed herein or any subsequent changes in the Tax Laws or the ERISA Laws. This opinion is intended solely for the benefit and use of the Company, and is not to be used, released, quoted, or relied upon by anyone else for any purpose (other than as required by HRPT Properties Trust July 27, 2004 Page 3 law) without our prior written consent. We hereby consent to the filing of a copy of this opinion as an exhibit to the Form 8-K, which is incorporated by reference in the Company's Registration Statements, and to the references to our firm in the Form 10-K and the Registration Statements. 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 SEC promulgated thereunder. Very truly yours, /s/ SULLIVAN & WORCESTER LLP SULLIVAN & WORCESTER LLP -----END PRIVACY-ENHANCED MESSAGE-----