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): June 8, 2009 (June 8, 2009)

HRPT PROPERTIES TRUST

(Exact Name of Registrant as Specified in Its Charter)

Maryland

(State or Other Jurisdiction of Incorporation)

1-9317	04-6558834
(Commission File Number)	(IRS Employer Identification No.)
400 Centre Street, Newton, Massachusetts	02458
(Address of Principal Executive Offices)	(Zip Code)

617-332-3990

(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

Item 8.01  Other Events.

Government Properties Income Trust

As we, HRPT Properties Trust, or HRPT, previously reported, our wholly-owned subsidiary, Government Properties Income Trust, or GOV, filed a registration statement with the Securities and Exchange Commission, or SEC, for the initial public offering, or IPO, of 10 million common shares of beneficial interest, or common shares.  The GOV registration statement was declared effective by the SEC on June 2, 2009 and the IPO was completed on June 8, 2009.  As a result, our percentage ownership of GOV was reduced from 100% to 49.9% of the outstanding GOV common shares (46.4% if the underwriters’ over allotment option is exercised in full).  Prior to the IPO, we transferred to GOV in April 2009, 29 properties, or the GOV Properties, 25 of which are leased primarily to the U.S. Government and four of which are leased to the States of California, Maryland, Minnesota and South Carolina. The GOV Properties contain approximately 3.3 million rentable square feet and are located in 14 states and the District of Columbia.

To govern the separation of GOV from us, we entered into a transaction agreement, or the Transaction Agreement, with GOV on June 8, 2009, which provides:

·that the current assets and liabilities from the GOV Properties, as of the time of closing of the IPO, were settled between us and GOV so that we retained all pre-closing current assets and liabilities and GOV retained all post-closing current assets and liabilities;

·that GOV will indemnify us with respect to any liability relating to any GOV Property, including liabilities which arose before GOV’s formation; and

·that so long as we own in excess of 10% of GOV’s outstanding common shares, we and GOV engage the same manager or we and GOV have any common managing trustees, (1) we will not acquire ownership (including fee interest, leaseholds, joint ventures, mortgages or other real estate assets) of properties which are majority leased to government tenants, unless a majority of GOV’s independent trustees who are not also trustees of ours have determined not to make the acquisition, (2) GOV will not acquire ownership (including fee interest, leaseholds, joint ventures, mortgages or other real estate assets) of office or industrial properties which are not majority leased to government tenants, unless a majority of our independent trustees who are not also trustees of GOV have determined not to make the acquisition, (3) GOV will have a right of first refusal to purchase any property owned by us that we determine to divest if the property is then majority leased to government tenants, which right of first refusal will also apply in the event of an indirect sale of any such properties resulting from a change of control of us, (4) GOV and we will cooperate to enforce the ownership limitations in our and its respective declarations of trust as may be appropriate for each of us to qualify for and maintain tax status as a real estate investment trust, or REIT, and otherwise to promote our respective orderly governance, and (5) we and GOV will cooperate to file

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future tax returns, including appropriate allocations of taxable income, expenses and other tax attributes.

The above restrictions will not prohibit us from leasing our current and future properties to government tenants.

In connection with the closing of the IPO, on June 8, 2009, we also entered into an amended and restated business management agreement, or the Management Agreement, with Reit Management & Research LLC, or RMR, our manager.  As a result of this amendment, our management fees to RMR have been reduced by the amount of fees that we currently pay on the GOV Properties.

The descriptions of the Transaction Agreement and the Management Agreement are qualified in their entirety by reference to the copies of the Management Agreement and the Transaction Agreement, which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and incorporated herein by reference.

Federal Income Tax Considerations

The following summary of federal income tax considerations relating to HRPT and its shareholders supersedes the description of these matters in our annual report for the year ended December 31, 2008.  Our counsel, Sullivan & Worcester LLP, Boston, Massachusetts, has rendered a legal opinion that the discussion in this section is accurate in all material respects and fairly summarizes the federal income tax issues related to HRPT, and that the opinions of counsel referred to in this section represent Sullivan & Worcester LLP’s opinions on these subjects.  Specifically, subject to the qualifications and assumptions contained in its opinions and in this Current Report on Form 8-K, which we refer to as this Current Report, Sullivan & Worcester LLP has rendered opinions to the effect:

·that we have been organized and have qualified as a REIT under the Internal Revenue Code of 1986, as amended, or the IRC, for our 1987 through 2008 taxable years, and that our current investments and plan of operation enable us to continue to meet the requirements for qualification and taxation as a REIT under the IRC; however, our continued qualification and taxation as a REIT will depend upon our compliance with various qualification tests imposed under the IRC and summarized below; and

·that beginning with its taxable year that commenced upon the date of GOV’s initial sale of shares for cash, GOV has been organized in conformity with the requirements for qualification as a REIT under the IRC, and that GOV’s current investments and plan of operation enable it to continue to meet the requirements for qualification and taxation as a REIT under the IRC; however, GOV’s continued qualification and taxation as a REIT will depend upon its compliance with the various qualification tests imposed under the IRC.

While we believe that we will satisfy the applicable REIT tests under the IRC at all times, our counsel has not reviewed and will not review compliance with these tests on a continuing basis.  If we fail to qualify as a REIT, we will be subject to federal income taxation as if we were a

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C corporation and our shareholders will be taxed like shareholders of C corporations.  In this event, we could be subject to significant tax liabilities, and the amount of cash available for distribution to our shareholders may be reduced or eliminated.

The following summary of federal income tax considerations is based on existing law, and is limited to investors who own our shares as investment assets rather than as inventory or as property used in a trade or business.  The summary does not discuss all of the particular tax consequences that might be relevant to you if you are subject to special rules under federal income tax law, for example if you are:

·a bank, life insurance company, regulated investment company, or other financial institution;

·a broker, dealer or trader in securities or foreign currency;

·a person who has a functional currency other than the U.S. dollar;

·a person who acquires our shares in connection with employment or other performance of services;

·a person subject to alternative minimum tax;

·a person who owns our shares as part of a straddle, hedging transaction, constructive sale transaction, constructive ownership transaction, or conversion transaction; or

·except as specifically described in the following summary, a tax-exempt entity or a foreign person.

The IRC sections that govern federal income tax qualification and treatment of a REIT and its shareholders are complex.  This presentation is a summary of applicable IRC provisions, related rules and regulations, and administrative and judicial interpretations, all of which are subject to change, possibly with retroactive effect.  Future legislative, judicial, or administrative actions or decisions could also affect the accuracy of statements made in this summary.  We have not received a ruling from the Internal Revenue Service, or IRS, with respect to any matter described in this summary, and we cannot assure you that the IRS or a court will agree with the statements made in this summary.  The IRS or a court could, for example, take a different position, which could result in significant tax liabilities for applicable parties, from that described in this summary with respect to our acquisitions, operations, restructurings or any other matters described in this summary.  In addition, this summary is not exhaustive of all possible tax consequences, and does not discuss any estate, gift, state, local, or foreign tax consequences.  For all these reasons, we urge you and any prospective acquiror of our shares to consult with a tax advisor about the federal income tax and other tax consequences of the acquisition, ownership and disposition of our shares.  Our intentions and beliefs described in this summary are based upon our understanding of applicable laws and regulations that are in effect as of the date of this Current Report.  If new laws or regulations are enacted which impact us directly or indirectly, we may change our intentions or beliefs.

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Your federal income tax consequences may differ depending on whether or not you are a “U.S. shareholder.”  For purposes of this summary, a “U.S. shareholder” for federal income tax purposes is:

·a citizen or resident of the United States, including an alien individual who is a lawful permanent resident of the United States or meets the substantial presence residency test under the federal income tax laws;

·an entity treated as a corporation for federal income tax purposes, that is created or organized in or under the laws of the United States, any state thereof or the District of Columbia;

·an estate the income of which is subject to federal income taxation regardless of its source; or

·a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust, or an electing trust in existence on August 20, 1996, to the extent provided in Treasury regulations;

whose status as a U.S. shareholder is not overridden by an applicable tax treaty.  Conversely, a “non-U.S. shareholder” is a beneficial owner of our shares who is not a U.S. shareholder.  If a partnership (including any entity treated as a partnership for federal income tax purposes) is a beneficial owner of our shares, the tax treatment of a partner in the partnership generally will depend upon the status of the partner and the activities of the partnership. A beneficial owner that is a partnership and partners in such a partnership should consult their tax advisors about the federal income tax consequences of the acquisition, ownership and disposition of our shares.

Federal income tax considerations to HRPT from the creation and IPO of GOV.

Our formation of GOV, followed by GOV’s issuance of its shares to the public in its IPO, impacted our own REIT qualification and taxation under the IRC in the following manner.

Formation of GOV.  Prior to its IPO, GOV and its wholly-owned subsidiaries were wholly owned by us.  During this period GOV and its subsidiaries were disregarded as entities separate from us for federal income tax purposes, either under the regulations issued under Section 7701 of the IRC or under the qualified REIT subsidiary rules of Section 856(i), all as described below.  Accordingly, all assets, liabilities and items of income, deduction and credit of GOV and its subsidiaries during this period, including in particular the outstanding indebtedness on the GOV credit facility, were treated as ours.  Under the Transaction Agreement, the federal income tax liabilities and federal income tax filings for GOV and its subsidiaries for this period are our responsibility.

Our Taxation upon GOV’s IPO.  When GOV first issued shares to persons other than us (the “Effective Time”), GOV ceased to be wholly owned by us.  As a consequence, GOV and its subsidiaries ceased to be disregarded as entities separate from us for federal income tax purposes.  Instead, at that time, GOV became regarded as a separate corporation that intends to

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satisfy the requirements for qualification as a REIT under the IRC, and its subsidiaries ceased to be treated as part of us and became disregarded entities treated as part of the newly separate GOV.  In particular, there was a “Deemed Exchange” for federal income tax purposes at the time when GOV ceased to be wholly owned by us, and this Deemed Exchange encompassed the following features:

·The cash, assets, and liabilities distributed from GOV to us prior to its issuance of shares in the IPO were treated as cash, assets, and liabilities retained by us and not included in the Deemed Exchange.

·The assets retained by GOV were treated as though contributed by us to GOV in the Deemed Exchange.

·The liabilities retained by GOV (other than the approximately $6 million reimbursement obligation to us), including in particular the outstanding balance on the GOV credit facility, were treated as liabilities of ours that were assumed by GOV in the Deemed Exchange.

·We were treated as receiving, as consideration in the Deemed Exchange, (1) the GOV shares that we owned immediately after the Effective Time, (2) the liabilities retained by GOV and treated as assumed by it from us in the Deemed Exchange, plus (3) GOV’s obligation to reimburse us for approximately $6 million that we advanced to GOV.

For the Deemed Exchange to be nontaxable to us for federal income tax purposes (except up to the extent of the approximately $6 million reimbursement obligation to us from GOV), each of the three issues discussed below must be concluded upon favorably.  Based on representations from us and from GOV, our tax counsel, Sullivan & Worcester LLP, has provided to us an opinion that the Deemed Exchange should be governed by Sections 351(a) and 357(a) of the IRC, except for up to approximately $6 million of gain recognized by us under Section 351(b) of the IRC in respect of GOV’s obligation to reimburse us for certain amounts that we advanced to GOV, all for the reasons discussed below.

First, Section 351(e) of the IRC must not apply to the Deemed Exchange, or else it would disqualify the Deemed Exchange from Sections 351(a) and 351(b) treatment altogether.  Section 351(e) and applicable regulations provide that, if our contribution of assets to GOV in the Deemed Exchange resulted, directly or indirectly, in diversification for us, then Sections 351(a) and 351(b) would not apply to the Deemed Exchange.  Because GOV intends to be a REIT and because the public is viewed as having contributed cash to GOV in the Deemed Exchange, our contribution of assets to GOV in the Deemed Exchange is automatically treated as resulting in diversification for us unless the assets we contributed to GOV in the Deemed Exchange were already a diversified portfolio.  That is, if the GOV portfolio was already a diversified portfolio, then the Deemed Exchange did not result in diversification for us, and thus Section 351(e) did not apply.  Current regulations under Section 351(e) provide a diversification standard for investment securities, including a provision that treats federal government securities as automatically diversified; but these regulations do not provide a diversification standard for real estate.  Still, the IRS has over the years issued several private letter rulings on diversified real estate portfolios, in each instance concluding that the real estate portfolio in question was a

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diversified portfolio and thus that Section 351(e) was inapplicable.  These private letter rulings do not consistently cite the same diversification factors, but cumulatively they reference similar factors such as geographic diversity, tenant diversity, lease length diversity and asset type diversity.  Although private letter rulings are not precedential and cannot be relied upon by taxpayers other than the ones to whom they are addressed, they do provide insight into how the IRS interprets and applies the federal income tax law.

We believe that the GOV real estate portfolio at the Effective Time was diversified for Section 351(e) purposes, given the properties’ diversity in geography, size, age, operating history and remaining lease length.  We believe that having the federal government as the principal tenant in most of the GOV portfolio does not detract from the diversified nature of these properties for several reasons, including:

·notwithstanding the presence or absence of tenant diversification, the owner of the portfolio continues to have an economic stake in each individual property through its residual interest in each property at the expiration of each property’s lease(s);

·the portfolio’s modest number of tenants is consistent with the business model of other publicly traded REITs and with prudent real estate practices generally;

·tenant diversity may be a proxy for diverse outcomes as to lease renewals, and the GOV portfolio’s outcomes as to lease renewals are sufficiently diversified because the properties are leased to many different government agencies, some of which may have renewal needs and others of which may not;

·tenant diversity may also be a proxy for exposure to diverse credit profiles, but as with federal government securities, which are treated as automatically diversified in the context of an investment securities portfolio, presumably on the theory that there is little or no credit risk, so too should real estate tenanted by the federal government be treated as automatically diversified in the context of a real estate portfolio.

Based on the above analysis, we believe that Section 351(e) does not apply to the Deemed Exchange.

Second, Section 357(a) provides that liabilities assumed by a transferee from a transferor, in connection with a transfer of assets from the transferor to the transferee governed by Sections 351(a) and 351(b), will not be taxable consideration to the transferor.  However, Section 357(b) provides that Section 357(a) will not apply, and thus all assumed liabilities will constitute taxable consideration (up to the amount of actual realized gains), if any liability assumption in the transaction was made either with a purpose to avoid federal income tax or without a bona fide business purpose.  In Revenue Ruling 79-258, 1979-2 C.B. 143, and in several subsequent private letter rulings, the IRS applied Sections 357(a) and 357(b) to conclude that a proportional part of the total debt of a parent corporation can be allocated to the properties and assets contributed to a new subsidiary and that this proportional part can be assigned to and assumed by the subsidiary as follows:  the subsidiary may assume a new debt, the loan proceeds of which are used by the parent to pay down the parent’s other, older debt.  In effect, the new debt is successor indebtedness of the parent which has been proportionately assigned to and assumed by the

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subsidiary.  We and GOV attempted to structure the Deemed Exchange so as to come within the principles articulated in these published and private rulings, and we believe that we have done so.  For example, based on our computations, in the Deemed Exchange we and GOV believe that we allocated, and therefore that GOV assumed in the form of the GOV credit facility and GOV’s other liabilities, no more than a proportional part of our overall indebtedness prior to the Deemed Exchange.  Accordingly, we believe that GOV’s assumption of liabilities from us in the Deemed Exchange is nontaxable consideration to us under Section 357(a) of the Code.

Third, related to but perhaps distinct from the preceding issue under Sections 357(a) and 357(b) of the IRC, Waterman Steamship v. Commissioner, 430 F.2d 1185 (5th Cir. 1970), and subsequent tax cases apply a judicial recharacterization rule to pre-transaction dividends funded from newly borrowed proceeds.  Under this case law, part or all of a pre-transaction dividend funded from a new borrowing is recharacterized as a taxable sale for cash, if the borrowing is paid off post-transaction with proceeds from cash investors, and if the new borrowing is temporary and supported by the impending cash investment.  This case law, to the extent applicable to our transactions with GOV, would overturn our nontaxable treatment of the debt funded, cash dividend paid by GOV to us prior to the Deemed Exchange, and instead would recharacterize that cash flow as our cash sale of a portion of GOV to the new public shareholders of GOV, a characterization which would render Sections 351(a) and 351(b) of the IRC inapplicable.  For a number of reasons, we believe that this case law does not apply to our transactions with GOV, and thus that the Deemed Exchange is properly governed by Sections 351(a), 351(b) and 357(a) of the IRC.  As discussed above, under the authority of Revenue Ruling 79-258, 1979-2 C.B. 143, and subsequent private letter rulings, the GOV credit facility and the dividend to us funded from that credit facility are not properly viewed as a new borrowing and associated dividend, but instead as the mechanism by which no more than a proportional amount of our overall debt was fairly assigned to and assumed by GOV.  Further, the GOV credit facility and the associated dividend were put in place and completed before the outcome of GOV’s IPO was known.  In our view, this timing not only demonstrates that the GOV credit facility and associated dividend were a separate, independent step from the IPO for federal income tax purposes, but also demonstrates that the lenders underwriting GOV’s credit facility, which has a four year term inclusive of renewal options, looked to the security of GOV’s portfolio and revenues rather than the success of GOV’s IPO.  In addition, when the GOV credit facility was put in place, the amount of cash that might have been raised in a potential IPO was not known and thus that cash amount could have been greater than or less than the amount outstanding on the GOV credit facility at the Effective Time.  Finally, the case law at issue involves pre-transaction dividends where the underlying transaction is already a sale of subsidiary stock between a seller and a buyer, typically for cash, and so the effect of the judicial recharacterization is merely to convert the subject dividend proceeds into additional sale proceeds.  However, our transactions with GOV and the Deemed Exchange were different because there was no sale by us to the public of GOV shares included in the baseline set of transactions, and we thus believe it would be improper to recharacterize a pre-transaction dividend as a sale in circumstances in which no sale is formally occurring.

Consequences if Deemed Exchange Were Taxable.  As discussed above, based on representations from us and from GOV, our tax counsel, Sullivan & Worcester LLP, has provided to us an opinion that the Deemed Exchange should be governed by Sections 351(a) and 357(a) of the IRC, except for up to approximately $6 million of gain recognized by us under

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Section 351(b) of the IRC in respect of GOV’s obligation to reimburse us for certain amounts that we advanced to GOV.  However, upon review the IRS or a court might conclude otherwise.  For example, contrary to Sullivan & Worcester LLP’s opinion and our belief, the IRS or a court might take one or more of the following views:  that the GOV portfolio was not a diversified portfolio for purposes of Section 351(e) of the IRC; that the assumption of liabilities by GOV from us in the Deemed Exchange was governed by Section 357(b) rather than Section 357(a) of the IRC; or that the debt funded, cash dividend paid by GOV to us was properly recharacterized as sale proceeds that preclude the application of Sections 351(a) and 351(b) of the IRC.  If we were unsuccessful in challenging any such adverse determination, then we would recognize most or all of the taxable gain in the GOV portfolio, computed as discussed below.  We expect that any taxable gain that we recognize, including the up to approximately $6 million of gain we recognized under Section 351(b), would be treated as capital gain, subject to ordinary income treatment for any depreciation recaptured under Sections 1245 and 1250 of the IRC.

If the Deemed Exchange were not governed by Sections 351(a), 351(b) and 357(a), our recognized taxable gain in the GOV portfolio would generally equal our aggregate amount realized in the Deemed Exchange, minus our aggregate adjusted tax basis in the GOV portfolio immediately before the Effective Time.  Our aggregate amount realized in the Deemed Exchange equals the sum of (1) the fair market value of the GOV shares that we own immediately after the Effective Time, (2) the liabilities that GOV is treated as assuming from us in the Deemed Exchange, and (3) the approximately $6 million reimbursement obligation from GOV to us.  Employing the valuation methodologies described below, we estimate that, if contrary to our expectation we must recognize significant gain as a result of the Deemed Exchange, then this taxable gain would be approximately $85 million.

In computing our aggregate amount realized, we must value for federal income tax purposes the GOV shares that we owned immediately after the Effective Time.  Under applicable judicial precedent, it is possible that the following two valuations may differ for federal income tax purposes:  (1) the per share fair market value of the GOV shares that we owned immediately after the Effective Time, versus (2) the average of the reported high and low trading prices for the GOV shares in the public market on the date of the Effective Time (called the “Initial Price”).  Because of the factual nature of the value of GOV shares, Sullivan & Worcester LLP is unable to render an opinion on the valuation of GOV shares generally, or on the valuation of the GOV shares that we owned immediately after the Effective Time.  Nevertheless, we believe that the per share fair market value of any and all GOV shares at the Effective Time may be properly valued at the Initial Price for federal income tax purposes.  Accordingly, the Initial Price will be used for all of our tax reporting, including for purposes of computing any gain we may have recognized in the Deemed Exchange.

Prior to the Deemed Exchange, we held the assets comprising the GOV portfolio for investment with a view to long-term income production and capital appreciation, and the

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conversion of GOV into a separate REIT by means of its IPO represented a new, unique opportunity to realize the value of that investment.  Accordingly, we expect that any gains we recognize in the GOV portfolio as a result of the Deemed Exchange, including in any event the up to approximately $6 million recognized as a result of Section 351(b), would not be subject to the 100% penalty tax of Section 857(b)(6) of the IRC, described below, applicable to gains from the disposition of inventory or other property held primarily for sale to customers.  Moreover, we expect that any such recognized gains from the Deemed Exchange would qualify as gains from disposition of real property, and therefore would count favorably toward our compliance with the 75% and 95% gross income tests, as described below.

If in a later year it is ultimately determined, contrary to our expectation, that we recognized additional gain or income as a result of the Deemed Exchange not qualifying under Sections 351(a), 351(b) or 357(a) of the IRC, then we may be required to amend our tax reports, including those sent to our shareholders, and we will owe federal income tax on the undistributed gain and income unless we elect to pay a sufficient deficiency dividend to our shareholders.  As discussed below, deficiency dividends may be included in our deduction for dividends paid for the year in which such gain or income is recognized, but an interest charge would be imposed upon us for the delay in distribution.

Our Investment in GOV.  Following the Effective Time, we have owned and continue to own a significant amount, in excess of 10%, of GOV shares.  In general, our aggregate initial tax basis in these shares equals our aggregate adjusted tax basis in the GOV portfolio immediately before the Effective Time, minus the liabilities accrued for federal income tax purposes and assumed by GOV from us in the Deemed Exchange, plus any gain we recognized in the Deemed Exchange, minus the approximately $6 million reimbursement obligation received by us from GOV.  As discussed above, we believe that we will not, and our counsel Sullivan & Worcester LLP has opined that we should not, recognize any gain in the Deemed Exchange, except up to the extent of GOV’s approximately $6 million reimbursement obligation to us.

We expect that GOV will qualify as a REIT under the IRC at all times subsequent to the IPO.  Specifically, subject to the qualifications and assumptions contained in its opinions and in this Current Report, our counsel Sullivan & Worcester LLP has rendered an opinion to the effect that, beginning with its taxable year that commenced upon the date of GOV’s initial sale of shares for cash, GOV has been organized in conformity with the requirements for qualification as a REIT under the IRC, and that GOV’s current investments and plan of operation enable it to continue to meet the requirements for qualification and taxation as a REIT under the IRC; however, GOV’s continued qualification and taxation as a REIT will depend upon its compliance with the various qualification tests imposed under the IRC.

For any of our taxable years in which GOV qualifies as a REIT, our investment in GOV will count as a qualifying REIT asset toward the REIT gross asset tests and our gains and dividends from GOV shares will count as qualifying income under the 75% and 95% gross income tests, all as described below.  However, because we cannot control GOV’s compliance with the federal income tax requirements for REIT qualification and taxation, we will join with GOV in filing a protective taxable REIT subsidiary election under Section 856(l) of the IRC, and we may reaffirm this protective election with GOV every January 1 thereafter unless and until our ownership of GOV falls below 9.8%.  Pursuant to this protective taxable REIT subsidiary

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election, we believe that even if GOV is not a REIT for some reason, then it would instead be considered one of our taxable REIT subsidiaries and treated in the manner described below.  As one of our taxable REIT subsidiaries, we believe that GOV’s failure to qualify as a REIT would not jeopardize our own qualification as a REIT even though we own more than 10% of it.

The Transaction Agreement contains provisions that require GOV and us, due to our ongoing affiliation, to refrain from taking actions that may jeopardize the other’s qualifications as a REIT under the IRC.  For example, each of us is obligated to limit its investment in any tenant of the other, so that neither owns more than 4.9% of any such tenant, and each of us is obligated to cooperate reasonably with the other’s requests motivated by REIT qualification and taxation.

Federal income taxation of HRPT as a REIT.

We have elected to be taxed as a REIT under Sections 856 through 860 of the IRC, commencing with our taxable year ending December 31, 1987.  Our REIT election, assuming continuing compliance with the then applicable qualification tests, continues in effect for subsequent taxable years.  Although no assurance can be given, we believe that we have been organized and have operated, and will continue to be organized and to operate, in a manner that qualified and will continue to qualify us to be taxed under the IRC as a REIT.

As a REIT, we generally are not subject to federal income tax on our net income distributed as dividends to our shareholders.  Distributions to our shareholders generally are included in their income as dividends to the extent of our current or accumulated earnings and profits.  Our dividends are not generally entitled to the favorable 15% rate on qualified dividend income (scheduled to increase to ordinary income rates for taxable years beginning after December 31, 2010), but a portion of our dividends may be treated as capital gain dividends, all as explained below.  No portion of any of our dividends is eligible for the dividends received deduction for corporate shareholders.  Distributions in excess of current or accumulated earnings and profits generally are treated for federal income tax purposes as return of capital to the extent of a recipient shareholder’s basis in our shares, and will reduce this basis.  Our current or accumulated earnings and profits are generally allocated first to distributions made on our preferred shares, and thereafter to distributions made on our common shares.  For all these purposes, our distributions include both cash distributions and any in kind distributions of property that we might make.

The conversion formula of our series D cumulative convertible preferred shares may be adjusted under a number of circumstances; adjustments may include changes in the type or amount of consideration a shareholder receives upon conversion.  Section 305 of the IRC treats some of these adjustments as constructive distributions, in which case they would be taxable in a similar manner to actual distributions.  In general, a shareholder that holds our series D cumulative convertible preferred shares would be deemed to receive a constructive distribution if the conversion price is adjusted for a taxable distribution to the holders of common shares. Such a shareholder’s adjusted tax basis in series D cumulative convertible preferred shares would be increased by constructive distributions that are taxable as dividends or gain, and would be unaffected by constructive distributions that are nontaxable returns of capital. Conversely, a failure to appropriately adjust the conversion price of the series D cumulative convertible

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preferred shares could result in a constructive distribution to shareholders that hold our common shares, which would be taxable to them in a similar manner as actual distributions.  A shareholder may also receive a constructive distribution if a conversion of its series D cumulative convertible preferred shares is accompanied by a change in the conversion formula.

If a shareholder actually or constructively owns none or a small percentage of our common shares, and such shareholder surrenders its preferred shares to us to be repurchased for cash only, then the repurchase of the preferred shares is likely to qualify for sale or exchange treatment because the repurchase would not be “essentially equivalent to a dividend” as defined by the IRC. More specifically, a cash repurchase of preferred shares will be treated under Section 302 of the IRC as a distribution, and hence taxable as a dividend to the extent of our allocable current or accumulated earnings and profits, as discussed above, unless the repurchase satisfies one of the tests set forth in Section 302(b) of the IRC and is therefore treated as a sale or exchange of the repurchased shares. The repurchase will be treated as a sale or exchange if it (1) is “substantially disproportionate” with respect to the surrendering shareholder’s ownership in us, (2) results in a “complete termination” of the surrendering shareholder’s common and preferred share interest in us, or (3) is “not essentially equivalent to a dividend” with respect to the surrendering shareholder, all within the meaning of Section 302(b) of the IRC. In determining whether any of these tests have been met, a shareholder must generally take into account our common and preferred shares considered to be owned by such shareholder by reason of constructive ownership rules set forth in the IRC, as well as our common and preferred shares actually owned by such shareholder.  In addition, if a repurchase is treated as a distribution under the preceding tests, then a shareholder’s tax basis in the repurchased preferred shares will be transferred to the shareholder’s remaining shares of our common or preferred shares, if any, and if such shareholder owns no other shares of our common or preferred shares, such basis may be transferred to a related person or may be lost entirely.  Because the determination as to whether a shareholder will satisfy any of the tests of Section 302(b) of the IRC depends upon the facts and circumstances at the time that the preferred shares are repurchased, we encourage you to consult your own tax advisor to determine your particular tax treatment.

Our counsel, Sullivan & Worcester LLP, has opined that we have been organized and have qualified as a REIT under the IRC for our 1987 through 2008 taxable years, and that our current investments and plan of operation enable us to continue to meet the requirements for qualification and taxation as a REIT under the IRC.  Our continued qualification and taxation as a REIT will depend upon our compliance with various qualification tests imposed under the IRC and summarized below.  While we believe that we will satisfy these tests, our counsel has not reviewed and will not review compliance with these tests on a continuing basis.  If we fail to qualify as a REIT, we will be subject to federal income taxation as if we were a C corporation and our shareholders will be taxed like shareholders of C corporations.  In this event, we could be subject to significant tax liabilities, and the amount of cash available for distribution to our shareholders may be reduced or eliminated.

If we qualify as a REIT and meet the tests described below, we generally will not pay federal income tax on amounts we distribute to our shareholders.  However, even if we qualify as a REIT, we may be subject to federal tax in the following circumstances:

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·We will be taxed at regular corporate rates on any undistributed “real estate investment trust taxable income,” including our undistributed net capital gains.

·If our alternative minimum taxable income exceeds our taxable income, we may be subject to the corporate alternative minimum tax on our items of tax preference.

·If we have net income from the disposition of “foreclosure property” that is held primarily for sale to customers in the ordinary course of business or from other nonqualifying income from foreclosure property, we will be subject to tax on this income at the highest regular corporate rate, currently 35%.

·If we have net income from prohibited transactions, including dispositions of inventory or property held primarily for sale to customers in the ordinary course of business other than foreclosure property, we will be subject to tax on this income at a 100% rate.

·If we fail to satisfy the 75% gross income test or the 95% gross income test discussed below, but nonetheless maintain our qualification as a REIT, we will be subject to tax at a 100% rate on the greater of the amount by which we fail the 75% or the 95% test, with adjustments, multiplied by a fraction intended to reflect our profitability.

·If we fail to distribute for any calendar year at least the sum of 85% of our REIT ordinary income for that year, 95% of our REIT capital gain net income for that year, and any undistributed taxable income from prior periods, we will be subject to a 4% nondeductible excise tax on the excess of the required distribution over the amounts actually distributed.

·If we acquire an asset from a corporation in a transaction in which our basis in the asset is determined by reference to the basis of the asset in the hands of a present or former C corporation, and if we subsequently recognize gain on the disposition of this asset during the ten year period beginning on the date on which the asset ceased to be owned by the C corporation, then we will pay tax at the highest regular corporate tax rate, which is currently 35%, on the lesser of the excess of the fair market value of the asset over the C corporation’s basis in the asset on the date the asset ceased to be owned by the C corporation, or the gain we recognize in the disposition.

·If we acquire a corporation, to preserve our status as a REIT we must generally distribute all of the C corporation earnings and profits inherited in that acquisition, if any, not later than the end of the taxable year of the acquisition.  However, if we fail to do so, relief provisions would allow us to maintain our status as a REIT provided we distribute any subsequently discovered C corporation earnings and profits and pay an interest charge in respect of the period of delayed distribution. As discussed below, we have acquired a C Corporation in connection with our acquisition of real estate.  Our investigations of this C Corporation indicated that it did not have undistributed earnings and profits that we inherited but failed to timely distribute. However, upon review or audit, the IRS may disagree.

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·As summarized below, REITs are permitted within limits to own stock and securities of a “taxable REIT subsidiary.”  A taxable REIT subsidiary is separately taxed on its net income as a C corporation, and is subject to limitations on the deductibility of interest expense paid to its REIT parent.  In addition, its REIT parent is subject to a 100% tax on the difference between amounts charged and redetermined rents and deductions, including excess interest.

·If and to the extent we invest in properties in foreign jurisdictions, our income from those properties will generally be subject to tax in those jurisdictions.  If we continue to operate as we do, then we will distribute our taxable income to our shareholders each year and we will generally not pay federal income tax.  As a result, we cannot recover the cost of foreign income taxes imposed on our foreign investments by claiming foreign tax credits against our federal income tax liability.  Also, we cannot pass through to our shareholders any foreign tax credits.

If we fail to qualify or elect not to qualify as a REIT, we will be subject to federal income tax in the same manner as a C corporation.  Distributions to our shareholders if we do not qualify as a REIT will not be deductible by us nor will distributions be required under the IRC.  In that event, distributions to our shareholders will generally be taxable as ordinary dividends potentially eligible for the 15% income tax rate (scheduled to increase to ordinary income rates for taxable years beginning after December 31, 2010) discussed below in “Taxation of U.S. Shareholders” and, subject to limitations in the IRC, will be eligible for the dividends received deduction for corporate shareholders.  Also, we will generally be disqualified from qualification as a REIT for the four taxable years following disqualification.  If we do not qualify as a REIT for even one year, this could result in reduction or elimination of distributions to our shareholders, or in our incurring substantial indebtedness or liquidating substantial investments in order to pay the resulting corporate-level taxes.  The IRC provides certain relief provisions under which we might avoid automatically ceasing to be a REIT for failure to meet certain REIT requirements, all as discussed in more detail below.

REIT Qualification Requirements

General Requirements.  Section 856(a) of the IRC defines a REIT as a corporation, trust or association:

·that is managed by one or more trustees or directors;

·the beneficial ownership of which is evidenced by transferable shares or by transferable certificates of beneficial interest;

·that would be taxable, but for Sections 856 through 859 of the IRC, as a C corporation;

·that is not a financial institution or an insurance company subject to special provisions of the IRC;

·the beneficial ownership of which is held by 100 or more persons;

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·that is not “closely held” as defined under the personal holding company stock ownership test, as described below; and

·that meets other tests regarding income, assets and distributions, all as described below.

Section 856(b) of the IRC provides that conditions (1) through (4) must be met during the entire taxable year and that condition (5) must be met during at least 335 days of a taxable year of 12 months, or during a pro rata part of a taxable year of less than 12 months. Section 856(h)(2) of the IRC provides that neither condition (5) nor (6) need be met for our first taxable year as a REIT.  We believe that we have met conditions (1) through (7) during each of the requisite periods ending on or before our most recently completed taxable year, and that we can continue to meet these conditions in future taxable years.  There can, however, be no assurance in this regard.

By reason of condition (6), we will fail to qualify as a REIT for a taxable year if at any time during the last half of a year more than 50% in value of our outstanding shares is owned directly or indirectly by five or fewer individuals. To help comply with condition (6), our declaration of trust and bylaws restrict transfers of our shares.  In addition, if we comply with applicable Treasury regulations to ascertain the ownership of our shares and do not know, or by exercising reasonable diligence would not have known, that we failed condition (6), then we will be treated as having met condition (6).  However, our failure to comply with these regulations for ascertaining ownership may result in a penalty of $25,000, or $50,000 for intentional violations.  Accordingly, we intend to comply with these regulations, and to request annually from record holders of significant percentages of our shares information regarding the ownership of our shares.  Under our declaration of trust and bylaws, our shareholders are required to respond to these requests for information.

For purposes of condition (6), REIT shares held by a pension trust are treated as held directly by the pension trust’s beneficiaries in proportion to their actuarial interests in the pension trust.  Consequently, five or fewer pension trusts could own more than 50% of the interests in an entity without jeopardizing that entity’s federal income tax qualification as a REIT.  However, as discussed below, if a REIT is a “pension-held REIT,” each pension trust owning more than 10% of the REIT’s shares by value generally may be taxed on a portion of the dividends it receives from the REIT.

The IRC provides that we will not automatically fail to be a REIT if we do not meet conditions (1) through (6), provided we can establish reasonable cause for any such failure.  Each such excused failure will result in the imposition of a $50,000 penalty instead of REIT disqualification.  It is impossible to state whether in all circumstances we would be entitled to the benefit of this relief provision.  This relief provision applies to any failure of the applicable conditions, even if the failure first occurred in a prior taxable year, as long as each of the requirements of the relief provision is satisfied after October 22, 2004.

Our Wholly Owned Subsidiaries and Our Investments through Partnerships.  Except in respect of taxable REIT subsidiaries as discussed below, Section 856(i) of the IRC provides that any corporation, 100% of whose stock is held by a REIT, is a qualified REIT subsidiary and shall not be treated as a separate corporation.  The assets, liabilities and items of income,

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deduction and credit of a qualified REIT subsidiary are treated as the REIT’s.  We believe that each of our direct and indirect wholly owned subsidiaries, other than the taxable REIT subsidiaries discussed below, will either be a qualified REIT subsidiary within the meaning of Section 856(i) of the IRC, or a noncorporate entity that for federal income tax purposes is not treated as separate from its owner under regulations issued under Section 7701 of the IRC.  Thus, except for the taxable REIT subsidiaries discussed below, in applying all the federal income tax REIT qualification requirements described in this summary, all assets, liabilities and items of income, deduction and credit of our direct and indirect wholly owned subsidiaries are treated as ours.

We have invested and may invest in real estate through one or more limited or general partnerships or limited liability companies that are treated as partnerships for federal income tax purposes.  In the case of a REIT that is a partner in a partnership, regulations under the IRC provide that, for purposes of the REIT qualification requirements regarding income and assets discussed below, the REIT is deemed to own its proportionate share of the assets of the partnership corresponding to the REIT’s proportionate capital interest in the partnership and is deemed to be entitled to the income of the partnership attributable to this proportionate share.  In addition, for these purposes, the character of the assets and gross income of the partnership generally retain the same character in the hands of the REIT.  Accordingly, our proportionate share of the assets, liabilities, and items of income of each partnership in which we are a partner is treated as ours for purposes of the income tests and asset tests discussed below.  In contrast, for purposes of the distribution requirement discussed below, we must take into account as a partner our share of the partnership’s income as determined under the general federal income tax rules governing partners and partnerships under Sections 701 through 777 of the IRC.

Taxable REIT Subsidiaries.  We are permitted to own any or all of the securities of a “taxable REIT subsidiary” as defined in Section 856(l) of the IRC, provided that no more than 25% of our assets, at the close of each quarter, is comprised of our investments in the stock or securities of our taxable REIT subsidiaries.  (For our 2001 through 2008 taxable years, no more than 20% of our assets, at the close of each quarter, was permitted to be comprised of our investments in the stock or securities of our taxable REIT subsidiaries; before the introduction of taxable REIT subsidiaries in 2001, our ability to own separately taxable corporate subsidiaries was more limited.)  Among other requirements, a taxable REIT subsidiary must:

·be a non-REIT corporation for federal income tax purposes in which we directly or indirectly own shares;

·join with us in making a taxable REIT subsidiary election;

·not directly or indirectly operate or manage a lodging facility or a health care facility; and

·not directly or indirectly provide to any person, under a franchise, license, or otherwise, rights to any brand name under which any lodging facility or health care facility is operated, except that in limited circumstances a subfranchise, sublicense or similar right can be granted to an independent contractor to operate or manage a lodging facility or, after our 2008 taxable year, a health care facility.

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In addition, a corporation other than a REIT in which a taxable REIT subsidiary directly or indirectly owns more than 35% of the voting power or value will automatically be treated as a taxable REIT subsidiary.  Subject to the discussion below, we believe that we and each of our taxable REIT subsidiaries have complied with, and will continue to comply with, the requirements for taxable REIT subsidiary status at all times during which we intend for a subsidiary’s taxable REIT subsidiary election to be in effect, and we believe that the same will be true for any taxable REIT subsidiary that we later form or acquire.

Our ownership of stock and securities in taxable REIT subsidiaries is exempt from the 10% and 5% REIT asset tests discussed below.  Also, as discussed below, taxable REIT subsidiaries can perform services for our tenants without disqualifying the rents we receive from those tenants under the 75% or 95% gross income tests discussed below.  Moreover, because taxable REIT subsidiaries are taxed as C corporations that are separate from us, their assets, liabilities and items of income, deduction and credit are not generally imputed to us for purposes of the REIT qualification requirements described in this summary.  Therefore, taxable REIT subsidiaries can generally undertake third-party management and development activities and activities not related to real estate.

Restrictions are imposed on taxable REIT subsidiaries to ensure that they will be subject to an appropriate level of federal income taxation.  For example, a taxable REIT subsidiary may not deduct interest paid in any year to an affiliated REIT to the extent that the interest payments exceed, generally, 50% of the taxable REIT subsidiary’s adjusted taxable income for that year.  However, the taxable REIT subsidiary may carry forward the disallowed interest expense to a succeeding year, and deduct the interest in that later year subject to that year’s 50% adjusted taxable income limitation.  In addition, if a taxable REIT subsidiary pays interest, rent, or other amounts to its affiliated REIT in an amount that exceeds what an unrelated third party would have paid in an arm’s length transaction, then the REIT generally will be subject to an excise tax equal to 100% of the excessive portion of the payment.  Finally, if in comparison to an arm’s length transaction, a tenant has overpaid rent to the REIT in exchange for underpaying the taxable REIT subsidiary for services rendered, then the REIT may be subject to an excise tax equal to 100% of the overpayment.  There can be no assurance that arrangements involving our taxable REIT subsidiaries will not result in the imposition of one or more of these deduction limitations or excise taxes, but we do not believe that we are or will be subject to these impositions.

Income Tests.  There are two gross income requirements for qualification as a REIT under the IRC:

·At least 75% of our gross income (excluding: (a) gross income from sales or other dispositions of property held primarily for sale; (b) any income arising from “clearly identified” hedging transactions that we enter into after July 30, 2008 to manage interest rate or price fluctuations with respect to borrowings we incur to acquire or carry real estate assets; (c) any income arising from “clearly identified” hedging transactions that we enter into after July 30, 2008 primarily to manage risk of currency fluctuations relating to any item that qualifies under the 75% or 95% gross income tests; and (d) real estate foreign exchange gain (as defined in Section 856(n)(2) of the IRC) that we recognize after July 30, 2008) must be derived from investments relating to real property,

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including “rents from real property” as defined under Section 856 of the IRC, interest and gain from mortgages on real property, income and gain from foreclosure property, or dividends and gain from shares in other REITs.  When we receive new capital in exchange for our shares or in a public offering of five-year or longer debt instruments, income attributable to the temporary investment of this new capital in stock or a debt instrument, if received or accrued within one year of our receipt of the new capital, is generally also qualifying income under the 75% gross income test.

·At least 95% of our gross income (excluding: (a) gross income from sales or other dispositions of property held primarily for sale; (b) any income arising from “clearly identified” hedging transactions that we enter into after December 31, 2004 to manage interest rate or price fluctuations with respect to borrowings we incur to acquire or carry real estate assets; (c) any income arising from “clearly identified” hedging transactions that we enter into after July 30, 2008 primarily to manage risk of currency fluctuations relating to any item that qualifies under the 75% or 95% gross income tests; and (d) passive foreign exchange gain (as defined in Section 856(n)(3) of the IRC) that we recognize after July 30, 2008) must be derived from a combination of items of real property income that satisfy the 75% gross income test described above, dividends, interest, gains from the sale or disposition of stock, securities, or real property or, for financial instruments entered into during our 2004 or earlier taxable years, certain payments under interest rate swap or cap agreements, options, futures contracts, forward rate agreements or similar financial instruments.

For purposes of the 75% and 95% gross income tests outlined above, income derived from a “shared appreciation provision” in a mortgage loan is generally treated as gain recognized on the sale of the property to which it relates.  Although we will use our best efforts to ensure that the income generated by our investments will be of a type that satisfies both the 75% and 95% gross income tests, there can be no assurance in this regard.

In order to qualify as “rents from real property” under Section 856 of the IRC, several requirements must be met:

·The amount of rent received generally must not be based on the income or profits of any person, but may be based on receipts or sales.

·Rents do not qualify if the REIT owns 10% or more by vote or value of the tenant, whether directly or after application of attribution rules.  While we intend not to lease property to any party if rents from that property would not qualify as rents from real property, application of the 10% ownership rule is dependent upon complex attribution rules and circumstances that may be beyond our control.  For example, an unaffiliated third party’s ownership directly or by attribution of 10% or more by value of our shares, as well as an ownership position in the stock of one of our tenants which, when added to our own ownership position in that tenant, totals 10% or more by vote or value of the stock of that tenant, would result in that tenant’s rents not qualifying as rents from real property.  Our declaration of trust and bylaws disallow transfers or purported acquisitions, directly or by attribution, of our shares to the extent necessary to maintain our REIT status under the IRC.  Nevertheless, there can be no assurance that these

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provisions in our declaration of trust and bylaws will be effective to prevent our REIT status from being jeopardized under the 10% affiliated tenant rule.  Furthermore, there can be no assurance that we will be able to monitor and enforce these restrictions, nor will our shareholders necessarily be aware of ownership of shares attributed to them under the IRC’s attribution rules.

·There is a limited exception to the above prohibition on earning “rents from real property” from a 10% affiliated tenant, if the tenant is a taxable REIT subsidiary.  If at least 90% of the leased space of a property is leased to tenants other than taxable REIT subsidiaries and 10% affiliated tenants, and if the taxable REIT subsidiary’s rent for space at that property is substantially comparable to the rents paid by nonaffiliated tenants for comparable space at the property, then otherwise qualifying rents paid by the taxable REIT subsidiary to the REIT will not be disqualified on account of the rule prohibiting 10% affiliated tenants.

·In order for rents to qualify, we generally must not manage the property or furnish or render services to the tenants of the property, except through an independent contractor from whom we derive no income or, for our 2001 taxable year and thereafter, through one of our taxable REIT subsidiaries.  There is an exception to this rule permitting a REIT to perform customary tenant services of the sort that a tax-exempt organization could perform without being considered in receipt of “unrelated business taxable income” as defined in Section 512(b)(3) of the IRC.  In addition, a de minimis amount of noncustomary services will not disqualify income as “rents from real property” so long as the value of the impermissible services does not exceed 1% of the gross income from the property.

·If rent attributable to personal property leased in connection with a lease of real property is 15% or less of the total rent received under the lease, then the rent attributable to personal property will qualify as “rents from real property”; if this 15% threshold is exceeded, the rent attributable to personal property will not so qualify.  For our taxable years through December 31, 2000, the portion of rental income treated as attributable to personal property was determined according to the ratio of the tax basis of the personal property to the total tax basis of the real and personal property that is rented.  For our 2001 taxable year and thereafter, the ratio is determined by reference to fair market values rather than tax bases.

We believe that all or substantially all our rents have qualified and will qualify as rents from real property for purposes of Section 856 of the IRC.

In order to qualify as mortgage interest on real property for purposes of the 75% test, interest must derive from a mortgage loan secured by real property with a fair market value, at the time the loan is made, at least equal to the amount of the loan.  If the amount of the loan exceeds the fair market value of the real property, the interest will be treated as interest on a mortgage loan in a ratio equal to the ratio of the fair market value of the real property to the total amount of the mortgage loan.

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Absent the “foreclosure property” rules of Section 856(e) of the IRC, a REIT’s receipt of business operating income from a property would not qualify under the 75% and 95% gross income tests.  But as foreclosure property, gross income from such a business operation would so qualify.  In the case of property leased by a REIT to a tenant, foreclosure property is defined under applicable Treasury regulations to include generally the real property and incidental personal property that the REIT reduces to possession upon a default or imminent default under the lease by the tenant, and as to which a foreclosure property election is made by attaching an appropriate statement to the REIT’s federal income tax return.

Any gain that a REIT recognizes on the sale of foreclosure property, plus any income it receives from foreclosure property that would not qualify under the 75% gross income test in the absence of foreclosure property treatment, reduced by expenses directly connected with the production of those items of income, would be subject to income tax at the maximum corporate rate, currently 35%, under the foreclosure property income tax rules of Section 857(b)(4) of the IRC.  Thus, if a REIT should lease foreclosure property in exchange for rent that qualifies as “rents from real property” as described above, then that rental income is not subject to the foreclosure property income tax.

Other than sales of foreclosure property, any gain we realize on the sale of property held as inventory or other property held primarily for sale to customers in the ordinary course of business will be treated as income from a prohibited transaction that is subject to a penalty tax at a 100% rate.  This prohibited transaction income also may adversely affect our ability to satisfy the 75% and 95% gross income tests for federal income tax qualification as a REIT.  We cannot provide assurances as to whether or not the IRS might successfully assert that one or more of our dispositions is subject to the 100% penalty tax.  However, we believe that dispositions of assets that we have made or that we might make in the future will not be subject to the 100% penalty tax, because we intend to:

·own our assets for investment with a view to long-term income production and capital appreciation;

·engage in the business of developing, owning and managing our existing properties and acquiring, developing, owning and managing new properties; and

·make occasional dispositions of our assets consistent with our long-term investment objectives.

If we fail to satisfy one or both of the 75% or the 95% gross income tests in any taxable year, we may nevertheless qualify as a REIT for that year if we satisfy the following requirements after October 22, 2004:

·our failure to meet the test is due to reasonable cause and not due to willful neglect, and

·after we identify the failure, we file a schedule describing each item of our gross income included in the 75% or 95% gross income tests for that taxable year.

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It is impossible to state whether in all circumstances we would be entitled to the benefit of this relief provision for the 75% and 95% gross income tests.  Even if this relief provision does apply, a 100% tax is imposed upon the greater of the amount by which we failed the 75% test or the 95% test, with adjustments, multiplied by a fraction intended to reflect our profitability.  This relief provision applies to any failure of the applicable income tests, even if the failure first occurred in a prior taxable year, as long as each of the requirements of the relief provision is satisfied after October 22, 2004.

Under prior law, if we failed to satisfy one or both of the 75% or 95% gross income tests, we nevertheless would have qualified as a REIT for that year if:  our failure to meet the test was due to reasonable cause and not due to willful neglect; we reported the nature and amount of each item of our income included in the 75% or 95% gross income tests for that taxable year on a schedule attached to our tax return; and any incorrect information on the schedule was not due to fraud with intent to evade tax.  For our 2004 and prior taxable years, we attached a schedule of gross income to our federal income tax returns, but it is impossible to state whether in all circumstances we would be entitled to the benefit of this prior relief provision for the 75% and 95% gross income tests.  Even if this relief provision did apply, a 100% tax is imposed upon the greater of the amount by which we failed the 75% test or the 95% test, with adjustments, multiplied by a fraction intended to reflect our profitability.

Asset Tests.  At the close of each quarter of each taxable year, we must also satisfy the following asset percentage tests in order to qualify as a REIT for federal income tax purposes:

·At least 75% of our total assets must consist of real estate assets, cash and cash items, shares in other REITs, government securities, and temporary investments of new capital (that is, stock or debt instruments purchased with proceeds of a stock offering or a public offering of our debt with a term of at least five years, but only for the one-year period commencing with our receipt of the offering proceeds).

·Not more than 25% of our total assets may be represented by securities other than those securities that count favorably toward the preceding 75% asset test.

·Of the investments included in the preceding 25% asset class, the value of any one non-REIT issuer’s securities that we own may not exceed 5% of the value of our total assets, and we may not own more than 10% of any one non-REIT issuer’s outstanding voting securities.  For our 2001 taxable year and thereafter, we may not own more than 10% of the vote or value of any one non-REIT issuer’s outstanding securities, unless that issuer is our taxable REIT subsidiary or the securities are “straight debt” securities or otherwise excepted as discussed below.

·For our 2001 taxable year and thereafter, our stock and securities in a taxable REIT subsidiary are exempted from the preceding 10% and 5% asset tests.  However, no more than 25% (for our 2001 through 2008 taxable years, 20%) of our total assets may be represented by stock or securities of taxable REIT subsidiaries.

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When a failure to satisfy the above asset tests results from an acquisition of securities or other property during a quarter, the failure can be cured by disposition of sufficient nonqualifying assets within 30 days after the close of that quarter.

In addition, if we fail the 5% value test or the 10% vote or value tests at the close of any quarter and do not cure such failure within 30 days after the close of that quarter, that failure will nevertheless be excused if (a) the failure is de minimis and (b) within 6 months after the last day of the quarter in which we identify the failure, we either dispose of the assets causing the failure or otherwise satisfy the 5% value and 10% vote and value asset tests.  For purposes of this relief provision, the failure will be “de minimis” if the value of the assets causing the failure does not exceed the lesser of (a) 1% of the total value of our assets at the end of the relevant quarter or (b) $10,000,000.  If our failure is not de minimis, or if any of the other REIT asset tests have been violated, we may nevertheless qualify as a REIT if (a) we provide the IRS with a description of each asset causing the failure, (b) the failure was due to reasonable cause and not willful neglect, (c) we pay a tax equal to the greater of (i) $50,000 or (ii) the highest rate of corporate tax imposed (currently 35%) on the net income generated by the assets causing the failure during the period of the failure, and (d) within 6 months after the last day of the quarter in which we identify the failure, we either dispose of the assets causing the failure or otherwise satisfy all of the REIT asset tests.  These relief provisions apply to any failure of the applicable asset tests, even if the failure first occurred in a prior taxable year, as long as each of the requirements of the relief provision is satisfied after October 22, 2004.

The IRC also provides, for our 2001 taxable year and thereafter, an excepted securities safe harbor to the 10% value test that includes among other items (a) “straight debt” securities, (b) certain rental agreements in which payment is to be made in subsequent years, (c) any obligation to pay rents from real property, (d) securities issued by governmental entities that are not dependent in whole or in part on the profits of or payments from a nongovernmental entity, and (e) any security issued by another REIT.

We intend to maintain records of the value of our assets to document our compliance with the above asset tests, and to take actions as may be required to cure any failure to satisfy the tests within 30 days after the close of any quarter.

Our Investment in Senior Housing Properties Trust. For several years, we owned a significant minority, in excess of 10%, of Senior Housing Properties Trust, or Senior Housing, shares, and we believe that Senior Housing during these years qualified as a REIT under the IRC.  We sold all our Senior Housing shares in 2006, and no longer own any material stake in that company.  For any of our taxable years in which Senior Housing qualified as a REIT, our investment in Senior Housing counted favorably toward the REIT asset tests and our gains and dividends from Senior Housing shares counted as qualifying income under both REIT gross income tests.  However, because we did not and could not control Senior Housing’s compliance with the federal income tax requirements for REIT qualification, we joined with Senior Housing in filing a protective taxable REIT subsidiary election under Section 856(l) of the IRC, effective January 1, 2001, and we reaffirmed this protective election every January 1 since then through January 1, 2006.  Pursuant to this protective taxable REIT subsidiary election, we believe that if Senior Housing was not a REIT, it would instead be considered one of our taxable REIT subsidiaries.  As one of our taxable REIT subsidiaries, we

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believe that Senior Housing’s failure to qualify as a REIT would not have jeopardized our own qualification as a REIT even though we owned more than 10% of it.

Annual Distribution Requirements.  In order to qualify for taxation as a REIT under the IRC, we are required to make annual distributions other than capital gain dividends to our shareholders in an amount at least equal to the excess of:

·the sum of 90% of our “real estate investment trust taxable income,” as defined in Section 857 of the IRC, computed by excluding any net capital gain and before taking into account any dividends paid deduction for which we are eligible, and 90% of our net income after tax, if any, from property received in foreclosure, over

·the sum of our qualifying noncash income, e.g., imputed rental income or income from transactions inadvertently failing to qualify as like-kind exchanges.

The distributions must be paid in the taxable year to which they relate, or in the following taxable year if declared before we timely file our tax return for the earlier taxable year and if paid on or before the first regular distribution payment after that declaration.  If a dividend is declared in October, November, or December to shareholders of record during one of those months, and is paid during the following January, then for federal income tax purposes the dividend will be treated as having been both paid and received on December 31 of the prior taxable year.  A distribution which is not pro rata within a class of our beneficial interests entitled to a distribution, or which is not consistent with the rights to distributions among our classes of beneficial interests, is a preferential distribution that is not taken into consideration for purposes of the distribution requirements, and accordingly the payment of a preferential distribution could affect our ability to meet the distribution requirements.  Taking into account our distribution policies, including the dividend reinvestment plan we have adopted, we expect that we will not make any preferential distributions. The distribution requirements may be waived by the IRS if a REIT establishes that it failed to meet them by reason of distributions previously made to meet the requirements of the 4% excise tax discussed below.  To the extent that we do not distribute all of our net capital gain and all of our real estate investment trust taxable income, as adjusted, we will be subject to tax on undistributed amounts.

In addition, we will be subject to a 4% nondeductible excise tax to the extent we fail within a calendar year to make required distributions to our shareholders of 85% of our ordinary income and 95% of our capital gain net income plus the excess, if any, of the “grossed up required distribution” for the preceding calendar year over the amount treated as distributed for that preceding calendar year.  For this purpose, the term “grossed up required distribution” for any calendar year is the sum of our taxable income for the calendar year without regard to the deduction for dividends paid and all amounts from earlier years that are not treated as having been distributed under the provision. We will be treated as having sufficient earnings and profits to treat as a dividend any distribution by us up to the amount required to be distributed in order to avoid imposition of the 4% excise tax.

If we do not have enough cash or other liquid assets to meet the 90% distribution requirements, we may find it necessary and desirable to arrange for new debt or equity financing

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to provide funds for required distributions in order to maintain our REIT status.  We can provide no assurance that financing would be available for these purposes on favorable terms.

We may be able to rectify a failure to pay sufficient dividends for any year by paying “deficiency dividends” to shareholders in a later year.  These deficiency dividends may be included in our deduction for dividends paid for the earlier year, but an interest charge would be imposed upon us for the delay in distribution.

In addition to the other distribution requirements above, to preserve our status as a REIT we are required to timely distribute C corporation earnings and profits that we inherit from acquired corporations.

Acquisition of C Corporations

On July 17, 2008, we acquired a C corporation in a transaction where the C corporation was ultimately merged into our disregarded entity under Treasury regulations issued under Section 7701 of the IRC, all as described in Section 381(a) of the IRC.  Thus, after the acquisition, all assets, liabilities and items of income, deduction and credit of the acquired corporation, and a proportionate share of the assets, liabilities and items of income, deduction and credit of the partnership in which the acquired corporation was a partner, are treated as ours for purposes of the various REIT qualification tests described above.  In addition, we generally were treated as the successor to the acquired corporate entity’s federal income tax attributes, such as the entity’s adjusted tax bases in its assets and its depreciation schedules; we were also treated as the successor to the acquired corporate entity’s earnings and profits for federal income tax purposes.

Built-in Gains from C Corporations.  As described above, notwithstanding our qualification and taxation as a REIT, we may still be subject to corporate taxation in particular circumstances.  Specifically, if we acquire an asset from a corporation in a transaction in which our adjusted tax basis in the asset is determined by reference to the adjusted tax basis of that asset in the hands of a present or former C corporation, and if we subsequently recognize gain on the disposition of that asset during the ten year period beginning on the date on which the asset ceased to be owned by the C corporation, then we will generally pay tax at the highest regular corporate tax rate, currently 35%, on the lesser of (1) the excess, if any, of the asset’s fair market value over its adjusted tax basis, each determined as of the time the asset ceased to be owned by the C corporation, or (2) our gain recognized in the disposition.  Accordingly, any taxable disposition of an asset so acquired during the applicable ten-year period could be subject to tax under these rules.  However, we have not disposed, and have no present plan or intent to dispose, of any material assets acquired in such transactions.

To the extent of our gains in a taxable year that are subject to the built in gains tax described above, net of any taxes paid on such gains with respect to that taxable year, our taxable dividends paid to you in the following year will be eligible for treatment as qualified dividends that are taxed to our noncorporate shareholders at the maximum capital gain rate of 15% (scheduled to increase to 20% for taxable years beginning after December 31, 2010).

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Earnings and Profits.  A REIT may not have any undistributed C corporation earnings and profits at the end of any taxable year. Upon the closing of the July 17, 2008 transaction, we succeeded to the undistributed earnings and profits, if any, of the acquired corporate entity.  Thus, we needed to distribute any such earnings and profits no later than the end of the applicable tax year. If we failed to do so, we would not qualify to be taxed as a REIT for that year and a number of years thereafter, unless we are able to rely on the relief provision described below.

Although Sullivan & Worcester LLP is unable to render an opinion on factual determinations such as the amount of undistributed earnings and profits, we retained accountants to compute the amount of undistributed earnings and profits that we inherited in the July 17, 2008 transaction. Based on these calculations, we believe that we did not inherit any undistributed earnings and profits that remained undistributed at the end of the applicable tax year. However, there can be no assurance that the IRS would not, upon subsequent examination, propose adjustments to our calculation of the undistributed earnings and profits that we inherited, including adjustments that might be deemed necessary by the IRS as a result of its examination of the companies we acquired.  In any such examination, the IRS might consider all taxable years of the acquired subsidiaries as open for review for purposes of its proposed adjustments.  If it is subsequently determined that we had undistributed earnings and profits as of the end of the applicable tax year, we may be eligible for a relief provision similar to the “deficiency dividends” procedure described above. To utilize this relief provision, we would have to pay an interest charge for the delay in distributing the undistributed earnings and profits; in addition, we would be required to distribute to our shareholders, in addition to our other REIT distribution requirements, the amount of the undistributed earnings and profits less the interest charge paid.

Acquisition of Publicly Traded Partnership

In 2004, we acquired all of the limited partnership interests and the general partnership interest of a publicly traded partnership as well as certain of the partnership’s affiliated entities.  Prior to our acquisition of the publicly traded partnership and its affiliates, the acquired entities directly or indirectly owned substantially all of the outstanding equity interests in various noncorporate subsidiaries and four C corporations.  However, before our acquisition of these entities, all four C corporation subsidiaries were converted into disregarded entities under Treasury regulations issued under Section 7701 of the IRC, and thus considered liquidated for federal income tax purposes.  Upon our acquisition, the publicly traded partnership itself and its affiliates and subsidiaries became disregarded entities of ours under Treasury regulations issued under Section 7701 of the IRC.  Thus, after the 2004 acquisition, all assets, liabilities and items of income, deduction and credit of these acquired entities have been treated as ours for purposes of the various REIT qualification tests described above.  Our initial tax basis in the acquired assets is our cost for acquiring them, and we believe that we did not succeed to any C corporation earnings and profits in this acquisition.

Depreciation and Federal Income Tax Treatment of Leases

Our initial tax bases in our assets will generally be our acquisition cost.  We will generally depreciate our real property on a straight-line basis over 40 years and our personal

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property over the applicable shorter periods.  These depreciation schedules may vary for properties that we acquire through tax-free or carryover basis acquisitions.

We are entitled to depreciation deductions from our facilities only if we are treated for federal income tax purposes as the owner of the facilities.  This means that the leases of the facilities must be classified for federal income tax purposes as true leases, rather than as sales or financing arrangements, and we believe this to be the case.  In the case of sale-leaseback arrangements, the IRS could assert that we realized prepaid rental income in the year of purchase to the extent that the value of a leased property, at the time of purchase, exceeded the purchase price for that property.  While we believe that the value of leased property at the time of purchase did not exceed purchase prices, because of the lack of clear precedent we cannot provide assurances as to whether the IRS might successfully assert the existence of prepaid rental income in any of our sale-leaseback transactions.

Like-Kind Exchanges

In May 2008, we entered into a series of agreements to sell medical office, clinic and biotech laboratory buildings to Senior Housing.  Most of these agreements closed during 2008; some closed in 2009; and two are scheduled to close in 2010.  Senior Housing’s obligations to complete these purchases were and are subject to various conditions typical of commercial real estate purchases. On advice of counsel, we believe that each of these agreements should be viewed as a separate transaction for federal income tax purposes.  Accordingly, we believe each agreement may, in our discretion, be the subject of a separate cash sale or like-kind exchange under Section 1031 of the IRC.  We therefore entered into like-kind exchanges for some, but not all, of the disposed properties and reported those exchanges as dispositions and exchanges separate from each other and from any cash sales.

If, contrary to our view, the IRS recharacterizes these agreements as a composite transaction, then some or all of our realized gain on the several dispositions that were intended to be like-kind exchanges may, contrary to our expectation of nonrecognition, be recognized in full.  In that event, we will not have distributed all of our capital gain for 2008, and possibly also for 2009 or 2010.  In such case, we may owe federal income tax on the undistributed capital gain unless we elect to pay deficiency dividends to our shareholders. As discussed above, deficiency dividends may be included in our deduction for dividends paid for the year in which such gain is recognized, but an interest charge would be imposed upon us for the delay in distribution.

Federal income taxation of HRPT shareholders.

Taxation of U.S. Shareholders

The maximum individual federal income tax rate for long-term capital gains is generally 15% (scheduled to increase to 20% for taxable years beginning after December 31, 2010) and for most corporate dividends is generally also 15% (scheduled to increase to ordinary income rates for taxable years beginning after December 31, 2010).  However, because we are not generally subject to federal income tax on the portion of our REIT taxable income or capital gains distributed to our shareholders, dividends on our shares generally are not eligible for such 15% tax rate on dividends while that rate is in effect.  As a result, our ordinary dividends continue to

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be taxed at the higher federal income tax rates applicable to ordinary income.  However, the favorable federal income tax rates for long-term capital gains, and while in effect, for dividends, generally apply to:

·your long-term capital gains, if any, recognized on the disposition of our shares;

·our distributions designated as long-term capital gain dividends (except to the extent attributable to real estate depreciation recapture, in which case the distributions are subject to a 25% federal income tax rate);

·our dividends attributable to dividends, if any, received by us from non-REIT corporations such as taxable REIT subsidiaries; and

·our dividends to the extent attributable to income upon which we have paid federal corporate income tax.

As long as we qualify as a REIT for federal income tax purposes, a distribution to our U.S. shareholders (including any constructive distributions on our common shares or on our series D cumulative convertible preferred shares) that we do not designate as a capital gain dividend will be treated as an ordinary income dividend to the extent of our current or accumulated earnings and profits. Distributions made out of our current or accumulated earnings and profits that we properly designate as capital gain dividends will be taxed as long-term capital gains, as discussed below, to the extent they do not exceed our actual net capital gain for the taxable year.  However, corporate shareholders may be required to treat up to 20% of any capital gain dividend as ordinary income under Section 291 of the IRC.

In addition, we may elect to retain net capital gain income and treat it as constructively distributed.  In that case:

·we will be taxed at regular corporate capital gains tax rates on retained amounts;

·each U.S. shareholder will be taxed on its designated proportionate share of our retained net capital gains as though that amount were distributed and designated a capital gain dividend;

·each U.S. shareholder will receive a credit for its designated proportionate share of the tax that we pay;

·each U.S. shareholder will increase its adjusted basis in our shares by the excess of the amount of its proportionate share of these retained net capital gains over its proportionate share of the tax that we pay; and

·both we and our corporate shareholders will make commensurate adjustments in our respective earnings and profits for federal income tax purposes.

If we elect to retain our net capital gains in this fashion, we will notify our U.S. shareholders of the relevant tax information within 60 days after the close of the affected taxable year.

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As discussed above, for noncorporate U.S. shareholders, long-term capital gains are generally taxed at maximum rates of 15% (scheduled to increase to 20% for taxable years beginning after December 31, 2010) or 25%, depending upon the type of property disposed of and the previously claimed depreciation with respect to this property.  If for any taxable year we designate capital gain dividends for U.S. shareholders, then the portion of the capital gain dividends we designate will be allocated to the holders of a particular class of shares on a percentage basis equal to the ratio of the amount of the total dividends paid or made available for the year to the holders of that class of shares to the total dividends paid or made available for the year to holders of all classes of our shares.  We will similarly designate the portion of any capital gain dividend that is to be taxed to noncorporate U.S. shareholders at the maximum rates of 15% (scheduled to increase to 20% for taxable years beginning after December 31, 2010) or 25% so that the designations will be proportionate among all classes of our shares.

Distributions in excess of current or accumulated earnings and profits will not be taxable to a U.S. shareholder to the extent that they do not exceed the shareholder’s adjusted tax basis in the shareholder’s shares, but will reduce the shareholder’s basis in those shares.  To the extent that these excess distributions exceed the adjusted basis of a U.S. shareholder’s shares, they will be included in income as capital gain, with long-term gain generally taxed to noncorporate U.S. shareholders at a maximum rate of 15% (scheduled to increase to 20% for taxable years beginning after December 31, 2010).  No U.S. shareholder may include on his federal income tax return any of our net operating losses or any of our capital losses.

Dividends that we declare in October, November or December of a taxable year to U.S. shareholders of record on a date in those months will be deemed to have been received by shareholders on December 31 of that taxable year, provided we actually pay these dividends during the following January.  Also, items that are treated differently for regular and alternative minimum tax purposes are to be allocated between a REIT and its shareholders under Treasury regulations which are to be prescribed.  It is possible that these Treasury regulations will require tax preference items to be allocated to our shareholders with respect to any accelerated depreciation or other tax preference items that we claim.

A U.S. shareholder will generally recognize gain or loss equal to the difference between the amount realized and the shareholder’s adjusted basis in our shares that are sold or exchanged.  This gain or loss will be capital gain or loss, and will be long-term capital gain or loss if the shareholder’s holding period in the shares exceeds one year.  In addition, any loss upon a sale or exchange of our shares held for six months or less will generally be treated as a long-term capital loss to the extent of our long-term capital gain dividends during the holding period.

In contrast to the typical redemption of preferred shares for cash only, discussed above, if a U.S. shareholder receives a number of our common shares as a result of a conversion or repurchase of series D cumulative convertible preferred shares, then the transaction will be treated as a recapitalization. As such, the shareholder would recognize income or gain only to the extent of the lesser of (1) the excess, if any, of the value of the cash and common shares received over such shareholder’s adjusted tax basis in its series D cumulative convertible preferred shares surrendered or (2) the cash received. Any cash a shareholder receives, up to the amount of income or gain recognized, would generally be characterized as a dividend to the extent that a surrender of series D cumulative convertible preferred shares to us for cash only would be

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taxable as a dividend, taking into account the surrendering shareholder’s continuing actual or constructive ownership interest in our shares, if any, as discussed above, and the balance of the recognized amount, if any, will be gain.  A U.S. shareholder’s basis in its common shares received would be equal to the basis for the series D cumulative convertible preferred shares surrendered less any cash received plus any income or gain recognized.  A U.S. shareholder’s holding period in the common shares received would be the same as the holding period for the series D cumulative convertible preferred shares surrendered.  If, in addition to common shares, upon conversion or repurchase a U.S. shareholder receives rights or warrants to acquire our common shares or other of our securities, then the receipt of the rights or warrants may be taxable, and we encourage you to consult your tax advisor as to the consequences of the receipt of rights or warrants upon conversion or repurchase.

A U.S. shareholder generally will not recognize any income, gain or loss upon conversion of series D cumulative convertible preferred shares into common shares except with respect to cash, if any, received in lieu of a fractional common share.  A U.S. shareholder’s basis in its common shares received would be equal to the basis for the series D cumulative convertible preferred shares surrendered less any basis allocable to any fractional share exchanged for cash.  A U.S. shareholder’s holding period in the common shares received would be the same as the holding period for the series D cumulative convertible preferred shares surrendered.  Any cash received in lieu of a fractional common share upon conversion will be treated as a payment in exchange for the fractional common share. Accordingly, receipt of cash in lieu of a fractional share generally will result in capital gain or loss, measured by the difference between the cash received for the fractional share and the adjusted tax basis attributable to the fractional share.  If, in addition to common shares, upon conversion a U.S. shareholder receives rights or warrants to acquire our common shares or other of our securities, then the receipt of the rights or warrants may be taxable, and we encourage you to consult your tax advisor as to the consequences of the receipt of rights or warrants upon conversion.

Effective for federal tax returns with due dates after October 22, 2004, the IRC imposes a penalty for the failure to properly disclose a “reportable transaction.”  A reportable transaction currently includes, among other things, a sale or exchange of our shares resulting in a tax loss in excess of (i) $10 million in any single year or $20 million in any combination of years in the case of our shares held by a C corporation or by a partnership with only C corporation partners or (ii) $2 million in any single year or $4 million in any combination of years in the case of our shares held by any other partnership or an S corporation, trust or individual, including losses that flow through pass through entities to individuals.  A taxpayer discloses a reportable transaction by filing IRS Form 8886 with its federal income tax return and, in the first year of filing, a copy of Form 8886 must be sent to the IRS’s Office of Tax Shelter Analysis.  The penalty for failing to disclose a reportable transaction is generally $10,000 in the case of a natural person and $50,000 in any other case.

Noncorporate U.S. shareholders who borrow funds to finance their acquisition of our shares could be limited in the amount of deductions allowed for the interest paid on the indebtedness incurred.  Under Section 163(d) of the IRC, interest paid or accrued on indebtedness incurred or continued to purchase or carry property held for investment is generally deductible only to the extent of the investor’s net investment income.  A U.S. shareholder’s net investment income will include ordinary income dividend distributions received from us and, if an appropriate election

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is made by the shareholder, capital gain dividend distributions received from us; however, distributions treated as a nontaxable return of the shareholder’s basis will not enter into the computation of net investment income.

Taxation of Tax-Exempt Shareholders

In Revenue Ruling 66-106, the IRS ruled that amounts distributed by a REIT to a tax-exempt employees’ pension trust did not constitute “unrelated business taxable income,” even though the REIT may have financed some of its activities with acquisition indebtedness.  Although revenue rulings are interpretive in nature and subject to revocation or modification by the IRS, based upon the analysis and conclusion of Revenue Ruling 66-106, our distributions made to shareholders that are tax-exempt pension plans, individual retirement accounts, or other qualifying tax-exempt entities should not constitute unrelated business taxable income, provided that the shareholder has not financed its acquisition of our shares with “acquisition indebtedness” within the meaning of the IRC, and provided further that, consistent with our present intent, we do not hold a residual interest in a real estate mortgage investment conduit.

Tax-exempt pension trusts that own more than 10% by value of a “pension-held REIT” at any time during a taxable year may be required to treat a percentage of all dividends received from the pension-held REIT during the year as unrelated business taxable income.  This percentage is equal to the ratio of:

·the pension-held REIT’s gross income derived from the conduct of unrelated trades or businesses, determined as if the pension-held REIT were a tax-exempt pension fund, less direct expenses related to that income, to

·the pension-held REIT’s gross income from all sources, less direct expenses related to that income,

except that this percentage shall be deemed to be zero unless it would otherwise equal or exceed 5%.  A REIT is a pension-held REIT if:

·the REIT is “predominantly held” by tax-exempt pension trusts; and

·the REIT would fail to satisfy the “closely held” ownership requirement discussed above if the stock or beneficial interests in the REIT held by tax-exempt pension trusts were viewed as held by tax-exempt pension trusts rather than by their respective beneficiaries.

A REIT is predominantly held by tax-exempt pension trusts if at least one tax-exempt pension trust owns more than 25% by value of the REIT’s stock or beneficial interests, or if one or more tax-exempt pension trusts, each owning more than 10% by value of the REIT’s stock or beneficial interests, own in the aggregate more than 50% by value of the REIT’s stock or beneficial interests. Because of the share ownership concentration restrictions in our declaration of trust and bylaws, we believe that we are not and will not be a pension-held REIT.  However, because our shares are publicly traded, we cannot completely control whether or not we are or will become a pension-held REIT.

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Social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts and qualified group legal services plans exempt from federal income taxation under Sections 501(c)(7), (c)(9), (c)(17) and (c)(20) of the IRC, respectively, are subject to different unrelated business taxable income rules, which generally will require them to characterize distributions from a REIT as unrelated business taxable income.  In addition, these prospective investors should consult their own tax advisors concerning any “set aside” or reserve requirements applicable to them.

Taxation of Non-U.S. Shareholders

The rules governing the United States federal income taxation of non-U.S. shareholders are complex, and the following discussion is intended only as a summary of these rules.  If you are a non-U.S. shareholder, we urge you to consult with your own tax advisor to determine the impact of United States federal, state, local, and foreign tax laws, including any tax return filing and other reporting requirements, with respect to your investment in our shares.

In general, a non-U.S. shareholder will be subject to regular United States federal income tax in the same manner as a U.S. shareholder with respect to its investment in our shares if that investment is effectively connected with the non-U.S. shareholder’s conduct of a trade or business in the United States (and, if provided by an applicable income tax treaty, is attributable to a permanent establishment or fixed base the non-U.S. shareholder maintains in the United States).  In addition, a corporate non-U.S. shareholder that receives income that is or is deemed effectively connected with a trade or business in the United States may also be subject to the 30% branch profits tax under Section 884 of the IRC, which is payable in addition to regular United States federal corporate income tax.  The balance of this discussion of the United States federal income taxation of non-U.S. shareholders addresses only those non-U.S. shareholders whose investment in our shares is not effectively connected with the conduct of a trade or business in the United States.

A distribution by us to a non-U.S. shareholder that is not attributable to gain from the sale or exchange of a United States real property interest and that is not designated as a capital gain dividend will be treated as an ordinary income dividend to the extent that it is made out of current or accumulated earnings and profits.  A distribution of this type will generally be subject to United States federal income tax and withholding at the rate of 30%, or at a lower rate if the non-U.S. shareholder has in the manner prescribed by the IRS demonstrated its entitlement to benefits under a tax treaty.  In the case of any in kind distributions of property, we or other applicable withholding agents will collect the amount required to be withheld by reducing to cash for remittance to the IRS a sufficient portion of the property that the non-U.S. shareholder would otherwise receive, and the non-U.S. shareholder may bear brokerage or other costs for this withholding procedure.  Because we cannot determine our current and accumulated earnings and profits until the end of the taxable year, withholding at the rate of 30% or applicable lower treaty rate will generally be imposed on the gross amount of any distribution to a non-U.S. shareholder that we make and do not designate a capital gain dividend.  Notwithstanding this withholding on distributions in excess of our current and accumulated earnings and profits, these distributions are a nontaxable return of capital to the extent that they do not exceed the non-U.S. shareholder’s adjusted basis in our shares, and the nontaxable return of capital will reduce the adjusted basis in these shares.  To the extent that distributions in excess of current and accumulated earnings and

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profits exceed the non-U.S. shareholder’s adjusted basis in our shares, the distributions will give rise to tax liability if the non-U.S. shareholder would otherwise be subject to tax on any gain from the sale or exchange of these shares, as discussed below.  A non-U.S. shareholder may seek a refund from the IRS of amounts withheld on distributions to him in excess of our current and accumulated earnings and profits.

From time to time, some of our distributions may be attributable to the sale or exchange of United States real property interests.  However, capital gain dividends that are received by a non-U.S. shareholder, including dividends attributable to our sales of United States real property interests, and that are deductible by us in respect of our 2005 taxable year and thereafter will be subject to the taxation and withholding regime applicable to ordinary income dividends and the branch profits tax will not apply, provided that (1) the capital gain dividends are received with respect to a class of shares that is “regularly traded” on a domestic “established securities market” such as the New York Stock Exchange, or the NYSE, both as defined by applicable Treasury regulations, and (2) the non-U.S. shareholder does not own more than 5% of that class of shares at any time during the one-year period ending on the date of distribution of the capital gain dividends.  If both of these provisions are satisfied, qualifying non-U.S. shareholders will not be subject to withholding on capital gain dividends as though those amounts were effectively connected with a United States trade or business, and qualifying non-U.S. shareholders will not be required to file United States federal income tax returns or pay branch profits tax in respect of these capital gain dividends.  Instead, these dividends will be subject to United States federal income tax and withholding as ordinary dividends, currently at a 30% tax rate unless reduced by applicable treaty, as discussed below.  Although there can be no assurance in this regard, we believe that our common shares and each class of our preferred shares have been and will remain “regularly traded” on a domestic “established securities market” within the meaning of applicable Treasury regulations; however, we can provide no assurance that our shares will continue to be “regularly traded” on a domestic “established securities market” in future taxable years.

Except as discussed above, for any year in which we qualify as a REIT, distributions that are attributable to gain from the sale or exchange of a United States real property interest are taxed to a non-U.S. shareholder as if these distributions were gains effectively connected with a trade or business in the United States conducted by the non-U.S. shareholder.  Accordingly, a non-U.S. shareholder that does not qualify for the special rule above will be taxed on these amounts at the normal capital gain rates applicable to a U.S. shareholder, subject to any applicable alternative minimum tax and to a special alternative minimum tax in the case of nonresident alien individuals; such a non-U.S. shareholder will be required to file a United States federal income tax return reporting these amounts, even if applicable withholding is imposed as described below; and such a non-U.S. shareholder that is also a corporation may owe the 30% branch profits tax under Section 884 of the IRC in respect of these amounts.  We or other applicable withholding agents will be required to withhold from distributions to such non-U.S. shareholders, and remit to the IRS, 35% of the maximum amount of any distribution that could be designated as a capital gain dividend.  In addition, for purposes of this withholding rule, if we designate prior distributions as capital gain dividends, then subsequent distributions up to the amount of the designated prior distributions will be treated as capital gain dividends.  The amount of any tax withheld is creditable against the non-U.S. shareholder’s United States federal income tax liability, and the non-U.S. shareholder may file for a refund from the IRS of any amount of withheld tax in excess of that tax liability.

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Effective generally from and after 2006, a special “wash sale” rule applies to a non-U.S. shareholder who owns any class of our shares if (1) the shareholder owns more than 5% of that class of shares at any time during the one-year period ending on the date of the distribution described below, or (2) that class of our shares is not, within the meaning of applicable Treasury regulations, “regularly traded” on a domestic “established securities market” such as the NYSE.  Although there can be no assurance in this regard, we believe that our common shares and each class of our preferred shares have been and will remain “regularly traded” on a domestic “established securities market” within the meaning of applicable Treasury regulations, all as discussed above; however, we can provide no assurance that our shares will continue to be “regularly traded” on a domestic “established securities market” in future taxable years.  We thus anticipate this wash sale rule to apply, if at all, only to a non-U.S. shareholder that owns more than 5% of either our common shares or any class of our preferred shares.  Such a non-U.S. shareholder will be treated as having made a “wash sale” of our shares if it (1) disposes of an interest in our shares during the 30 days preceding the ex-dividend date of a distribution by us that, but for such disposition, would have been treated by the non-U.S. shareholder in whole or in part as gain from the sale or exchange of a United States real property interest, and then (2) acquires or enters into a contract to acquire a substantially identical interest in our shares, either actually or constructively through a related party, during the 61-day period beginning 30 days prior to the ex-dividend date.  In the event of such a wash sale, the non-U.S. shareholder will have gain from the sale or exchange of a United States real property interest in an amount equal to the portion of the distribution that, but for the wash sale, would have been a gain from the sale or exchange of a United States real property interest.  As discussed above, a non-U.S. shareholder’s gain from the sale or exchange of a United States real property interest can trigger increased United States taxes, such as the branch profits tax applicable to non-U.S. corporations, and increased United States tax filing requirements.

If for any taxable year we designate capital gain dividends for our shareholders, then the portion of the capital gain dividends we designate will be allocated to the holders of a particular class of shares on a percentage basis equal to the ratio of the amount of the total dividends paid or made available for the year to the holders of that class of shares to the total dividends paid or made available for the year to holders of all classes of our shares.

Tax treaties may reduce the withholding obligations on our distributions.  Under some treaties, however, rates below 30% that are applicable to ordinary income dividends from United States corporations may not apply to ordinary income dividends from a REIT or may apply only if the REIT meets certain additional conditions.  You must generally use an applicable IRS Form W-8, or substantially similar form, to claim tax treaty benefits.  If the amount of tax withheld with respect to a distribution to a non-U.S. shareholder exceeds the shareholder’s United States federal income tax liability with respect to the distribution, the non-U.S. shareholder may file for a refund of the excess from the IRS.  The 35% withholding tax rate discussed above on some capital gain dividends corresponds to the maximum income tax rate applicable to corporate non-U.S. shareholders but is higher than the current 15% and 25% maximum rates on capital gains generally applicable to noncorporate non-U.S. shareholders.  Treasury regulations also provide special rules to determine whether, for purposes of determining the applicability of a tax treaty, our distributions to a non-U.S. shareholder that is an entity should be treated as paid to the entity or to those owning an interest in that entity, and whether the entity or its owners are entitled to benefits under the tax treaty.  In the case of any in kind distributions of property, we or other

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applicable withholding agents will have to collect the amount required to be withheld by reducing to cash for remittance to the IRS a sufficient portion of the property that the non-U.S. shareholder would otherwise receive, and the non-U.S. shareholder may bear brokerage or other costs for this withholding procedure.

If our shares are not “United States real property interests” within the meaning of Section 897 of the IRC, then a non-U.S. shareholder’s gain on sale of these shares (including a conversion of our series D cumulative convertible preferred shares into common shares) generally will not be subject to United States federal income taxation, except that a nonresident alien individual who was in the United States for 183 days or more during the taxable year may be subject to a 30% tax on this gain.  Our shares will not constitute a United States real property interest if we are a “domestically controlled REIT.”  A domestically controlled REIT is a REIT in which at all times during the preceding five-year period less than 50% in value of its shares is held directly or indirectly by foreign persons.  We believe that we have been and will remain a domestically controlled REIT and thus a non-U.S. shareholder’s gain on sale of our shares will not be subject to United States federal income taxation.  However, because our shares are publicly traded, we can provide no assurance that we have been or will remain a domestically controlled REIT.  If we are not a domestically controlled REIT, a non-U.S. shareholder’s gain on sale of our shares will not be subject to United States federal income taxation as a sale of a United States real property interest, if that class of shares is “regularly traded,” as defined by applicable Treasury regulations, on an established securities market like the NYSE, and the non-U.S. shareholder has at all times during the preceding five years owned 5% or less by value of that class of shares.  In this regard, because the shares of others may be redeemed,  and in the case of the series D cumulative convertible preferred shares, are convertible, a non-U.S. shareholder’s percentage interest in a class of our shares may increase even if it acquires no additional shares in that class.  If the gain on the sale of our shares were subject to United States federal income taxation, the non-U.S. shareholder will generally be subject to the same treatment as a U.S. shareholder with respect to its gain, will be required to file a United States federal income tax return reporting that gain, and a corporate non-U.S. shareholder might owe branch profits tax under Section 884 of the IRC.  A purchaser of our shares from a non-U.S. shareholder will not be required to withhold on the purchase price if the purchased shares are regularly traded on an established securities market or if we are a domestically controlled REIT.  Otherwise, a purchaser of our shares from a non-U.S. shareholder may be required to withhold 10% of the purchase price paid to the non-U.S. shareholder and to remit the withheld amount to the IRS.

Backup Withholding and Information Reporting

Information reporting and backup withholding may apply to distributions or proceeds paid to our shareholders under the circumstances discussed below.  The backup withholding rate is currently 28% and is scheduled to increase to 31% after 2010.  Amounts withheld under backup withholding are generally not an additional tax and may be refunded by the IRS or credited against the REIT shareholder’s federal income tax liability.  In the case of any in kind distributions of property by us to a shareholder, we or other applicable withholding agents will have to collect any applicable backup withholding by reducing to cash for remittance to the IRS a sufficient portion of the property that our shareholder would otherwise receive, and the shareholder may bear brokerage or other costs for this withholding procedure.

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A U.S. shareholder will be subject to backup withholding when it receives distributions on our shares or proceeds upon the sale, exchange, redemption, retirement or other disposition of our shares, unless the U.S. shareholder properly executes, or has previously properly executed, under penalties of perjury an IRS Form W-9 or substantially similar form that:

·provides the U.S. shareholder’s correct taxpayer identification number; and

·certifies that the U.S. shareholder is exempt from backup withholding because it is a corporation or comes within another exempt category, it has not been notified by the IRS that it is subject to backup withholding, or it has been notified by the IRS that it is no longer subject to backup withholding.

If the U.S. shareholder has not provided and does not provide its correct taxpayer identification number on the IRS Form W-9 or substantially similar form, it may be subject to penalties imposed by the IRS, and the REIT or other withholding agent may have to withhold a portion of any distributions or proceeds paid to it. Unless the U.S. shareholder has established on a properly executed IRS Form W-9 or substantially similar form that it is a corporation or comes within another exempt category, distributions or proceeds on our shares paid to it during the calendar year, and the amount of tax withheld, if any, will be reported to it and to the IRS.

Distributions on our shares to a non-U.S. shareholder during each calendar year and the amount of tax withheld, if any, will generally be reported to the non-U.S. shareholder and to the IRS. This information reporting requirement applies regardless of whether the non-U.S. shareholder is subject to withholding on distributions on our shares or whether the withholding was reduced or eliminated by an applicable tax treaty.  Also, distributions paid to a non-U.S. shareholder on our shares may be subject to backup withholding, unless the non-U.S. shareholder properly certifies its non-U.S. shareholder status on an IRS Form W-8 or substantially similar form in the manner described above.  Similarly, information reporting and backup withholding will not apply to proceeds a non-U.S. shareholder receives upon the sale, exchange, redemption, retirement or other disposition of our shares, if the non-U.S. shareholder properly certifies its non-U.S. shareholder status on an IRS Form W-8 or substantially similar form.  Even without having executed an IRS Form W-8 or substantially similar form, however, in some cases information reporting and backup withholding will not apply to proceeds that a non-U.S. shareholder receives upon the sale, exchange, redemption, retirement or other disposition of our shares if the non-U.S. shareholder receives those proceeds through a broker’s foreign office.

Other tax consequences.

Our tax treatment and that of our shareholders may be modified by legislative, judicial, or administrative actions at any time, which actions may be retroactive in effect.  The rules dealing with federal income taxation are constantly under review by the Congress, the IRS and the Treasury Department, and statutory changes, new regulations, revisions to existing regulations, and revised interpretations of established concepts are issued frequently.  Likewise, the rules regarding taxes other than federal income taxes may also be modified.  No prediction can be made as to the likelihood of passage of new tax legislation or other provisions, or the direct or indirect effect on us and our shareholders.  Revisions to tax laws and interpretations of these laws could adversely affect the tax or other consequences of an investment in our shares.  We

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and our shareholders may also be subject to taxation by state, local or other jurisdictions, including those in which we or our shareholders transact business or reside.  These tax consequences may not be comparable to the federal income tax consequences discussed above.

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ERISA Plans, Keogh Plans and Individual Retirement Accounts

General Fiduciary Obligations.

Fiduciaries of a pension, profit-sharing or other employee benefit plan subject to Title I of the Employee Retirement Income Security Act of 1974, as amended, or ERISA, must consider whether:

·their investment in our shares satisfies the diversification requirements of ERISA;

·the investment is prudent in light of possible limitations on the marketability of our shares;

·they have authority to acquire our shares under the applicable governing instrument and Title I of ERISA; and

·the investment is otherwise consistent with their fiduciary responsibilities.

Trustees and other fiduciaries of an ERISA plan may incur personal liability for any loss suffered by the plan on account of a violation of their fiduciary responsibilities.  In addition, these fiduciaries may be subject to a civil penalty of up to 20% of any amount recovered by the plan on account of a violation. Fiduciaries of any IRA, Roth IRA, Keogh Plan or other qualified retirement plan not subject to Title I of ERISA, referred to as “non-ERISA plans,” should consider that a plan may only make investments that are authorized by the appropriate governing instrument.

Fiduciaries considering an investment in our securities should consult their own legal advisors if they have any concern as to whether the investment is consistent with the foregoing criteria or is otherwise appropriate.  The sale of our securities to a plan is in no respect a representation by us or any underwriter of the securities that the investment meets all relevant legal requirements with respect to investments by plans generally or any particular plan, or that the investment is appropriate for plans generally or any particular plan.

Prohibited Transactions.

Fiduciaries of ERISA plans and persons making the investment decision for an IRA or other non-ERISA plan should consider the application of the prohibited transaction provisions of ERISA and the IRC in making their investment decision. Sales and other transactions between an ERISA or non-ERISA plan, and persons related to it, are prohibited transactions.  The particular facts concerning the sponsorship, operations and other investments of an ERISA plan or non-ERISA plan may cause a wide range of other persons to be treated as disqualified persons or parties in interest with respect to it.  A prohibited transaction, in addition to imposing potential personal liability upon fiduciaries of ERISA plans, may also result in the imposition of an excise tax under the IRC or a penalty under ERISA upon the disqualified person or party in interest with respect to the plan.  If the disqualified person who engages in the transaction is the individual on behalf of whom an IRA or Roth IRA is maintained or his beneficiary, the IRA or Roth IRA may lose its tax-exempt status and its assets may be deemed to have been distributed to the individual in a taxable distribution on account of the prohibited transaction, but no excise tax will be imposed.

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Fiduciaries considering an investment in our securities should consult their own legal advisors as to whether the ownership of our securities involves a prohibited transaction.

“Plan Assets” Considerations.

The Department of Labor, which has administrative responsibility over ERISA plans as well as non-ERISA plans, has issued a regulation defining “plan assets.” The regulation generally provides that when an ERISA or non-ERISA plan acquires a security that is an equity interest in an entity and that security is neither a “publicly offered security” nor a security issued by an investment company registered under the Investment Company Act of 1940, as amended, the ERISA plan’s or non-ERISA plan’s assets include both the equity interest and an undivided interest in each of the underlying assets of the entity, unless it is established either that the entity is an operating company or that equity participation in the entity by benefit plan investors is not significant.

Each class of our shares (that is, our common shares and any class of preferred shares that we have issued or may issue) must be analyzed separately to ascertain whether it is a publicly offered security. The regulation defines a publicly offered security as a security that is “widely held,” “freely transferable” and either part of a class of securities registered under the Exchange Act, or sold under an effective registration statement under the Securities Act of 1933, as amended, provided the securities are registered under the Exchange Act within 120 days after the end of the fiscal year of the issuer during which the offering occurred.  Each class of our outstanding shares has been registered under the Exchange Act.

The regulation provides that a security is “widely held” only if it is part of a class of securities that is owned by 100 or more investors independent of the issuer and of one another. However, a security will not fail to be “widely held” because the number of independent investors falls below 100 subsequent to the initial public offering as a result of events beyond the issuer’s control.  Our common shares and our preferred shares have been widely held and we expect our common shares and our preferred shares to continue to be widely held.  We expect the same to be true of any additional class of preferred stock that we may issue, but we can give no assurance in that regard.

The regulation provides that whether a security is “freely transferable” is a factual question to be determined on the basis of all relevant facts and circumstances. The regulation further provides that, where a security is part of an offering in which the minimum investment is $10,000 or less, some restrictions on transfer ordinarily will not, alone or in combination, affect a finding that these securities are freely transferable. The restrictions on transfer enumerated in the regulation as not affecting that finding include:

·any restriction on or prohibition against any transfer or assignment which would result in a termination or reclassification for federal or state tax purposes, or would otherwise violate any state or federal law or court order;

·any requirement that advance notice of a transfer or assignment be given to the issuer and any requirement that either the transferor or transferee, or both, execute documentation setting forth representations as to compliance with any restrictions on transfer which are

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among those enumerated in the regulation as not affecting free transferability, including those described in the preceding clause of this sentence;

·any administrative procedure which establishes an effective date, or an event prior to which a transfer or assignment will not be effective; and

·any limitation or restriction on transfer or assignment that is not imposed by the issuer or a person acting on behalf of the issuer.

We believe that the restrictions imposed under our declaration of trust and bylaws on the transfer of shares do not result in the failure of our shares to be “freely transferable.”  Furthermore, we believe that there exist no other facts or circumstances limiting the transferability of our shares which are not included among those enumerated as not affecting their free transferability under the regulation, and we do not expect or intend to impose in the future, or to permit any person to impose on our behalf, any limitations or restrictions on transfer which would not be among the enumerated permissible limitations or restrictions.

Assuming that each class of our shares will be “widely held” and that no other facts and circumstances exist which restrict transferability of these shares, we have received an opinion of  our counsel, Sullivan & Worcester LLP, that our shares will not fail to be “freely transferable” for purposes of the regulation due to the restrictions on transfer of the shares under our declaration of trust and bylaws and that under the regulation each class of our currently outstanding shares is publicly offered and our assets will not be deemed to be “plan assets” of any ERISA plan or non-ERISA plan that invests in our shares.

Item 9.01  Financial Statements and Exhibits.

(d)	Exhibits.
The Company hereby files the following exhibits:
8.1	Opinion of Sullivan & Worcester LLP as to tax matters.
10.1	Business Management Agreement dated June 8, 2009, between HRPT Properties Trust and Reit Management & Research LLC.
10.2	Transaction Agreement dated June 8, 2009, between HRPT Properties Trust and Government Properties Income Trust.
23.1	Consent of Sullivan & Worcester LLP (contained in Exhibit 8.1).

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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
Name:	John C. Popeo
Title:	Treasurer and Chief Financial Officer

Dated:  June 8, 2009

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EX-8.1

Exhibit 8.1

June 8, 2009

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 the preparation of the Form 8-K, and we have reviewed originals or copies of such corporate records, such 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.  In doing so, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as copies, and the authenticity of the originals of such documents.  Specifically, and without limiting the generality of the foregoing, we have reviewed: (i) the amended and restated declaration of trust and the amended and restated by-laws of the Company, each as amended to date, and in the case of the declaration of trust, as supplemented; (ii) the Registration Statement filed by Government Properties Income Trust (“GOV”) on Form S-11, File No. 333-157455 under the Securities Act of 1933, as amended (the “Act”), and each of the exhibits filed therewith (collectively, the “GOV Registration Statement and Exhibits”); (iii) the Transaction Agreement dated June 8, 2009 between the Company and Government Properties Income Trust, filed as Exhibit 10.2 to the Form 8-K; and (iv) the sections of Item 8.01 of the Form 8-K captioned “Federal Income Tax Considerations” and “ERISA Plans, Keogh Plans and Individual Retirement Accounts”.

The opinion set forth below is based upon the Internal Revenue Code of 1986, as amended, the Treasury Regulations issued thereunder, published administrative interpretations thereof, and judicial decisions with respect thereto, all as of the date hereof (collectively, “Tax Laws”), and upon the Employee Retirement Income Security Act of 1974, as amended, the

Department of Labor regulations issued thereunder, published administrative interpretations thereof, and judicial decisions with respect thereto, all as of the date hereof (collectively, “ERISA Laws”).  No assurance can be given that Tax Laws or ERISA Laws will not change.  In preparing the discussions with respect to Tax Laws matters and ERISA Laws matters in the sections of Item 8.01 of the Form 8-K captioned “Federal Income Tax Considerations” and “ERISA Plans, Keogh Plans and Individual Retirement Accounts”, we have made certain assumptions therein 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 and representations set forth in the Form 8-K and in the GOV Registration Statement and Exhibits; and (ii) representations made to us by officers of the Company and officers of GOV, in each such instance without regard to qualifications such as “to the best knowledge of” or “in the belief of”.  We have not independently verified such information.

We have relied upon, but not independently verified, the foregoing assumptions.  If any of the foregoing assumptions are inaccurate or incomplete for any reason, or if the transactions described in the Form 8-K or in the GOV Registration Statement and Exhibits 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 matters and ERISA Laws matters in the sections of Item 8.01 of the Form 8-K captioned “Federal Income Tax Considerations” and “ERISA Plans, Keogh Plans and Individual Retirement Accounts” 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 Tax Laws or 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 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 on Form S-3 (File Nos. 333-135110 and 333-155976) under the Act, and to the references to our firm in the Form 8-K and such 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.

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Very truly yours,

/s/ Sullivan & Worcester LLP

SULLIVAN & WORCESTER LLP

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EX-10.1

Exhibit 10.1

BUSINESS MANAGEMENT AGREEMENT

THIS BUSINESS MANAGEMENT AGREEMENT (this “Agreement”) is entered into effective as of June 8, 2009, by and between HRPT Properties Trust, a Maryland real estate investment trust (the “Company”), and Reit Management & Research LLC, a Delaware limited liability company (the “Manager”).

WHEREAS, the Company and the Manager are parties to an Advisory Agreement, dated as of January 1, 1998, as amended (the “Advisory Agreement”); and

WHEREAS, the Company and Manager wish to amend and restate the Advisory Agreement as hereinafter provided;

NOW, THEREFORE, in consideration of the mutual agreements herein set forth, the parties hereto agree as follows:

1.Engagement.  Subject to the terms and conditions hereinafter set forth, the Company hereby continues to engage the Manager to provide the management and real estate investment services contemplated by this Agreement with respect to the Company’s business and real estate investments and the Manager hereby accepts such continued engagement.

2.General Duties of the Manager.  The Manager shall use its reasonable best efforts to present to the Company a continuing and suitable real estate investment program consistent with the real estate investment policies and objectives of the Company.  Subject to the management, direction and supervision of the Company’s Board of Trustees (the “Trustees”), the Manager shall:

(a)provide research and economic and statistical data in connection with the Company’s real estate investments and recommend changes in the Company’s real estate investment policies when appropriate;

(b)(i) investigate and evaluate investments in, or acquisitions or dispositions of, real estate and related interests, and financing and refinancing opportunities, (ii) make recommendations concerning specific investments to the Trustees, and (iii) evaluate and negotiate contracts with respect to the foregoing, in each case, on behalf of the Company and in the furtherance of the Company’s real estate financing objectives;

(c)investigate, evaluate and negotiate the prosecution and negotiation of any claims of the Company in connection with its real estate investments;

(d)administer bookkeeping and accounting functions as are required for the management and operation of the Company, contract for audits and prepare or cause to be prepared such reports and filings as may be required by any governmental authority in connection with the ordinary conduct of the Company’s business, and otherwise advise and assist the Company with its compliance with applicable legal and regulatory requirements, including without limitation, periodic reports, returns or statements required under the Securities Exchange Act of 1934, as amended, the Internal Revenue Code of 1986, as amended (said Code, as in effect from time to time, together with any regulations and rulings thereunder, being hereinafter referred to as the “Internal Revenue Code”), the securities and tax statutes of any jurisdiction in which the Company is obligated to file such reports, or the rules and regulations promulgated under any of the foregoing;

(e)advise and assist in the preparation and filing of all offering documents (public and private), and all registration statements, prospectuses or other documents filed with the Securities and Exchange Commission (the “SEC”) or any state (it being understood that the Company shall be responsible for the content of any and all of its offering documents and SEC filings (including without limitation those filings referred to in Section 2(d) hereof), and the Manager shall not be held liable for any costs or liabilities arising out of any misstatements or omissions in the Company’s offering documents or SEC filings, whether or not material, and the Company shall promptly indemnify the Manager from such costs and liabilities);

(f)retain counsel, consultants and other third party professionals on behalf of the Company;

(g)provide internal audit services as hereinafter provided;

(h)advise and assist with the Company’s risk management and oversight function;

(i)to the extent not covered above, advise and assist the Company in the review and negotiation of the Company’s contracts and agreements, coordination and supervision of all third party legal services and oversight of processing of claims by or against the Company;

(j)advise and assist the Company with respect to the Company’s public relations, preparation of marketing materials, internet website and investor relations services;

(k)provide office space, office equipment and the use of accounting or computing equipment when required;

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(l)advise and assist with respect to: the design, operation and maintenance of network infrastructure, including telephone and data transmission lines, voice mail, facsimile machines, cellular phones, pager, etc.; and local area network and wide area network communications support; and

(m)provide personnel necessary for the performance of the foregoing services.

In performing its services under this Agreement, the Manager may utilize facilities, personnel and support services of various of its affiliates.  The Manager shall be responsible for paying such affiliates for their personnel and support services and facilities out of its own funds unless otherwise approved by a majority vote of the Independent Trustees (the “Independent Trustees”), as defined in the Company’s Declaration of Trust and Bylaws, in each case, as in effect from time to time (the “Declaration of Trust” and the “Bylaws”, respectively).  Notwithstanding the foregoing, fees, costs and expenses of any third party which is not an affiliate of the Manager retained as permitted hereunder are to be paid by the Company.  Without limiting the foregoing sentence, any such fees, cost or expenses referred to in the immediately preceding sentence which may be paid by the Manager shall be reimbursed to the Manager by the Company promptly following submission to the Company of a statement of any such fees, costs or expenses by the Manager.

Notwithstanding anything herein, it is understood and agreed that the duties of, and services to be provided by, the Manager pursuant to this Agreement shall not include any investment management or related services with respect to any assets of the Company as the Company may wish to allocate from time to time to investments in “securities” (as defined in the Investment Advisers Act of 1940, as amended).

In performing its services hereunder with respect to the Company, the Manager shall adhere to, and shall require its officers and employees in the course of providing such services to the Company to adhere to, the Company’s Code of Business Conduct and Ethics, as in effect from time to time.  In addition, the Manager shall make available to its officers and employees providing such services to the Company the procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters relating to the Company and for the confidential, anonymous submission by such officers and employees of concerns regarding questionable accounting or auditing matters relating to the Company, as set forth in the Company’s Procedures for Handling Concerns or Complaints about Accounting, Internal Accounting Controls or Auditing Matters, as in effect from time to time.

3.Bank Accounts.  The Manager shall establish and maintain one or more bank accounts in its own name or, at the direction of the Trustees, in the name of the Company, and shall collect and deposit into such account or accounts and disburse therefrom any monies on behalf of the Company, provided that no funds in any such account shall be commingled with any funds of the Manager or any other person or entity.  The Manager shall from time to time, or

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at any time requested by the Trustees, render an appropriate accounting of such collections and payments to the Trustees and to the auditors of the Company.

4.Records.  The Manager shall maintain appropriate books of account and records relating to this Agreement, which books of account and records shall be available for inspection by representatives of the Company upon reasonable notice during ordinary business hours.

5.Information Furnished to Manager.  The Trustees shall at all times keep the Manager fully informed with regard to the real estate investment policies of the Company, the capitalization policy of the Company, and generally the Trustees’ then-current intentions as to the future of the Company.  In particular, the Trustees shall notify the Manager promptly of their intention to sell or otherwise dispose of any of the Company’s real estate investments or to make any new real estate investment.  The Company shall furnish the Manager with such information with regard to its affairs as the Manager may from time to time reasonably request.  The Company shall retain legal counsel and accountants to provide such legal and accounting advice and services as the Manager or the Trustees shall deem necessary or appropriate to adequately perform the functions of the Company, and shall have such legal or accounting opinions and advice as the Manager shall reasonably request.

6.REIT Qualification; Compliance with Law and Organizational Documents.  Anything else in this Agreement to the contrary notwithstanding, the Manager shall refrain from any action (including, without limitation, the furnishing or rendering of services to tenants of property or managing real property) which, in its good faith judgment, or in the judgment of the Trustees as transmitted to the Manager in writing, would (a) adversely affect the qualification of the Company as a real estate investment trust as defined and limited in the Internal Revenue Code or which would make the Company subject to the Investment Company Act of 1940, as amended (the “1940 Act”), (b) violate any law or rule, regulation or statement of policy of any governmental body or agency having jurisdiction over the Company or over its securities, or (c) not be permitted by the Declaration of Trust or Bylaws, except if such action shall be approved by the Trustees, in which event the Manager shall promptly notify the Trustees of the Manager’s judgment that such action would adversely affect such qualification, make the Company subject to the 1940 Act or violate any such law, rule, regulation or policy, or the Declaration of Trust or Bylaws and shall refrain from taking such action pending further clarification or instructions from the Trustees.  In addition, the Manager shall take such affirmative steps which, in its judgment made in good faith, or in the judgment of the Trustees as transmitted to the Manager in writing, would prevent or cure any action described in (a), (b) or (c) above.

7.Self-Dealing.  Neither the Manager nor any affiliate of the Manager shall sell any property or assets to the Company or purchase any property or assets from the Company, directly or indirectly, except as approved by a majority of the Independent Trustees (or otherwise pursuant to the Declaration of Trust or Bylaws).  In addition, except as otherwise provided in Section 2, 10, 11 or 12 hereof, or except as approved by a majority of the Independent Trustees (or otherwise pursuant to the Declaration of Trust or Bylaws), neither the Manager nor any affiliate of the Manager shall receive any commission or other remuneration, directly or

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indirectly, in connection with the activities of the Company or any joint venture or partnership in which the Company is a party.  Except for compensation received by the Manager pursuant to Section 10 hereof, all commissions or other remuneration proposed to be received by the Manager or an affiliate of the Manager and not approved by the Independent Trustees (or otherwise pursuant to the Declaration of Trust or Bylaws) under Section 2, 11 or 12 hereof or this Section 7 shall be promptly reported to the Company for consideration by the Independent Trustees.

8.No Partnership or Joint Venture.  The Company and the Manager are not partners or joint venturers with each other and neither the terms of this Agreement nor the fact that the Company and the Manager have joint interests in any one or more investments, ownership or other interests in any one or more entities or may have common officers or employees or a tenancy relationship shall be construed so as to make them such partners or joint venturers or impose any liability as such on either of them.

9.Fidelity Bond.  The Manager shall not be required to obtain or maintain a fidelity bond in connection with the performance of its services hereunder.

10.Compensation.

(a)The Manager shall be paid, for the services rendered by it to the Company pursuant to this Agreement, an annual management fee (the “Management Fee”).  The Management Fee for each full fiscal year shall equal the sum of seven tenths of one percent (0.7%) of the Annual Average Invested Capital (as defined below) up to $250,000,000, plus one half of one percent (0.5%) of the Annual Average Invested Capital exceeding $250,000,000.  The Management Fee shall be prorated for any partial fiscal year of the Company during the term of this Agreement.

(b)In addition, the Manager shall be paid an annual incentive fee (the “Incentive Fee”) for each fiscal year of the Company, consisting of a number of shares of the Company’s common shares of beneficial interest (“Common Shares”) with an aggregate value (determined as provided below) equal to fifteen percent (15%) of the product of (i) the weighted average Common Shares of the Company outstanding on a fully diluted basis during such fiscal year and (ii) the excess if any of FFO Per Share (as defined below) for such fiscal year over the FFO Per Share for the preceding fiscal year.  In no event shall the aggregate value of the Incentive Fee (as determined pursuant to the immediately preceding sentence) payable in respect of any fiscal year exceed $.01 multiplied by the weighted average number of Common Shares outstanding on a fully diluted basis during such fiscal year.  (The Management Fee and Incentive Fee are hereinafter collectively referred to as the “Fees”.)

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(c)For purposes of this Agreement:  (i) “Annual Average Invested Capital” of the Company shall mean the average of the aggregate historical cost of the consolidated assets of the Company and its subsidiaries invested, directly or indirectly, in equity interests in or loans secured by real estate and personal property owned in connection with such real estate (including acquisition related costs and costs which may be allocated to intangibles or are unallocated), all before reserves for depreciation, amortization, impairment charges or bad debts or other similar noncash reserves, computed by taking the average of such values at the end of each month during such period, other than any such interest of the Company or its subsidiaries as a result of its ownership of the securities of the Company’s former subsidiary, Government Properties Income Trust (“GOV”); and (ii) “FFO Per Share” for any fiscal year shall mean (x) the Company’s consolidated net income, computed in accordance with generally accepted accounting principles in the United States, excluding gain or loss on sale of properties, acquisition costs and extraordinary items, depreciation, amortization, impairment charges and other non-cash items, including the Company’s pro rata share of the funds from operations (determined in accordance with this clause) for such fiscal year of (A) any unconsolidated subsidiary and (B) any entity for which the Company accounts by the equity method of accounting but not including (C) any income, loss or funds from operations attributable to (I) the Company’s or its subsidiaries’ equity investment in GOV or (II) for the Company’s 2008 and 2009 fiscal years, the assets contributed to GOV or its subsidiaries by the Company or its subsidiaries prior to completion of the initial public offering of common shares of beneficial interest of GOV (the “GOV IPO”), with such resulting net income amount reduced by, if applicable, the amount of any preferred shares dividends declared or otherwise payable (without duplication) during such fiscal year, determined for these purposes as of the date any such preferred shares dividend amounts are accrued by the Company in accordance with generally accepted accounting principles in the United States divided by (y) the weighted average number of Common Shares outstanding on a fully diluted basis during such fiscal year.  It is agreed and understood that, for purposes of this agreement, GOV and its subsidiaries shall not constitute a subsidiary of the Company or its subsidiaries.

Unless the Company and the Manager otherwise agree, the Management Fee shall be computed and payable monthly by the Company on a year to date basis, with adjustments to account for previous payments, within thirty (30) days following the end of each fiscal month, and the Incentive Fee shall be computed and payable within thirty (30) days following the public availability of the Company’s annual audited financial statements for each fiscal year.  Such computations of the Management Fee shall be based upon the Company’s monthly or quarterly financial statements, as the case may be, and such computations of the Incentive Fee shall be based upon the Company’s annual audited financial statements, and all such computations shall be in reasonable detail.  A copy of such computations shall promptly be delivered to the Manager accompanied by payment of the Fees shown thereon to be due and payable.

The payment of the aggregate annual Fees payable for any fiscal year shall be subject to adjustment as of the end of each fiscal year. On or before the 30th day after public availability of the Company’s annual audited financial statements for each fiscal year, the Company shall

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deliver to the Manager an officer’s certificate (a “Certificate”) reasonably acceptable to the Manager and certified by an authorized officer of the Company setting forth (i) the Annual Average Invested Capital and FFO Per Share for the Company’s fiscal year ended upon the immediately preceding December 31, and (ii) the Company’s computation of the Fees payable for said fiscal year.

If the aggregate annual Fees payable for said fiscal year as shown in such Certificate exceed the aggregate amounts previously paid with respect thereto by the Company, the Company shall include its check for such deficit and deliver the same to the Manager with such Certificate.

If the aggregate annual Fees payable for said fiscal year as shown in such Certificate are less than the aggregate amounts previously paid with respect thereto by the Company, the Company shall specify in such Certificate whether the Manager should (i) remit to the Company its check in an amount equal to such difference or (ii) grant the Company a credit against the Fees next coming due in the amount of such difference until such amount has been fully paid or otherwise discharged.

Payment of the Incentive Fee shall be made by issuance of Common Shares under the Company’s 2003 Incentive Share Award Plan, as the same may be amended from time to time.  The number of shares to be issued in payment of the Incentive Fee shall be the whole number of shares (disregarding any fraction) equal to the value of the Incentive Fee, as provided above, divided by the average closing price of the Company’s Common Shares on the New York Stock Exchange (or such other stock exchange upon which the Common Shares are principally listed for trading) during the month of December in the year for which the computation is made.

11.Internal Audit Services.    The Manager shall provide to the Company an internal audit function meeting applicable requirements of the New York Stock Exchange and the Securities and Exchange Commission and otherwise in scope approved by the Company’s Audit Committee.  In addition to the Fees, the Company agrees to reimburse the Manager, within 30 days of the receipt of the invoice therefor, the Company’s pro rata share (as reasonably agreed to by the Independent Trustees from time to time) of the following:

(a)employment expenses of the Manager’s internal audit manager and other employees of the Manager actively engaged in providing internal audit services, including but not limited to salary, wages, payroll taxes and the cost of employee benefit plans; and

(b)the reasonable travel and other out-of-pocket expenses of the Manager relating to the activities of the Manager’s internal audit manager and other of the Manager’s employees actively engaged in providing internal audit services and the

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reasonable third party expenses which the Manager incurs in connection with its provision of internal audit services.

12.Additional Services.   If, and to the extent that, the Company shall request the Manager to render services on behalf of the Company other than those required to be rendered by the Manager in accordance with the terms of this Agreement, such additional services shall be compensated separately on terms to be agreed upon between the Manager and the Company from time to time.

13.Expenses of the Manager.  Without regard to and without limiting the compensation received by the Manager from the Company pursuant to this Agreement and except to the extent provided by Sections 2, 11 or 12, the Manager shall bear the following expenses incurred in connection with the performance of its duties under this Agreement:

(a)employment expenses of the personnel employed by the Manager, including but not limited to, salaries, wages, payroll taxes and the cost of employee benefit plans;

(b)fees and travel and other expenses paid to directors, officers and employees of the Manager, except fees and travel and other expenses of such persons who are Trustees or officers of the Company incurred in their capacities as Trustees or officers of the Company;

(c)rent, telephone, utilities, office furniture, equipment and machinery (including computers, to the extent utilized) and other office expenses of the Manager, except to the extent such expenses relate solely to an office maintained by the Company separate from the office of the Manager; and

(d)miscellaneous administrative expenses relating to performance by the Manager of its obligations hereunder.

14.Expenses of the Company.  Except as expressly otherwise provided in this Agreement, the Company shall pay all its expenses not payable by the Manager, and, without limiting the generality of the foregoing, it is specifically agreed that the following expenses of the Company shall be paid by the Company and shall not be paid by the Manager:

(a)the cost of borrowed money;

(b)taxes on income and taxes and assessments on real and personal property, if any, and all other taxes applicable to the Company;

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(c)legal, auditing, accounting, underwriting, brokerage, listing, reporting, registration and other fees, and printing, engraving and other expenses and taxes incurred in connection with the issuance, distribution, transfer, trading, registration and stock exchange listing of the Company’s securities, including transfer agent’s, registrar’s and indenture trustee’s fees and charges;

(d)expenses of organizing, restructuring, reorganizing or terminating the Company, or of revising, amending, converting or modifying the Company’s organizational documents;

(e)fees and travel and other expenses paid to Trustees and officers of the Company in their capacities as such (but not in their capacities as officers or employees of the Manager) and fees and travel and other expenses paid to advisors, contractors, mortgage servicers, consultants, and other agents and independent contractors employed by or on behalf of the Company;

(f)expenses directly connected with the investigation, acquisition, disposition or ownership of real estate interests or other property (including third party property diligence costs, appraisal reporting, the costs of foreclosure, insurance premiums, legal services, brokerage and sales commissions, maintenance, repair, improvement and local management of property), other than expenses with respect thereto of employees of the Manager, to the extent that such expenses are to be borne by the Manager pursuant to Section 13 above;

(g)all insurance costs incurred in connection with the Company (including officer and trustee liability insurance) or in connection with any officer and trustee indemnity agreement to which the Company is a party;

(h)expenses connected with payments of dividends or interest or contributions in cash or any other form made or caused to be made by the Trustees to holders of securities of the Company;

(i)all expenses connected with communications to holders of securities of the Company and other bookkeeping and clerical work necessary to maintaining relations with holders of securities, including the cost of preparing, printing, posting, distributing and mailing certificates for securities and proxy solicitation materials and reports to holders of the Company’s securities;

(j)legal, accounting and auditing fees and expenses, other than those described in subsection (c) above;

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(k)filing and recording fees for regulatory or governmental filings, approvals and notices to the extent not otherwise covered by any of the foregoing items of this Section 14;

(l)expenses relating to any office or office facilities maintained by the Company separate from the office of the Manager; and

(m)the costs and expenses of all equity award or compensation plans or arrangements established by the Company, including the value of awards made by the Company to the Manager or its employees, if any.

15.Limits of Manager Responsibility; Indemnification; Company Remedies.  The Manager assumes no responsibility other than to render the services described herein in good faith and shall not be responsible for any action of the Trustees in following or declining to follow any advice or recommendation of the Manager.  The Manager, its shareholders, directors, officers, employees and affiliates will not be liable to the Company, its shareholders, or others, except by reason of acts constituting bad faith, willful or wanton misconduct or gross negligence in the performance of its obligations hereunder.  The Company shall reimburse, indemnify and hold harmless the Manager, its shareholders, directors, officers and employees and its affiliates for and from any and all expenses, losses, damages, liabilities, demands, charges and claims of any nature whatsoever (including without limitation all reasonable attorneys’, accountants’ and experts’ fees and expenses) in respect of or arising from any acts or omissions of the Manager with respect to the provision of services by it or performance of its obligations in connection with this Agreement or performance of other matters pursuant to specific instruction by the Trustees, except to the extent such provision or performance was in willful bad faith or grossly negligent.  Without limiting the foregoing, the Company shall promptly advance expenses incurred by the indemnitees referred to in this section for matters referred to in this section, upon request for such advancement.

16.Other Activities of Manager.  Nothing herein shall prevent the Manager from engaging in other activities or businesses or from acting as the Manager to any other person or entity (including other real estate investment trusts) even though such person or entity has investment policies and objectives similar to those of the Company.  The Manager shall notify the Company in writing in the event that it does so act as a manager to another business.  The Company acknowledges that the Manager manages real estate investment trusts and other entities (including, as of the date of this Agreement, Hospitality Properties Trust, GOV, Senior Housing Properties Trust, Five Star Quality Care, Inc. and TravelCenters of America LLC) and that the Manager shall be free from any obligation to present to the Company any particular investment opportunity which comes to the Manager and the Manager is not required to present the Company with opportunities to invest in properties that are primarily of a type that are the investment focus of another person or entity now or in the future managed by the Manager.  In addition, nothing herein shall prevent any shareholder or affiliate of the Manager from engaging in any other business or from rendering services of any kind to any other person or entity (including competitive business activities).  The Company acknowledges and agrees that the

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Manager has certain interests that may be divergent from those of the Company.  The parties agree that these relationships and interests shall not affect either party’s rights and obligations under this Agreement.  Without limiting the foregoing provisions, the Manager agrees, upon the request of any Trustee, to disclose certain real estate investment information concerning the Manager or certain of its affiliates; provided, however, that such disclosure shall be required only if it does not constitute a breach of any fiduciary duty or obligation of the Manager and the Company shall be required to keep such information confidential.

Directors, officers, employees and agents of the Manager or of its affiliates may serve as Trustees, officers, employees, agents, nominees or signatories of the Company.  When executing documents or otherwise acting in such capacities for the Company, such persons shall use their respective titles in the Company.  Such persons shall receive no compensation from the Company for their services to the Company in any such capacities, except that the Company may make awards to the employees of the Manager and others under the Company’s 2003 Incentive Share Award Plan or any equity plan adopted by the Company from time to time.

17.Term, Termination.  This Agreement shall continue in force and effect until December 31, 2009, and is renewable annually thereafter by the Company, upon such terms and conditions as may be approved by a majority of the Independent Trustees serving on the Compensation Committee of the Trustees.

Notwithstanding any other provision of this Agreement to the contrary, this Agreement, or any extension thereof, may be terminated by either party thereto upon sixty (60) days’ written notice to the other party, which termination, if by the Company, must be approved by a majority vote of the Independent Trustees serving on the Compensation Committee of the Trustees, or if by the Manager, must be approved by a majority vote of the directors of the Manager.

Section 18 hereof shall govern the rights, liabilities and obligations of the parties upon termination of this Agreement; and, except as provided in Section 18, such termination shall be without further liability of either party to the other, other than for breach or violation of this Agreement prior to termination.

18.Action Upon Termination.  From and after the effective date of any termination of this Agreement pursuant to Section 17 hereof, the Manager shall be entitled to no compensation for services rendered hereunder for the pro-rata remainder of the then-current term of this Agreement, but shall be paid, on a pro rata basis as set forth in this Section 18, all compensation due for services performed prior to the effective date of such termination, including without limitation, a pro-rata portion of the current year’s Incentive Fee. Upon such termination, the Manager shall as promptly as practicable:

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(a)pay over to the Company all monies collected and held for the account of the Company by it pursuant to this Agreement, after deducting therefrom any accrued Fees  and reimbursements for its expenses to which it is then entitled;

(b)deliver to the Trustees a full and complete accounting, including a statement showing all sums collected by it and a statement of all sums held by it for the period commencing with the date following the date of its last accounting to the Trustees; and

(c)deliver to the Trustees all property and documents of the Company then in its custody or possession.

The amount of Fees paid to the Manager upon termination shall be subject to adjustment pursuant to the following mechanism.  On or before the 30th day after public availability of the Company’s annual audited financial statements for the fiscal year in which termination occurs, the Company shall deliver to the Manager a Certificate reasonably acceptable to the Manager and certified by an authorized officer of the Company setting forth (i) the Annual Average Invested Capital and FFO Per Share for the Company’s fiscal year ended upon the immediately preceding December 31, and (ii) the Company’s computation of the Fees payable upon the date of termination.

If the annual Fees owed upon termination as shown in such Certificate exceed the Fees paid by the Company upon termination, the Company shall include its check for such deficit and deliver the same to the Manager with such Certificate.  If the annual Fees owed upon termination as shown in such Certificate are less than the Fees paid by the Company upon termination, the Manager shall remit to the Company its check in an amount equal to such difference.

The Incentive Fee for any partial fiscal year will be determined by multiplying the Incentive Fee for such year (assuming this Agreement were in effect for the entire year) by a fraction, the numerator of which is the number of days in the portion of such year during which this Agreement was in effect, and the denominator of which shall be 365.

19.Trustee Action.  Wherever action on the part of the Trustees is contemplated by this Agreement, action by a majority of the Trustees, including a majority of the Independent Trustees, shall constitute the action provided for herein.

20.TRUSTEES AND SHAREHOLDERS NOT LIABLE.  THE DECLARATION OF TRUST OF THE COMPANY, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS, 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 COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY.  NO TRUSTEE, OFFICER,

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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.

21.Notices.  Any notice, report or other communication required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when delivered in person, upon confirmation of receipt when transmitted by facsimile transmission, on the next business day if transmitted by a nationally recognized overnight courier or on the third business day following mailing by first class mail, postage prepaid, in each case as follows (or at such other United States address or facsimile number for a party as shall be specified by like notice):

If to the Company:

HRPT Properties Trust
400 Centre Street
Newton, Massachusetts 02458
Attention:  Chief Financial Officer
Facsimile No.:  (617) 332-2261

If to the Manager:

Reit Management & Research LLC
400 Centre Street
Newton, Massachusetts 02458
Attention:  President
Facsimile No.:  (617) 928-1305

22.Amendments.  This Agreement shall not be amended, changed, modified, terminated, or discharged in whole or in part except by an instrument in writing signed by each of the parties hereto, or by their respective successors or assigns, or otherwise as provided herein.

23.Assignment.  Neither party may assign this Agreement or its rights hereunder or delegate its duties hereunder without the written consent of the other party, except in the case of an assignment by the Manager to a corporation, partnership, limited liability company, association, trust, or other successor entity which may take over the property and carry on the affairs of the Manager and which remains under the control of the same persons who control the Manager.

24.Successors and Assigns.  This Agreement shall be binding upon any successors or permitted assigns of the parties hereto as provided herein.

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25.No Third Party Beneficiary.  No person or entity other than the parties hereto and their successors and permitted assigns is intended to be a beneficiary of this Agreement.

26.Governing Law.  The provisions of this Agreement shall be governed by and construed in accordance with the laws of The Commonwealth of Massachusetts.

27.Arbitration.

(a)Any disputes, claims or controversies between the parties (i) arising out of or relating to this Agreement or the provision of services by the Manager pursuant to this Agreement, or (ii) brought by or on behalf of any shareholder of the Company (which, for purposes of this Section 27, shall mean any shareholder of record or any beneficial owner of shares of the Company, or any former shareholder of record or beneficial owner of shares of the Company), either on its own behalf, on behalf of the Company or on behalf of any series or class of shares of the Company or shareholders of the Company against the Company or any trustee, officer, manager (including Reit Management & Research LLC or its successor), agent or employee of the Company, including disputes, claims or controversies relating to the meaning, interpretation, effect, validity, performance or enforcement of this Agreement, the Declaration of Trust or the Bylaws (all of which are referred to as “Disputes”) or relating in any way to such a Dispute or Disputes, shall on the demand of any party to such Dispute be resolved through binding and final arbitration in accordance with the Commercial Arbitration Rules (the “Rules”) of the American Arbitration Association (“AAA”) then in effect, except as modified herein.  For the avoidance of doubt, and not as a limitation, Disputes are intended to include derivative actions against trustees, officers or managers of the Company and class actions by a shareholder against those individuals or entities and the Company.

(b)There shall be three arbitrators.  If there are (i) only two parties to the Dispute, each party shall select one arbitrator within 15 days after receipt by respondent of a copy of the demand for arbitration and (ii) more than two parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand, shall each select, by the vote of a majority of the claimants or the respondents, as the case may be, one arbitrator.  The two party-nominated arbitrators shall jointly nominate the third and presiding arbitrator within 15 days of the nomination of the second arbitrator.  If any arbitrator has not been nominated within the time limit specified herein, then the AAA shall provide a list of proposed arbitrators in accordance with the Rules and the arbitrator shall be appointed by the AAA in accordance with a listing, striking and ranking procedure, with each party having a limited number of strikes, excluding strikes for cause.  For the avoidance of doubt, the arbitrators appointed by the parties to such Dispute may be affiliates or interested persons of such parties but the third arbitrator elected by the party arbitrators or by the AAA shall be unaffiliated with either party.

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(c)The place of arbitration shall be Boston, Massachusetts unless otherwise agreed by the parties.

(d)There shall be only limited documentary discovery of documents directly related to the issues in dispute, as may be ordered by the arbitrators.

(e)In rendering an award or decision (the “Award”), the arbitrators shall be required to follow the laws of The Commonwealth of Massachusetts.  Any arbitration proceedings or Award rendered hereunder and the validity, effect and interpretation of this arbitration agreement shall be governed by the Federal Arbitration Act, 9 U.S.C. §1 et seq.  The Award shall be in writing and may, but shall not be required to, briefly state the findings of fact and conclusions of law on which it is based.

(f)Except to the extent expressly provided by this Agreement or as otherwise agreed between the parties, each party involved in a Dispute shall bear its own costs and expenses (including attorneys’ fees), and the arbitrators shall not render an award that would include shifting of any such costs or expenses (including attorneys’ fees) or, in a derivative case or class action by a shareholder of the Company, award any portion of the Company’s award to the claimant or the claimant’s attorneys.  Each party (or, if there are more than two parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand, respectively) shall bear the costs and expenses of its (or their) selected arbitrator and the parties (or, if there are more than two parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand) shall equally bear the costs and expenses of the third appointed arbitrator.

(g)The Award shall be final and binding upon the parties thereto and shall be the sole and exclusive remedy between such parties relating to the Dispute, including any claims, counterclaims, issues or accounting presented to the arbitrators.  Judgment upon the Award may be entered in any court having jurisdiction.  To the fullest extent permitted by law, no application or appeal to any court of competent jurisdiction may be made in connection with any question of law arising in the course of arbitration or with respect to any award made except for actions relating to enforcement of this agreement to arbitrate or any arbitral award issued hereunder and except for actions seeking interim or other provisional relief in aid of arbitration proceedings in any court of competent jurisdiction.

(h)Any monetary award shall be made and payable in U.S. dollars free of any tax, deduction or offset.  The party against which the Award assesses a monetary obligation shall pay that obligation on or before the 30th day following the date of the Award or such other date as the Award may provide.

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28.Consent to Jurisdiction and Forum.  This Section 28 is subject to, and shall not in any way limit the application of, Section 27; in case of any conflict between this Section 28 and Section 27, Section 27 shall govern.  The exclusive jurisdiction and venue in any action brought by any party hereto pursuant to this Agreement shall lie in any federal or state court located in Boston, Massachusetts.  By execution and delivery of this Agreement, each party hereto irrevocably submits to the jurisdiction of such courts for itself and in respect of its property with respect to such action. The parties irrevocably agree that venue would be proper in such court, and hereby waive any objection that such court is an improper or inconvenient forum for the resolution of such action.  The parties further agree and consent to the service of any process required by any such court by delivery of a copy thereof in accordance with Section 21 and that any such delivery shall constitute valid and lawful service of process against it, without necessity for service by any other means provided by statute or rule of court.

29.Captions.  The captions included herein have been inserted for ease of reference only and shall not be construed to affect the meaning, construction or effect of this Agreement.

30.Entire Agreement.  This Agreement and the Advisory Agreement constitute the entire agreement of the parties hereto with respect to the subject matter hereof and supersede and cancel any pre-existing agreements with respect to such subject matter.

31.Severability.If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions hereof.

32.Survival.  The provisions of Sections 2 (limited to the obligation of the Company to indemnify the Manager for matters provided thereunder), 15, 16 (limited to the obligations of the Company to keep information provided to the Company by the Manager confidential as provided in the last proviso in such Section), 17 (limited to the last paragraph of such Section), 18, 20, 21, 25, 26, 27, 28 and 32 of this Agreement shall survive the termination hereof.

33.Advisory Agreement.  This Agreement amends and restates the Advisory Agreement in its entirety, effective as of the date hereof.

34.Other Agreements.The parties hereto are also parties to an Amended and Restated Master Management Agreement, dated as of January 1, 2006, as in effect from time to time (the “Property Management Agreement”).  The parties agree that this Agreement does not include or otherwise address the rights and obligations of the parties under the Property Management Agreement and that the Property Management Agreement provides for its own separate rights and obligations of the parties thereto, including without limitation separate

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compensation payable by the Company and the other Owners (as defined in the Property Management Agreement) to the Manager thereunder for services to be provided by the Manager pursuant to the Property Management Agreement.

[Signature Page To Follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers, under seal, as of the day and year first above written.

HRPT PROPERTIES TRUST
By:	/s/ John C. Popeo
	Name: John C. Popeo
	Title: Treasurer and Chief Financial Officer
REIT MANAGEMENT & RESEARCH LLC
By:	/s/ David J. Hegarty
	Name: David J. Hegarty
	Title: Executive Vice President

[Signature Page to Business Management Agreement]

EX-10.2

Exhibit 10.2

TRANSACTION AGREEMENT

by and between

HRPT PROPERTIES TRUST

and

GOVERNMENT PROPERTIES INCOME TRUST

June 8, 2009

Table of Contents

		Page
SECTION 1 DEFINITIONS		1
1.1	Definitions	1
SECTION 2 PRELIMINARY ACTIONS, PROPERTIES TRANSFER; ETC.		7
2.1	Preliminary Actions	7
SECTION 3 POST-EFFECTIVE DATE RIGHTS, OPTIONS AND COVENANTS		9
3.1	First Right to Purchase re: Government Properties Owned by HRPT or its Subsidiaries	9
3.2	Investments of HRPT	10
3.3	Investments of GOV	10
3.4	Expiration or Termination of Tenancies	11
3.5	Cooperation, Exchange of Information, Retention of Records, and Costs of Reporting	11
3.6	Restrictions	13
SECTION 4 REPRESENTATIONS		13
SECTION 5 INDEMNIFICATION		14
5.1	Indemnification by HRPT	14
5.2	Indemnification by GOV	14
5.3	Certain Limitations, Etc.	14
5.4	Priority of Section 6	15
SECTION 6 TAX MATTERS		15
6.1	General Responsibility for Taxes	15
6.2	Allocation of Certain Taxes among Taxable Periods	16
6.3	Filing and Payment Responsibility	16
6.4	Refunds and Credits	17
6.5	Tax Contests	18
SECTION 7 MISCELLANEOUS		18
7.1	Arbitration	18
7.2	Notices	20
7.3	Waivers, Etc.	21
7.4	Assignment; Successors and Assigns; Third Party Beneficiaries	21
7.5	Severability	21
7.6	Counterparts, Etc.	22
7.7	Governing Law	22
7.8	Section and Other Headings; Interpretation	22
7.9	Exculpation	22

i

TRANSACTION AGREEMENT

THIS TRANSACTION AGREEMENT made June 8, 2009, by and between HRPT PROPERTIES TRUST, a Maryland real estate investment trust (“HRPT”) and GOVERNMENT PROPERTIES INCOME TRUST (“GOV”), a Maryland real estate investment trust.

RECITAL

GOV is a wholly-owned subsidiary of HRPT.

The principal assets of GOV are 29 properties previously contributed to GOV’s wholly-owned subsidiary, Government Properties Income Trust LLC (“GOV LLC”), by HRPT, tenanted primarily by the United States government and several state governments and subject to mortgages securing a revolving credit facility.

GOV filed a registration statement on Form S-11 under the Securities Act of 1933 with respect to an initial public offering of up to 11,500,000 of its common shares of beneficial interest, $0.01 par value.

In connection with the foregoing, the parties wish to define certain rights and obligations in connection with their businesses.

NOW, THEREFORE, it is agreed:

SECTION 1
DEFINITIONS

1.1           Definitions.

Capitalized terms used in this Agreement shall have the meanings set forth below:

(1)           “AAA”:  as defined in Section 7.1(a).

(2)           “Action”:  any litigation or legal or other action, arbitration, counterclaim, investigation, proceeding, request for material information by or pursuant to the order of any Governmental Authority, or suit, at law or in arbitration or equity commenced by any Person.

(3)           “Affiliate”:  with respect to any Person, any other Person controlling, controlled by or under common control with, such Person, with “control” for such purpose, with respect to an Entity, meaning the possession of the power to vote or direct the voting of a majority of the voting securities of, or other voting interests in, such Entity which are entitled to elect directors, trustees or similar officials of such Entity.

(4)           “Agreement”:  this Transaction Agreement, together with the Schedules hereto, as amended in accordance with the terms hereof.

(5)           “Award”:  as defined in Section 7.1(e).

(6)           “Business Day”:  any day which is neither a Saturday or Sunday nor a legal holiday on which commercial banks are authorized or required to be closed in the Commonwealth of Massachusetts.

(7)           “Change in Control”:  with respect to HRPT means (a) the acquisition by any Person, or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the Commission) of 9.8% or more, or rights, options or warrants to acquire 9.8% or more, of the outstanding shares of voting stock of HRPT or any Subsidiary of HRPT that directly or indirectly owns a Government Property (a “Specified Subsidiary”), or the power to direct the management and policies of HRPT or any Specified Subsidiary, directly or indirectly, (b) the merger or consolidation of HRPT or any Specified Subsidiary with or into any other Entity (other than the merger or consolidation of HRPT or any Specified Subsidiary into another Entity that does not result in a Change in Control of HRPT or such Specified Subsidiary under clauses (a), (c) or (d) of this definition), (c) any one or more sales or conveyances to any person by HRPT or any Specified Subsidiary of all or any material portion of the assets (including capital stock) or the business of HRPT or any Specified Subsidiary, other than to a wholly-owned subsidiary of HRPT or to HRPT, as the case may be, (d) the cessation, for any reason, of the individuals who at the beginning of any twenty-four (24) consecutive month period (commencing on or after the date hereof) constituted the board of trustees or directors of HRPT (together with any new trustees or directors whose election by such board, or whose nomination for election by the shareholders of HRPT, was approved by a vote of a majority of the trustees or directors then still in office who were either trustees or directors at the beginning of any such period or whose election or nomination for election was previously so approved, but excluding any individual whose initial nomination for, or assumption of, office as a member of such board of directors occurs as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors by any Person other than a solicitation for the election of one or more directors by or on behalf of the board of directors) to constitute a majority of the board of trustees or directors of HRPT then in office, or (e) the election to the board of directors of HRPT of any individual not nominated or appointed by vote of a majority of the directors of HRPT in office immediately prior to the nomination or appointment of such individual.

(8)           “Change in Control Purchase Price”:  with respect to any Government Property, such price shall be the fair market value (“Fair Market Value”) as determined by agreement of a majority of the Independent Trustees of each of HRPT and GOV (but not including persons who are Independent Trustees of both HRPT and GOV), provided if the Independent Trustees have not reached agreement within the 30 day period following notice from HRPT to GOV of a Change in Control referred to in Section 3.1(b) (“Agreement Period”), the Fair Market Value shall be determined by appraisal.  In such event, within 5 Business Days after the end of the Agreement Period, HRPT and GOV shall each give notice to the other specifying the name and address of an appraiser.  The two appraisers so chosen shall meet within ten (10) days after notice of the selection of the second appraiser and shall endeavor to agree upon Fair Market Value.  If, within twenty (20) days after such notice, the two appraisers do not agree upon Fair Market Value, they shall together appoint a third appraiser.

If the two appraisers cannot agree upon the appointment of a third appraiser within ten (10) days after the expiration of such twenty (20) day period, either HRPT or GOV may request

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such appointment by the American Arbitration Association (or any successor organization) in accordance with its then prevailing rules. Once the third appraiser is selected, all three appraisers shall meet to endeavor to agree unanimously on Fair Market Value, within ten (10) days of such third appraiser’s selection.  In the event that all three appraisers cannot unanimously agree upon the Fair Market Value within ten (10) days after the third appraiser shall have been selected, each appraiser shall submit his or her designation of Fair Market Value to the other two appraisers in writing within five (5) days after the expiration of such 10-day period; and Fair Market Value shall be determined by calculating the average of the two numerically closest (or, if the values are equidistant, all three) values so determined.

If only one appraiser shall have been chosen whose name and address shall have been given to the other party within 5 Business Days after the end of the Agreement Period and who shall have the qualifications set forth below, that sole appraiser shall render the decision which would otherwise have been made as above provided.

Each of the appraisers selected shall have at least ten (10) years experience as a commercial real estate sales broker in the applicable real estate market, dealing with properties of the same type and quality as the relevant Government Properties.

Each of HRPT and GOV shall pay the fees and expenses of the appraiser it has selected and the fees of its own counsel, if any is employed.  Each of HRPT and GOV shall pay one half (1/2) of the fees and expenses of the third appraiser (or the sole appraiser, as the case may be) and all other expenses of the appraisal.

Each of the appraisers selected shall certify the determination of the Fair Market Value to both HRPT and GOV promptly upon determination.

In determining Fair Market Value, the appraiser(s) shall assume that neither HRPT nor GOV is under a compulsion to sell or purchase, and that both parties are typically motivated, well-informed and well-advised, and each is acting in what it considers its own best interest.

(9)           “Charter”:  with respect to any Entity, its constituent governing documents, including, by way of example, its certificate of incorporation and by-laws (if a corporation), its operating agreement and certificate of formation (if a limited liability company), its declaration of trust and by-laws (if a real estate investment trust) and its limited partnership agreement and certificate of limited partnership (if a limited partnership).

(10)         “Code”:  the United States Internal Revenue Code of 1986, as from time to time in effect, and any successor law, and any reference to any statutory provision shall be deemed to be a reference to any successor statutory provision.

(11)         “Commission”:  the United States Securities and Exchange Commission.

(12)         “Contract”:  any lease, contract, instrument, license, agreement, sales order, purchase order, open bid or other obligation or commitment (whether or not written) and all rights and obligations therein or thereunder.

(13)         “Covered Liabilities”:  as defined in Section 5.1.

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(14)         “Credit Facility”: the revolving credit facility among GOV, GOV LLC and Bank of America, N.A. and the other lenders party thereto dated April 24, 2009.

(15)         “Disputes”:  as defined in Section 7.1(a).

(16)         “Effective Date”:  the date on which the GOV Common Shares sold pursuant to the GOV Registration Statement are paid for by the underwriters named therein.

(17)         “Entity”:  a real estate investment trust, a corporation, a limited liability company, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or any agency or instrumentality thereof.

(18)         “Exchange Act”:  the United States Securities Exchange Act of 1934, as amended and in effect from time to time.

(19)         “GAAP”: generally accepted accounting principles as in effect from time to time in the United States of America.

(20)         “GOV”:  the meaning given in the preamble to this Agreement.

(21)         “GOV Common Shares”:  common shares of beneficial interest, $0.01 par value of GOV.

(22)         “GOV Expenses”:  (a) all costs, expenses, fees and underwriting commissions (including in each case the reasonable fees and disbursements of counsel) of GOV and GOV LLC, incident to (i) the drafting, negotiation, execution and delivery of this Agreement and all other agreements, instruments and documents entered into in connection herewith, (ii) the preparation, printing, filing and distribution under the Securities Act of the GOV Registration Statement  (including financial statements and exhibits), each preliminary prospectus and prospectus in connection therewith and all amendments and supplements to any of them, (iii) the registration or qualification of the GOV Common Shares for offer and sale under the securities and Blue Sky laws of the several states, (iv) the initial listing of the GOV Common Shares on the New York Stock Exchange, (v) furnishing such copies of the GOV Registration Statement, the final prospectus contained therein and all amendments and supplements thereto as may be requested for use by the underwriters named therein, and (vi) the drafting, negotiation, execution and delivery of the Credit Facility and all other agreements, instruments and documents to be executed in connection therewith, including any arrangement, upfront, administrative and other fees and expenses of lenders in connection with the Credit Facility, and (b) all real property transfer Taxes, and all excise, sales, use, value added, registration, stamp, recording, documentary, conveyancing, property, transfer, gains and similar Taxes, levies, charges and fees, including any associated deficiencies, interest, penalties, additions to Tax or additional amounts, in any such case in connection with the transfers referred to in Section 2.1(e).

(23)         “GOV Group”:  GOV and each Entity (i) whose income after the Effective Date will be included in the federal Income Tax Return Form 1120-REIT with GOV as the parent or (ii) that is a Subsidiary of GOV on or after the Effective Date.

(24)         “GOV Indemnified Parties”:  as defined in Section 5.1.

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(25)“GOV Liabilities”:  all (i) liabilities which represent GOV Expenses and (ii) Liabilities, whether arising before or after the transfer of the Properties and Property Assets to GOV LLC, but not including those current Liabilities which were transferred to HRPT as part of the distribution paid under Section 2.1(k).

(26)“GOV Registration Statement”:  the registration statement on Form S-11 filed by GOV under the Securities Act with respect to up to 11,500,000 GOV Common Shares, as amended.

(27)“Government Property”:  shall mean a property which, at the time of consideration, is majority leased or occupied (determined by rentable square footage, excepting common areas) to one or more Governmental Authorities or which is reasonably expected to be majority leased to one or more Governmental Authorities within twelve (12) months of such time.

(28)“Governmental Authority”: any nation or government, any state or other political subdivision thereof, any federal, state, local or foreign entity or organization exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any governmental authority, agency, department, board, commission or instrumentality of the United States, any state of the United States or any political subdivision thereof, and any tribunal.

(29)“HRPT”:  as defined in the preamble to this Agreement.

(30)“HRPT Expenses”:  all costs, expenses and fees (including in each case the reasonable fees and disbursements of counsel of HRPT and its Subsidiaries other than GOV) incident to the drafting, negotiation, execution and delivery of this Agreement and all other agreements, instruments and other documents entered into by HRPT or any HRPT Subsidiary (other than GOV) in connection herewith.

(31)“HRPT Group”:  HRPT and each Entity (i) whose income is included in the federal Income Tax Return Form 1120-REIT with HRPT as the parent or (ii) that is a Subsidiary of HRPT, but excluding, in each case, any Entity in the GOV Group.

(32)“HRPT Indemnified Parties”:  as defined in Section 5.2.

(33)“HRPT Liabilities”:  all (i) liabilities which represent HRPT Expenses, (ii) current Liabilities which were transferred to HRPT as part of the distribution paid under Section 2.1(k)), whether arising before or after the transfer of the Properties and Property Assets to GOV LLC.

(34)“Income Taxes”:  any and all Taxes to the extent based upon or measured by net income (regardless of whether denominated as an “income tax,” a “franchise tax” or otherwise), imposed by any Taxing Authority, together with any related interest, penalties or other additions thereto.

(35)“Independent Trustee”:  a trustee of an Entity within the meaning of the term “Independent Trustee” under such Entity’s Charter (as then in effect), or if no such term is contained in an Entity’s Charter, a trustee who is not an employee of the manager of such Entity,

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who is not involved in the Entity’s day to day activities and who meets the qualifications of an independent director under the applicable rules of any stock exchange on which such Entity’s shares are traded and the Securities and Exchange Commission, as those requirements may be amended from time to time.

(36)“Leases”:  collectively, the Tenant leases of the Properties listed on Schedule 1.1(36).

(37)“Liability”:  any and all debts, liabilities and obligations, absolute or contingent, matured or unmatured, liquidated or unliquidated, accrued or unaccrued, known or unknown, whenever arising, including all costs and expenses relating thereto, and including those debts, liabilities and obligations arising under any law, rule, regulation, Action, threatened Action, order or consent decree of any Governmental Authority or any award of any arbitrator of any kind, and those arising under any contract, commitment or undertaking, in each case to the extent arising out of or relating to the ownership, financing or operation of the Properties or the Property Assets.

(38)“License”:  any federal, state, local or foreign governmental approval, authorization, certificate, license, permit or exemption to which any Person is a party or that is or may be binding upon or inure to the benefit of any Person or its securities, properties or business.

(39)“Person”:  any individual or any Entity.

(40)“Properties”:  the Government Properties listed on Schedule 1.1(40), each a “Property.”

(41)“Property Assets”:  with respect to any Property, (i) all land together with any appurtenances thereto and any buildings, structures or other improvements thereon, (ii) all furnishings, fixtures and equipment located thereon or affixed thereto, (iii) all cash reserves established to pay for furnishings, fixtures and equipment for such Property, (iv) all Leases and all Contracts for goods and services provided to such Property, but if not exclusively provided to such Property, only to the extent actually provided to such Property,  (iv) all Licenses related to such Property and (v) all books and records to the extent related to the foregoing; provided, however, that Property Assets shall not, in any event, include refunds in respect of property tax or other liabilities for which any Tenant is liable under any Lease.

(42)“Property Owners”:  the HRPT Subsidiaries listed on Schedule 1.1(42).

(43)“Proceeds”;  all cash received by GOV from the sale of GOV Common Shares contemplated by the GOV Registration Statement.

(44)“Rules”:  as defined in Section 7.1(a).

(45)“Sale”: as defined in Section 3.1(a).

(46)“SEC”: the United States Securities and Exchange Commission.

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(47)“Securities Act”:  the United States Securities Act of 1933, and the rules and regulations of the Commission thereunder, all as from time to time in effect.

(48)“Subsidiary”:  with respect to any Entity, any other Entity in which (i) a majority of the voting securities, or other voting interests which are entitled to elect directors, trustees or similar officials of such other Entity, or (ii) a majority of the equity interests of such other Entity, is owned directly or indirectly by such Entity or any Subsidiary of such Entity.

(49)“Tax Contests”:  as defined in Section 6.5.

(50)“Taxes”:  any net income, gross income, gross receipts, sales, use, excise, franchise, transfer, payroll, premium, real property or windfall profits tax, alternative or add-on minimum tax, or other similar tax, fee or assessment, together with any interest and any penalty, addition to tax or other additional amount imposed by any Taxing Authority, whether any such tax is imposed directly or through withholding.

(51)“Taxing Authorities”:  the United States Internal Revenue Service (or any successor authority) and any other domestic or foreign Governmental Authority responsible for the administration of any Tax.

(52)“Tax Returns”:  all returns, reports, estimates, information statements, declarations and other filings relating to, or required to be filed by any taxpayer in connection with, its liability or reporting for, or its payment or receipt of any refund of, any Tax.

(53)“Tenants”: collectively, the tenants under any Lease of all or a portion of the Properties.

(54)“Third-Party Claim”:  any Action asserted by a Person, other than any party hereto or their respective Affiliates, that gives rise to a right of indemnification hereunder.

SECTION 2
PRELIMINARY ACTIONS, PROPERTIES TRANSFER; ETC.

2.1Preliminary Actions.

Prior to the execution and delivery of this Agreement, the following actions were taken:

(a)GOV was organized as a Maryland real estate investment trust on or about February 17, 2009;

(b)HRPT contributed $5,000,000, in cash, to the capital of GOV on or about February 17, 2009 and an additional $1,766,000, in cash, to the capital of GOV on or about April 24, 2009;

(c)HRPT advanced $6,015,000 on behalf of GOV to pay certain GOV Expenses related to the offering of GOV Common Shares on or about April 24, 2009;

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(d)GOV LLC was organized as a Delaware limited liability company on or about March 23, 2009;

(e)each of the Property Owners transferred and conveyed all its right, title and interest in and to all of the land more particularly described in Schedule 1.1(40) that is identified in said Schedule as being owned by such Entity, together with any appurtenances thereto and any buildings, structures or other improvements thereon and all other Property Assets with respect thereto, to GOV LLC and GOV LLC assumed and agreed to timely pay, perform, observe and discharge all Liabilities, whether arising before or after the date of transfer and which are agreed to be GOV Liabilities for purposes of Section 5.2(b);

(f)THE PROPERTY ASSETS WERE TRANSFERRED AND CONVEYED “AS IS, WHERE IS”, WITHOUT ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED (INCLUDING ANY EXPRESS OR IMPLIED WARRANTY OF TITLE, OF MERCHANTABILITY OR OF FITNESS FOR ANY PARTICULAR PURPOSE);

(g)GOV and GOV LLC entered into the Credit Facility;

(h)the Board of Trustees of GOV declared a distribution payable to HRPT, as GOV’s sole shareholder, in the amount of $250 million, which was paid on or about April 24, 2009;

(i)GOV filed the GOV Registration Statement and the Registration Statement became effective under the Securities Act on June 2, 2009;

(j)GOV has applied for listing of the GOV Common Shares for trading on the New York Stock Exchange;

(k)prior to the Effective Date, the Board of Trustees of GOV declared a distribution to HRPT, as GOV’s sole shareholder, payable at the commencement of business on the Effective Date (and prior to the time HRPT ceases to be GOV’s sole shareholder) of all current assets (excluding any cash representing a portion of the contributions referred to in Section 2.1(b) or Proceeds), subject to all current Liabilities (excluding the advance referred to in Section 2.1(c) or any Liability representing repayment of principal under the Credit Facility) all as determined as of the close of business on the Effective Date in accordance with GAAP applied in a manner consistent with past practice of the HRPT Group and which shall include interest expense and all items of income and expense customarily prorated in sales transactions involving properties similar to the Properties including fixed and additional rents, real estate taxes and assessments and operating expenses;

(l)HRPT’s Board of Trustees (or an authorized committee thereof) approved the execution and delivery of this Agreement and ratified and approved the transactions described herein; and

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(m)GOV’s Board of Trustees (or an authorized committee thereof) approved the execution and delivery of this Agreement and ratified and approved the transactions described herein.

2.2Other Action.  Promptly following the Effective Date, GOV will repay to HRPT the advance referred to in Section 2.1(c).

SECTION 3
POST-EFFECTIVE DATE RIGHTS, OPTIONS AND COVENANTS

3.1First Right to Purchase re: Government Properties Owned by HRPT or its Subsidiaries.

(a)HRPT hereby grants to GOV, subject to the Declaration of Trust of HRPT, the first right to purchase Government Properties as provided in this Section 3.1(a).  If HRPT or any HRPT Subsidiary owning a Government Property determines to offer for sale, mortgage or other financing (including through a sale and leaseback transaction, each a “Sale”), any property that at such a time is a Government Property, then prior to entering into any agreement with respect to such Sale, HRPT shall provide, or cause to be provided, written notice of such proposed Sale to GOV, describing such proposed Sale in sufficient detail (including pricing, payment terms, closing date and other material terms) and offering GOV the right to purchase, mortgage or finance such Government Property and shall negotiate in good faith with GOV for such purchase, mortgage or financing by GOV.  If, within fifteen Business Days after HRPT’s notice, HRPT and GOV have not reached agreement on the terms of such Sale, HRPT (or such HRPT Subsidiary) will be free to sell, mortgage or finance such Government Property upon the same or substantially similar terms as those contained in the written notice described above, free of the restrictions of this Section 3.1, provided if such Sale has not occurred at a price (or on pricing terms if a mortgage or other financing) not less than 95% of the price (or pricing terms if a mortgage or other financing) set forth in the notice within 365 days after the closing date set forth in such notice, then any future Sale of such Government Property shall once again be subject to this Section 3.1(a).  The right of first refusal in this Section 3.1(a) shall terminate at such time as all of the following are satisfied: (i) HRPT no longer owns directly or indirectly 10% or more of the outstanding GOV Common Shares, (ii) HRPT and GOV no longer have engaged the same provider of business management services and (iii) GOV and HRPT no longer have one or more managing trustees in common.

(b)For purposes of this Section 3.1, a direct or indirect Change of Control of either HRPT or a Specified Subsidiary shall be deemed a Sale of HRPT or such Specified Subsidiary, as the case may be.  HRPT shall provide, or cause to be provided, prompt written notice of such Change in Control to GOV and negotiate in good faith with GOV.  GOV shall have 60 days after determination of the Change in Control Purchase Price to purchase all or any Government Properties owned at that time by HRPT or any HRPT Subsidiary, or by a Specified Subsidiary, as the case may be, for the applicable Change in Control Purchase Price.

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(c)HRPT agrees that irreparable damage would occur if its obligations under this Section 3.1 were not performed in accordance with their terms and that GOV’s remedy at law for HRPT’s breach of its obligations under this Section 3.1would be inadequate.  Upon any such breach, GOV shall be entitled (in addition to any other rights or remedies it may have at law) to seek an injunction enjoining and restraining HRPT and/or such HRPT Subsidiary from continuing such breach.

3.2Investments of HRPT.

(a)After the Effective Date and for so long thereafter as (i) HRPT owns directly or indirectly 10% or more of the outstanding GOV Common Shares, (ii) HRPT and GOV both have engaged the same provider of business management services or (iii) GOV and HRPT have one or more managing trustees in common, neither HRPT nor any HRPT Subsidiary will make any investment (including fee interests, leaseholds, joint ventures, mortgages or other real estate interests) in a Government Property without the prior approval of a majority of GOV’s Independent Trustees who are not trustees of HRPT; provided that, if a majority of GOV’s Independent Trustees who are not trustees of HRPT have determined GOV should not make the investment after the investment has been presented to them, then HRPT (or such HRPT Subsidiary) may make the investment without any further approval of any of GOV’s Independent Trustees.

(b)HRPT agrees that irreparable damage would occur if its obligations under this Section 3.2 were not performed in accordance with their terms and that GOV’s remedy at law for the breach by HRPT or any HRPT Subsidiary of this Section 3.2 would be inadequate.  Upon any such breach, GOV shall be entitled (in addition to any other rights or remedies it may have at law) to seek an injunction enjoining and restraining HRPT and/or such HRPT Subsidiary from continuing such breach.  HRPT agrees that the period of restriction and the geographical area of restriction imposed upon HRPT are fair and reasonable.  If the provisions of this Section 3.2 relating to the period or the area of restriction are determined to exceed the maximum period or areas which a court having jurisdiction over the matter would deem enforceable, such period or area shall, for purposes of this Agreement, be deemed to be the maximum period or area which such court determines valid and enforceable.

3.3Investments of GOV.

(a)After the Effective Date and for so long thereafter as (i) HRPT owns directly or indirectly 10% or more of the outstanding GOV Common Shares, (ii) HRPT and GOV both have engaged the same provider of business management services or (iii) GOV and HRPT have one or more managing trustees in common, neither GOV nor any GOV Subsidiary will make any investment (including fee interests, leaseholds, joint ventures, mortgages or other real estate interests) in office or industrial real property which is not a Government Property without the prior approval of a majority of HRPT’s Independent Trustees who are not trustees of GOV; provided that, if a majority of HRPT’s Independent Trustees who are not trustees of GOV have determined that HRPT should not make the investment after the investment has been presented to them, then

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GOV (or such GOV Subsidiary) may make the investment without any further approval of any of HRPT’s Independent Trustees.

(b)GOV agrees that irreparable damage would occur if its obligations under this Section 3.3 were not performed in accordance with their terms and that HRPT’s remedy at law for the breach by GOV or any GOV Subsidiary of this Section 3.3 would be inadequate.  Upon any such breach, HRPT shall be entitled (in addition to any other rights or remedies it may have at law) to seek an injunction enjoining and restraining GOV and/or such GOV Subsidiary from continuing such breach.  GOV agrees that the period of restriction and the geographical area of restriction imposed upon GOV are fair and reasonable.  If the provisions of this Section 3.3 relating to the period or the area of restriction are determined to exceed the maximum period or areas which a court having jurisdiction over the matter would deem enforceable, such period or area shall, for purposes of this Agreement, be deemed to be the maximum period or area which such court determines valid and enforceable.

3.4Expiration or Termination of Tenancies.

(a)Anything in Section 3.2 to the contrary notwithstanding, the leasing of a property held by HRPT or any HRPT Subsidiary on the date hereof or which was acquired hereafter, and which (i) is a Government Property on the date hereof, (ii) was not a Government Property at the time of acquisition by HRPT or such HRPT Subsidiary or (iii) is a property the acquisition of which was permitted under Section 3.2, to one or more Governmental Authorities is not prohibited under Section 3.2.

(b)Anything in Section 3.3 to the contrary notwithstanding, the leasing of a property held by GOV or any GOV Subsidiary, whether one of the Properties or a property which was acquired thereafter, and which (i) is one of the Properties, (ii) was a Government Property at the time of acquisition by GOV or such GOV Subsidiary or (iii) is a property the acquisition of which was permitted under Section 3.3, to one or more tenants which are not Governmental Authorities is not prohibited under Section 3.3.

3.5Cooperation, Exchange of Information, Retention of Records, and Costs of Reporting.

(a)Upon reasonable request, HRPT (on behalf of the HRPT Group) and GOV (on behalf of the GOV Group) will promptly provide, and will cause their respective Affiliates to provide, the requesting party with such cooperation and assistance, documents and other information, without charge, as may be necessary or reasonably helpful in connection with (i) the consummation of the transactions contemplated by this Agreement and the preservation for each such party, to the extent reasonably feasible, of the benefits of this Agreement (including, in the case of GOV, the economic and operational benefits of the Properties and Property Assets and in the case of HRPT, the economic benefits of the distribution contemplated by Section 2.1(k), (ii) each such party’s preparation and filing of any original or amended Tax Return or of any financial or other report required to be filed under the Exchange Act or other applicable law, (iii) the conduct of any audit, appeal, protest or other examination or any judicial or

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administrative proceeding involving to any extent Taxes or Tax Returns within the scope of this Agreement, and (iv) the verification of an amount payable hereunder to, or receivable hereunder from, any other party.  In addition, HRPT (on behalf of the HRPT Group) and GOV (on behalf of the GOV Group) acknowledge and agree that certain of the Properties are located adjacent to properties which have been retained by HRPT (or other members of the HRPT Group) and that, in order to maintain the economic and operational benefits attributable to the proximity of such Properties and such adjacent properties, the cooperation contemplated hereby shall include all reasonable cooperation with respect to matters relating to the enjoyment, preservation and maintenance of all such benefits, including (i) the maintenance and operation of any common parking or other amenities and facilities, (ii) the provision of any access and other rights, (iii) compliance with zoning rules and regulations, and (iv) allowances for minor encroachments across property lines.  Each such party will make its officers and facilities available on a mutually convenient basis to facilitate such cooperation.

(b)In furtherance of the obligations of each of HRPT and GOV pursuant to clause (i) of Section 3.5(a), relative to the economic and operational benefits of the Properties and Property Assets and to the economic benefits of the distribution paid under Section 2.1(k), each of HRPT and GOV will, as needed, act as the agent of the other in the collection of assets and the payment of Liabilities that belong to the other.  GOV will, within 30 days following the Effective Date, prepare and deliver to HRPT a balance sheet reflecting the current assets and current Liabilities which were the subject of the distribution paid under Section 2.1(k).  Contemporaneous with the delivery of the balance sheet, GOV will remit to HRPT any amounts representing such current assets then collected by GOV on behalf of HRPT, net of any amounts representing current Liabilities then paid by GOV on behalf of HRPT, all as set forth on such balance sheet; thereafter, as amounts representing current assets, net of current Liabilities, are received or paid by GOV on behalf of HRPT, upon demand but in any event not less often than monthly, GOV will remit to HRPT the excess (if any) of such amounts collected over such amounts paid (in each case since the last remittance between HRPT and GOV), and HRPT shall remit to GOV the deficit (if any) of such amounts paid over such amounts collected (in each case since the last remittance between HRPT and GOV).

(c)For purposes of preparing the balance sheet referred to in Section 3.5(b), the following items of income and expense with respect to the Properties, determined as of the close of business on the Effective Date, shall be included in the determination of current assets and current Liabilities: (i) rent and additional rent payable under the Leases; (ii) real estate taxes and assessments payable based on the rates and assessed valuations applicable in the tax year during which the Effective Date occurs; (iii) electricity, water and other utility charges payable; (iv) interest expense under the Credit Facility; and (v) all other items of income and expense as are customarily prorated in sales transactions involving properties similar to the Properties.  If any of the foregoing items cannot be determined as of the date on which the balance sheet is to be delivered due to the unavailability of information, such items shall be included  on the basis of a good faith estimate by GOV and adjusted and reconciled as soon as practicable thereafter.  If after the Effective Date, HRPT or any HRPT Subsidiary receives rent or additional rent due under any Lease, it will promptly pay such amounts to GOV.  Any rent or additional

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rent received by GOV shall be applied to rent and additional rent due in the inverse order of their due dates, and GOV shall remit to HRPT any such rent or additional rent attributable to HRPT in accordance with Section 3.5(b).  To the extent rent and additional rent payable under the Leases are to be paid to HRPT as part of the distribution paid under Section 2.1(k), HRPT shall not have any right to take any action to collect the same and GOV shall use commercially reasonable efforts to do so except that GOV shall have no obligation to institute an Action to enforce its rights.

(d)Each of HRPT and GOV will retain or cause to be retained all books, records and other documents within its possession or control relating to the Property Assets and all Tax Returns, and all books, records, schedules, workpapers, and other documents relating thereto, which Tax Returns and other materials are within the scope of this Agreement, until the expiration of the later of (i) all applicable statutes of limitations (including any waivers or extensions thereof), and (ii) any retention period required by applicable law or pursuant to any record retention agreement.

(e)Each of HRPT and GOV will cooperate to enforce the ownership limitations in their respective declarations of trust to promote orderly governance and to maintain the ability of each of HRPT and GOV to qualify as a “real estate investment trust” under Sections 856 through 860 of the Code.

3.6Restrictions.

After the Effective Date, and for so long thereafter as HRPT owns 9.8% or more of the outstanding GOV Common Shares, (a) GOV (together with its Affiliates) will not actually or constructively (within the meaning of Section 856(d) of the Code, but excepting any constructive attribution from HRPT and its Affiliates) acquire or own more than 4.9% of the outstanding securities (by vote or value) of any Entity which is also a tenant of HRPT or its Affiliates, (b) HRPT (together with its Affiliates) will not actually or constructively (within the meaning of Section 856(d) of the Code, but excepting any constructive attribution from GOV and its Affiliates) acquire or own more than 4.9% of the outstanding securities (by vote or value) of any Entity which is also a tenant of GOV or its Affiliates, (c) GOV will not take (or permit its Affiliates to take) any action that, in the reasonable judgment of HRPT, might reasonably be expected to have an adverse impact on the ability of HRPT to qualify as a “real estate investment trust” under Sections 856 through 860 of the Code, and (d) HRPT will not take (or permit its Affiliates to take) any action that, in the reasonable judgment of GOV, might reasonably be expected to have an adverse impact on the ability of GOV to qualify as a “real estate investment trust” under Sections 856 through 860 of the Code.

SECTION 4
REPRESENTATIONS

Each party hereto represents and warrants to the other that (i) it is duly authorized to enter into and perform this Agreement and has duly executed and delivered this Agreement, (ii) the execution, delivery and performance of its obligations under this Agreement will not conflict with or result in a breach of or default under or a violation of its Charter, any material Contract to which it is a party or by which any of its assets or its Subsidiaries are bound or any order,

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judgment, decree, permit, statute, law, rule or regulation to which it or any of its Subsidiaries is subject, and (iii) this Agreement constitutes its valid and binding obligation, enforceable in accordance with its terms, subject to (A) bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement generally of creditors’ rights and remedies, (B) general principles of equity (regardless of whether considered in a proceeding at law or in equity), including the discretion of any court of competent jurisdiction in granting specific performance or other equitable relief, and (C) an implied duty to take action and make determinations on a reasonable basis and in good faith.

SECTION 5
INDEMNIFICATION

5.1          Indemnification by HRPT.

From and after the Effective Date, HRPT shall indemnify and hold harmless GOV, its Subsidiaries, each of their respective directors, trustees, officers, employees and agents, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “GOV Indemnified Parties”) from and against any and all damages, claims, losses, expenses, costs, obligations and liabilities, including liabilities for all reasonable attorneys’, accountants’, and experts’ fees and expenses, including those incurred to enforce the terms of this Agreement (collectively, “Covered Liabilities”), suffered, directly or indirectly, by any GOV Indemnified Party by reason of, or arising out of;

(a)           any breach of any covenant or agreement of HRPT contained in this Agreement; or

(b)           any HRPT Liabilities.

5.2          Indemnification by GOV.

From and after the Effective Date, GOV shall indemnify and hold harmless HRPT, its Subsidiaries, each of their respective directors, trustees, officers, employees and agents, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “HRPT Indemnified Parties”) from and against any and all Covered Liabilities suffered, directly or indirectly, by any HRPT Indemnified Party by reason of, or arising out of:

(a)           any breach of any covenant or agreement of GOV contained in this Agreement; or

(b)           any GOV Liabilities.

5.3          Certain Limitations, Etc.

The amount of any Covered Liabilities for which indemnification is provided under this Agreement shall be net of any amounts actually recovered by the indemnified party from third parties (including amounts actually recovered under insurance policies) with respect to such Covered Liabilities.  Any indemnifying party hereunder shall be subrogated to the rights of the indemnified party upon payment in full of the amount of the relevant indemnifiable loss.  An

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insurer who would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto or, solely by virtue of the indemnification provision hereof, have any subrogation rights with respect thereto. If any indemnified party recovers an amount from a third party in respect of an indemnifiable loss for which indemnification is provided in this Agreement after the full amount of such indemnifiable loss has been paid by an indemnifying party or after an indemnifying party has made a partial payment of such indemnifiable loss and the amount received from the third party exceeds the remaining unpaid balance of such indemnifiable loss, then the indemnified party shall promptly remit to the indemnifying party the excess of (i) the sum of the amount theretofore paid by such indemnifying party in respect of such indemnifiable loss plus the amount received from the third party in respect thereof, less (ii) the full amount of such Covered Liabilities.

5.4          Priority of Section 6.

As to the Tax matters addressed in Section 6, including the indemnification for Taxes and the notice, control and conduct of Tax Contests, the provisions of Section 6 shall be the exclusive governing provisions.

SECTION 6
TAX MATTERS

6.1          General Responsibility for Taxes.

(a)           All federal Income Taxes of the HRPT Group shall be borne by, shall be the responsibility of, and shall be paid by the HRPT Group, and all federal Income Taxes of the GOV Group shall be borne by, shall be the responsibility of, and shall be paid by the GOV Group.  For purposes of federal Income Taxes, items of income, gain, loss, deduction, expenditure, and credit shall be allocated and apportioned between the HRPT Group and the GOV Group in the following manner.  Any item relating to the Property Assets or the GOV Group shall be:  (i) allocated exclusively to the HRPT Group if such item is in respect of a period ending before the Effective Date; (ii) allocated exclusively to the GOV Group if such item is in respect of a period commencing after the Effective Date; and (iii) apportioned, if such item is in respect of a period that includes the Effective Date, between the HRPT Group and the GOV Group in a manner consistent with (A) applicable Tax laws (including the analogous principles of Section 1.1361-5(a)(1)(iii) of the Treasury Regulations under which the GOV Group would cease to be a qualified REIT subsidiary of the HRPT Group at the close of the Effective Date), (B) the continued qualification of both HRPT and GOV as real estate investment trusts under the Code, and (C) commercially reasonable prorations of items between transferors and transferees of real estate.

(b)           For any state or local Income Tax that follows Section 856(i) of the Code and Section 301.7701-2(c)(2)(i) of the Treasury Regulations, (i) such state and local Income Taxes of the HRPT Group shall be borne by, shall be the responsibility of, and shall be paid by HRPT, and (ii) such state and local Income Taxes of the GOV Group shall be borne by, shall be the responsibility of, and shall be paid by GOV; for purposes of such state and local Income Taxes, items of income, gain, loss, deduction, expenditure,

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and credit shall be allocated and apportioned between the HRPT Group and the GOV Group in the same manner as Section 6.1(a).

(c)           State or local Income Taxes of any member of the HRPT Group that are not covered by Section 6.1(b) shall be borne by, shall be the responsibility of, and shall be paid by HRPT.  State or local Income Taxes of any member of the GOV Group that are not covered by Section 6.1(b), without duplication for Taxes included in current Liabilities as part of the distribution in Section 2.1(k), shall be:  (i) allocated exclusively to the HRPT Group if such item is in respect of a portion of a period prior to the Effective Date; (ii) allocated exclusively to the GOV Group if such item is in respect of a portion of a period following the Effective Date; and (iii) allocated under the apportionment principles of Section 6.1(a)(iii) if such item arises during a portion of a period including the Effective Date.

(d)           Other Taxes (other than those included in GOV Expenses) of any member of the GOV Group shall be allocated, but without duplication for Taxes included in current Liabilities as part of the distribution in Section 2.1(k), consistent with the apportionment principles of Section 6.1(a)(iii), between the HRPT Group and the GOV Group on the basis of actual transactions, events or activities (including, if applicable, days elapsed) that give rise to or create liability for such Taxes on or before the Effective Date (to be borne by, be the responsibility of, and be paid by, the HRPT Group) versus those that give rise to create liability for such Taxes after the Effective Date (to be borne by, be the responsibility of, and be paid by the GOV Group).

(e)           HRPT shall hold GOV harmless from and against all Taxes which are to be borne by the HRPT Group under this Section 6.1.  GOV shall hold HRPT harmless from and against all Taxes which are to be borne by the GOV Group under this Section 6.1.

6.2          Allocation of Certain Taxes among Taxable Periods.

HRPT and GOV agree that if GOV or any member of the GOV Group is permitted but not required under any applicable Tax law, including applicable state and local Income Tax laws, to treat the day before the Effective Date or the Effective Date as the last day of a taxable period, HRPT and GOV shall cooperate so that such day will be treated as the last day of a taxable period.

6.3          Filing and Payment Responsibility.

(a)           Each of HRPT (on behalf of the HRPT Group) and GOV (on behalf of the GOV Group) shall cause to be prepared and filed such Tax Returns as the HRPT Group and the GOV Group, respectively, are required to file with applicable Taxing Authorities.  Each of HRPT (on behalf of the HRPT Group) and GOV (on behalf of the GOV Group) agree that, except as required by applicable law or a final determination resulting from a Tax Contest (defined below) including either HRPT or GOV, they will not take positions in any such Tax Return that are inconsistent with (i) the description of federal Income Tax consequences in the GOV Registration Statement or in a report on Form 8-K to be

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filed by HRPT with the Securities and Exchange Commission on or immediately after the Effective Date and (ii) and any other Tax Return, whether filed on behalf of the HRPT Group or the GOV Group, previously or substantially contemporaneously filed with such Tax Return.  In particular, HRPT and GOV will use all reasonable business efforts to cooperate with one another in valuing the individual assets comprising the Property Assets, to the extent such valuations are necessary for Tax purposes.

(b)           To the extent that either of the HRPT Group or the GOV Group bears responsibility pursuant to Section 6.1 for some or all of a Tax which is to be paid with a Tax Return for which the other bears preparation and filing responsibility pursuant to Section 6.3, then (i) the party bearing responsibility for some or all of such Tax shall have the right to review and comment upon such Tax Return at least fifteen (15) days before such Tax Return must be filed, (ii) the party bearing responsibility for some or all of such Tax shall pay over by wire transfer the amount of such Tax for which it is responsible to the party filing such Tax Return at least three (3) days before such Tax Return must be filed, and (iii) the party responsible for preparing and filing such Tax Return will file such Tax Return on or before its due date and pay over to the applicable Taxing Authority the amount of Tax due with such Tax Return.

(c)           GOV will file, effective as of seven days prior to the Effective Date, an affirmative election on Internal Revenue Service Form 8832 to be taxed as an association taxable as a corporation, such that GOV on the Effective Date will be a “qualified REIT subsidiary” of HRPT within the meaning of Section 856(i) of the Code.  GOV will not cause or permit the filing of any election on Internal Revenue Service Form 8832 with respect to any of its Subsidiaries in respect of any period preceding or including the Effective Date, such that the GOV Subsidiaries through the Effective Date will remain “disregarded entities” of HRPT within the meaning of Section 301.7701-3 of the Treasury Regulations under Section 7701 of the Code.

(d)           HRPT and GOV shall cooperate to file, effective as of the day after the Effective Date, a Code Section 856(l) “taxable REIT subsidiary” election for HRPT’s investment in GOV after the Effective Date, and at HRPT’s request shall renew and refile such election effective each January 1 thereafter for so long as HRPT continues to own 9.8% or more of GOV’s outstanding Common Shares.

6.4          Refunds and Credits.

Any refunds or credits of Taxes shall be for the account of the party bearing responsibility for such Taxes under Section 6.1  Each of HRPT and GOV agrees that if as the result of any audit adjustment made by any Taxing Authority with respect to a Tax to be borne by the other party under Section 6.1, any member of the HRPT Group or the GOV Group, respectively, receives a Tax benefit in the form of a cash refund or in the form of a credit applicable against Tax liabilities to be borne by such benefited party under this Section 6, then the benefited party shall notify the other party of the same within ten (10) days of, as applicable, receiving the cash refund or filing the Tax Return in which such credit is utilized, and then pay over immediately to such other party the amount of such Tax refund or credit.

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6.5          Tax Contests.

If either HRPT (on behalf of the HRPT Group) or GOV (on behalf of the GOV Group) becomes aware of any audit, pending or threatened assessment, official inquiry, examination or proceeding (“Tax Contests”) that could result in an official determination with respect to Taxes due or payable, the responsibility for any portion of which may rest with the other party, such party shall promptly so notify the other party in writing.  The party bearing greater responsibility for the Taxes contested in a Tax Contest shall bear the costs (including attorneys’ and accountants’ fees, but excluding the contested Taxes) of such Tax Contest, and shall control and conduct such Tax Contest in a reasonable manner after consulting in good faith with the other party.  The other party shall supply the party controlling the Tax Contest with such powers of attorney and assistance as may be reasonably requested.  The responsibility for any additional liability for Taxes resulting from a Tax Contest shall be allocated and apportioned between the HRPT Group and the GOV Group in accordance with Section 6.1.  Except to the extent in conflict with the provisions of this Section 6, the provisions of Section 5.3 shall be applicable to Tax Contests.

SECTION 7
MISCELLANEOUS

7.1           Arbitration.  (a) Any disputes, claims or controversies between the parties (i) arising out of or relating to this Agreement or the transactions contemplated hereby, or (ii) brought by or on behalf of any shareholder of either HRPT or GOV (which, for purposes of this Section 7, shall mean any shareholder of record or any beneficial owner of shares of either HRPT or GOV, or any former shareholder of record or beneficial owner of Shares of either HRPT or GOV), either on its own behalf, on behalf of either HRPT or GOV or on behalf of any series or class of shares of either HRPT or GOV or shareholders of either HRPT or GOV against either HRPT or GOV or any trustee, officer, manager (including Reit Management & Research LLC or its successor), agent or employee of either HRPT or GOV, including disputes, claims or controversies relating to the meaning, interpretation, effect, validity, performance or enforcement of this Agreement, the Declaration of Trust or the Bylaws of either HRPT or GOV (all of which are referred to as “Disputes”) or relating in any way to such a Dispute or Disputes, shall on the demand of any party to such Dispute be resolved through binding and final arbitration in accordance with the Commercial Arbitration Rules (the “Rules”) of the American Arbitration Association (“AAA”) then in effect, except as modified herein.  For the avoidance of doubt, and not as a limitation, Disputes are intended to include derivative actions against trustees, officers or managers of either HRPT or GOV and class actions by a shareholder of either HRPT or GOV against those individuals or entities and either HRPT and GOV.

(b)           There shall be three arbitrators.  If there are (i) only two parties to the Dispute, each party shall select one arbitrator within 15 days after receipt by respondent of a copy of the demand for arbitration and (ii) more than two parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand, shall each select, by the vote of a majority of the claimants or the respondents, as the case may be, one arbitrator.  The two party-nominated arbitrators shall jointly nominate the third and presiding arbitrator within 15 days of the nomination of the second arbitrator.  If any arbitrator has not been nominated within the time limit specified herein, then the AAA shall provide a list of proposed arbitrators in accordance

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with the Rules, and the arbitrator shall be appointed by the AAA in accordance with a listing, striking and ranking procedure, with each party having a limited number of strikes, excluding strikes for cause.  For the avoidance of doubt, the arbitrators appointed by the parties to such Dispute may be affiliates or interested persons of such parties but the third arbitrator elected by the party arbitrators or by the AAA shall be unaffiliated with either party.

(c)           The place of arbitration shall be Boston, Massachusetts unless otherwise agreed by the parties.

(d)           There shall be only limited documentary discovery of documents directly related to the issues in dispute, as may be ordered by the arbitrators.

(e)           In rendering an award or decision (the “Award”), the arbitrators shall be required to follow the laws of the Commonwealth of Massachusetts.  Any arbitration proceedings or Award rendered hereunder and the validity, effect and interpretation of this arbitration agreement shall be governed by the Federal Arbitration Act, 9 U.S.C. §1 et seq.  The Award shall be in writing and may, but shall not be required to, briefly state the findings of fact and conclusions of law on which it is based.

(f)            Except to the extent expressly provided by this Agreement or as otherwise agreed between the parties, each party involved in a Dispute shall bear its own costs and expenses (including attorneys’ fees), and the arbitrators shall not render an award that would include shifting of any such costs or expenses (including attorneys’ fees) or, in a derivative case or class action by a shareholder of either HRPT or GOV, award any portion of HRPT’s or GOV’s award to the claimant or the claimant’s attorneys.  Each party (or, if there are more than two parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand, respectively) shall bear the costs and expenses of its (or their) selected arbitrator and the parties (or, if there are more than two parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand) shall equally bear the costs and expenses of the third appointed arbitrator.

(g)           The Award shall be final and binding upon the parties thereto and shall be the sole and exclusive remedy between such parties relating to the Dispute, including any claims, counterclaims, issues or accounting presented to the arbitrators.  Judgment upon the Award may be entered in any court having jurisdiction.  To the fullest extent permitted by law, no application or appeal to any court of competent jurisdiction may be made in connection with any question of law arising in the course of arbitration or with respect to any award made except for actions relating to enforcement of this agreement to arbitrate or any arbitral award issued hereunder and except for actions seeking interim or other provisional relief in aid of arbitration proceedings in any court of competent jurisdiction.

(h)           Any monetary award shall be made and payable in U.S. dollars free of any tax, deduction or offset.  The party against which the Award assesses a monetary obligation shall pay that obligation on or before the 30th day following the date of the Award or such other date as the Award may provide.

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7.2          Notices.

(a)           Any and all notices, demands, consents, approvals, offers, elections and other communications required or permitted under this Agreement shall be deemed adequately given if in writing and the same shall be delivered either in hand, or by telecopy or by Federal Express or similar expedited commercial carrier, addressed to the recipient of the notice, and with all freight charges prepaid (if by Federal Express or similar carrier).

(b)           All notices required or permitted to be sent hereunder shall be deemed to have been given for all purposes of this Agreement upon the date of receipt or refusal, except that whenever under this Agreement a notice is either received on a day which is not a Business Day or is required to be delivered on or before a specific day which is not a Business Day, the day of receipt or required delivery shall automatically be extended to the next Business Day.

(c)           All such notices shall be addressed:

If to GOV, to:

Government Properties Income Trust

400 Centre Street

Newton, Massachusetts  02458

Attn:  President
Telecopy no:  (617) 219-1441

With a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

1 Beacon Street

Boston, MA  02108

Attn.: Margaret R. Cohen

Telecopy No.  (617) 573-4822

If to HRPT, to:

HRPT Properties Trust

400 Centre Street

Newton, Massachusetts  02458

Attn:  President
Telecopy no:  (617)

With a copy to:

Sullivan & Worcester LLP

One Post Office Square

Boston, MA  02109

Attn.: Richard Teller

Telecopy no. (617) 338-2880

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(d)           By notice given as herein provided, the parties hereto and their respective successors and assigns shall have the right from time to time and at any time during the term of this Agreement to change their respective addresses effective upon receipt by the other parties of such notice and each shall have the right to specify as its address up to two other addresses within the United States of America.

7.3          Waivers, Etc.

No provision of this Agreement may be waived except by a written instrument signed by the party waiving compliance. No waiver by any party hereto of any of the requirements hereof or of any of such party’s rights hereunder shall release the other parties from full performance of their remaining obligations stated herein. No failure to exercise or delay in exercising on the part of any party hereto any right, power or privilege of such party shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege by such party.  This Agreement may not be amended, nor shall any waiver, change, modification, consent or discharge be effected, except by an instrument in writing executed by or on behalf of the party against whom enforcement of any amendment, waiver, change, modification, consent or discharge is sought.

7.4          Assignment; Successors and Assigns; Third Party Beneficiaries.

This Agreement and all rights and obligations hereunder shall not be assignable by any party without the written consent of the other parties, except to a successor to such party by merger or consolidation or an assignee of substantially all of the assets of such party.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.  This Agreement is not intended and shall not be construed to create any rights in or to be enforceable in any part by any other Person.

7.5          Severability.

If any provision of this Agreement shall be held or deemed to be, or shall in fact be, invalid, inoperative or unenforceable as applied to any particular case in any jurisdiction or jurisdictions, or in all jurisdictions or in all cases, because of the conflict of any provision with any constitution or statute or rule of public policy or for any other reason, such circumstance shall not have the effect of rendering the provision or provisions in question invalid, inoperative or unenforceable in any other jurisdiction or in any other case or circumstance or of rendering any other provision or provisions herein contained invalid, inoperative or unenforceable to the extent that such other provisions are not themselves actually in conflict with such constitution, statute or rule of public policy, but this Agreement shall be reformed and construed in any such jurisdiction or case as if such invalid, inoperative or unenforceable provision had never been contained herein and such provision reformed so that it would be valid, operative and enforceable to the maximum extent permitted in such jurisdiction or in such case.

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7.6          Counterparts, Etc.

This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and shall supersede and take the place of any other instruments purporting to be an agreement of the parties hereto relating to the subject matter hereof.  This Agreement may not be amended or modified in any respect other than by the written agreement of all of the parties hereto.

7.7          Governing Law.

This Agreement shall be interpreted, construed, applied and enforced in accordance with the laws of the Commonwealth of Massachusetts applicable to contracts between residents of Massachusetts which are to be performed entirely within Massachusetts.

7.8          Section and Other Headings; Interpretation.

The headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.  The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; and Section, subsection and Schedule references are to this Agreement, unless otherwise specified.  The words “including” and “include” shall be deemed to be followed by the words “without limitation.”

7.9          Exculpation.

(a)           THE AMENDED AND RESTATED DECLARATION OF TRUST ESTABLISHING HRPT, DATED JULY 1, 1994, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS AND SUPPLEMENTS THERETO, 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 OF TRUST COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF HRPT SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, HRPT. ALL PERSONS DEALING WITH HRPT, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF HRPT FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

(b)           THE AMENDED AND RESTATED DECLARTION OF TRUST ESTABLISHING GOV, DATED JUNE 8, 2009, A COPY OF WHICH IS DULY FILED IN THE OFFICE OF THE STATE DEPARTMENT OF ASSSESSMENTS AND TAXATION OF MARYLAND, PROVIDES THAT THE NAME “GOVERNMENT PROPERTIES INCOME TRUST” REFERS TO THE TRUSTEES UNDER THE DECLARATION OF TRUST COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF GOV SHALL BE HELD TO ANY

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PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, GOV. ALL PERSONS DEALING WITH GOV, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF GOV FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as a sealed instrument as of the date first above written.

HRPT PROPERTIES TRUST
By:	/s/ John C. Popeo
	Title: Treasurer Chief Financial Officer
GOVERNMENT PROPERTIES INCOME TRUST
By:	/s/ David M. Blackman
	Title: Treasurer and Chief Financial Officer

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