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): August 21, 1998
HRPT PROPERTIES TRUST
(Exact name of registrant as specified in charter)
Maryland 1-9317 04-6558834
(State or other (Commission file (IRS employer
jurisdiction of number) identification no.)
incorporation)
400 Centre Street, Newton, Massachusetts 02158
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 617-332-3990
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits.
1.1 Purchase Agreement dated as of August 21, 1998 by and among
HRPT Properties Trust and the several Underwriters named
therein pertaining to $160,000,000 in aggregate principal
amount of 6 7/8 %Senior Notes due 2003.
4.1 Form of Supplemental Indenture dated as of August 26, 1998 by
and between HRPT Properties Trust and State Street Bank and
Trust Company pertaining to $160,000,000 in aggregate
principal amount of 6 7/8% Senior Notes due 2003.
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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 thereunto duly authorized.
HRPT PROPERTIES TRUST
By: /s/ Ajay Saini
Ajay Saini
Treasurer and Chief Financial Officer
Date: August 21, 1998
EXHIBIT 1.1
HRPT PROPERTIES TRUST
(a Maryland real estate investment trust)
$160,000,000 6 7/8% Senior Notes due August 26, 2002
PURCHASE AGREEMENT
August 21, 1998
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MORGAN STANLEY & CO. INCORPORATED
SALOMON BROTHERS INC
c/o MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center - North Tower
250 Vesey Street
New York, NY 10281-1326
Ladies and Gentlemen:
HRPT Properties Trust, a Maryland real estate investment trust (the
"Company"), confirms its agreement with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Donaldson Lufkin &
Jenrette Securities Corporation ("Donaldson Lufkin"), Morgan Stanley & Co.
Incorporated ("Morgan Stanley") and Salomon Brothers Inc ("Salomon")
(collectively, the "Underwriters", which term shall include any underwriter
substituted as hereinafter provided in Section 10 hereof), with respect to the
sale by the Company and the purchase by each such Underwriter severally, of the
Company's principal amount of 6(% Senior Notes due August 26, 2002 (the "Notes")
set forth opposite the name of each such Underwriter listed in Schedule A hereto
at a purchase price of 99.151% of the principal amount of the Notes. The Notes
are to be issued pursuant to an indenture dated as of July 9, 1997 and a
supplemental indenture dated as of August 26, 1998 (together, the "Indenture"),
each between the Company and State Street Bank and Trust Company (the
"Trustee").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form-S3 (No. 33356051) for the
registration of debt securities, preferred shares of beneficial interest,
depositary shares, common shares of beneficial interest and warrants under the
Securities Act of 1933, as amended (the "1933 Act"), and has
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filed such amendments thereto, if any, as may have been required to the date
hereof. Such registration statement has been declared effective under the 1933
Act. Such registration statement (as amended, if applicable) and the prospectus
constituting a part thereof, as supplemented by the prospectus supplement
relating to the Notes (including, in each case, all documents incorporated or
deemed to be incorporated by reference therein), as from time to time amended or
supplemented pursuant to the 1933 Act, the Securities Exchange Act of 1934, as
amended (the "1934 Act"), or otherwise, are hereinafter referred to as the
"Registration Statement" and the "Prospectus", respectively. All references in
this Agreement to financial statements and schedules and other information which
is "contained", "included" or "stated" in the Registration Statement or the
Prospectus (and all other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
is or is deemed to be incorporated by reference in the Registration Statement or
in the Prospectus, as the case may be.
Section 1. Representations and Warranties.
(a) The Company represents and warrants to each Underwriter as of the
date hereof as follows:
(i) At the time the Registration Statement became effective,
the Registration Statement complied in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and did not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. The Prospectus, at the date hereof
(unless the term "Prospectus" refers to a prospectus which has been
provided to the Underwriters by the Company for use in connection with
the offering of the Notes which differs from the Prospectus on file at
the Commission at the date of effectiveness of the Registration
Statement, in which case at the time it is first provided to the
Underwriters for such use) and at the Closing Time referred to in
Section 2 hereof, does not and will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
representations and warranties in this subsection (i) shall not apply
to statements or omissions in the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through Merrill
Lynch expressly for use in the Registration Statement or the
Prospectus.
(ii) The documents incorporated or deemed to be incorporated
by reference in the Prospectus, at the time they were or hereafter are
filed with the Commission, complied and will comply in all material
respects with the requirements of the 1934 Act and the rules and
regulations of the Commission under the 1934 Act (the "1934 Act
Regulations"), and, when read together with the other information in
the Prospectus, at the time the Registration Statement became effective
and at Closing Time, did not and will not include an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
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(iii) The Company is a Maryland real estate investment trust
duly organized, validly existing and in good standing under the laws of
the State of Maryland. Each of its subsidiaries has been duly organized
and is validly existing as a corporation or trust in good standing
under the laws of its jurisdiction of incorporation or organization.
Each of the Company and its subsidiaries has full power and authority
(corporate and other) to carry on its business as described in the
Registration Statement and in the Prospectus and to own, lease and
operate its properties. Each of the Company and its subsidiaries is
duly qualified and is in good standing as a foreign corporation or
trust, as the case may be, and is authorized to do business in each
jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole.
(iv) The financial statements of the Company and its
subsidiaries, together with the related schedules and notes thereto,
included or incorporated by reference in the Registration Statement and
in the Prospectus, comply as to form in all material respects with the
requirements of the 1933 Act. Such financial statements of the Company,
together with the related schedules and notes thereto, present fairly
the consolidated financial position, results of operations,
shareholders' equity and changes in financial position of the Company
and its subsidiaries, at the dates or for the periods therein specified
and have been prepared in accordance with generally accepted accounting
principles ("GAAP") consistently applied throughout the periods
involved. The pro forma financial statements and other pro forma
financial information (including the notes thereto) included or
incorporated by reference in the Registration Statement and in the
Prospectus (i) present fairly the information shown therein, (ii) have
been prepared in accordance with the Commission's rules and guidelines
with respect to pro forma financial statements and (iii) have been
properly compiled on the basis described therein and the assumptions
used in the preparation of such pro forma financial statements and
other pro forma financial information (including the notes thereto) are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions or circumstances referred to therein. The
adjusted pro forma financial statements and other adjusted pro forma
financial information (including the notes thereto) included or
incorporated by reference in the Registration Statement and in the
Prospectus (i) present fairly the information shown therein and (ii)
have been properly compiled on the basis described therein and the
assumptions used in the preparation of such adjusted pro forma
financial statements and other adjusted pro forma financial information
(including the notes thereto) are reasonable and the adjustments used
therein are appropriate to give effect to the transactions or
circumstances referred to therein.
(v) The accountants who have certified the financial
statements of the Company and its subsidiaries included or incorporated
by reference in the Registration Statement and in the Prospectus are
independent certified public accountants as required by the 1933 Act.
(vi) The Indenture has been duly qualified under the Trust
Indenture Act of 1939 (the "1939 Act") and has been duly authorized,
executed and delivered by the Company and is a valid and binding
agreement of the Company enforceable in
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accordance with its terms, except as limited by (a) the effect of
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer
or other similar laws relating to or affecting the rights or remedies
of creditors or (b) the effect of general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity
or at law).
(vii) All of the issued and outstanding indebtedness of the
Company is duly and validly authorized and issued; the Notes have been
authorized by all necessary trust action and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered and paid for pursuant to this Agreement, will be valid and
binding obligations of the Company enforceable in accordance with their
terms, except as limited by (a) the effect of bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws
relating to or affecting the rights or remedies of creditors or (b) the
effect of general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
(viii) The Notes and the Indenture conform to the descriptions
thereof in the Registration Statement and in the Prospectus.
(ix) The authorized capital of the Company, including the
Notes, conforms as to legal matters to the description thereof
contained in the Prospectus (or the documents incorporated therein by
reference).
(x) Since the respective dates as of which information is
given in the Prospectus, and except as otherwise disclosed therein, (i)
there has been no material adverse change in the business, operations,
earnings, prospects, properties or condition (financial or otherwise)
of the Company and its subsidiaries, taken as a whole, whether or not
arising in the ordinary course of business, (ii) there have been no
material transactions entered into by the Company and its subsidiaries,
on a consolidated basis, other than transactions in the ordinary course
of business, (iii) neither the Company nor its subsidiaries has
incurred any material liabilities or obligations, direct or contingent,
(iv) the Company and its subsidiaries, on a consolidated basis, have
not, (A) other than regular quarterly dividends, declared, paid or made
a dividend or distribution of any kind on any class of its shares of
beneficial interest (other than dividends or distributions from wholly
owned subsidiaries to the Company), (B) issued any shares of beneficial
interest of the Company or any of its subsidiaries or any options,
warrants, convertible securities or other rights to purchase the shares
of beneficial interest of the Company or any of its subsidiaries (other
than the issuance of common shares of beneficial interest ("Common
Shares") upon conversion of certain convertible debentures of the
Company and grants to employees pursuant to the Company's Stock
Incentive Plan in July 1998) or (C) repurchased or redeemed shares of
beneficial interest, and (v) there has not been (A) any material
decrease in the Company's net worth or (B) any material increase in the
shortterm or longterm debt (including capitalized lease obligations but
excluding borrowings under existing bank lines of credit) of the
Company and its subsidiaries, on a consolidated basis.
(xi) The Company and each of its subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are
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executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xii) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or bylaws or other organizational
documents or in default in the performance of any obligation, agreement
or condition contained in any bond, debenture, note or any other
evidence of indebtedness or in any other agreement, indenture or
instrument to which the Company or any of its subsidiaries is a party
or by which any of their respective properties or assets may be bound
or affected, except for any such violation that would not have a
material adverse effect on the condition, financial or otherwise or in
the earnings, business affairs or business prospects of the Company and
its subsidiaries, taken as a whole. The Company is not in violation of
any law, ordinance, governmental rule or regulation or court decree to
which it is subject, except for any such violations that would not,
individually or in the aggregate, have a material adverse effect on the
business, operations, earnings, prospects, properties or condition
(financial or otherwise) of any of the Company and its subsidiaries,
taken as a whole.
(xiii) Except as disclosed in the Registration Statement or in
the Prospectus, there is not now pending or, to the knowledge of the
Company, threatened, any litigation, action, suit or proceeding to
which the Company is or will be a party before or by any court or
governmental agency or body, which (A) might result in any material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company or (B)
might materially and adversely affect the property or assets of the
Company or (C) concerns the Company and is required to be disclosed in
the Registration Statement or the Prospectus, or (D) could adversely
affect the consummation of this Agreement and the issuance, purchase
and sale of the Notes. No contract or other document is required to be
described in the Registration Statement or in the Prospectus or to be
filed as an exhibit to the Registration Statement that is not described
therein or filed as required.
(xiv) The execution, delivery and performance by the Company
of this Agreement, the issuance, offering and sale by the Company of
the Notes as contemplated by the Registration Statement and by the
Prospectus and the consummation of the transactions contemplated hereby
and compliance with the terms and provisions hereof, will not violate
or conflict with or constitute a breach of any of the terms or
provisions of, or a default under, (i) the Amended and Restated
Declaration of Trust (the "Declaration of Trust") or the By-laws of the
Company or the charter or by-laws or other organizational documents of
any subsidiaries of the Company, (ii) any agreement, indenture or other
instrument to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or their respective
properties or assets is bound, or (iii) any laws, administrative
regulations or rulings or decrees to which the Company or any of its
subsidiaries or their respective properties or assets may be subject.
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(xv) No consent, approval, authorization or order of, or
registration, filing or qualification with, any governmental body or
regulatory agency having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties or assets is
required for the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby,
including, without limitation, the issuance, sale and delivery of the
Notes pursuant to this Agreement, except such as have been obtained and
such as may be required under foreign and state securities or "Blue
Sky" or real estate syndication laws.
(xvi) Except as otherwise disclosed in the Registration
Statement or in the Prospectus, the Company and each of its
subsidiaries has good and marketable title or ground leases, free and
clear of all liens, claims, encumbrances and restrictions, except liens
for taxes not yet due and payable and other liens and encumbrances
which do not, either individually or in the aggregate, materially and
adversely affect the current use or value thereof, to all property and
assets described in the Registration Statement or in the Prospectus as
being owned by them. Except as otherwise set forth in the Registration
Statement or in the Prospectus, all leases to which the Company and
each of its subsidiaries is a party relating to real property, and all
other leases which are material to the business of the Company and its
subsidiaries, taken as a whole, are valid and binding, and no default
(to the Company's knowledge, in the case of leases to which the Company
is a party as lessor, that would, individually or in the aggregate,
have a material adverse effect on the business, operations, earnings,
prospects, properties or condition (financial or otherwise) of the
Company and its subsidiaries, taken as a whole) has occurred and is
continuing thereunder, and the Company and each of its subsidiaries
enjoys peaceful and undisturbed possession under all such leases to
which it is a party as lessee. With respect to all properties owned or
leased by the Company and each of its subsidiaries, the Company or such
subsidiary has such documents, instruments, certificates, opinions and
assurances, including without limitation, fee, leasehold owners or
mortgage title insurance policies (disclosing no encumbrances or title
exceptions which are material to the Company and its subsidiaries
considered as a whole, except as otherwise set forth in the
Registration Statement and in the Prospectus), legal opinions and
property insurance policies in each case in form and substance as are
usual and customary in transactions involving the purchase of similar
real estate and are appropriate for the Company or such subsidiary to
have obtained.
(xvii) The Company and each of its subsidiaries owns, or
possesses adequate rights to use, all patents, trademarks, trade names,
service marks, copyrights, licenses and other rights necessary for the
conduct of their respective businesses as described in the Registration
Statement and in the Prospectus, and neither the Company nor any of its
subsidiaries has received any notice of conflict with, or infringement
of, the asserted rights of others with respect to any such patents,
trademarks, trade names, service marks, copyrights, licenses and other
such rights (other than conflicts or infringements that, if proven,
would not have a material adverse effect on the business, operations,
earnings, prospects, properties or condition (financial or otherwise)
of the Company and its subsidiaries, taken as a whole), and neither the
Company nor any of its subsidiaries knows of any basis therefor.
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(xviii) All material tax returns required to be filed by the
Company and each of its subsidiaries in any jurisdiction have been
timely filed, other than those filings being contested in good faith,
and all material taxes, including withholding taxes, penalties and
interest, assessments, fees and other charges due pursuant to such
returns or pursuant to any assessment received by the Company or any of
its subsidiaries have been paid, other than those being contested in
good faith and for which adequate reserves have been provided.
(xix) Except for those matters which in the aggregate do not
have a material adverse effect on the business, operations, earnings,
prospects, properties or condition (financial or otherwise) of the
Company and its subsidiaries taken as a whole, and except for Hazardous
Materials (as defined below) or substances which are handled and/or
disposed of in compliance with all applicable federal, state and local
requirements, to the Company's knowledge, after due investigation, the
real property owned, leased or otherwise operated by the Company and
each of its subsidiaries in connection with the operation of their
respective businesses, including, without limitation, any subsurface
soils and ground water (the "Realty"), is free of contamination from
any Hazardous Materials. To the Company's knowledge, after due
investigation, the Realty does not contain any underground storage or
treatment tanks, active or abandoned water, gas or oil wells, or any
other underground improvements or structures, other than the
foundations, footings, or other supports for the improvements located
thereon which, based on present knowledge, could, in their present
condition, reasonably be expected to presently cause a material
detriment to or materially impair the beneficial use thereof by the
Company or constitute or cause a significant health, safety or other
environmental hazard to occupants or users thereof without regard to
any special conditions of such occupants or users. The Company
represents that, after due investigation, it has no knowledge of any
material violation, with respect to the Realty, of any Environmental
Law, or of any material liability on the part of the Company with
respect to the Realty, resulting from the presence, use, release,
threatened release, emission, disposal, pumping, discharge, generation
or processing of any Hazardous Materials. As used herein,
"Environmental Law" means any federal, state or local statute,
regulation, judgment, order or authorization relating to emissions,
discharges, releases or threatened releases of Hazardous Materials into
ambient air, surface water, ground water, publicly-owned treatment
works, septic systems or land, or otherwise relating to the pollution
or protection of public health or the environment, and "Hazardous
Materials" means any substance, material or waste which is regulated,
defined, or listed as a "hazardous waste", "hazardous substance",
"toxic substance", "medical waste", "infectious waste" or other similar
terms in any Environmental Law or by any federal, state or local
government or quasigovernment authority, or any petroleum products,
asbestos, leadbased paint, polychlorinated biphenyls, flammable
explosives or radioactive materials.
(xx) Each of the Company and its subsidiaries has such
permits, licenses, franchises and authorizations of governmental or
regulatory authorities (together, "permits"), including, without
limitation, under any applicable Environmental Law, as are necessary to
own, lease and operate its properties and to engage in the business
currently conducted by it, except such licenses and permits as to which
the failure to own or possess will not in the aggregate have a material
adverse effect on the business,
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operations, earnings, prospects, properties or condition (financial or
otherwise) of the Company, and the Company does not have any reason to
believe that any governmental body or agency is considering limiting,
suspending or revoking any such license, certificate, permit,
authorization, approval, franchise or right; each of the Company and
its subsidiaries has fulfilled and performed all of its material
obligations with respect to such permits, and no event has occurred
which allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other material impairment of
the rights of the holder of any such permit; and, except as described
in the Registration Statement and in the Prospectus, such permits
contain no restrictions that are materially burdensome to the Company
or any of its subsidiaries.
(xxi) To the knowledge of the Company, no labor problem exists
or is imminent with employees of the Company or any of its subsidiaries
that could have a material adverse effect on the business, operations,
earnings, prospects, properties or condition (financial or otherwise)
of the Company and its subsidiaries, taken as a whole.
(xxii) Neither the Company nor any of its subsidiaries nor, to
the knowledge of the Company, any officer, trustee or director
purporting to act on behalf of the Company or any of its subsidiaries,
has at any time: (i) made any contributions to any candidate for
political office, or failed to disclose fully any such contributions,
in violation of law; (ii) made any payment of funds to, or received or
retained any funds from, any state, federal or foreign governmental
officer or official, or other person charged with similar public or
quasipublic duties, other than payments required or allowed by
applicable law; or (iii) engaged in any transactions, maintained any
bank accounts or used any corporate funds except for transactions, bank
accounts and funds, which have been and are reflected in the normally
maintained books and records of the Company and its subsidiaries.
(xxiii) All of the outstanding shares of beneficial interest
of, or other ownership interests in, each of the Company's subsidiaries
have been duly authorized and validly issued and are fully paid and,
except as to subsidiaries that are partnerships, nonassessable, and,
except as disclosed in the Registration Statement or in the Prospectus,
are or will be owned by the Company free and clear of any security
interest, claim, lien, encumbrance or adverse interest of any nature.
(xxiv) Except as referred to or described in the Registration
Statement and in the Prospectus, none of the subsidiaries of the
Company owns any shares of stock or any other securities of any
corporation or has any equity interest in any firm, partnership,
association or other entity other than the issued capital shares of its
subsidiaries, and the Company does not own, directly or indirectly, any
shares of stock or any other securities of any corporation or have any
equity interest in any firm, partnership, association or other entity
other than the issued capital shares of its subsidiaries, except in
each case for noncontrolling positions acquired in the ordinary course
of business.
(xxv) Except as disclosed in the Registration Statement and in
the Prospectus, there are no material outstanding loans or advances or
material guarantees of indebtedness by the Company or any of its
subsidiaries to or for the benefit of any of the
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officers, trustees or directors of the Company or any of its
subsidiaries or any of the members of the families of any of them.
(xxvi) The Company and each of its subsidiaries maintains
insurance, duly in force, with insurers of recognized financial
responsibility; such insurance insures against such losses and risks as
are adequate in accordance with customary industry practice to protect
the Company and its subsidiaries and their respective businesses; and
neither the Company nor any such subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost
that would not materially and adversely affect the business,
operations, earnings, prospects, properties or condition (financial or
otherwise) of the Company and its subsidiaries, taken as a whole,
except as disclosed in or contemplated by the Registration Statement
and by the Prospectus.
(xxvii) Neither the Company nor any of its officers and
directors (as defined in the 1933 Act Regulations) has taken or will
take, directly or indirectly, prior to the termination of the offering
contemplated by this Agreement, any action designed to stabilize or
manipulate the price of any security of the Company, or which has
caused or resulted in, or which might in the future reasonably be
expected to cause or result in, stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Notes.
(xxviii) Neither the Company nor any of its subsidiaries is an
"investment company" or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the "1940
Act"), or an "investment adviser" as such term is defined in the
Investment Advisers Act of 1940, as amended.
(xxix) The Company is organized in conformity with the
requirements for qualification, and, as of the date hereof the Company
operates, and as of Closing Time the Company will operate, in a manner
that qualifies the Company as a "real estate investment trust" under
the Internal Revenue Code of 1986, as amended (the "Code"), and the
rules and regulations thereunder, for 1998 and subsequent years. The
Company qualified as a real estate investment trust under the Code for
each of its taxable years from 1987 through 1997.
(xxx) No default exists, and no event has occurred which, with
notice or lapse of time or both, would constitute a default in the due
performance and observance of any term, covenant or condition of any
indenture, mortgage, deed of trust, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or any of their
respective properties is bound or may be affected, except such defaults
which, singly or in the aggregate, would not have a material adverse
effect on the business, operations, earnings, prospects, properties or
condition (financial or otherwise) of the Company and its subsidiaries,
considered as a whole, except as disclosed in the Registration
Statement and in the Prospectus.
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(xxxi) Except as otherwise disclosed in the Prospectus, since
the respective dates as of which information is given in the
Prospectus, there has been no material adverse change in the business,
operations, earnings, prospects, properties or condition (financial or
otherwise) of REIT Management & Research, Inc. (the "Advisor"), whether
or not arising in the ordinary course of business, that would have a
material adverse effect on the Company and its subsidiaries, taken as a
whole. The Advisory Agreement, dated as of January 1, 1998 (the
"Advisory Agreement"), between the Company and the Advisor, has been
duly authorized, executed and delivered by the parties thereto and
constitutes the valid agreement of the parties thereto, enforceable in
accordance with its terms, except as limited by (a) the effect of
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer
or other similar laws relating to or affecting the rights or remedies
of creditors or (b) the effect of general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity
or at law).
(b) Any certificate signed by any officer of the Company or any of its
subsidiaries and delivered to the Underwriters or to counsel for the
Underwriters shall be deemed a representation and warranty by the Company to
each Underwriter as to the matters covered thereby.
Section 2. Sale and Delivery to the Underwriters; Closing.
(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company agrees to
sell to each Underwriter, severally and not jointly, and each Underwriter,
severally and not jointly, agrees to purchase from the Company, the Notes as set
forth in Schedule A.
(b) Payment of the purchase price for and delivery of the Notes shall
be made, subject to Section 9, at the offices of Sullivan & Worcester LLP, One
Post Office Square, Boston, Massachusetts 02109, or at such other place as shall
be agreed upon by the Underwriters and the Company, at 9:00 A.M. on the third
(fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given day)
business day (unless postponed in accordance with the provisions of Section 10
hereof) following the date of this Agreement, or such other time not later than
ten business days after such date as shall be agreed upon by the Underwriters
and the Company (such time and date of payment and delivery being herein called
"Closing Time"). Payment shall be made by wire transfer of immediately available
funds payable to the order of the Company against delivery to the Underwriters
of the Notes to be purchased by them. The Notes shall be in such authorized
denominations and registered in such names as the Underwriters may request in
writing at least one business day before Closing Time.
Section 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Immediately following the execution of this Agreement, the Company
will prepare a Prospectus Supplement setting forth the aggregate principal
amount of Notes covered thereby and their terms not otherwise specified in the
Prospectus, the Underwriters' names, the price at which the Notes are to be
purchased by the Underwriters from the Company, and such other information as
the Underwriters and the Company deem appropriate in connection with the
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offering of the Notes; and the Company will promptly transmit copies of the
Prospectus Supplement to the Commission for filing pursuant to Rule 424(b) of
the 1933 Act Regulations and will furnish to the Underwriters as many copies of
the Prospectus (including such Prospectus Supplement) as they shall reasonably
request.
(b) Until the termination of the initial offering of the Notes, the
Company will notify the Underwriters immediately, and confirm the notice in
writing, (i) of the effectiveness of any amendment to the Registration
Statement, (ii) of the transmittal to the Commission for filing of any
supplement or amendment to the Prospectus or any document to be filed pursuant
to the 1934 Act, (iii) of the receipt of any comments from the Commission with
respect to the Notes, (iv) of any request by the Commission for any amendment to
the Registration Statement or any amendment or supplement to the Prospectus with
respect to the Notes or for additional information relating thereto, and (v) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that
purpose. The Company will make every reasonable effort to prevent the issuance
of any such stop order and, if any stop order is issued, to obtain the lifting
thereof at the earliest possible moment.
(c) The Company will give the Underwriters notice of its intention to
file or prepare any posteffective amendment to the Registration Statement or any
amendment or supplement (including any document to be filed pursuant to the 1934
Act prior to the termination of the initial offering of the Notes) to the
Prospectus (including any revised prospectus which the Company proposes for use
by the Underwriters in connection with the offering of the Notes which differs
from the prospectus on file at the Commission at the time that the Registration
Statement becomes effective, whether or not such revised prospectus is required
to be filed pursuant to Rule 424(b) of the 1933 Act Regulations), will furnish
the Underwriters with copies of any such amendment or supplement a reasonable
amount of time prior to such proposed filing or use, as the case may be, and
will not file any such amendment or supplement or use any such prospectus to
which counsel for the Underwriters shall reasonably object.
(d) The Company will deliver to each of the Underwriters a conformed
copy of the Registration Statement as originally filed and of each amendment
thereto filed prior to the termination of the initial offering of the Notes
(including exhibits filed therewith or incorporated by reference therein and the
documents incorporated by reference into the Prospectus pursuant to Item 12 of
Form S3).
(e) The Company will furnish to the Underwriters, from time to time
during the period when the Prospectus is required to be delivered under the 1933
Act or the 1934 Act, such number of copies of the Prospectus (as amended or
supplemented) as the Underwriters may reasonably request for the purposes
contemplated by the 1933 Act, the 1933 Act Regulations, the 1934 Act or 1934 Act
Regulations.
(f) If any event shall occur as a result of which it is necessary, in
the opinion of counsel for the Underwriters, to amend or supplement the
Prospectus in order to make the Prospectus not misleading in the light of the
circumstances existing at the time it is delivered, the Company will either (i)
forthwith prepare and furnish to the Underwriters an amendment of or supplement
to the Prospectus or (ii) make an appropriate filing pursuant to Section 13, 14
or 15
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of the 1934 Act, in form and substance reasonably satisfactory to counsel for
the Underwriters, which will amend or supplement the Prospectus so that it will
not include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered, not misleading.
(g) The Company will endeavor in good faith, in cooperation with the
Underwriters, to qualify the Notes for offering and sale under the applicable
securities laws and real estate syndication laws of such states and other
jurisdictions of the United States as the Underwriters may designate; provided
that, in connection therewith, the Company shall not be required to qualify as a
foreign corporation or trust or to file any general consent to service of
process. In each jurisdiction in which the Notes have been so qualified the
Company will file such statements and reports as may be required by the laws of
such jurisdiction to continue such qualification in effect for so long as
required for the distribution of the Notes.
(h) The Company will make generally available to its security holders
as soon as reasonably practicable, but not later than 90 days after the close of
the period covered thereby, an earning statement of the Company (in form
complying with the provisions of Rule 158 of the 1933 Act Regulations) covering
a period of at least twelve months beginning not later than the first day of the
Company's fiscal quarter next following the effective date of the Registration
Statement. "Earning statement", "make generally available" and "effective date"
will have the meanings contained in Rule 158 of the 1933 Act Regulations.
(i) The Company will use the net proceeds received by it from the sale
of the Notes in the manner specified in the Prospectus under the caption "Use of
Proceeds" in all material respects.
(j) The Company currently intends to continue to elect to qualify as a
"real estate investment trust" under the Code, and use its best efforts to
continue to meet the requirements to qualify as a "real estate investment
trust".
(k) The Company will timely file any document which it is required to
file pursuant to the 1934 Act prior to the termination of the offering of the
Notes.
(l) The Company will not, between the date of this Agreement and the
termination of any trading restrictions or Closing Time, whichever is later,
with respect to the Notes, without your prior written consent, offer or sell,
grant any option for the sale of, or enter into any agreement to sell, any debt
securities of the Company with a maturity of more than one year (other than the
Notes which are to be sold pursuant to this Agreement and additional or expanded
commitments to participate in the Company's revolving line of credit) except as
may otherwise be provided in this Agreement.
Section 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation and filing of the Registration Statement as originally filed
and of each amendment thereto, (ii) the preparation and filing of this
Agreement, (iii) the preparation, issuance and delivery of the Notes to the
Underwriters, (iv) the fees and disbursements of counsel for the Company,
referred to in Section 5(b) hereof, and the Company's accountants, (v) the
qualification of the Notes under securities
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laws and real estate syndication laws in accordance with the provisions of
Section 3(g) hereof, including filing fees and the fee and disbursements of
counsel for the Company in connection therewith and in connection with the
preparation of any Blue Sky Survey, (vi) the printing and delivery to the
Underwriters of copies of the Registration Statement as originally filed and of
each amendment thereto, and of the Prospectus and any amendments or supplements
thereto, (vii) any fees charged by nationally recognized statistical rating
organizations for the rating of the Notes, (viii) the cost of printing or
reproducing and delivering to the Underwriters copies of any Blue Sky Survey,
(ix) the cost of providing any CUSIP or other identification numbers for the
Notes, and (x) the fees and expenses of any depositary in connection with the
Notes.
If this Agreement is terminated by the Underwriters in accordance with
the provisions of Section 5 or Section 9(a)(i), the Company shall reimburse the
Underwriters for all of their outofpocket expenses, including the reasonable
fees and disbursements of counsel for the Underwriters.
Section 5. Conditions of the Underwriters' Obligations. The obligations
of the Underwriters hereunder are subject to the accuracy of the representations
and warranties of the Company herein contained, to the performance by the
Company of its obligations hereunder, and to the following further conditions:
(a) At Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission. The price of the Notes and
any other information previously omitted from the effective Registration
Statement pursuant to Rule 415 of the 1933 Act Regulations shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) of the 1933 Act
Regulations within the prescribed time period, and prior to Closing Time the
Company shall have provided evidence satisfactory to the Underwriters of such
timely filing, or a posteffective amendment providing such information shall
have been filed and declared effective in accordance with the requirements of
the 1933 Act Regulations.
(b) At Closing Time the Underwriters shall have received the favorable
opinion, dated as of Closing Time, of Sullivan & Worcester LLP, counsel for the
Company, in form and substance satisfactory to counsel for the Underwriters, to
the effect that:
(i) The Company is a Maryland real estate investment trust
duly organized, validly existing and in good standing under the laws of
the State of Maryland; each of its Significant Subsidiaries (as defined
in Rule 102 of Regulation SX under the 1933 Act) has been duly
organized, is validly existing as a corporation or trust in good
standing under the laws of its jurisdiction of incorporation or
organization; each of the Company and its subsidiaries has the trust or
corporate (as applicable) power and authority to carry on its business
as described in the Registration Statement and in the Prospectus and to
own, lease and operate its properties; each of the Company and its
subsidiaries is duly qualified and is in good standing as a foreign
corporation or trust, as the case may be, authorized to do business in
each jurisdiction in which its ownership or leasing of property
requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
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(ii) All of the issued and outstanding shares of beneficial
interest of, or other ownership interests in, each of the Company's
subsidiaries have been duly authorized and validly issued and are fully
paid and, except as to subsidiaries that are partnerships,
nonassessable, and are owned by the Company free and clear of any
security interest or other adverse interest (within the meaning of
Article 8 of the Massachusetts Uniform Commercial Code).
(iii) The Company has the requisite trust power and authority
to enter into and perform this Agreement and to issue and deliver the
Notes.
(iv) This Agreement and the Indenture have been duly
authorized, executed and delivered by the Company.
(v) The Indenture is a valid and binding obligation of the
Company enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights generally and equitable principles; and the
Indenture has been duly qualified under the 1939 Act.
(vi) The Notes have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture
and delivered and paid for in accordance with the terms of this
Agreement, will be valid and binding obligations of the Company
enforceable in accordance with their terms subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights generally and equitable principles; and the
holders of the Notes are entitled to the benefit of the Indenture.
(vii) The execution, delivery and performance of this
Agreement, and the consummation of the transactions herein contemplated
will not conflict with or constitute a breach or violation of any of
the terms or provisions of, or constitute a default under, (A) the
Declaration of Trust or the By-laws of the Company or the charter or
by-laws or other organizational documents of any Significant Subsidiary
of the Company, (B) except as disclosed in the Prospectus, any material
agreement, indenture or other instrument to which the Company, or any
of its Significant Subsidiaries or their respective material properties
or assets is bound, or (C) any laws, administrative regulations or
rulings or decrees known to such counsel to which the Company, any of
its Significant Subsidiaries or their respective material properties or
assets may be subject.
(viii) No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any
federal, Massachusetts or Maryland court or public, governmental or
regulatory agency or body having jurisdiction over the Company or any
of its Significant Subsidiaries or any of their respective material
properties or assets is required for the Company's execution, delivery
and performance of this Agreement and the consummation of the
transactions contemplated hereby, including, without limitation, the
issuance, sale and delivery of the Notes pursuant to this Agreement,
except such as have been obtained and such as may be required under
foreign and state securities or "Blue Sky" laws.
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(ix) The Registration Statement has become effective under the
1933 Act, and, to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission; and any required filing of the Prospectus
pursuant to Rule 424 under the 1933 Act has been made in accordance
with said Rule 424.
(x) To such counsel's knowledge, except as disclosed in the
Registration Statement or in the Prospectus, there is not now pending
or threatened, any litigation, action, suit or proceeding to which the
Company or any of its subsidiaries is or will be a party before or by
any court or governmental agency or body, which (A) might result in any
material adverse change in the condition, financial or otherwise, or in
the business, operations, earnings, prospects or properties of the
Company and its subsidiaries, taken as a whole, or (B) might materially
and adversely affect the property or assets of the Company and its
subsidiaries, taken as a whole, or (C) concerns the Company or any of
its subsidiaries and is required to be disclosed in the Prospectus, or
(D) could adversely affect the consummation of this Agreement and the
issuance of the Notes; to such counsel's knowledge, no contract or
other document is required to be described in the Registration
Statement or in the Prospectus or to be filed as an exhibit to the
Registration Statement that is not described therein or filed as
required.
(xi) Except as otherwise disclosed in the Prospectus, to such
counsel's knowledge, neither the Company nor any of its subsidiaries is
in violation of its respective charter or by-laws or other
organizational documents or in default in the performance of any
obligation, agreement or condition contained in any bond, debenture,
note or any other evidence of indebtedness or in any other material
agreement, indenture or instrument to which the Company or any of its
subsidiaries is a party or by which any of their respective properties
or assets may be bound or affected, except for any such violation that
would not have a material adverse effect on the business, operations,
earnings, business prospects, properties or condition (financial or
otherwise) of the Company and its subsidiaries taken as a whole.
(xii) To such counsel's knowledge, each of the Company and its
subsidiaries has such permits, licenses, franchises and authorizations
of governmental or regulatory authorities (together, "permits"),
including, without limitation, under any applicable Environmental Law,
as are necessary to own, lease and operate its properties and to engage
in the business currently conducted by it, except such licenses and
permits as to which the failure to own or possess will not in the
aggregate have a material adverse effect on the business, operations,
earnings, business prospects, properties or condition (financial or
otherwise) of the Company and its subsidiaries, taken as a whole.
(xiii) The Registration Statement and the Prospectus and any
supplements or amendments thereto (except for the financial statements
and the notes thereto and the schedules and other financial and
statistical data included therein and the Excluded Proceedings (as
defined in paragraph (xx) below), as to which such counsel need not
express any opinion) comply as to form in all material respects with
the requirements of the 1933 Act.
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<PAGE>
(xiv) Each document incorporated by reference in the
Registration Statement and in the Prospectus (except for the financial
statements and the notes thereto and the schedules and other financial
and statistical data included therein and the Excluded Proceedings, as
to which such counsel need not express any opinion) complied as to form
when filed with the Commission in all material respects with the
requirements of the 1934 Act.
(xv) To the extent required to be described therein, the Notes
conform in all material respects to the descriptions in the
Registration Statement and the Prospectus.
(xvi) The statements (a) in the Prospectus under the captions
"Description of Debt Securities", "Description of the Notes",
"Description of Shares", "Redemption; Business Combinations and Control
Share Acquisitions," "Limitation of Liability; Shareholder Liability"
and "Federal Income Tax and ERISA Considerations" and (b) in Item 1 of
the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 under the captions "Regulation and Reimbursement,"
"Federal Income Tax Considerations" and "ERISA Plans, Keogh Plans and
Individual Retirement Accounts" in each case insofar as they purport to
summarize matters arising under Massachusetts or Maryland law or the
federal law of the United States, or provisions of documents to which
the Company is a party specifically referred to therein, are accurate
summaries of such legal matters or provisions.
(xvii) The Company has qualified to be taxed as a real estate
investment trust pursuant to Sections 856860 of the Code for each of
the fiscal years ended December 31, 1987 through December 31, 1997, and
the Company's current anticipated investments and its current plan of
operation will enable it to continue to meet the requirements for
qualification and taxation as a real estate investment trust under the
Code; actual qualification of the Company as a real estate investment
trust, however, will depend upon the Company's continued ability to
meet, and its meeting, through actual annual operating results and
distributions, the various qualification tests imposed under the Code.
(xviii) The Company is not required to register as an
"investment company" within the meaning of the 1940 Act.
(xix) The Advisor (A) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware,
and (B) has the requisite corporate power and authority to conduct its
business as described in the Prospectus and to own and operate its
material properties.
(xx) The Advisory Agreement has been duly authorized, executed
and delivered by the parties thereto and constitutes the valid
agreement of the parties thereto, enforceable in accordance with its
terms, except (a) as limited by the effect of bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or other similar laws
relating to or affecting the rights or remedies of creditors, (b) as
limited by the effect of general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law) and
(c) insofar as the enforceability of the indemnity and
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contribution provisions contained in such agreement may be limited by
federal or state securities laws and the public policy underlying such
laws.
(xxi) Although counsel has not undertaken, except as otherwise
indicated in their opinion, to determine independently, and does not
assume any responsibility for, the accuracy or completeness of the
statements in the Registration Statement, such counsel has participated
in the preparation of the Registration Statement and the Prospectus,
including review and discussion of the contents thereof (including
review and discussion of the contents of all documents incorporated by
reference in the Registration Statement and the Prospectus), and
nothing has come to the attention of such counsel that has caused them
to believe that the Registration Statement (including the documents
incorporated by reference therein) at the time the Registration
Statement became effective, or the Prospectus, as of its date and as of
Closing Time, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or
that any amendment or supplement to the Prospectus, as of its
respective date, and as of Closing Time, as the case may be, contained
any untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading (it being
understood that such counsel need express no view with respect to (a)
the financial statements and the notes thereto and the schedules and
other financial and statistical data included or incorporated by
reference in the Registration Statement or in the Prospectus or (b) the
proceedings referred to in Item 3 of the Company's Annual Report on
Form 10K for the fiscal year ended December 31, 1997 under the caption
"Legal Proceedings" and any claims related thereto (collectively, the
"Excluded Proceedings").
In rendering their opinion as aforesaid, Sullivan & Worcester LLP may
rely upon an opinion, dated as of Closing Time, of Piper & Marbury L.L.P. as to
matters governed by Maryland law, provided that such reliance is expressly
authorized by such opinion and a copy of such opinion is delivered to the
Underwriters and is, in form and substance, satisfactory to the Underwriters and
counsel for the Underwriters. In addition, in rendering such opinion, such
counsel may state that their opinion as to laws of the State of Delaware is
limited to the Delaware General Corporation Law and that their opinion with
respect to the qualification of the Company and its subsidiaries to do business
in jurisdictions other than their respective jurisdictions of organization is
based solely upon certificates to such effect issued by an appropriate official
of the applicable jurisdictions.
The opinion of Piper & Marbury L.L.P. described in the paragraph above
shall be rendered to the Underwriters at the request of the Company and shall so
state therein.
In addition, the Underwriters shall have received at Closing Time an
opinion (satisfactory to the Underwriters and counsel for the Underwriters) of
Sherin & Lodgen LLP, special counsel for the Company, dated as of Closing Time,
to the effect that the statements describing the proceedings in Item 3 of the
Company's Annual Report on Form 10K for the fiscal year ended December 31, 1997
under the caption "Legal Proceedings", insofar as they purport to summarize
legal proceedings, constitute a fair summary of such legal proceedings.
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(c) The Underwriters shall have received at Closing Time an opinion,
dated as of Closing Time, of Brown & Wood LLP, counsel for the Underwriters, as
to the matters referred to in clauses (iv), (v), (vi), (ix), (xiii), (xv) and
(xxi) of the foregoing paragraph (b). In giving such opinion with respect to the
matters covered by clause (xxi), such counsel may state that their opinion and
belief are based upon their participation in the preparation of the Registration
Statement and the Prospectus and any amendments or supplements thereto and
review and discussion of the contents thereof, but are without independent check
or verification except as specified.
In rendering their opinion as aforesaid, Brown & Wood LLP may rely upon
an opinion, dated as of Closing Time, of Piper & Marbury L.L P. as to matters
governed by Maryland law, and the opinion of Sullivan & Worcester LLP referred
to above as to matters governed by Massachusetts law. In addition, in rendering
such opinion, such counsel may state that their opinion as to laws of the State
of Delaware is limited to the Delaware General Corporation Law.
(d) At Closing Time (i) the Registration Statement and the Prospectus
shall contain all statements which are required to be stated therein in
accordance with the 1933 Act and the 1933 Act Regulations and in all material
respects shall conform to the requirements of the 1933 Act and the 1933 Act
Regulations, and neither the Registration Statement nor the Prospectus shall
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading and no action, suit or proceeding at law or in equity shall be
pending or to the knowledge of the Company threatened against the Company which
would be required to be set forth in the Prospectus other than as set forth
therein, (ii) there shall not have been, since the respective dates as of which
information is given in the Registration Statement and the Prospectus, any
material adverse change in the condition, financial or otherwise, of the Company
or in its earnings, business affairs or business prospects, whether or not
arising in the ordinary course of business from that set forth in the
Registration Statement, and (iii) no proceedings shall be pending or, to the
knowledge of the Company, threatened against the Company before or by any
federal, state or other commission, board or administrative agency wherein an
unfavorable decision, ruling or finding would materially and adversely affect
the business, property, financial condition or income of the Company other than
as set forth in the Prospectus; and the Underwriters shall have received, at
Closing Time, a certificate of the President and Chief Operating Officer and the
chief financial officer of the Company, dated as of Closing Time, evidencing
compliance with the provisions of this subsection (d) and stating that the
representations and warranties set forth in Section 1(a) hereof are accurate as
though expressly made at and as of Closing Time.
(e) At Closing Time, there shall not have been, since the respective
dates as of which information is given in the Registration Statement and the
Prospectus, any material adverse change in the business, operations, earnings,
prospects, properties or condition (financial or otherwise) of the Advisor,
whether or not arising in the ordinary course of business; and the Underwriters
shall have received, at Closing Time, a certificate of the President of the
Advisor evidencing compliance with this subsection (e).
(f) Concurrently with the execution and delivery of this Agreement, and
at Closing Time prior to payment and delivery of the Notes, Ernst & Young LLP
shall have furnished to the Underwriters a letter, dated the date of its
delivery, addressed to the Underwriters and in form
18
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and substance satisfactory to the Underwriters, confirming that they are
independent accountants with respect to the Company as required by the 1933 Act
and the 1933 Act Regulations and with respect to the financial and other
statistical and numerical information contained in the Registration Statement
and the Prospectus or incorporated by reference therein. Each such letter shall
contain information of the type customarily included in accountants' comfort
letters to underwriters.
(g) At Closing Time counsel for the Underwriters shall have been
furnished with such documents and opinions as they may reasonably require for
the purpose of enabling them to pass upon the issuance and sale of the Notes as
herein contemplated and related proceedings, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Notes as herein contemplated shall
be reasonably satisfactory in form and substance to the Underwriters and counsel
for the Underwriters.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Underwriters by notice to the Company at any time at or prior to Closing
Time, and such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof.
Section 6. Indemnification. (a) The Company hereby agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls each
Underwriter within the meaning of Section 15 of the 1933 Act as follows:
(1) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out of any
untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any amendment
thereto), or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material
fact included in any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto), or the omission, or
alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading:
(2) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of
the aggregate amount paid in settlement of any litigation, or
any investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is
effected with the written consent of the Company; and
(3) against any and all expense whatsoever, as
incurred (including, subject to Section 6(c) hereof, the fees
and disbursements of counsel chosen by Merrill Lynch),
reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceedings by
any governmental
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agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission,
or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under paragraph (1)
or (2) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto); and provided, further, that the foregoing indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter, or the benefit of any person controlling any
Underwriter, if a copy of the Prospectus (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto and excluding
documents incorporated or deemed to be incorporated by reference therein) was
not sent or given by or on behalf of such Underwriter to such person asserting
any such losses, claims, damages or liabilities at or prior to the written
confirmation of the sale of such Notes to such person, if required by law so to
have been delivered, and if the Prospectus (as so amended or supplemented) would
have cured the defect giving rise to such loss, claim, damage or expense.
(a) Each Underwriter agrees to indemnify and hold harmless the Company,
each of the Company's trustees, each of the Company's officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section 6, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through Merrill Lynch expressly for
use in the Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto).
(b) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
Section 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company and the
Underwriters shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity
20
<PAGE>
agreement incurred by the Company and the Underwriters, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the offering
of the Notes pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Notes
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Notes pursuant to
this Agreement (before deducting expenses) received by the Company and the total
discount received by the Underwriters, bear to the aggregate initial offering
price of the Notes.
The relative fault of the Company on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. Notwithstanding the
provisions of this Section 7, the Underwriters shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Notes purchased from the Company by the Underwriters and distributed to the
public were offered to the public exceeds the amount of any damages which the
Underwriters have otherwise been required to pay in respect of such losses,
liabilities, claims, damages and expenses. For purposes of this Section 7, each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such Underwriter, and
each trustee of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as the Company.
21
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Section 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Underwriters or any controlling
person, or by or on behalf of the Company, and shall survive delivery of the
Notes to the Underwriters.
Section 9. Termination of Agreement. (a) The Underwriters may terminate
this Agreement, by notice to the Company, at any time at or prior to Closing
Time (i) if there has been, since the respective dates as of which information
is given in the Registration Statement, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company or the Advisor, whether or not arising in the
ordinary course of business, which would make it, in the Underwriters'
reasonable judgment, impracticable or inadvisable to market the Notes or enforce
contracts for the sale of the Notes, (ii) if there has occurred any material
adverse change in the financial markets in the United States or any outbreak of
hostilities or escalation of existing hostilities or other calamity or crisis
the effect of which on the financial markets of the United States is such as to
make it, in the Underwriters' reasonable judgment, impracticable or inadvisable
to market the Notes or enforce contracts for the sale of the Notes, or (iii) if
trading in the Company's Common Shares has been suspended by the Commission, or
if trading generally on either the New York Stock Exchange or the American Stock
Exchange has been suspended, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices for securities have been required, by either
of said exchanges or by order of the Commission or any other governmental
authority, or if a banking moratorium has been declared by Federal or New York
authorities.
(b) If this Agreement is terminated pursuant to this Section 9, such
termination shall be without liability of any party to any other party except as
provided in Section 4, and provided further that Sections 6 and 7 hereof shall
survive such termination.
Section 10. Default. If one or more of the Underwriters shall fail at
Closing Time to purchase the Notes which it or they are obligated to purchase
under this Agreement (the "Defaulted Notes"), the Underwriters shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Notes in such amounts as may be agreed upon and
upon the terms herein set forth; if, however, the Underwriters shall not have
completed such arrangements within such 24-hour period, then:
(i) if the total principal amount of Defaulted Notes does not
exceed 10% of the Notes to be purchased pursuant to this Agreement, the
non-defaulting Underwriters shall be obligated to purchase the full
amount thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all
non-defaulting Underwriters, or
(ii) if the total principal amount of Defaulted Notes exceeds
10% of the Notes to be purchased pursuant to this Agreement, this
Agreement shall terminate without liability on the part of any
non-defaulting Underwriter and the Company.
22
<PAGE>
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Underwriters or the Company shall have the right
to postpone Closing Time for a period not exceeding seven days in order to
effect any required changes in the Prospectus or in any other documents or
arrangements.
Section 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Underwriters in c/o Merrill Lynch, Pierce,
Fenner & Smith Incorporated at World Financial Center, North Tower, 250 Vesey
Street, New York, NY 10281-1326, Attention: Tjarda van S. Clagett, Director; and
notices to the Company shall be directed to it at 400 Centre Street, Newton,
Massachusetts 02158, Attention: David J. Hegarty, President.
Section 12. Parties. This Agreement shall inure to the benefit of and
be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than those
referred to in Sections 6 and 7 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
parties hereto and thereto and their respective successors and said controlling
persons and officers, trustees and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Notes from any Underwriter shall be deemed to be a successor by
reason merely of such purchase.
Section 13. Governing Law and Time; Miscellaneous. This Agreement shall
be governed by and construed in accordance with the laws of the State of New
York applicable to agreements made and to be performed in said State. Specified
times of day refer to New York City time.
THE AMENDED AND RESTATED DECLARATION OF TRUST ESTABLISHING THE COMPANY,
DATED JULY 1, 1994, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE
"DECLARATION"), IS DULY FILED IN THE OFFICE OF THE STATE DEPARTMENT OF
ASSESSMENTS AND TAXATION OF MARYLAND, PROVIDES THAT THE NAME "HRPT PROPERTIES
TRUST" REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES,
BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER,
EMPLOYEE OR AGENT OF THE COMPANY SHALL BE HELD TO ANY PERSONAL LIABILITY,
JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, THE COMPANY. ALL
PERSONS DEALING WITH THE COMPANY, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF
THE COMPANY FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
23
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
Very truly yours,
HRPT PROPERTIES TRUST
By /s/ Ajay Saini
Name: Ajay Saini
Title: Treasurer and Chief Financial Officer
CONFIRMED AND ACCEPTED, as of the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MORGAN STANLEY & CO. INCORPORATED
SALOMON BROTHERS INC
By: MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By /s/ Tjarda Claget
Name: Tjarda Claget
Title:
Acting on behalf of themselves and
the other named Underwriters in Schedule A
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<PAGE>
SCHEDULE A
Underwriter Aggregate Principal
Amount of Notes
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................... $112,000,000
Donaldson, Lufkin & Jenrette
Securities Corporation.................................... 16,000,000
Morgan Stanley & Co. Incorporated.............................. 16,000,000
Salomon Brothers Inc........................................... 16,000,000
------------
Total.......................................... $160,000,000
============
EXHIBIT 4.1
SUPPLEMENTAL INDENTURE NO. 4
by and between
HRPT PROPERTIES TRUST
and
STATE STREET BANK AND TRUST COMPANY
as of August 26, 1998
SUPPLEMENTAL TO THE INDENTURE DATED AS OF JULY 9, 1997
------------------------------------
HRPT PROPERTIES TRUST
$160,000,000 6 7/8% Senior Notes due 2002
<PAGE>
This SUPPLEMENTAL INDENTURE NO. 4 (this "Supplemental Indenture") made
and entered into as of August 26, 1998 between HRPT PROPERTIES TRUST, a Maryland
real estate investment trust (the "Company"), and STATE STREET BANK AND TRUST
COMPANY, a Massachusetts trust company, as Trustee (the "Trustee").
WITNESSETH THAT:
WHEREAS, the Company and the Trustee have executed and delivered an
Indenture dated as of July 9, 1997 (the "Indenture"), relating to the Company's
issuance, from time to time, of various series of debt securities; and
WHEREAS, the Company has determined to issue debt securities known as
its $160,000,000 6 7/8% Senior Notes due 2002; and
WHEREAS, the Indenture provides that certain terms and conditions for
each series of debt securities issued by the Company thereunder may be set forth
in an indenture supplemental to the Indenture;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
ARTICLE 1
DEFINED TERMS
Section 1.1 The following definitions supplement, and, to the extent
inconsistent with, replace the definitions in Section 101 of the Indenture:
"Acquired Debt" means Debt of a Person (i) existing at the time such
Person becomes a Subsidiary or (ii) assumed in connection with the acquisition
of assets from such Person, in each case, other than Debt incurred in connection
with, or in contemplation of, such Person's becoming a Subsidiary or such
acquisition. Acquired Debt shall be deemed to be incurred on the date of the
related acquisition of assets from any Person or the date the acquired Person
becomes a Subsidiary.
"Annual Debt Service" as of any date means the maximum amount which is
expensed in any 12-month period for interest on Debt of the Company and its
Subsidiaries.
"Business Day" means any day other than a Saturday or Sunday or a day
on which banking institutions in The City of New York or in the city in which
the Corporate Trust Office of the Trustee is located, are required or authorized
to close.
"Capital Stock" means, with respect to any Person, any capital stock
(including preferred stock), shares, interests, participation or other ownership
interests (however designated) of such Person and any rights (other than debt
securities convertible into or exchangeable for capital stock), warrants or
options to purchase any thereof.
"Consolidated Income Available for Debt Service" for any period means
Earnings from Operations of the Company and its Subsidiaries plus amounts which
have been deducted, and minus amounts which have been added, for the following
(without duplication): (i) interest on Debt of the Company and its Subsidiaries,
(ii) provision for taxes of the Company and its Subsidiaries based on income,
(iii) amortization of debt discount and deferred financing costs, (iv)
provisions for gains and losses on properties and property depreciation and
amortization, (v) the effect of any noncash charge resulting from a change in
accounting principles in determining Earnings from Operations for such period
and (vi) amortization of deferred charges.
<PAGE>
"Debt" of the Company or any Subsidiary means, without duplication, any
indebtedness of the Company or any Subsidiary, whether or not contingent, in
respect of (i) borrowed money or evidenced by bonds, notes, debentures or
similar instruments, (ii) indebtedness for borrowed money secured by any
Encumbrance existing on property owned by the Company or any Subsidiary, (iii)
the reimbursement obligations, contingent or otherwise, in connection with any
letters of credit actually issued (other than letters of credit issued to
provide credit enhancement or support with respect to other indebtedness of the
Company or any Subsidiary otherwise reflected as Debt hereunder) or amounts
representing the balance deferred and unpaid of the purchase price of any
property or services, except any such balance that constitutes an accrued
expense or trade payable, or all conditional sale obligations or obligations
under any title retention agreement, (iv) the principal amount of all
obligations of the Company or any Subsidiary with respect to redemption,
repayment or other repurchase of any Disqualified Stock, or (v) any lease of
property by the Company or any Subsidiary as lessee which is reflected on the
Company's consolidated balance sheet as a capitalized lease in accordance with
GAAP, to the extent, in the case of items of indebtedness under (i) through
(iii) above, that any such items (other than letters of credit) would appear as
a liability on the Company's consolidated balance sheet in accordance with GAAP,
and also includes, to the extent not otherwise included, any obligation by the
Company or any Subsidiary to be liable for, or to pay, as obligor, guarantor or
otherwise (other than for purposes of collection in the ordinary course of
business), Debt of another Person (other than the Company or any Subsidiary) (it
being understood that Debt shall be deemed to be incurred by the Company or any
Subsidiary whenever the Company or such Subsidiary shall create, assume,
guarantee or otherwise become liable in respect thereof).
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which by the terms of such Capital Stock (or by the terms
of any security into which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise (i) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise
(other than Capital Stock which is redeemable solely in exchange for common
stock or shares), (ii) is convertible into or exchangeable or exercisable for
Debt or Disqualified Stock, or (iii) is redeemable at the option of the holder
thereof, in whole or in part (other than Capital Stock which is redeemable
solely in exchange for common stock or shares), in each case on or prior to the
Stated Maturity of the Notes.
"Earnings from Operations" for any period means net earnings excluding
gains and losses on sales of investments, extraordinary items and property
valuation losses, as reflected in the financial statements of the Company and
its Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP.
"Encumbrance" means any mortgage, lien, charge, pledge or security
interest of any kind.
"Interest Payment Date" means any date on which interest is due and
payable on the Notes in accordance with the terms thereof.
"Issuance Date" means the closing date for the sale and original
issuance of the Notes.
"Make-Whole Amount" means, in connection with any optional redemption
or accelerated payment of any Note, the excess, if any, of (i) the aggregate
present value as of the date of such redemption or accelerated payment of each
dollar of principal being redeemed or paid and the amount of interest (exclusive
of interest accrued to the date of redemption or accelerated payment) that would
have been payable in respect of such dollar if such redemption or accelerated
payment had not been made, determined by discounting, on a semiannual basis,
such principal and interest at the Reinvestment Rate (determined on the third
Business Day preceding the date such notice of redemption is given or
declaration of acceleration is made) from the respective dates on which such
principal and interest would have been payable if such redemption or accelerated
payment had not been made, over (ii) the aggregate principal amount of the Notes
being redeemed
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<PAGE>
or paid. For purposes of this Supplemental Indenture and the Notes, references
in the Indenture to the payment of the principal (and premium, if any) and
interest on the Notes shall be deemed to include the payment of the Make-Whole
Amount, if any, due upon redemption with respect to the Notes.
"Notes" means the Company's $160,000,000 aggregate principal amount of
6 7/8% Senior Notes, due 2002, issued under this Indenture, as amended or
supplemented from time to time.
"Record Date" means the fifteenth calendar day, whether or not a
Business Day, next preceding the applicable Interest Payment Date.
"Reinvestment Rate" means a rate per annum equal to the sum of 0.25%
(twenty-five one hundredths of one percent) plus the yield on treasury
securities at constant maturity under the heading "Week Ending" published in the
Statistical Release under the caption "Treasury Constant Maturities" for the
maturity (rounded to the nearest month) corresponding to the remaining life to
maturity, as of the payment date of the principal being redeemed or paid. If no
maturity exactly corresponds to such maturity, yields for the two published
maturities most closely corresponding to such maturity shall be calculated
pursuant to the immediately preceding sentence and the Reinvestment Rate shall
be interpolated or extrapolated from such yields on a straight-line basis,
rounding in each of such relevant periods to the nearest month. For purposes of
calculating the Reinvestment Rate, the most recent Statistical Release published
prior to the date of determination of the Make-Whole Amount shall be used.
"SEC" means the Securities and Exchange Commission.
"Secured Debt" means Debt secured by any mortgage, lien, charge, pledge
or security interest of any kind.
"Securities Act" means the Securities Act of 1933, as amended.
"Statistical Release" means the statistical release designated "H.
15(519)" or any successor publication which is published weekly by the Federal
Reserve System and which establishes yields on actively traded United States
government securities adjusted to constant maturities or, if such statistical
release is not published at the time of any determination under this
Supplemental Indenture, then any publicly available source of similar market
data which shall be designated by the Company.
"Subsidiary" means any corporation or other entity of which a majority
of (i) the voting power of the voting equity securities or (ii) the outstanding
equity interests of which are owned, directly or indirectly, by the Company or
one or more other Subsidiaries of the Company. For the purposes of this
definition, "voting equity securities" means equity securities having voting
power for the election of directors, whether at all times or only so long as no
senior class of security has such voting power by reason of any contingency.
"Total Assets" as of any date means the sum of (i) the Undepreciated
Real Estate Assets and (ii) all other assets of the Company and its Subsidiaries
determined in accordance with GAAP (but excluding accounts receivable and
intangibles).
"Total Unencumbered Assets" means the sum of (i) those Undepreciated
Real Estate Assets not subject to an Encumbrance for borrowed money and (ii) all
other assets of the Company and its Subsidiaries not subject to an Encumbrance
for borrowed money determined in accordance with GAAP (but excluding accounts
receivable and intangibles).
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<PAGE>
"Undepreciated Real Estate Assets" as of any date means the cost
(original cost plus capital improvements) of real estate assets of the Company
and its Subsidiaries on such date, before depreciation and amortization
determined on a consolidated basis in accordance with GAAP.
"Unsecured Debt" means Debt which is not secured by any of the
properties of the Company or any Subsidiary.
ARTICLE 2
TERMS OF THE NOTES
Section 2.1 Pursuant to Section 301 of the Indenture, the Notes shall
have the following terms and conditions:
(a) Title; Limitation on Aggregate Principal Amount; Form of Notes. The
Notes shall be known as the Company's $160,000,000 6 7/8% Senior Notes due 2002.
The Notes will be limited to an aggregate principal amount of $160,000,000. The
Notes (together with the Trustee's certificate of authentication) shall be
substantially in the form of Exhibit A hereto, which is hereby incorporated in
and made a part of this Supplemental Indenture.
The Notes will be issued in the form of single fully registered global
security without coupons (the "Global Note") which will be deposited with, or on
behalf of, The Depository Trust Company ("DTC"), and registered in the name of
DTC's nominee, Cede & Co. Except under the circumstance described below, the
Notes will not be issuable in a definitive form. Unless and until it is
exchanged in whole or in part for the individual notes represented thereby, the
Global Note may not be transferred except as a whole by DTC to a nominee of DTC
or by a nominee of DTC to DTC or another nominee of DTC or by DTC or any nominee
of DTC to a successor depository or any nominee of such successor.
So long as DTC or its nominee is the registered owner of such Global
Note, DTC or such nominee, as the case may be, will be considered the sole owner
or holder of the Notes represented by such Global Note for all purposes under
this Supplemental Indenture. Except as described below, owners of beneficial
interest in Notes evidenced by the Global Note will not be entitled to have any
of the individual Notes represented by such Global Note registered in their
names, will not receive or be entitled to receive physical delivery of any such
Notes in definitive form and will not be considered the owners or holders
thereof under the Indenture or this Supplemental Indenture.
If DTC is at any time unwilling, unable or ineligible to continue as
depository and a successor depository is not appointed by the Company within 90
days, the Company will issue individual Notes in exchange for the Global Note
representing such Notes and the Trustee, upon receipt of an authentication order
pursuant to ss. 303 of the Indenture, shall authenticate and deliver such Notes.
In addition, the Company may at any time and in its sole discretion, subject to
certain limitations set forth in the Indenture, determine not to have any of
such Notes represented by one or more Global Notes and in such event will issue
individual Notes in exchange for the Global Note or Notes representing such debt
Securities. Individual Notes so issued will be issued in such names as DTC
should instruct and in denominations of $1,000 and integral multiples thereof
and will be issued in registered form only, without coupons.
(b) Principal Repayment; Currency. The Stated Maturity of the Notes is
August 26, 2002, provided, however, the Notes may be earlier redeemed at the
option of the Company as provided in paragraph (c) below. The principal of each
Note payable on its maturity date shall be paid against presentation and
surrender thereof at the Corporate Trust Office of the Trustee, located
initially at Two International Place,
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<PAGE>
Boston, Massachusetts 02110, in such coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public or
private debts. The Company will not pay Additional Amounts (as defined in the
Indenture) on the Notes.
(c) Redemption at the Option of the Company; Acceleration. The Notes
will be subject to redemption at any time at the option of the Company, in whole
or in part, upon not less than 30 nor more than 60 days' notice to each Holder
of Notes to be redeemed at its address appearing in the Security Register, at a
price equal to the sum of (i) the principal amount of the Notes being redeemed,
plus accrued and unpaid interest to but excluding the applicable redemption date
and (ii) the Make-Whole Amount. Upon the acceleration of the Notes in accordance
with Section 502 of the Indenture, the principal amount of the Notes, plus
accrued and unpaid interest thereon and the Make-Whole Amount shall become due
and payable immediately.
(d) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Company shall be directed
to it at 400 Centre Street, Newton, Massachusetts 02458, Attention: David J.
Hegarty, President; notices to the Trustee shall be directed to it at Two
International Place, Boston, Massachusetts 02110, Attention: Corporate Trust
Department, Re: HRPT Properties Trust 6 7/8% Senior Notes due 2002.
(e) Global Note Legend. The Global Note shall bear the following legend
on the face thereof:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
ARTICLE 3
ADDITIONAL COVENANTS
Section 3.1 In addition to the covenants of the Company set forth in
Article Ten of the Indenture, for the benefit of the holders of the Notes:
(a) Limitations on Incurrence of Debt.
(i) The Company will not, and will not permit any Subsidiary
to, incur any Debt if, immediately after giving effect to the
incurrence of such additional Debt and the application of the proceeds
thereof, the aggregate principal amount of all outstanding Debt of the
Company and its Subsidiaries on a consolidated basis determined in
accordance with GAAP is greater than 60% of the sum ("Adjusted Total
Assets") of (without duplication) (i) the Total Assets of the Company
and its Subsidiaries as of the end of the calendar quarter covered in
the Company's Annual Report on Form 10-K, or the Quarterly Report on
Form 10-Q, as the case may be, most recently filed with the Securities
and Exchange Commission (or, if such filing is not permitted under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), with
the Trustee) prior to the incurrence of such
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<PAGE>
additional Debt and (ii) the purchase price of any real estate assets
or mortgages receivable acquired, and the amount of any securities
offering proceeds received (to the extent that such proceeds were not
used to acquire real estate assets or mortgages receivable or used to
reduce Debt), by the Company or any Subsidiary since the end of such
calendar quarter, including those proceeds obtained in connection with
the incurrence of such additional Debt.
(ii) In addition to the foregoing limitations on the
incurrence of Debt, the Company will not, and will not permit any
Subsidiary to, incur any Secured Debt if, immediately after giving
effect to the incurrence of such additional Secured Debt and the
application of the proceeds thereof, the aggregate principal amount of
all outstanding Secured Debt of the Company and its Subsidiaries on a
consolidated basis is greater than 40% of Adjusted Total Assets.
(iii) In addition to the foregoing limitations on the
Incurrence of Debt, the Company will not, and will not permit any
Subsidiary to, incur any Debt if the ratio of Consolidated Income
Available for Debt Service to the Annual Debt Service for the four
consecutive fiscal quarters most recently ended prior to the date on
which such additional Debt is to be incurred shall have been less than
1.5x, on a pro forma basis after giving effect thereto and to the
application of the proceeds therefrom, and calculated on the assumption
that (i) such Debt and any other Debt incurred by the Company and its
Subsidiaries since the first day of such four-quarter period and the
application of the proceeds therefrom, including to refinance other
Debt, had occurred at the beginning of such period; (ii) the repayment
or retirement of any other Debt by the Company and its Subsidiaries
since the first date of such four-quarter period had been repaid or
retired at the beginning of such period (except that, in making such
computation, the amount of Debt under any revolving credit facility
shall be computed based upon the average daily balance of such Debt
during such period); (iii) in the case of Acquired Debt or Debt
incurred in connection with any acquisition since the first day of such
four-quarter period, the related acquisition had occurred as of the
first day of such period with appropriate adjustments with respect to
such acquisition being included in such pro forma calculation; and (iv)
in the case of any acquisition or disposition by the Company or its
Subsidiaries of any asset or group of assets since the first day of
such four-quarter period, whether by merger, stock purchase or sale, or
asset purchase or sale, such acquisition or disposition or any related
repayment of Debt had occurred as of the first day of such period with
the appropriate adjustments with respect to such acquisition or
disposition being included in such pro forma calculation.
(b) Maintenance of Total Unencumbered Assets. The Company and its
Subsidiaries will maintain Total Unencumbered Assets of not less than 200% of
the aggregate outstanding principal amount of the Unsecured Debt of the Company
and its Subsidiaries on a consolidated basis.
(c) Applicability of Discharge, Defeasance and Covenant Defeasance
Provisions. The Discharge, Defeasance and Covenant Defeasance provisions in
Article Fourteen of the Indenture will apply to the Notes.
ARTICLE 4
ADDITIONAL EVENTS OF DEFAULT
For purposes of this Supplemental Indenture and the Notes, in addition
to the Events of Default set forth in Section 501 of the Indenture, it shall
also constitute an "Event of Default" if an event of default under any bond,
debenture, note or other evidence of indebtedness of the Company (including an
event of default with respect to any other series of securities), or under any
mortgage, indenture or other instrument of the Company under which there may be
issued or by which there may be secured or evidenced any indebtedness of the
Company (or by any Subsidiary, the repayment of which the Company has guaranteed
or for which the
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Company is directly responsible or liable as obligor or guarantor), whether such
indebtedness now exists or shall hereafter be created, shall happen and shall
result in an aggregate principal amount exceeding $20,000,000 becoming or being
declared due and payable prior to the date on which it would otherwise have
become due and payable, without such indebtedness having been discharged, or
such acceleration having been rescinded or annulled, within a period of ten days
after there shall have been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the holders of at
least 25% in principal amount of the outstanding Notes, a written notice
specifying such default and requiring the Company to cause such indebtedness to
be discharged or cause such acceleration to be rescinded or annulled and stating
that such notice is a "Notice of Default" hereunder.
ARTICLE 5
EFFECTIVENESS
This Supplemental Indenture shall be effective for all purposes as of
the date and time this Supplemental Indenture has been executed and delivered by
the Company and the Trustee in accordance with Article Nine of the Indenture. As
supplemented hereby, the Indenture is hereby confirmed as being in full force
and effect.
ARTICLE 6
MISCELLANEOUS
Section 6.1 In the event any provision of this Supplemental Indenture
shall be held invalid or unenforceable by any court of competent jurisdiction,
such holding shall not invalidate or render unenforceable any other provision
hereof or any provision of the Indenture.
Section 6.2 To the extent that any terms of the Notes are inconsistent
with the terms of the Indenture, the terms of the Notes shall govern and
supersede such inconsistent terms.
Section 6.3 This Supplemental Indenture shall be governed by and
construed in accordance with the laws of The Commonwealth of Massachusetts.
Section 6.4 This Supplemental Indenture may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
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IN WITNESS WHEREOF, the Company and the Trustee have caused this
Supplemental Indenture to be executed as an instrument under seal in their
respective corporate names as of the date first above written.
HRPT PROPERTIES TRUST
By:
David J. Hegarty
President
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
Name:
Title:
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EXHIBIT A
(Face of Note)
6 7/8% Senior Notes due 2002
No. $__________
HRPT PROPERTIES TRUST
promises to pay to _______________________________________ or registered
assigns, the principal sum of _____________________________________ Dollars on
August 26, 2002.
Interest Payment Dates: February 26 and August 26.
Record Dates: February 11 and August 11.
CUSIP No.: 40426WAF8
HRPT PROPERTIES TRUST
By:______________________________
Name:
Title:
[SEAL]
Dated:
This is one of the Notes referred to in the within-mentioned Indenture:
STATE STREET BANK AND TRUST COMPANY, as Trustee
By:
Authorized Signatory
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<PAGE>
(Back of Note)
HRPT PROPERTIES TRUST
6 7/8% Senior Notes due 2002
Capitalized terms used herein have the meanings assigned to them in the
Indenture (as defined below) unless otherwise indicated.
1. Interest. HRPT Properties Trust, a Maryland real estate investment
trust (the "Company"), promises to pay interest on the principal amount of this
Note at the rate and in the manner specified below.
The Company shall pay in cash interest on the principal amount of this
Note at the rate per annum of 6 7/8%. The Company will pay interest
semi-annually in arrears on February 26 and August 26 of each year, commencing
on February 26, 1999 or if any such day is not a Business Day (as defined in the
Indenture), on the next succeeding Business Day (each an "Interest Payment
Date"), to Holders of record on the immediately preceding February 11 and August
11.
Interest will be computed on the basis of a 360-day year consisting of
twelve 30-day months. Interest shall accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of the
original issuance of the Notes.
2. Method of Payment. The Company will pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the record date next preceding the Interest Payment
Date, even if such Notes are canceled after such record date and on or before
such Interest Payment Date. The Company will pay principal and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. The Company, however, may pay principal, premium, if
any, and interest by check payable in such money. It may mail an interest check
to a Holder's registered address.
3. Indenture. The Company issued the Notes under an Indenture dated as
of July 9, 1997, as supplemented by a Supplemental Indenture dated as of August
26, 1998 (the "Indenture") between the Company and the Trustee. The terms of the
Notes include those stated in the Indenture and those made part of the Indenture
by reference to the Trust Indenture Act of 1939 (15 U.S. Code ss.ss.
77aaa-77bbbb) as in effect on the date of the Indenture. The Notes are subject
to all such terms, and Holders of the Notes are referred to the Indenture and
such act for a statement of such terms. The terms of the Indenture shall govern
any inconsistencies between the Indenture and the Notes. The Notes are unsecured
general obligations of the Company limited to $160,000,000 in aggregate
principal amount.
4. Optional Redemption. The Notes will be subject to redemption at any
time at the option of the Company, in whole or in part, upon not less than 30
nor more than 60 days' notice, at a redemption price equal to the sum of (i) the
principal amount of the Notes being redeemed, plus accrued and unpaid interest
to but excluding the applicable redemption date and (ii) the Make-Whole Amount.
As used herein the term "Make-Whole Amount" means, in connection with
any optional redemption or accelerated payment of any Note, the excess, if any,
of (i) the aggregate present value as of the date of such redemption or
accelerated payment of each dollar of principal being redeemed or paid and the
amount of interest (exclusive of interest accrued to the date of redemption or
accelerated payment) that would have been payable in respect of such dollar if
such redemption or accelerated payment had not been made, determined by
discounting, on a semiannual basis, such principal and interest at the
Reinvestment Rate (as defined herein) (determined on the third Business Day
preceding the date such notice of redemption is given or declaration
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<PAGE>
of acceleration is made) from the respective dates on which such principal and
interest would have been payable if such redemption or accelerated payment had
not been made, over (ii) the aggregate principal amount of the Notes being
redeemed or paid.
As used herein the term "Reinvestment Rate" means a rate per annum
equal to the sum of 0.25% (twenty-five one hundredths of one percent) plus the
yield on treasury securities at constant maturity under the heading "Week
Ending" published in the Statistical Release (as defined herein) under the
caption "Treasury Constant Maturities" for the maturity (rounded to the nearest
month) corresponding to the remaining life to maturity, as of the payment date
of the principal being redeemed or paid. If no maturity exactly corresponds to
such maturity, yields for the two published maturities most closely
corresponding to such maturity shall be calculated pursuant to the immediately
preceding sentence and the Reinvestment Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding in each of such
relevant periods to the nearest month. For purposes of calculating the
Reinvestment Rate, the most recent Statistical Release published prior to the
date of determination of the Make-Whole Amount shall be used.
As used herein the term "Statistical Release" means the statistical
release designated "H. 15(519)" or any successor publication which is published
weekly by the Federal Reserve System and which establishes yields on actively
traded United States government securities adjusted to constant maturities or,
if such statistical release is not published at the time of any determination
under the Supplemental Indenture, then such other reasonably comparable index
which shall be designated by the Company.
5. Mandatory Redemption. The Company shall not be required to make
sinking fund or redemption payments with respect to the Notes.
6. Notice of Redemption. Notice of redemption shall be mailed at least
30 days but not more than 60 days before the redemption date to each Holder of
Notes to be redeemed at its registered address. Notes may be redeemed in part
but only in whole multiples of $1,000, unless all of the Notes held by a Holder
are to be redeemed. On and after the redemption date, interest ceases to accrue
on Notes or portions of them called for redemption.
7. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples thereof. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture. The Registrar
need not exchange or register the transfer of any Note or portion of a Note
selected for redemption. Also, it need not exchange or register the transfer of
any Notes for a period of 15 days before the mailing of a notice of redemption
of Notes, or during the period between a record date and the corresponding
Interest Payment Date.
8. Defaults and Remedies. In case an Event of Default (as defined in
the Indenture) with respect to the Notes shall have occurred and be continuing,
the principal hereof may be declared, and upon such declaration shall become,
due and payable, in the manner, with the effect and subject to the provisions
provided in the Indenture.
9. Actions of Holders. The Indenture contains provisions permitting the
holders of not less than a majority of the aggregate principal amount of the
outstanding Notes, on behalf of the holders of all such Notes at a meeting duly
called and held as provided in the Indenture, to make, give or take any request,
demand, authorization, direction, notice, consent, waiver or other action
provided in the Indenture to be made, given or taken by the holders of the
Notes, including without limitation, waiving (a) compliance by the Company with
certain provisions of the Indenture, and (b) certain past defaults under the
Indenture and their consequences. Any resolution passed or decision taken at any
meeting of the holders of the Notes in
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accordance with the provisions of the Indenture shall be conclusive and binding
upon such holders and upon all future holders of this Note and other Notes
issued upon the registration of transfer hereof or in exchange heretofore or in
lieu hereof
10. Persons Deemed Owners. The Company, the Trustee, and any agent of
the Company or the Trustee may deem and treat the Person in whose name this Note
is registered on the Security Register as its absolute owner for all purposes.
11. Authentication. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
12. Governing Law. THE INTERNAL LAW OF THE COMMONWEALTH OF
MASSACHUSETTS SHALL GOVERN AND BE USED TO CONSTRUE THE INDENTURE AND THE NOTES.
13. No Personal Liability. THE AMENDED AND RESTATED DECLARATION OF
TRUST OF THE COMPANY, DATED JULY 1, 1994, A COPY OF WHICH, TOGETHER WITH ALL
AMENDMENTS THERETO (THE "DECLARATION"), IS DULY FILED IN THE OFFICE OF THE
DEPARTMENT OF ASSESSMENTS AND TAXATION OF THE STATE OF MARYLAND, PROVIDES THAT
THE NAME "HRPT PROPERTIES TRUST" REFERS TO THE TRUSTEES UNDER THE DECLARATION
COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO
TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF THE COMPANY SHALL BE HELD TO
ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM
AGAINST, THE COMPANY. ALL PERSONS DEALING WITH THE COMPANY, IN ANY WAY, SHALL
LOOK ONLY TO THE ASSETS OF THE COMPANY FOR THE PAYMENT OF ANY SUM OR THE
PERFORMANCE OF ANY OBLIGATION.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Request may be made to:
HRPT Properties Trust
400 Centre Street
Newton, MA 02458
Telecopier No.: (617) 332-2261
Attention: President
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ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
(Insert assignee's soc. sec. or tax I.D. no.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
Your Signature:
(Sign exactly as your name appears on
the face of this Note)
Signature Guarantee:
