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): March 11, 1999
HRPT PROPERTIES TRUST
(Exact name of registrant as specified in its charter)
Maryland 1-9317 04-6558834
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
400 Centre Street, Newton, Massachusetts 02458
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 617-332-3990
<PAGE>
THIS CURRENT REPORT CONTAINS FORWARD-LOOKING STATEMENTS. SUCH
STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES WHICH COULD CAUSE ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THOSE ANTICIPATED OR PROJECTED. INVESTORS ARE
CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS WHICH
SPEAK ONLY AS OF THE DATE HEREOF. THE REGISTRANT UNDERTAKES NO OBLIGATION TO
PUBLISH REVISED FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES
AFTER THE DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(b) Unaudited Pro Forma Consolidated Financial Statements (set forth beginning
on page F-1)
(c) Exhibits.
4.1. Form of Common Share Certificate.
4.2. Supplemental Indenture No. 5, dated as of November 30, 1998, by and
between the Company and State Street Bank and Trust Company, relating
to $130,000,000 in aggregate principal amount of 8 1/2% Monthly
Income Senior Notes due 2013, including form thereof.
10.1. Note Modification Agreement, dated as of June 30, 1998, by and
between Connecticut Subacute Corporation and the Company.
10.2. Second Amendment to Master Lease Agreement General Terms and
Conditions and Leases Entered Into Pursuant Thereto, dated as of
October 5, 1998, by and between the Company and Connecticut Subacute
Corporation.
23.1. Consent of Ernst & Young LLP.
23.2. Consent of Arthur Andersen LLP.
23.3. Consent of Arthur Andersen LLP.
<PAGE>
HRPT PROPERTIES TRUST
Unaudited Pro Forma Consolidated Financial Statements
The following unaudited pro forma consolidated balance sheet at
December 31, 1998 is intended to present the consolidated financial position of
the Company as if the transactions described in the notes hereto were
consummated as of December 31, 1998. The following unaudited pro forma
consolidated statement of income is intended to present the consolidated results
of operations of the Company as if the transactions were consummated as of
January 1, 1998. These unaudited pro forma consolidated financial statements
should be read in conjunction with, and are qualified in their entirety by
reference to, the separate consolidated financial statements of the Company for
the year ended December 31, 1998, filed in the Company's Current Report on Form
8-K dated March 5, 1999. These unaudited pro forma consolidated financial
statements are not necessarily indicative of what the actual consolidated
financial position or results of operations of the Company would have been as of
the date or for the period indicated, nor do they represent the expected
consolidated financial position or results of operations for any future period.
Differences would result from, among other considerations, future changes in the
Company's portfolio of investments, changes in interest rates, changes in the
capital structure of the Company, changes in the occupancies of properties,
changes in rent which the Company receives, delays in the acquisition of
properties and changes in property level operating expenses.
F-1
<PAGE>
HRPT PROPERTIES TRUST
Pro Forma Consolidated Balance Sheet
December 31, 1998
(dollars in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Recent Proposed
Historical Dispositions (A) Offering (B) Pro Forma
---------------- ------------------ --------------- -------------
ASSETS
<S> <C> <C> <C> <C>
Real estate properties, at cost:
Land $ 369,770 $ (330) $ -- $ 369,440
Buildings and improvements 2,586,712 (6,097) -- 2,580,615
------------- ----------- ------------- ------------
2,956,482 (6,427) -- 2,950,055
Less accumulated depreciation (169,811) 2,200 -- (167,611)
------------- ----------- ------------- ------------
2,786,671 (4,227) -- 2,782,444
Real estate mortgages and notes, net 69,228 (2,973) -- 66,255
Investment in Hospitality Properties Trust 110,554 -- -- 110,554
Cash and cash equivalents 15,643 (7,800) 375 8,218
Interest and rents receivable 36,229 -- -- 36,229
Other assets, net 45,732 -- 1,625 47,357
------------- ----------- ------------- ------------
$ 3,064,057 $ (15,000) $ 2,000 $ 3,051,057
============= =========== ============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Bank notes payable $ 100,000 $ (15,000) $ (48,000) $ 37,000
Senior notes payable, net 802,439 -- 50,000 852,439
Mortgage notes payable 24,779 -- -- 24,779
Convertible subordinated debentures 204,863 -- -- 204,863
Accounts payable and accrued expenses 44,446 -- -- 44,446
Deferred rents 34,162 -- -- 34,162
Security deposits 18,383 -- -- 18,383
Due to affiliates 7,192 -- -- 7,192
Shareholders' equity:
Preferred shares of beneficial interest, $.01 par value;
50,000,000 shares authorized; none issued -- -- -- --
Common shares of beneficial interest, $.01 par value;
150,000,000 shares authorized and pro forma,
131,547,178 shares issued and outstanding and pro forma 1,315 -- -- 1,315
Additional paid-in capital 1,964,878 -- -- 1,964,878
Cumulative net income 564,814 -- -- 564,814
Dividends (703,214) -- -- (703,214)
------------- ----------- ------------- ------------
Total shareholders' equity 1,827,793 -- -- 1,827,793
------------- ----------- ------------- ------------
$ 3,064,057 $ (15,000) $ 2,000 $ 3,051,057
============= =========== ============= ============
</TABLE>
See accompanying notes to unaudited pro forma consolidated financial statements.
F-2
<PAGE>
HRPT PROPERTIES TRUST
Pro Forma Consolidated Statement of Income
For the Year Ended December 31, 1998
(amounts in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
1998 1998
First Quarter 1600 Market Second Quarter
Historical Acquisitions (C) Street (D) Acquisitions (C)
------------- --------------- ------------ --------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 340,851 $ 2,455 $ 4,721 $ 10,184
Interest and other income 15,703 -- -- --
------------- --------------- ------------ --------------
Total revenues 356,554 2,455 4,721 10,184
------------- --------------- ------------ --------------
Expenses:
Operating expenses 77,536 338 1,915 2,965
Interest 64,326 1,028 1,869 3,962
Depreciation and amortization 60,764 479 650 1,619
General and administrative 17,172 104 145 361
------------- --------------- ------------ --------------
Total expenses 219,798 1,949 4,579 8,907
------------- --------------- ------------ --------------
Income (loss) before equity in earnings of
Hospitality Properties Trust 136,756 506 142 1,277
Equity in earnings of Hospitality Properties Trust 7,687 -- -- --
Gain on equity transaction of Hospitality Properties Trust 2,213 -- -- --
------------- --------------- ------------ --------------
Income (loss) before extraordinary item $ 146,656 $ 506 $ 142 $ 1,277
============= =============== ============ ==============
Weighted average shares outstanding 119,867
=============
Basic and diluted earnings per common share:
Income before extraordinary item $ 1.22
=============
</TABLE>
<TABLE>
<CAPTION>
1998 1998
Third Fourth
1735 Market Quarter Quarter
Street (E) Acquisitions (C) Acquisitions (C) Other (F)
------------ --------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 12,472 $ 8,915 $ 17,352 $ --
Interest and other income -- -- -- --
------------ --------------- ------------- -------------
Total revenues 12,472 8,915 17,352 --
------------ --------------- ------------- -------------
Expenses:
Operating expenses 4,098 1,726 5,206 --
Interest 6,641 3,630 4,964 (9,405)
Depreciation and amortization 2,784 1,666 2,734 --
General and administrative 525 370 678 --
------------ --------------- ------------- -------------
Total expenses 14,048 7,392 13,582 (9,405)
------------ --------------- ------------- -------------
Income (loss) before equity in earnings of
Hospitality Properties Trust (1,576) 1,523 3,770 9,405
Equity in earnings of Hospitality Properties Trust -- -- -- --
Gain on equity transaction of Hospitality Properties Trust -- -- -- --
------------ --------------- ------------- -------------
Income (loss) before extraordinary item $ (1,576) $ 1,523 $ 3,770 $ 9,405
============ =============== ============= =============
Weighted average shares outstanding
Basic and diluted earnings per common share:
Income before extraordinary item
</TABLE>
<TABLE>
<CAPTION>
Recent Proposed
Dispositions (G) (Offering (H) Pro Forma
------------ --------- -----------
<S> <C> <C> <C>
Revenues:
Rental income $ (1,008) $ -- $ 395,942
Interest and other income (265) -- 15,438
------------ ---------- -------------
Total revenues (1,273) -- 411,380
------------ ---------- -------------
Expenses:
Operating expenses -- -- 93,784
Interest (975) 755 76,795
Depreciation and amortization (235) 163 70,624
General and administrative (47) -- 19,308
------------ ---------- -------------
Total expenses (1,257) 918 260,511
------------ ---------- -------------
Income (loss) before equity in earnings of
Hospitality Properties Trust (16) (918) 150,869
Equity in earnings of Hospitality Properties Trust -- -- 7,687
Gain on equity transaction of Hospitality Properties Trust -- -- 2,213
------------ ---------- -------------
Income (loss) before extraordinary item $ (16) $ (918) $ 160,769
============ ========== =============
Weighted average shares outstanding 131,380
=============
Basic and diluted earnings per common share:
Income before extraordinary item $ 1.22
=============
</TABLE>
See accompanying notes to unaudited pro forma consolidated financial statements.
F-3
<PAGE>
HRPT Properties Trust
Notes To Unaudited Pro Forma Consolidated Financial Statements
(dollars in thousands)
Consolidated Balance Sheet Adjustments
A. Represents the disposition of a nursing facility in Akron, Ohio and the
repayment of a mortgage loan secured by two nursing facilities in Spencer,
North Carolina (the "Recent Dispositions") and the use of proceeds to repay
amounts outstanding under the Company's revolving line of credit.
B. Represents the proposed debt offering of $50,000 senior notes due
2009 (the "Proposed Offering"). Net proceeds from the Proposed Offering
will be used to repay amounts outstanding under the Company's revolving
line of credit.
Consolidated Statement of Income Adjustments for the Year Ended December 31,
1998
C. Represents the increases in rental income, operating expenses, depreciation
and amortization and general and administrative expenses arising from a)
the Company's acquisitions during January 1998, February 1998 and March
1998 of two medical office properties and three commercial office
properties located in Pennsylvania, two commercial office properties and
two medical office properties located in Texas, one medical office property
located in Massachusetts, one commercial office property located in
Maryland, three commercial office properties located in Minnesota and three
medical office properties and one commercial office property located in
Florida (collectively, "1998 First Quarter Acquisitions"), b) the Company's
acquisitions during April 1998, May 1998 and June 1998 of three commercial
office properties located in Massachusetts, one medical office property
located in California, three commercial office properties located in New
Jersey, one commercial office property located in Connecticut, one
commercial office property located in Pennsylvania, one commercial office
property located in Ohio, one commercial office property located in
Washington, D.C., and one commercial office property located in New York
(collectively, "1998 Second Quarter Acquisitions"), c) the Company's
acquisitions during July 1998, August 1998, and September 1998 of one
medical office property located in Texas, one commercial office property
located in Delaware, one commercial office property located in New Jersey,
one commercial office property located in Virginia, one commercial office
property located in Tennessee and one commercial office property located in
Pennsylvania (collectively, "1998 Third Quarter Acquisitions") and d) the
Company's acquisitions during October 1998, November 1998 and December 1998
of one commercial office property located in Maryland, one commercial
office property located in Pennsylvania, one commercial office property
located in Virginia, one commercial office property located in Connecticut
and developable land and five commercial office properties located in
Texas, (collectively, "1998 Fourth Quarter Acquisitions"), and the increase
in interest expense from the use of the Company's revolving line of credit
to fund these acquisitions.
D. Represents the increases in rental income, operating expenses, depreciation
and amortization and general and administrative expenses arising from the
Company's acquisition on March 30, 1998 of a commercial office property
located at 1600 Market Street in Philadelphia, Pennsylvania ("1600 Market
Street") and the increase in interest expense from the use of the Company's
revolving line of credit to fund this acquisition.
E. Represents the increases in rental income, operating expenses, depreciation
and amortization and general and administrative expenses arising from the
Company's acquisition on May 22, 1998 of a mortgage secured by, and
subsequent acquisition on June 30, 1998 of a controlling interest in, a
commercial office property located in Philadelphia, Pennsylvania ("1735
Market Street"), as well as the increase in interest expense from the use
of the Company's revolving line of credit to fund this acquisition.
F. Represents the net decrease in interest expense relating to the issuance of
additional Remarketed Reset Notes and 6.7% Senior Notes due 2005 in
February 1998, the issuance of 6 7/8% Senior Notes due 2002 in August 1998,
the issuance of 8.5% Senior Notes due 2013 in November 1998 and the
issuance of 31,977,575 common shares in February 1998, March 1998 and June
1998. The proceeds of these offerings were used to repay amounts then
outstanding on the Company's revolving credit facility.
G. Represents the decreases in rental income, interest income, interest
expense, depreciation and amortization and general and administrative
expenses arising from the Recent Dispositions.
H. Reflects the increase in interest and amortization expense as a result of
the Proposed Offering and the application of the net proceeds to the
Company's revolving line of credit.
F-4
<PAGE>
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/ David J. Hegarty
-----------------------------
David J. Hegarty, President
Date: March 11, 1999
[FRONT OF CERTIFICATE]
COMMON SHARES COMMON SHARES
$.01 PAR VALUE $.01 PAR VALUE
[Picture of doctor holding beaker,
businessman holding clipboard and nurse holding
caduceus, standing over urban landscape.]
THIS CERTIFICATE IS TRANSFERABLE [CUSIP NUMBER]
IN BOSTON OR IN NEW YORK CITY SEE REVERSE FOR CERTAIN DEFINITIONS
HRPT PROPERTIES TRUST
A MARYLAND REAL ESTATE INVESTMENT TRUST
THIS CERTIFIES THAT
--SPECIMEN--
IS THE REGISTERED
HOLDER OF
FULLY PAID AND NONASSESSABLE COMMON SHARES OF BENEFICIAL INTEREST IN
[Superimposed over the following paragraph are the words "COMMON SHARES"]
HRPT Properties trust (the "Trust"), a Maryland Real Estate Investment Trust
established by Declaration of Trust made as of October 9, 1986, as amended from
time to time, a copy of which, together with all amendments thereto (the
"Declaration") is on file with the Maryland State Department of Assessments and
Taxation. The provisions of the Declaration are hereby incorporated in and made
a part of this certificate as fully as if set forth herein in their entirety, to
all of which provisions the holder and every transferee or assignee hereof by
accepting or holding the same agrees to be bound. See Reverse for Existence of
Trustees' Authority to Determine Rights and Preferences of Subsequent Series of
Stock, and of Redemption and Prohibition of Transfer Provisions Governing the
Shares Represented by this Certificate. This certificate and the shares
represented hereby are negotiable and transferable on the books of the Trust by
the registered holder hereof in person or by attorney upon surrender of this
certificate properly endorsed or assigned to the same extent as a stock
certificate and the shares of a Maryland business corporation. This certificate
is issued by the Trustees of HRPT Properties Trust, acting not individually but
as such Trustees, and is not valid until countersigned by the Transfer Agent and
registered by the Registrar.
Witness the facsimile seal of the Trust and the facsimile signature of its
duly authorized representative.
Dated:
<TABLE>
<S> <C> <C>
Countersigned and Registered
STATE STREET BANK AND TRUST COMPANY [Signature of David J. Hegarty]
(BOSTON) Transfer Agent
and Registrar
By President and
Authorized Signature Chief Operating Officer
</TABLE>
THE DECLARATION OF TRUST PROVIDES THAT THE NAME "HRPT PROPERTIES TRUST" REFERS
TO THE TRUSTEES UNDER THE DECLARATION OF TRUST, COLLECTIVELY AS TRUSTEES, BUT
NOT INDIVIDUALLY OR PERSONALLY, AND NO TRUSTEE, SHAREHOLDER, EMPLOYEE OR AGENT
OF THE TRUST SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, IN
CONNECTION WITH THIS INSTRUMENT. ALL PERSONS DEALING WITH THE TRUST IN ANY WAY
SHALL LOOK ONLY TO THE ASSETS OF THE TRUST FOR PAYMENT OF ANY SUM OR PERFORMANCE
OF ANY OBLIGATION.
[The left side of the front of the Certificate contains a graphic design, at the
top of which is a box labeled "NUMBER" and at the bottom of which is a facsimile
of the Trust's seal and a box.]
[The right side of the front of the Certificate contains a graphic design, at
the top of which is a box labeled "SHARES".]
<PAGE>
[REVERSE OF CERTIFICATE]
HRPT PROPERTIES TRUST
REFERENCE IS MADE TO THE DECLARATION OF TRUST OF THE TRUST FOR A STATEMENT OF
ALL THE DESIGNATIONS, PREFERENCES, LIMITATIONS, AND RELATIVE RIGHTS OF EACH
CLASS OR SERIES OF SHARES THAT THE TRUST IS AUTHORIZED TO ISSUE, THE VARIATIONS
IN THE RELATIVE RIGHTS AND PREFERENCES OF ANY PREFERRED OR SPECIAL CLASS OR
SERIES OF SHARES, TO THE EXTENT THEY HAVE BEEN FIXED AND DETERMINED, AND THE
AUTHORITY OF THE TRUSTEES TO FIX AND DETERMINE THE RELATIVE RIGHTS AND
PREFERENCES OF SUBSEQUENT SERIES. ANY SUCH STATEMENT SHALL BE FURNISHED WITHOUT
CHARGE ON REQUEST TO THE TRUST AT ITS PRINCIPAL PLACE OF BUSINESS OR REGISTERED
OFFICE.
IF NECESSARY TO EFFECT COMPLIANCE BY THE TRUST WITH REQUIREMENTS OF THE INTERNAL
REVENUE CODE RELATING TO REAL ESTATE INVESTMENT TRUSTS, THE SHARES REPRESENTED
BY THIS CERTIFICATE MAY BE REDEEMED BY THE TRUST AND/OR THE TRANSFER THEREOF MAY
BE PROHIBITED ALL UPON THE TERMS AND CONDITIONS SET FORTH IN THE DECLARATION OF
TRUST. THE TRUST WILL FURNISH A COPY OF SUCH TERMS AND CONDITIONS TO THE
REGISTERED HOLDER OF THIS CERTIFICATE UPON REQUEST AND WITHOUT CHARGE.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C> <C>
TEN COM -as tenants in common UNIF GIFT MIN ACT-_________Custodian__________
TEN ENT -as tenants by the entireties (Cust) (Minor)
JT TEN -as joint tenants with right under Uniform Gifts to Minors
of survivorship and not as Act_________________
tenants in common (State)
</TABLE>
Additional abbreviations may also be used though not in the above list
For value received _______________________________________________ hereby
sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF NEW OWNER
<TABLE>
<S> <C>
[Box]
-------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE.
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Shares of Beneficial Interest represented by the within Certificate, and do
hereby irrevocably constitute and appoint
__________________________________________________________________________ Attorney
to transfer the said shares on the books of the within-named Trust with full
power of substitution in the premises.
</TABLE>
Dated, _______________________
<PAGE>
(Sign here) _________________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT
MUST CORRESPOND WITH THE NAME AS WRITTEN UPON
THE FACE OF THE CERTIFICATE, IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE
WHATEVER.
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN RIGHTS
AS SET FORTH IN THE RIGHTS AGREEMENT BETWEEN HRPT PROPERTIES TRUST (THE
"COMPANY") AND STATE STREET BANK AND TRUST COMPANY (THE "RIGHTS AGENT") DATED AS
OF OCTOBER 17, 1994 (THE "RIGHTS AGREEMENT"), THE TERMS OF WHICH ARE HEREBY
INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH IS ON FILE AT THE PRINCIPAL
OFFICES OF THE COMPANY. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS
AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO
LONGER BE EVIDENCED BY THIS CERTIFICATE. THE COMPANY WILL MAIL TO THE HOLDER OF
THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT, AS IN EFFECT ON THE DATE OF
MAILING, WITHOUT CHARGE PROMPTLY AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR.
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
BENEFICIALLY OWNED (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) BY ANY
PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON, OR ANY AFFILIATE OR ASSOCIATE
THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY
HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BECOME NULL
AND VOID. THE RIGHTS SHALL NOT BE EXERCISABLE, AND SHALL BE VOID SO LONG AS
HELD, BY A HOLDER IN ANY JURISDICTION WHERE THE REQUISITE QUALIFICATION FOR THE
ISSUANCE TO SUCH HOLDER, OR THE EXERCISE BY SUCH HOLDER, OF THE RIGHTS IN SUCH
JURISDICTION SHALL NOT HAVE BEEN OBTAINED OR BE OBTAINABLE.
(ii)
SUPPLEMENTAL INDENTURE NO. 5
by and between
HRPT PROPERTIES TRUST
and
STATE STREET BANK AND TRUST COMPANY
as of November 30, 1998
SUPPLEMENTAL TO THE INDENTURE DATED AS OF JULY 9, 1997
------------------------------------
HRPT PROPERTIES TRUST
8 1/2% Monthly Income Senior Notes due 2013
<PAGE>
This SUPPLEMENTAL INDENTURE NO. 5 (this "Supplemental Indenture")
made and entered into as of November 30, 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 8 1/2% Monthly Income Senior Notes due 2013; 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
<PAGE>
principles in determining Earnings from Operations for such period and (vi)
amortization of deferred charges.
"Debt" of the Company or any Subsidiary means, without duplication,
any indebtedness of the Company or any Subsidiary, whether or not contingent, in
respect of (i) borrowed money or evidenced by bonds, notes, debentures or
similar instruments, (ii) indebtedness for borrowed money secured by any
Encumbrance existing on property owned by the Company or any Subsidiary, to the
extent of the lesser of (x) the amount of indebtedness so secured and (y) the
fair market value of the property subject to such Encumbrance, (iii) the
reimbursement obligations, contingent or otherwise, in connection with any
letters of credit actually issued (other than letters of credit issued to
provide credit enhancement or support with respect to other indebtedness of the
Company or any Subsidiary otherwise reflected as Debt hereunder) or amounts
representing the balance deferred and unpaid of the purchase price of any
property or services, except any such balance that constitutes an accrued
expense or trade payable, or all conditional sale obligations or obligations
under any title retention agreement, (iv) the principal amount of all
obligations of the Company or any Subsidiary with respect to redemption,
repayment or other repurchase of any Disqualified Stock, or (v) any lease of
property by the Company or any Subsidiary as lessee which is reflected on the
Company's consolidated balance sheet as a capitalized lease in accordance with
GAAP, to the extent, in the case of items of indebtedness under (i) through
(iii) above, that any such items (other than letters of credit) would appear as
a liability on the Company's consolidated balance sheet in accordance with GAAP,
and also includes, to the extent not otherwise included, any obligation by the
Company or any Subsidiary to be liable for, or to pay, as obligor, guarantor or
otherwise (other than for purposes of collection in the ordinary course of
business), Debt of another Person (other than the Company or any Subsidiary) (it
being understood that Debt shall be deemed to be incurred by the Company or any
Subsidiary whenever the Company or such Subsidiary shall create, assume,
guarantee or otherwise become liable in respect thereof).
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which by the terms of such Capital Stock (or by the terms
of any security into which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise (i) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise
(other than Capital Stock which is redeemable solely in exchange for common
stock or shares), (ii) is convertible into or exchangeable or exercisable for
Debt or Disqualified Stock, or (iii) is redeemable at the option of the holder
thereof, in whole or in part (other than Capital Stock which is redeemable
solely in exchange for common stock or shares), in each case on or prior to the
Stated Maturity of the Notes.
"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.
"Notes" means the Company's 8 1/2% Monthly Income Senior Notes, due
2013, issued under this Indenture, as amended or supplemented from time to time.
"Secured Debt" means Debt secured by any mortgage, lien, charge,
pledge or security interest of any kind.
"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.
-2-
<PAGE>
"Total Assets" as of any date means the sum of (i) the Undepreciated
Real Estate Assets and (ii) all other assets of the Company and its Subsidiaries
determined in accordance with GAAP (but excluding accounts receivable and
intangibles).
"Total Unencumbered Assets" means the sum of (i) those Undepreciated
Real Estate Assets not subject to an Encumbrance for borrowed money and (ii) all
other assets of the Company and its Subsidiaries not subject to an Encumbrance
for borrowed money determined in accordance with GAAP (but excluding accounts
receivable and intangibles).
"Undepreciated Real Estate Assets" as of any date means the cost
(original cost plus capital improvements) of real estate assets of the Company
and its Subsidiaries on such date, before depreciation and amortization,
determined on a consolidated basis in accordance with GAAP.
"Unsecured Debt" means Debt which is not secured by any of the
properties of the Company or any Subsidiary.
ARTICLE 2
TERMS OF THE NOTES
Section 2.1 Pursuant to Section 301 of the Indenture, the Notes shall
have the following terms and conditions:
(a) Title; Aggregate Principal Amount; Form of Notes. The Notes shall
be known as the Company's 8 1/2% Monthly Income Senior Notes due 2013. The Notes
will be limited to an aggregate principal amount of $149,500,000, subject to the
right of the Company to reopen such series for issuances of additional
securities of such series, and except as provided in this Section and in Section
306 of the Indenture. The Notes (together with the Trustee's certificate of
authentication) shall be substantially in the form of Exhibit A hereto, which is
hereby incorporated in and made a part of this Supplemental Indenture.
The Notes will be issued in the form of one or more registered global
securities without coupons (the "Global Notes") that will be deposited with, or
on behalf of, The Depository Trust Company ("DTC"), and registered in the name
of DTC's nominee, Cede & Co. Except under the circumstance described below, the
Notes will not be issuable in definitive form. Unless and until it is exchanged
in whole or in part for the individual notes represented thereby, a Global Note
may not be transferred except as a whole by DTC to a nominee of DTC or by a
nominee of DTC to DTC or another nominee of DTC or by DTC or any nominee of DTC
to a successor depositary or any nominee of such successor.
So long as DTC or its nominee is the registered owner of a Global
Note, DTC or such nominee, as the case may be, will be considered the sole owner
or holder of the Notes represented by such Global Note for all purposes under
this Supplemental Indenture. Except as described below, owners of beneficial
interest in Notes evidenced by a Global Note will not be entitled to have any of
the individual Notes represented by such Global Note registered in their names,
will not receive or be entitled to receive physical delivery of any such Notes
in definitive form and will not be considered the owners or holders thereof
under the Indenture or this Supplemental Indenture.
If DTC is at any time unwilling, unable or ineligible to continue as
depositary and a successor depositary is not appointed by the Company within 90
days, the Company will issue individual Notes in exchange for the Global Note or
Global Notes representing such Notes and the Trustee, upon receipt of an
authentication order pursuant to Section 303 of the Indenture, shall
authenticate and deliver such Notes. In
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<PAGE>
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 the
Notes. 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) Interest and Interest Rate. The Notes will bear interest at a
rate of 8 1/2% per annum, from November 30, 1998 (or, in the case of Notes
issued upon the reopening of this series of Notes, from the date designated by
the Company in connection with such reopening) or from the immediately preceding
Interest Payment Date to which interest has been paid or duly provided for,
payable monthly in arrears on the 15th of each month, commencing January 15,
1998 (each of which shall be an "Interest Payment Date"), to the Persons in
whose names the Notes are registered in the Security Register at the close of
business on the first day of each month (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date (each, a "Regular Record
Date").
(c) Principal Repayment; Currency. The Stated Maturity of the Notes
is November 15, 2013, provided, however, the Notes may be earlier redeemed at
the option of the Company as provided in paragraph (d) below. The principal of
each Note payable on its maturity date shall be paid against presentation and
surrender thereof at the Corporate Trust Office of the Trustee, located
initially at Two International Place, 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.
(d) Redemption at the Option of the Company; Acceleration. The Notes
may not be redeemed prior to November 15, 2003. From and after November 15,
2003, 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 principal amount of the Notes being
redeemed, plus accrued and unpaid interest to but excluding the applicable
Redemption Date. 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 shall become due and payable immediately.
(e) Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or transmitted
by any standard form of telecommunication. Notices to the Company shall be
directed to it at 400 Centre Street, Newton, Massachusetts 02458, Attention:
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 8 1/2% Monthly Income Senior Notes due
2013.
(f) Global Note Legend. Each 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.
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<PAGE>
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, with the Trustee) prior to the incurrence of such
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. If the Debt
giving rise to the need to make the foregoing calculation or any
other Debt incurred after the
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<PAGE>
first day of the relevant four-quarter period bears interest at a
floating rate then, for purposes of calculating the Annual Debt
Service, the interest rate on such Debt shall be computed on a pro
forma basis as if the average interest rate which would have been in
effect during the entire such four-quarter period had been the
applicable rate for the entire such period.
(b) Maintenance of Total Unencumbered Assets. The Company and its
Subsidiaries will maintain 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 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.
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<PAGE>
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.
[Remainder of page intentionally left blank.]
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<PAGE>
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: /s/ David J. Hegarty
--------------------------------
David J. Hegarty
President
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: /s/ Julie A. Balerna
--------------------------------
Name: Julie A. Balerna
Title: Assistant Vice President
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<PAGE>
EXHIBIT A
(Face of Note)
8 1/2% Monthly Income Senior Notes due 2013
No. $__________
HRPT PROPERTIES TRUST
promises to pay to _________________________________ or registered assigns, the
principal sum of _______________________________ Dollars on November, __ 2013.
Interest Payment Dates: the 15th of each month.
Record Dates: the first day of each month.
CUSIP No.: _________
HRPT PROPERTIES TRUST
By:
--------------------------------
David J. Hegarty
President
[SEAL]
Attest:
----------------------------
Alexander A. Notopoulos, Jr.
Assistant Secretary
Dated: November ___, 1998
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
__% Monthly Income Senior Notes due 2013
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 8 1/2%. The Company will pay interest monthly
in arrears on the 15th of each month, commencing on January 15, 1998 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 first day of each month (whether or not a Business
Day).
Interest will be computed on the basis of a 360-day year consisting
of twelve 30-day months. Interest shall accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from November 30,
1998.
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 Supplemental Indenture No. 5, dated as of
November 30, 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. 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 $149,500,000 in
aggregate principal amount, except as otherwise provided in the Indenture.
4. Optional Redemption. The Notes may not be redeemed prior to
November 15, 2003. From and after November 15, 2003, 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 principal amount of the Notes being redeemed, plus accrued and unpaid
interest to but excluding the applicable redemption date.
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.
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<PAGE>
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 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
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<PAGE>
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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<PAGE>
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:
A - 5
NOTE MODIFICATION AGREEMENT
THIS NOTE MODIFICATION AGREEMENT (this "Agreement") is made as of
June 30, 1998, by and between CONNECTICUT SUBACUTE CORPORATION, a Delaware
corporation ("Borrower"), and HRPT PROPERTIES TRUST, formerly known as Health
and Retirement Properties Trust, a Maryland real estate investment trust
("Lender").
W I T N E S S E T H :
WHEREAS, pursuant to an Amended and Restated Working Capital
Promissory Note, dated July 29, 1996 (as amended, the "Note"), made by Borrower
to the order of Lender, Lender made a loan (the "Loan") to Borrower in the
original principal amount of up to Four Million Dollars ($4,000,000); and
WHEREAS, Borrower and Lender now wish to extend the maturity
date of the Loan;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the mutual receipt and
legal sufficiency of which are hereby acknowledged, Lender and Borrower hereby
agree as follows:
1. The Maturity Date (as such term is defined in the Note) of the
Note is hereby extended to June 30, 1999.
2. As amended hereby, the Note is ratified and confirmed and declared
to be in full force and effect.
IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement
under seal as of the date above first written.
BORROWER:
CONNECTICUT SUBACUTE CORPORATION
By: /s/ Mark J. Finkelstein
----------------------------
Its: President
LENDER:
HRPT PROPERTIES TRUST
By: /s/ David J. Hegarty
----------------------------
Its: President
SECOND AMENDMENT TO MASTER LEASE DOCUMENT GENERAL TERMS
AND CONDITIONS AND LEASES ENTERED INTO PURSUANT THERETO
THIS SECOND AMENDMENT TO MASTER LEASE DOCUMENT GENERAL TERMS AND
CONDITIONS AND LEASES ENTERED INTO PURSUANT THERETO (this "Amendment") is
entered into as of this 5th day of October, 1998, by and between HRPT PROPERTIES
TRUST, a Maryland real estate investment trust formerly known as Health and
Retirement Properties Trust ("Lessor"), and CONNECTICUT SUBACUTE CORPORATION, a
Delaware corporation ("Lessee").
W I T N E S S E T H:
WHEREAS, pursuant to a Master Lease Document General Terms and
Conditions, dated as of July 23, 1993, as amended by letter agreement, dated
November 16, 1995 (as so amended, the "Master Lease Document") and the Leases
entered into pursuant thereto, all dated as of July 23, 1993, as amended by
letter agreement, dated November 16, 1995 (as so amended, collectively, the
"Facility Leases"), Lessor leased to Lessee and Lessee leased from Lessor
certain premises located in Bristol, Waterbury and Wallingford, Connecticut,
each as more particularly described in and subject to and upon the terms and
conditions set forth in the Leases; and
WHEREAS, pursuant to a First Amendment to Master Lease Document
General Terms and Conditions and Leases Entered Into Pursuant Thereto, dated
_______, 1996 (the "Amendment"), Lessor and Lessee amended certain terms of the
Master Lease Document (as amended by the Amendment, the "Master Lease") and the
Facility Leases (as amended by the Amendment, the "Leases"); and
WHEREAS, Lessor and Lessee now wish to amend further certain terms
and conditions of the Master Lease and the Leases;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the mutual receipt and
legal sufficiency of which are hereby acknowledged, Lessor and Lessee hereby
agree as follows:
1. Capitalized terms used and not otherwise defined in this Amendment
shall have the meanings ascribed to such terms in the Master Lease and the
Leases.
2. Section 3.1 of the Master Lease is hereby amended by inserting the
following paragraph at the end thereof:
<PAGE>
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Effective on the date of each disbursement to pay for the
cost of any improvements or renovations pursuant to Section 10.7, the
Minimum Rent shall be adjusted, effective on the date of such
disbursement, to an annual sum equal to ten percent (10%) of the
amount so disbursed. If any such disbursement is made during any
calendar month on a day other than the first day of a calendar month,
Lessee shall pay to Lessor on the first day of the immediately
following calendar month (in addition to the amount of Minimum Rent
payable with respect to such month, as adjusted pursuant to this
paragraph) the amount by which Minimum Rent for the preceding month,
as adjusted for such disbursement, exceeded the amount of Minimum
Rent payable by Lessee for such preceding month without giving effect
to such adjustment.
3. Article 10 of the Leases is hereby amended by inserting the
following section at the end thereof:
10.7 Additional Improvements; Advances. At any time during
that portion of the Term expiring prior to the Additional Applicable
Expiration Date (as defined below), Lessor agrees to advance to
Lessee, from time to time, as hereinafter provided, an aggregate
amount pursuant to this Section 10.7, with respect to each Leased
Property, of up to the Additional Improvements Funding Amount (as
defined below) for the purpose of making of such improvements to the
applicable Leased Property as Lessee shall determine, subject to and
in accordance with the applicable terms and conditions of this Master
Lease Document and the applicable Lease and existing laws and
regulations, including, without limitation, certificate of need
restrictions. The obligation of Lessor to make each advance pursuant
to this Section 10.7 shall be subject to the prior or simultaneous
satisfaction of the following conditions:
(a) At the time of each disbursement, no Event of
Default or event which with the giving of notice and/or
lapse of time may constitute an Event of Default shall have
occurred and be continuing; and
(b) At least fifteen (15) Business Days before
the date on which Lessee desires a disbursement to be made
hereunder (but in no event subsequent to the Additional
Applicable Expiration Date), Lessee shall submit to Lessor
a written requisition and the substantiation therefor which
shall include paid bills and invoices with respect to the
work for which reimbursement is sought, together with
such other information with respect thereto as Lessor may
require, including, without
<PAGE>
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limitation, the items identified in Section 10.3, if
applicable. Any such requisition shall be for not less than
$100,000 (or such lesser amount as shall constitute the
difference between the Additional Improvements Funding
Amount and the aggregate of all prior disbursements). Such
requisitions shall be made not more frequently than
monthly.
For purposes of this Section 10.7, "Additional Applicable
Expiration Date" shall mean December 31, 1999.
For purposes of this Section 10.7, "Additional Improvements
Funded Amount" shall mean (i) with respect to the Initial
Leased Property known as Brook Hollow Nursing Home and
located in Wallingford, Connecticut, One Hundred
Seventy-Five Thousand Dollars ($175,000); (ii) with respect
to the Initial Leased Property known as Cedar Lane Nursing
Home and located in Waterbury, Connecticut, Four Hundred
Thousand Dollars ($400,000); and (iii) with respect to the
Initial Leased Property known as Forestville Nursing Home
and located in Bristol, Connecticut, Four Hundred
Twenty-Five Thousand Dollars ($425,000).
4. As amended hereby, the Master Lease and Leases are ratified and
confirmed and declared to be in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
as of the date above first written.
HRPT PROPERTIES TRUST
By: /s/ David J. Hegarty
----------------------------
Its President
LESSEE:
CONNECTICUT SUBACUTE CORPORATION
By: /s/ Mark J. Finkelstein
----------------------------
Its President
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 333-56051) and related Prospectus
Supplement of HRPT Properties Trust and to the incorporation by reference
therein and in the Registration Statement on Form S-3 pursuant to Rule 462(b) of
the Securities Act of 1933 to be filed with the Securities and Exchange
Commission, of our report dated February 5, 1999, with respect to the
consolidated financial statements of HRPT Properties Trust included in the
Current Report on Form 8-K of HRPT Properties Trust dated March 5, 1999, filed
with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Boston, Massachusetts
March 11, 1999
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation by
reference in HRPT Properties Trust's registration statement (Form S-3 No.
333-56051) and the related prospectus supplement of our report dated January 15,
1999 on Hospitality Properties Trust included in HRPT Properties Trust's Form
8-K dated March 5, 1999 for the year ended December 31, 1998 and to all
references to our Firm included in the prospectus supplement.
/s/ Arthur Andersen LLP
Washington, D.C.
March 11, 1999
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation by
reference in HRPT Properties Trust's registration statement on Form S-3 pursuant
to Rule 462(b) of the Securities Act of 1933 of our report dated January 15,
1999 on Hospitality Properties Trust included in HRPT Properties Trust's Form
8-K dated March 5, 1999 for the year ended December 31, 1998 and to all
references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
Washington, D.C.
March 11, 1999
