Document:

Third Amendment  - 2000 Transaction - PFG II

Exhibit 10.47

THIRD AMENDMENT

TO CERTAIN OPERATIVE AGREEMENTS

 

 

THIS THIRD AMENDMENT TO CERTAIN OPERATIVE AGREEMENTS dated as of September 12, 2002 (this "Amendment") is by and among the parties to the Participation Agreement (hereinafter defined) from time to time as the lessees and as the construction agents (subject to the definition of Lessee and Construction Agent in Appendix A to the Participation Agreement, individually a "Lessee" or a "Construction Agent" and collectively the "Lessees" or the "Construction Agents"); PERFORMANCE FOOD GROUP COMPANY, a Tennessee corporation, as the guarantor ("Guarantor"); WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION (formerly known as First Security Bank, National Association), a national banking association, not individually, but solely as the Owner Trustee under the PFG Real Estate Trust 2000-1 (the "Owner Trustee", the "Borrower" or the "Lessor"); the various banks and other lending institutions which are parties to the Participation Agreement from time to time as holders of certificates issued with respect to the PFG Real Estate Trust 2000-1 (subject to the definition of Holders in Appendix A to the Participation Agreement, individually, a "Holder" and collectively, the "Holders"); the various banks and other lending institutions which are parties to the Participation Agreement from time to time as lenders (subject to the definition of Lenders in Appendix A to the Participation Agreement, individually, a "Lender" and collectively, the "Lenders"); and WACHOVIA BANK, NATIONAL ASSOCIATION (as successor to First Union National Bank), a national banking association, as the agent for the Lenders and respecting the Security Documents, as the agent for the Lenders and the Holders, to the extent of their interests (in such capacity, the "Agent").  Capitalized terms used but not otherwise defined in this Amendment shall have the meanings set forth in Appendix A to the Participation Agreement.  

 

W I T N E S S E T H:

WHEREAS, the parties to this Amendment are parties to that certain Participation Agreement dated as of June 9, 2000, as amended by that certain First Amendment to Certain Operative Agreements dated as of December 7, 2000, as further amended by that certain Second Amendment to Certain Operative Agreements and Consent dated as of April 27, 2001 (as otherwise amended, restated, supplemented or otherwise modified from time to time, the "Participation Agreement").

WHEREAS, the parties to this Amendment desire to amend certain certificates previously delivered pursuant to Section 5.5 of the Participation Agreement to allow for additional limited Advances.

WHEREAS, the parties to this Amendment desire to extend the Construction Period Termination Date.

WHEREAS, the parties to this Amendment desire to reduce the aggregate size of the lease facility evidenced by the Operative Agreements from $60,000,000.00 to $24,200,579.49.

WHEREAS, the parties to this Amendment desire to amend the Operative Agreements in order to effect the changes described in the prior recitals and to make other modifications to the Operative Agreements.

 

A G R E E M E N T

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Amendment agree as follows:

 

PART 1

AMENDMENTS TO THE PARTICIPATION AGREEMENT

1.1Section 5.4 of the Participation Agreement is amended to add the following phrase at the beginning of such Section 5.4:

"Subject to Section 5.12 of this Agreement,"

1.2A new Section 5.12 is added to the Participation Agreement as follows:

"5.12.Limited Permission to Amend Completion Certificates and Obtain Additional Advances for Properties Previously Determined to be Complete.

Notwithstanding any provision to the contrary herein or in any other Operative Agreement and notwithstanding any final delivery of a certificate pursuant to Section 5.5 with respect to any Property, the Lessee may on or prior to October 14, 2002 obtain Advances for each such Property for the limited purpose of paying Transactions Expenses or reimbursing the Lessee for the payment of Transaction Expenses; provided, prior to the funding of any such Advance (a) the Lessee must satisfy the relevant conditions precedent set forth in the Operative Agreements for Construction Advances and must also satisfy any other conditions precedent reasonably imposed by the Agent at such time (including without the limitation the issuance of new title insurance endorsements and the modification of any Mortgage Instruments) and (b) the Lessee must provide an amended certificate (in form and substance reasonably satisfactory to the Agent) for such Property pursuant to Section 5.5 adding the amount of such Advance to the Property Cost.  At all times, each Property for which any such Advance is sought shall continue to be construed as a Property for which Completion has occurred and shall not be construed as a Construction Period Property."

1.3The definition of "Construction Period Termination Date" in Appendix A to the Participation Agreement is amended and restated in its entirety to read as follows:

" "Construction Period Termination Date" shall mean (a) the earlier of (i) the date that the Commitments have been terminated in their entirety in accordance with the terms of Section 2.5(a) of the Credit Agreement or (ii) December 31, 2003 or (b) such later date as shall be agreed to by the Majority Secured Parties."

1.4The following defined terms are added in the appropriate alphabetical order to Appendix A to the Participation Agreement:

" "PFG 1997 Agent" shall mean the Agent (as such term is defined in the PFG 1997 Participation Agreement)."

" "PFG 1997 Lease Financing" shall mean the financing transaction made available to PFG pursuant to the (a) PFG 1997 Participation Agreement and (b) the other Operative Agreements (as such term is defined in the PFG 1997 Participation Agreement)."

" "PFG 1997 Lessee" shall mean the Lessee (as such term is defined in the PFG 1997 Participation Agreement)."

" "PFG 1997 Owner Trustee" shall mean the Owner Trustee (as such term is defined in the PFG 1997 Participation Agreement)."

" "PFG 1997 Participation Agreement" shall mean the Participation Agreement dated as of August 29, 1997 (as amended, restated, supplemented or otherwise modified from time to time, among PFG, as construction agent and lessee thereunder; Wells Fargo Bank Northwest, National Association (formerly known as First Security Bank, National Association), as Owner Trustee under the PFG Real Estate Trust 1997-1; the various banks and other lending institutions which are parties thereto from time to time, as holders thereunder; the various banks and other lending institutions which are parties thereto from time to time, as lenders thereunder; and Wachovia Bank, National Association (as successor to First Union National Bank), as the agent for such lenders, and respecting the security documents thereunder as the agent for such lenders and such holders to the extent of their interest."

" "Third Amendment Closing Date" shall mean September 12, 2002."

 

PART 2

AMENDMENTS TO THE CREDIT AGREEMENT

2.1Schedule 2.1 of the Credit Agreement is amended and restated to read as set forth in Exhibit A.

 

PART 3

AMENDMENTS TO THE TRUST AGREEMENT

3.1Schedule I of the Trust Agreement is amended and restated to read as set forth in Exhibit B.

 

PART 4

AMENDMENTS TO THE SECURITY AGREEMENT

4.1Section 24 of the Security Agreement is amended by adding the following phrase at the beginning of the first paragraph of such Section 24:

"Subject to the second paragraph of this Section 24," 

4.2Section 24 of the Security Agreement is amended by adding the following paragraph at the end of such Section 24:

"NOTWITHSTANDING THE FOREGOING PROVISIONS OF THIS SECTION 24 OR ANY OTHER PROVISION OF ANY OPERATIVE AGREEMENT, NO LESSEE HAS GRANTED, AND NO LESSEE SHALL BE DEEMED TO HAVE GRANTED, ANY SECURITY INTEREST IN ANY INVENTORY OR RECEIVABLE EXCEPT FOR inventory and/or receivables which have been conveyed or transferred to the Borrower or which have been acquired with Advances.  In addition, EACH LESSEE covenants that it has not, and that IT shall not at any time, use any Advance to acquire or finance any inventory and/or receivable for itself, as a part of the Trust Property or otherwise.  THE AGENT ACKNOWLEDGES ITS OBLIGATIONS PURSUANT TO SECTION 12.11 OF THE PARTICIPATION AGREEMENT WITH RESPECT TO THE PRIOR SENTENCE."

 

PART 5

MISCELLANEOUS

5.1This Amendment shall be effective upon satisfaction of the following conditions precedent:

(a)execution and delivery of this Amendment by the parties hereto and execution and delivery of such other documents, agreements or instruments deemed necessary or advisable by the Agent;

(b)receipt by the Agent of a certificate of a secretary or an assistant secretary of each Credit Party (in form and in substance reasonably satisfactory to the Agent) certifying that a resolution has been adopted by such Credit Party's Board of Directors approving and authorizing the execution, delivery, and performance of this Amendment and certifying as to the incumbency of the officer of the Credit Party executing this Amendment;

(c)receipt by the Agent of an officer's certificate of the Lessee certifying that no Default or Event of Default shall have occurred and be continuing and certifying that the representations and warranties of each Credit Party set forth in the Participation Agreement are true and correct (except for any such representations and warranties which relate solely to an earlier time);

(d)receipt by the PFG 1997 Agent of all amounts due and owing by the PFG 1997 Lessee and/or the PFG 1997 Owner Trustee in connection with the PFG 1997 Lease Financing; and

(e)receipt by the appropriate parties of the fees and expenses incurred by the Agent or otherwise incurred by Wachovia Bank, National Association (as successor to First Union National Bank) (including without limitation legal fees and expenses) in connection with (i) the negotiation, preparation, execution and delivery of this Amendment, (ii) the transactions contemplated herein, (iii) any of the other Operative Agreements and/or (iv) other transactions intended for the Guarantor and/or its Affiliates.

5.2Upon satisfaction of the conditions precedent described in Section 5.1, (a) the amendment of the definition of "Construction Period Termination Date" set forth in Section 1.3 shall be effective as of June 7, 2002, and (b) the balance of this Amendment shall be effective as of the date such conditions precedent are in fact satisfied.

5.3Except as modified hereby, all of the terms and provisions of the Operative Agreements (including Schedules and Exhibits) shall remain in full force and effect.

5.4The Credit Parties agree to pay all reasonable costs and expenses of the Agent in connection with the preparation, execution and delivery of this Amendment, including without limitation the reasonable fees and expenses of Moore & Van Allen, PLLC.

5.5This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original and it shall not be necessary in making proof of this Amendment to produce or account for more than one such counterpart.

5.6This Amendment shall be deemed to be a contract made under, and for all purposes shall be construed in accordance with the laws of the State of North Carolina.

 

 

 

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

PERFORMANCE FOOD GROUP COMPANY, as a Construction Agent and as a Lessee

By: 

Name: 

Title: 

 

CARROLL COUNTY FOODS, INC. (as successor to CCF Acquisition, Inc.), as a Construction Agent and as a Lessee

By: 

Name: 

Title: 

 

HALE BROTHERS SUMMIT, INC., as a Construction Agent and as a Lessee

By: 

Name: 

Title: 

 

VIRGINIA FOODSERVICE GROUP, INC., as a Construction Agent and as a Lessee

 

By: 

Name: 

Title: 

 

 

[signature pages continued]

 

 

 
PERFORMANCE FOOD GROUP COMPANY, as the Guarantor

By: 

Name: 

Title: 

 

 

[signature pages continued]

 

 

 

 
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION (formerly known as First Security Bank, National Association), not individually, except as expressly stated herein, but solely as the Owner Trustee under the PFG Real Estate Trust 2000-1

By: 

Name: 

Title: 

 

 

[signature pages continued]

 

 

 
WACHOVIA BANK, NATIONAL ASSOCIATION (as successor to First Union National Bank), as a Lender, as a Holder and as the Agent

By: 

Name: 

Title: 

 

 

[signature pages continued]

 

 

 
BANK ONE, NA, as a Lender

(Main Office Chicago)

By: 

Name: 

Title: 

 

 

[signature pages continued]

 

 

 
SUNTRUST BANK, as a Lender and as a Holder

By: 

Name: 

Title: 

 

 

[signature pages end]

 

 

Exhibit A

Schedule 2.1

 

      Tranche A      Tranche B

      Commitment          Commitment        

Name and Address of LendersAmount/PercentageAmount/Percentage

Wachovia Bank, National Association$6,897,165.1537.01%$4,840,115.90100%

(as successor to First Union National Bank)

c/o Wachovia Securities, Inc.

301 South College Street, TW-17

Charlotte, North Carolina  28288-0174

Attention:Van Jones

Telephone:(704) 383-6787

Telecopy:(704) 383-8108

Bank One, NA$6,050,144.8732.47%$00%

153 West 51st Street, 6th Floor

New York, New York 10019

Attention:Andrea S. Kantor

Telephone:(212) 373-1023

Telecopy:(212) 373-1180

SunTrust Bank$5,687,136.1830.52%$00%

919 East Main Street

Richmond, Virginia 23219

Attention:Gray Key

Telephone:(804) 782-5237

Telecopy:(804) 782-5413

 

TOTAL$18,634,446.21100%$4,840,115.90100%

 

 

The Commitment of each Lender shall be subject to change in accordance with the provisions of the Operative Agreements.

Exhibit B

SCHEDULE I

HOLDER COMMITMENTS

 

	
 

 

Name of Holder
	
Holder Commitment

Amount/Percentage

	
Wachovia Bank, National Association

(as successor to First Union National Bank)

c/o Wachovia Securities, Inc.

301 South College Street, TW-17

Charlotte, North Carolina  28288-0174

Attention:Van Jones

Telephone:(704) 383-6787

Telecopy:(704) 383-8108

	
$363,008.6950%

	
SunTrust Bank

919 East Main Street

Richmond, Virginia 23219

Attention: Gray Key

Telephone:(804) 782-5237

Telecopy:(804) 782-5413

	
$363,008.6950%

	 	 
	 	 
	 	 
	 	 
	 	 
	
TOTAL
	
$726,017.38100%

 

 

The Holder Commitment of each Holder shall be subject to change in accordance with the provisions of the Operative Agreements.Exhibit 4.1

                              HRPT PROPERTIES TRUST
                             ARTICLES SUPPLEMENTARY
             8 3/4% SERIES B CUMULATIVE REDEEMABLE PREFERRED SHARES
                            $0.01 par value per share

         HRPT  PROPERTIES  TRUST, a Maryland real estate  investment  trust (the
"Trust"), having its principal office in Newton, Massachusetts, hereby certifies
to the State Department of Assessments and Taxation of Maryland that:

         FIRST:  Pursuant  to  authority  expressly  vested in the  Trustees  by
Section 6.1 of the Third  Amendment and  Restatement  of Declaration of Trust of
the Trust, dated July 1, 1994, as amended and supplemented (the  "Declaration"),
the Trustees have duly classified and designated  12,650,000 Preferred Shares of
the Trust as 8 3/4% Series B Cumulative  Redeemable  Preferred Shares, $0.01 par
value per share, of the Trust ("Series B Preferred Shares").

         SECOND:   The  preferences,   rights,   voting  powers,   restrictions,
limitations as to dividends and other distributions, qualifications and terms or
conditions of redemption of the Series B Preferred Shares are as follows,  which
upon any restatement of the Declaration  shall be made part of Article VI of the
Declaration,  with any necessary or  appropriate  changes to the  enumeration or
lettering  of sections or  subsections  hereof.  Capitalized  terms used in this
ARTICLE SECOND which are defined in the  Declaration  and not otherwise  defined
herein are used herein as so defined in the Declaration.

8 3/4% Series B  Cumulative  Redeemable  Preferred  Shares,  $0.01 par value per
share

         1. Designation and Number. A series of Preferred Shares, designated the
8 3/4 % Series B Cumulative  Redeemable  Preferred  Shares,  $0.01 par value per
share (the "Series B Preferred Shares"),  is hereby  established.  The number of
authorized Series B Preferred Shares is 12,650,000.

         2. Relative Seniority. In respect of rights to receive dividends and to
participate  in  distributions  or  payments  in the  event of any  liquidation,
dissolution or winding up of the Trust, the Series B Preferred Shares shall rank
(i) senior to the Common Shares, the Junior  Participating  Preferred Shares and
any  other  class  or  series  of  Shares  of the  Trust,  the  terms  of  which
specifically  provide that such class or series  ranks,  as to rights to receive
dividends and to  participate in  distributions  or payments in the event of any
liquidation,  dissolution  or winding  up of the  Trust,  junior to the Series B
Preferred Shares (the Shares  described in this clause (i) being,  collectively,
"Junior  Shares"),  (ii)  on a  parity  with  the 9  7/8%  Series  A  Cumulative
Redeemable  Preferred Shares, $0.01 par value per share (the "Series A Preferred
Shares"),  and any other  class or series of Shares of the  Trust,  the terms of
which  specifically  provide  that such class or series  ranks,  as to rights to
receive  dividends and to participate in  distributions or payments in the event
of any liquidation, dissolution or winding up of the Trust, on a parity with the
Series B Preferred Shares,  and (iii) junior to any class or series of Shares of
the Trust,  the terms of which  specifically  provide  that such class or series
ranks, as to rights to receive  dividends and to participate in distributions or
payments  in the event of any  liquidation,  dissolution  or  winding  up of the
Trust, senior to the Series B Preferred Shares. For the avoidance of doubt, debt
securities

<PAGE>

of the Trust which are convertible  into or exchangeable for Shares of the Trust
or any other debt securities of the Trust do not constitute a class or series of
Shares for purposes of this Section 2.

         3.       Dividends and Distributions.

                  (a) Subject to the  preferential  rights of the holders of any
class or series of Shares of the Trust ranking  senior to the Series B Preferred
Shares as to dividends,  the holders of the then outstanding  Series B Preferred
Shares shall be entitled to receive,  when and as authorized by the Trustees and
declared by the Trust, out of any funds legally available  therefor,  cumulative
dividends  at a rate of eight and three  fourths  percent (8 3/4 %) per annum of
the Twenty-five Dollars ($25.00) per share liquidation  preference of the Series
B Preferred  Shares  (equivalent to the annual rate of $2.1875 per share).  Such
dividends shall accrue and be cumulative from (but excluding) September 12, 2002
(the "Original  Issue Date") in the case of Series B Preferred  Shares issued on
or prior to October 11, 2002, and otherwise from (but excluding) the date of the
original issuance  thereof,  and will be payable quarterly in arrears in cash on
the  fifteenth  day of each  February,  May,  August and  November  beginning on
November 15, 2002 (each such day being hereinafter called a "Quarterly  Dividend
Date");  provided that if any Quarterly  Dividend Date is not a Business Day (as
hereinafter defined),  then the dividend which would otherwise have been payable
on such Quarterly Dividend Date may be paid on the next succeeding  Business Day
with the same force and effect as if paid on such  Quarterly  Dividend Date, and
no interest or additional  dividends or other sums shall accrue on the amount so
payable from such Quarterly Dividend Date to such next succeeding  Business Day.
As used herein the term  "Dividend  Period" for Series B Preferred  Shares means
the  period  from but  excluding  the  Original  Issue Date or other date of the
original issuance thereof,  as applicable,  and ending on and including the next
following Quarterly Dividend Date, and each subsequent period from but excluding
a  Quarterly  Dividend  Date and  ending  on and  including  the next  following
Quarterly  Dividend  Date.  The  amount  of any  dividend  payable  for any full
Dividend  Period or portion  thereof shall be computed on the basis of a 360-day
year of twelve 30-day months (it being understood that the first Dividend Period
is shorter than a full Dividend  Period).  Dividends shall be payable to holders
of record  as they  appear  in the  share  records  of the Trust at the close of
business on the  applicable  record date (the "Record  Date"),  which shall be a
date  designated  by the Trustees for the payment of dividends  that is not more
than 60 nor less than 10 days prior to the applicable Quarterly Dividend Date.

                  (b)  Dividends  on the Series B Preferred  Shares shall accrue
and be  cumulative,  whether or not (i) the Trust has  earnings,  (ii) there are
funds  legally  available  for the  payment  of such  dividends  or  (iii)  such
dividends have been declared.

                  (c) If Series B  Preferred  Shares  are  outstanding,  no full
dividends  shall be declared or paid or set apart for payment on any other class
or series of Shares of the Trust ranking, as to dividends,  on a parity with the
Series B Preferred Shares for any period,  unless the full cumulative  dividends
on the Series B Preferred Shares have been or contemporaneously are declared and
paid or declared  and a sum  sufficient  for the  payment  thereof set apart for
payment for all past Dividend Periods. When dividends are not paid in full (or a
sum  sufficient  for such full  payment is not so set  apart)  upon the Series B
Preferred Shares and the Shares of any other class or series ranking on a parity
as to dividends with the Series B Preferred Shares,  all dividends declared upon
Series B Preferred  Shares and any such other class or series of Shares

                                      -2-
<PAGE>

shall in all cases bear to each other the same ratio that accrued  dividends per
share on the Series B Preferred  Shares and such other class or series of Shares
(which shall not include any  accumulation  in respect of unpaid  dividends  for
prior dividend  periods if such other class or series does not have a cumulative
dividend) bear to each other.

                  (d) Except as  provided  in Section  3(c)  above,  unless full
cumulative   dividends   on  the  Series  B   Preferred   Shares  have  been  or
contemporaneously are declared and paid or declared and a sum sufficient for the
repayment  thereof set apart for payment for all past  Dividend  Periods and the
then current Dividend Period, no dividends (other than in Common Shares or other
Junior Shares or options, warrants or rights to subscribe for or purchase Common
Shares  or other  Junior  Shares)  shall be  declared  or paid or set  apart for
payment  and no other  distribution  shall be  declared  or made upon the Common
Shares or any other Shares ranking junior to the Series B Preferred Shares as to
rights to receive  dividends or to participate in  distributions  or payments in
the event of any liquidation,  dissolution or winding up of the Trust, nor shall
any Common  Shares or any other such Shares be redeemed,  purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available for a
sinking fund for the  redemption  of any such Shares) by the Trust except (i) by
conversion  into or exchange  for Common  Shares or other  Junior  Shares,  (ii)
pursuant to pro rata offers to purchase or a concurrent  redemption of all, or a
pro rata  portion of, the  outstanding  Series B Preferred  Shares and any other
class or series of Shares ranking on a parity with Series B Preferred  Shares as
to rights to receive  dividends and to participate in  distributions or payments
in the event of any liquidation,  dissolution or winding up of the Trust,  (iii)
by redemption,  purchase or other acquisition of Common Shares made for purposes
of an  incentive,  benefit  or share  purchase  plan of the  Trust or any of its
subsidiaries  for  officers,  Trustees  or  employees  or others  performing  or
providing similar services, (iv) by redemption, purchase or other acquisition of
rights to purchase Junior Participating  Preferred Shares pursuant to the Rights
Agreement, dated as of October 17, 1994, between the Trust and State Street Bank
and Trust Company,  as rights agent,  or pursuant to any  replacement  agreement
therefor relating to such rights, each as in effect from time to time, or of any
similar  rights  from  time to time  issued by the  Trust in  connection  with a
successor or  supplemental  shareholder  rights  protection  plan adopted by the
Trustees, and (v) for redemptions, purchases or other acquisitions by the Trust,
whether  pursuant to any  provision of the  Declaration  or  otherwise,  for the
purpose of preserving  the Trust's status as a real estate  investment  trust (a
"REIT") for federal income tax purposes.

                  (e) No  interest,  or sum of money in lieu  thereof,  shall be
payable in respect of any  dividend  payment or  payments  on Series B Preferred
Shares which may be in arrears, and the holders of Series B Preferred Shares are
not entitled to any  dividends,  whether  payable in cash,  securities  or other
property,  in excess of the full cumulative  dividends described in this Section
3. Except as otherwise  expressly provided herein, the Series B Preferred Shares
shall not be entitled to participate in the earnings or assets of the Trust.

                  (f) Any dividend payment made on the Series B Preferred Shares
shall be first  credited  against the earliest  accrued but unpaid  dividend due
with respect to such Shares which remains  payable.  Any cash  dividends paid in
respect of Series B Preferred  Shares,  including any portion  thereof which the
Trust elects to designate as "capital gain dividends" (as defined in Section 857
(or any  successor  provision)  of the Internal  Revenue Code) or as a return of
capital, shall be credited to the cumulative dividends on the Series B Preferred
Shares.

                                      -3-
<PAGE>

                  (g) No  dividends  on the Series B Preferred  Shares  shall be
authorized  by the  Trustees or be paid or set apart for payment by the Trust at
such time as the terms and  provisions of any agreement of the Trust,  including
any agreement  relating to its  indebtedness,  directly or  indirectly  prohibit
authorization,  payment  or  setting  apart for  payment  or  provide  that such
authorization,  payment or setting apart for payment  would  constitute a breach
thereof  or a default  thereunder,  or if such  declaration,  payment or setting
apart for payment shall be restricted or prohibited by law.

                  (h) The Trust shall remain  entitled to receive and retain any
interest or other  earnings on any money set aside for the payment of  dividends
on Series B  Preferred  Shares and holders  thereof  shall have no claim to such
interest or other  earnings.  Any funds for the payment of dividends on Series B
Preferred  Shares  which  have been set  apart by the  Trust  and  which  remain
unclaimed by the holders of the Series B Preferred  Shares  entitled  thereto on
the first  anniversary  of the  applicable  Quarterly  Dividend  Date,  or other
dividend  payment  date,  shall revert and be repaid to the general funds of the
Trust,  and thereafter the holders of the Series B Preferred  Shares entitled to
the funds which have reverted or been repaid to the Trust shall look only to the
general  funds of the Trust for  payment,  without  interest  or other  earnings
thereon.

                  (i) "Business  Day" shall mean any day,  other than a Saturday
or  Sunday,  that  is  neither  a  legal  holiday  nor a day  on  which  banking
institutions  in New York, New York or Boston,  Massachusetts  are authorized or
required by law, regulation or executive order to close.

         4.       Liquidation Rights.

                  (a) Upon any voluntary or involuntary liquidation, dissolution
or winding up of the Trust,  before any distribution or payment shall be made to
the  holders  of any Common  Shares or any other  Shares  ranking  junior to the
Series B  Preferred  Shares as to  rights to  participate  in  distributions  or
payments  in the event of any  liquidation,  dissolution  or  winding  up of the
Trust, but subject to the preferential  rights of holders of any class or series
of  Shares  ranking  senior  to the  Series B  Preferred  Shares as to rights to
participate  in  distributions  or  payments  in the  event of any  liquidation,
dissolution or winding up of the Trust, the holders of Series B Preferred Shares
shall be entitled to receive,  out of assets of the Trust legally  available for
distribution to shareholders,  liquidating  distributions in cash or property at
its fair market value as determined by the Trustees in the amount of Twenty-five
Dollars  ($25.00)  per Series B  Preferred  Share,  plus an amount  equal to all
dividends accrued and unpaid thereon.

                  (b)  After  payment  of the  full  amount  of the  liquidating
distributions  to which they are  entitled,  the  holders of Series B  Preferred
Shares will have no right or claim to any of the remaining assets of the Trust.

                  (c) In the  event  that  upon  any  voluntary  or  involuntary
liquidation, dissolution or winding up of the Trust, the available assets of the
Trust are  insufficient to pay the full amount of the liquidating  distributions
on all  outstanding  Series B Preferred  Shares and the full amounts  payable as
liquidating  distributions on all Shares of other classes or series of Shares of
the Trust ranking on a parity with the Series B Preferred Shares as to rights to
participate  in  distributions  or  payments  in the  event of any  liquidation,
dissolution  or  winding  up of the  Trust,  then the  holders  of the  Series B
Preferred  Shares and all other such  classes  or series of Shares  shall  share

                                      -4-
<PAGE>

ratably in any such distribution of assets in proportion to the full liquidating
distributions to which they would otherwise be respectively entitled.

                  (d) For purposes of this  Section 4, neither the sale,  lease,
transfer or conveyance of all or  substantially  all of the property or business
of the  Trust,  nor the  merger or  consolidation  of the Trust into or with any
other entity or the merger or consolidation of any other entity into or with the
Trust or a  statutory  share  exchange  by the  Trust,  shall be  deemed to be a
dissolution, liquidation or winding up of the Trust.

                  (e) In  determining  whether a  distribution  (other than upon
voluntary  or  involuntary  liquidation),   by  dividend,  redemption  or  other
acquisition of Shares or otherwise,  is permitted  under  Maryland law,  amounts
that  would be  needed,  if the Trust  were to be  dissolved  at the time of the
distribution, to satisfy the preferential rights upon dissolution of the holders
of Series B Preferred Shares will not be added to the Trust's total liabilities.

         5.       Redemption by the Trust.

                  (a) Optional Redemption. The Series B Preferred Shares are not
redeemable prior to September 12, 2007, except as otherwise  provided in Section
5(b)  below.  On and after  September  12,  2007,  the Trust may, at its option,
redeem Series B Preferred Shares in whole or from time to time in part, for cash
at a redemption price per share of Twenty-five  Dollars ($25.00),  together with
all accrued and unpaid  dividends  to the date fixed for  redemption,  except as
otherwise  provided in Section 5(c)(vi) below, and without interest (the "Series
B  Redemption  Price").  Each date fixed for  redemption  of Series B  Preferred
Shares  pursuant to this Section 5(a) or to Section 5(b) below is referred to in
these  provisions  of the Series B  Preferred  Shares as a "Series B  Redemption
Date." The Series B Preferred Shares have no stated maturity and are not subject
to any  sinking  fund or  mandatory  redemption.  Any  redemption  of  Series  B
Preferred  Shares pursuant to this Section 5(a) shall be made in accordance with
the applicable provisions of Section 5(c) below.

                  (b) Special Optional Redemption. The Trust may, at its option,
redeem at any time all or from time to time any Series B Preferred  Shares which
constitute  Excess Series B Preferred Shares (as defined in Section 9 below) for
cash at a  redemption  price per share equal to the Series B  Redemption  Price,
subject,  with  respect  to  the  portion  of  the  Series  B  Redemption  Price
constituting  accrued and unpaid dividends to the date fixed for redemption,  to
Section 5(c)(vi) below, and without interest. The Trust's right to redeem Excess
Series B  Preferred  Shares  shall be in addition  to, and shall not limit,  its
rights with  respect to such  Series B  Preferred  Shares set forth in Section 9
below  or in  Section  6.14 of the  Declaration.  Any  redemption  of  Series  B
Preferred  Shares pursuant to this Section 5(b) shall be made in accordance with
the applicable provisions of Section 5(c) below.

                  (c)      Procedures and Terms for Redemption.

                           (i) Notice of  redemption  will be mailed at least 30
         days but not more than 60 days before the Series B  Redemption  Date to
         each  holder of record of Series B  Preferred  Shares to be redeemed at
         the address shown on the share  transfer  books of the Trust;  provided
         that if the Trust shall have reasonably  concluded,  based on advice of

                                      -5-
<PAGE>

         independent tax counsel experienced in such matters,  that a redemption
         pursuant  to  Section  5(b)  must  be  made  on a  date  (the  "Special
         Redemption  Date") which is earlier than 30 days after the date of such
         mailing  in order to  preserve  the  status  of the Trust as a REIT for
         federal income tax purposes or to comply with federal tax laws relating
         to the Trust's  qualification  as a REIT,  then the Trust may give such
         shorter notice as is necessary to effect such redemption on the Special
         Redemption  Date.  Each  notice  of  redemption  shall  state:  (A) the
         applicable  Series  B  Redemption  Date;  (B) the  number  of  Series B
         Preferred Shares to be redeemed; (C) the applicable Series B Redemption
         Price;  (D) the place or places  where  certificates  for such Series B
         Preferred  Shares  are to be  surrendered  for  payment of the Series B
         Redemption  Price;  and (E) that  dividends  on the Series B  Preferred
         Shares to be redeemed  will cease to accrue on such Series B Redemption
         Date.  If  fewer  than  all the  Series B  Preferred  Shares  are to be
         redeemed,  the notice  mailed to each such  holder  thereof  shall also
         specify  the number of Series B Preferred  Shares to be  redeemed  from
         each such holder or the method for calculating that number.  No failure
         to give such  notice or any defect  therein or in the  mailing  thereof
         shall affect the validity of the  proceedings for the redemption of any
         Series B Preferred Shares except as to the holder to whom the Trust has
         failed to give notice or to whom notice was defective.

                           (ii) If notice of  redemption  of Series B  Preferred
         Shares has been mailed in accordance  with Section 5(c)(i) above and if
         the  funds  necessary  for such  redemption  have been set aside by the
         Trust in trust for the benefit of the holders of the Series B Preferred
         Shares so called for  redemption,  subject to the provisions of Section
         5(c)(v)  below,  then  from and  after  the  Series B  Redemption  Date
         specified in the notice,  dividends will cease to accumulate,  and such
         Shares shall no longer be deemed to be  outstanding  and shall not have
         the status of Series B  Preferred  Shares and all rights of the holders
         thereof as  shareholders  of the Trust (except the right to receive the
         Series B Redemption Price) shall terminate.

                           (iii) Upon surrender,  in accordance with the Trust's
         notice of redemption,  of the  certificates  for any Series B Preferred
         Shares  redeemed  (properly  endorsed or assigned for transfer and with
         applicable signature guarantees,  if the Trust shall so require and the
         notice shall so state), the Series B Preferred Shares shall be redeemed
         by the Trust at the Series B Redemption  Price.  In case fewer than all
         the Series B Preferred  Shares  evidenced by any such  certificate  are
         redeemed,  a new certificate or certificates shall be issued evidencing
         the  unredeemed  Series B Preferred  Shares  without cost to the holder
         thereof.

                           (iv) If fewer  than all of the  outstanding  Series B
         Preferred  Shares are to be redeemed,  the number of Series B Preferred
         Shares to be redeemed  will be  determined by the Trust and such Shares
         may be  redeemed  pro rata from the holders of record of such Shares in
         proportion  to the number of such  Shares  held by such  holders  (with
         adjustments to avoid redemption of fractional Shares), by lot or by any
         other equitable method determined by the Trust.

                           (v)  Any  funds  for  the   redemption  of  Series  B
         Preferred  Shares  which have been set aside by the Trust  pursuant  to
         Section  5(c)(ii)  above,  shall be irrevocably

                                       -6-
<PAGE>

         set aside  separate and apart from the Trust's other funds in trust for
         the pro rata  benefit of the holders of the Series B  Preferred  Shares
         called for redemption, except that:

                  (A)      the Trust shall be  entitled to receive any  interest
                           or other earnings, if any, earned on any money so set
                           aside  in  trust,  and  the  holders  of  any  Shares
                           redeemed  shall  have no  claim to such  interest  or
                           other earnings; and

                  (B)      any  balance  of  monies  deposited  by the Trust and
                           unclaimed  by the  holders of the Series B  Preferred
                           Shares entitled thereto at the expiration of one year
                           from the applicable Series B Redemption Date shall be
                           repaid,  together with any interest or other earnings
                           earned  thereon,  to the general  funds of the Trust,
                           and  after any such  repayment,  the  holders  of the
                           Shares  entitled  to the funds which have been repaid
                           to the Trust shall look only to the general  funds of
                           the  Trust  for  payment  without  interest  or other
                           earnings thereon.

                           (vi)  Anything  in these  provisions  of the Series B
         Preferred Shares to the contrary notwithstanding, the holders of record
         of Series B Preferred  Shares at the close of business on a Record Date
         will be entitled to receive the  dividend  payable with respect to such
         Shares on the corresponding Quarterly Dividend Date notwithstanding the
         redemption  of such  Shares  after such  Record Date and on or prior to
         such Quarterly  Dividend Date or the Trust's  default in the payment of
         the dividend due on such  Quarterly  Dividend  Date,  in which case the
         amount payable upon  redemption of such Series B Preferred  Shares will
         not include such dividend (and the full amount of the dividend  payable
         for  the  applicable  Dividend  Period  shall  instead  be paid on such
         Quarterly Dividend Date to the holders of record on such Record Date as
         aforesaid).  Except as  provided  in this clause (vi) and except to the
         extent that accrued and unpaid  dividends  are payable as a part of the
         Series B Redemption  Price  pursuant to Section 5(a) or 5(b), the Trust
         will make no payment or allowance for unpaid  dividends,  regardless of
         whether or not in  arrears,  on Series B  Preferred  Shares  called for
         redemption.

                           (vii) Notwithstanding the foregoing,  unless the full
         cumulative  dividends on all Series B Preferred  Shares shall have been
         or  contemporaneously  are  declared  and  paid or  declared  and a sum
         sufficient  for the payment  thereof set apart for payment for all past
         Dividend  Periods and the then  current  Dividend  Period,  no Series B
         Preferred  Shares  shall be redeemed  unless all  outstanding  Series B
         Preferred Shares are simultaneously redeemed;  provided,  however, that
         (i) the  foregoing  shall  not  prevent  the  redemption  of  Series  B
         Preferred  Shares  pursuant  to Section  5(b) above or the  purchase or
         acquisition  of Series B  Preferred  Shares  pursuant  to a purchase or
         exchange  offer made on the same  terms to  holders of all  outstanding
         Series B  Preferred  Shares,  and (ii) the  foregoing  shall not in any
         respect  limit  the  terms  and  provisions  of  Section  6.14  of  the
         Declaration  or  Section  9  hereof.  In  addition,   unless  the  full
         cumulative  dividends on all outstanding Series B Preferred Shares have
         been or  contemporaneously  are declared and paid or declared and a sum
         sufficient  for the payment  thereof set apart for payment for all past
         Dividend Periods and the then current Dividend Period,  the Trust shall
         not purchase or otherwise  acquire  directly or indirectly any Series B
         Preferred  Shares  (except by  conversion  into or exchange  for Common
         Shares  or  other  Junior  Shares);  provided,

                                       -7-
<PAGE>

         however,  that (i) the  foregoing  shall not prevent the  redemption of
         Series  B  Preferred  Shares  pursuant  to  Section  5(b)  above or the
         purchase  or  acquisition  of Series B Preferred  Shares  pursuant to a
         purchase  or  exchange  offer  made on the same terms to holders of all
         outstanding Series B Preferred Shares, and (ii) the foregoing shall not
         in any respect  limit the terms and  provisions  of Section 6.14 of the
         Declaration or Section 9 hereof.

                           (viii) For the avoidance of doubt,  the provisions of
         this  Section  5 shall not limit any  direct or  indirect  purchase  or
         acquisition by the Trust of all or any Series B Preferred Shares on the
         open market (including in privately negotiated transactions), except as
         otherwise expressly provided in Section 5(c)(vii) above.

         6. Voting Rights. Notwithstanding anything to the contrary contained in
the Declaration, except as set forth below in this Section 6, the holders of the
Series B  Preferred  Shares  shall not be entitled to vote at any meeting of the
shareholders  for election of Trustees or for any other  purpose or otherwise to
participate in any action taken by the Trust or the shareholders  thereof, or to
receive notice of any meeting of shareholders (except for such notices as may be
expressly required by law).

                  (a) At any time  dividends  on the Series B  Preferred  Shares
shall  be in  arrears  for six or more  quarterly  periods,  whether  or not the
quarterly  periods are  consecutive,  the  holders of Series B Preferred  Shares
(voting  separately as a class with all other series of Preferred  Shares of the
Trust upon which like voting  rights have been  conferred  and are  exercisable)
will be entitled  to vote for the  election  of two  additional  Trustees of the
Trust  at the  next  annual  meeting  of  shareholders  and for  those  or other
replacement Trustees at each subsequent meeting (and the number of Trustees then
constituting  the Board of Trustees will  automatically  increase by two, if not
already increased by two by reason of the election of Trustees by the holders of
such Preferred  Shares),  until all dividends  accumulated on Series B Preferred
Shares for the past Dividend  Periods and the then current Dividend Period shall
have been fully paid or declared and a sum  sufficient  for the payment  thereof
set apart for payment.  For the avoidance of doubt, and by means of example,  in
the event dividends on the Series B Preferred  Shares and the Series A Preferred
Shares shall both be in arrears for six or more quarterly  periods,  the holders
of Series B Preferred  Shares and Series A Preferred  Shares (and the holders of
all other series of Preferred  Shares of the Trust upon which like voting rights
have been  conferred  and are  exercisable)  shall be  entitled  to vote for the
election  of two  additional  Trustees  in  the  aggregate,  not  four  or  more
additional Trustees.

                           (i)  Upon  the full  payment  of all  such  dividends
         accumulated on Series B Preferred  Shares for the past Dividend Periods
         and the then current Dividend Period or the declaration in full thereof
         and the Trust's setting aside a sum sufficient for the payment thereof,
         the right of the holders of Series B Preferred Shares to elect such two
         Trustees shall cease, and (unless there are one or more other series of
         Preferred  Shares of the Trust upon which like voting  rights have been
         conferred  and are  exercisable)  the term of office  of such  Trustees
         previously so elected shall automatically  terminate and the authorized
         number of Trustees of the Trust will thereupon  automatically return to
         the number of  authorized  Trustees  otherwise  in effect,  but subject
         always to the same provisions for the  reinstatement  and divestment of
         the  right to elect  two  additional  Trustees  in the case of any such
         future dividend arrearage.

                                      -8-
<PAGE>

                           (ii) If at any time when the voting rights  conferred
         upon the Series B Preferred  Shares  pursuant to this  Section 6(a) are
         exercisable any vacancy in the office of a Trustee elected  pursuant to
         this Section 6(a) shall occur,  then such vacancy may be filled only by
         the written  consent of the  remaining  such  Trustee or by vote of the
         holders of record of the outstanding  Series B Preferred Shares and any
         other  series of  Preferred  Shares of the Trust upon which like voting
         rights have been conferred and are  exercisable  and which are entitled
         to vote as a class with the Series B Preferred  Shares in the  election
         of Trustees pursuant to this Section 6(a).

                           (iii) Any Trustee  elected or  appointed  pursuant to
         this Section 6(a) may be removed only by the holders of the outstanding
         Series B Preferred  Shares and any other series of Preferred  Shares of
         the Trust upon which like  voting  rights have been  conferred  and are
         exercisable and which are entitled to vote as a class with the Series B
         Preferred  Shares in the election of Trustees  pursuant to this Section
         6(a), and may not be removed by the holders of the Common Shares.

                           (iv) The term of any  Trustees  elected or  appointed
         pursuant to this Section  6(a) shall be from the date of such  election
         or appointment and their qualification until the next annual meeting of
         the  shareholders  and until  their  successors  are duly  elected  and
         qualify, except as otherwise provided above in this Section 6(a).

                  (b)  So  long  as  any  Series  B  Preferred   Shares   remain
outstanding, the Trust shall not, without the affirmative vote or consent of the
holders of at least two-thirds of the Series B Preferred  Shares  outstanding at
the time,  given in person or by proxy,  either in writing or at a meeting  (the
holders  of  Series B  Preferred  Shares  voting  separately  as a  class),  (i)
authorize or create,  or increase the  authorized or issued amount of, any class
or series of Shares ranking senior to the Series B Preferred Shares with respect
to  payment  of  dividends  or the  distribution  of  assets  upon  liquidation,
dissolution or winding up of the Trust,  or reclassify any authorized  Shares of
the Trust into any such Shares, or create,  authorize or issue any obligation or
security  convertible  into or evidencing the right to purchase any such Shares,
or (ii) amend, alter or repeal the provisions of the Declaration or the terms of
the Series B Preferred Shares, whether by merger, consolidation or otherwise, so
as to materially and adversely affect any right, preference, privilege or voting
power of the Series B Preferred Shares; provided,  however, that any increase in
the amount of authorized  Preferred  Shares,  any issuance of or increase in the
amount of Series B Preferred  Shares or any  creation or issuance of or increase
in the amount of  authorized  shares of any class or series of Preferred  Shares
which  rank on a parity  with the  Series B  Preferred  Shares  with  respect to
payment of dividends or the distribution of assets upon liquidation, dissolution
or  winding up of the Trust or which are  Junior  Shares  shall not be deemed to
materially and adversely  affect the rights,  preferences,  privileges or voting
powers of the Series B Preferred Shares.

                  (c) The voting  provisions  set forth in  clauses  (a) and (b)
above  will not apply if, at or prior to the time when the act with  respect  to
which a vote would  otherwise  be required  shall be effected,  all  outstanding
Series B Preferred  Shares shall have been redeemed or called for redemption and
sufficient  funds shall have been  deposited in trust pursuant to the provisions
of Sections 5(c)(ii) and 5(c)(v) hereof to effect the redemption.

                                      -9-
<PAGE>

                  (d) On  each  matter  submitted  to a vote of the  holders  of
Series B Preferred  Shares or on which the holders of Series B Preferred  Shares
are otherwise entitled to vote as provided herein, each Series B Preferred Share
shall be  entitled  to one vote,  except  that when Shares of any other class or
series of Preferred Shares of the Trust have the right to vote with the Series B
Preferred Shares as a single class on any matter,  the Series B Preferred Shares
and the  Shares of each such other  class or series  will have one vote for each
Twenty-five Dollars ($25.00) of liquidation preference.

         7.  Conversion.  The Series B Preferred Shares are not convertible into
or  exchangeable  for any  other  property  or  securities  of the  Trust.  This
provision  will not prevent the Trust from  offering to convert or exchange  the
Series B Preferred Shares.

         8. Status of Redeemed and Reacquired  Series B Preferred Shares. In the
event any Series B  Preferred  Shares  shall be  redeemed  pursuant to Section 5
hereof  or  otherwise  reacquired  by the  Trust,  the  Shares  so  redeemed  or
reacquired  shall  become  authorized  but unissued  Series B Preferred  Shares,
available  for  future  issuance  and  reclassification  by the  Trust or, if so
determined by the Trustees, may be retired and canceled by the Trust.

         9.       Restrictions on Transfer.

                  (a)  The  Trustees,  by  notice  to the  holder  thereof,  may
purchase  any or all  Series B  Preferred  Shares  that  have  been  transferred
pursuant to a transfer which, in the opinion of the Trustees,  would  jeopardize
the  status of the Trust as a REIT for  federal  income  tax  purposes.  Without
limiting the generality of the foregoing,  as a condition to the transfer and/or
registration  of  transfer of any Series B Preferred  Shares  ("Excess  Series B
Preferred Shares") which could result in

                           (i)  direct or  indirect  ownership  (as  defined  in
                  Section  6.14(i)  of the  Declaration)  of Series B  Preferred
                  Shares  representing  more  than  8.5% in value  of the  total
                  Series B Preferred Shares outstanding becoming concentrated in
                  the hands of one owner other than an Excepted  Person (as such
                  term is defined in Section 6.14(c) of the Declaration), or

                           (ii) the outstanding  Series B Preferred Shares being
                  owned by fewer than 120 persons,

such  potential  owner  shall  file with the Trust the  statement  or  affidavit
described in Section  6.14(b) of the Declaration no later than the fifteenth day
prior to any  transfer,  registration  of  transfer  or  transaction  which,  if
consummated,  would result in such ownership.  The Trustees shall have the power
and right (i) by lot or other  means  deemed  equitable  by them to call for the
purchase from the  beneficial  owner or the  shareholder of such Excess Series B
Preferred  Shares,  and (ii) to  refuse to  transfer  or issue  Excess  Series B
Preferred  Shares or share  certificates  to any Person  (as  defined in Section
1.4(r) of the Declaration)  whose  acquisition of such Series B Preferred Shares
would,  in the  opinion  of the  Trustees,  result  in the  direct  or  indirect
beneficial  ownership of any Excess Series B Preferred  Shares by a person other
than any of the Excepted Persons.

                                      -10-
<PAGE>

                  (b) Any Excess Series B Preferred  Shares shall  automatically
be deemed to constitute  Excess Shares  (within the meaning of the  Declaration)
and shall be treated  in the manner  prescribed  for Excess  Shares,  including,
without limitation, the provisions set forth in Section 6.14(c) thereof.

                  (c)  Notwithstanding any other provision of the Declaration or
hereof to the contrary,  any purported  acquisition of Series B Preferred Shares
(whether  such  purported  acquisition  results  from  the  direct  or  indirect
acquisition or ownership (as defined for purposes of the  Declaration) of Series
B Preferred Shares) which would result in the disqualification of the Trust as a
REIT for federal income tax purposes,  shall be null and void. Any such Series B
Preferred  Shares may be treated by the  Trustees in the manner  prescribed  for
Excess Series B Preferred  Shares in these  provisions of the Series B Preferred
Shares and for Excess Shares in Section 6.14(c) of the Declaration.

                  (d) The  provisions  of this  Section  9 shall  not  limit the
applicability of Section 6.14 of the Declaration to Series B Preferred Shares in
accordance  with the terms thereof,  and the provisions of this Section 9 and of
Section 6.14 of the Declaration  shall not limit the right of the Trust to elect
to redeem  Excess  Series B Preferred  Shares  pursuant to Section  5(b) hereof.
Nothing  contained in this  Section 9 or in any other  provision of the Series B
Preferred  Shares  shall limit the  authority of the Trustees to take such other
action  as they  deem  necessary  or  advisable  to  protect  the  Trust and the
interests of the  shareholders  by  preservation of the Trust's status as a REIT
for federal income tax purposes.  The provisions of subsections  (g) through (i)
of Section  6.14 of the  Declaration  shall be  applicable  to this Section 9 as
though (i) the references  therein to Section 6.14 of the  Declaration  referred
instead to this  Section 9 and (ii) the  references  therein to  subsections  of
Section 6.14 of the  Declaration  referred to the comparable  provisions of this
Section 9.

         10. Severability.  If any preference, right, voting power, restriction,
limitation  as to  dividends  or  other  distributions,  qualification,  term or
condition  of  redemption  or other  term of the  Series B  Preferred  Shares is
invalid, unlawful or incapable of being enforced by reason of any rule of law or
public  policy,  then,  to the extent  permitted by law, all other  preferences,
rights,  voting  powers,  restrictions,  limitations  as to  dividends  or other
distributions,  qualifications,  terms and  conditions of  redemption  and other
terms of the Series B Preferred  Shares  which can be given  effect  without the
invalid, unlawful or unenforceable preference, right, voting power, restriction,
limitation  as to  dividends  or  other  distributions,  qualification,  term or
condition  of  redemption  or other term of the Series B Preferred  Shares shall
remain in full  force and  effect  and  shall not be deemed  dependent  upon any
invalid, unlawful or unenforceable preference, right, voting power, restriction,
limitation  as to  dividends  or  other  distributions,  qualification,  term or
condition of redemption or other term of the Series B Preferred Shares.

         THIRD:   The  Series  B  Preferred  Shares  have  been  classified  and
designated  by the  Board of  Trustees  under  the  authority  contained  in the
Declaration.

         FOURTH: These Articles Supplementary have been approved by the Board of
Trustees in the manner and by the vote required by law.

                                      -11-
<PAGE>

         FIFTH:  The  undersigned  President  of the  Trust  acknowledges  these
Articles  Supplementary  to be the trust act of the Trust and, as to all matters
or  facts  required  to  be  verified  under  oath,  the  undersigned  President
acknowledges that, to the best of his knowledge,  information and belief,  these
matters and facts are true in all material  respects and this  statement is made
under the penalties for perjury.

                  (Remainder of Page Intentionally Left Blank)

                                      -12-
<PAGE>

         IN WITNESS  WHEREOF,  HRPT  PROPERTIES  TRUST has caused these Articles
Supplementary  to be signed in its name and on its behalf by its  President  and
witnessed by its Secretary on September 6, 2002.

WITNESS:                                  HRPT PROPERTIES TRUST

/s/ John C. Popeo                         By: /s/ John A. Mannix
-----------------                             -----------------------
John C. Popeo                                 John A. Mannix
Secretary                                     President

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