<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 8, 1998
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
EQUITY OFFICE PROPERTIES TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS GOVERNING INSTRUMENT)
<TABLE>
<S> <C>
MARYLAND 36-4151656
(STATE OF ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
</TABLE>
TWO NORTH RIVERSIDE PLAZA, SUITE 2200
CHICAGO, ILLINOIS 60606
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
STANLEY M. STEVENS
CHIEF LEGAL COUNSEL
TWO NORTH RIVERSIDE PLAZA, SUITE 2200
CHICAGO, ILLINOIS 60606
(NAME AND ADDRESS OF AGENT FOR SERVICE)
---------------------
Copies to:
J. WARREN GORRELL, JR.
JAMES E. SHOWEN
HOGAN & HARTSON L.L.P.
555 THIRTEENTH STREET, N.W.
WASHINGTON, D.C. 20004-1109
(202) 637-5600
---------------------
Approximate date of commencement of proposed sale to the public: From time
to time after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] ________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
---------------------
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
PROPOSED MAXIMUM
TITLE OF CLASS AGGREGATE OFFERING AMOUNT OF
OF SECURITIES BEING REGISTERED PRICE (1) REGISTRATION FEE (1)(2)
- -------------------------------------------------------------------------------------------------------
Common Shares of Beneficial Interest, $.01 par value,
Preferred Shares of Beneficial Interest, $.01 par
value, Common Share Warrants and Preferred Share Warrants $1,500,000,000 $442,500
</TABLE>
- --------------------------------------------------------------------------------
(1) Determined pursuant to Rule 457(o).
(2) Pursuant to Rule 429, the Company is applying $73,750 previously paid in
connection with the Company's Registration Statement on Form S-11
(Commission File No. 333-51597) to the amount of registration fee
calculated hereunder.
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
The information in this Prospectus is not complete and may be changed. We
may not sell these Securities until the registration statement relating to
these Securities has been declared effective by the Securities and Exchange
Commission. This Prospectus is neither an offer to sell nor a solicitation
of an offer to buy these Securities in any jurisdiction where such offer or
sale is unlawful.
SUBJECT TO COMPLETION, DATED JULY 8, 1998
PROSPECTUS
$1,500,000,000
EQUITY OFFICE PROPERTIES TRUST
COMMON SHARES, PREFERRED SHARES,
COMMON SHARE WARRANTS AND PREFERRED SHARE WARRANTS
------------------------
We may from time to time offer in one or more series or classes (i) our
common shares of beneficial interest, par value $.01 per share ("Common
Shares"), (ii) our preferred shares of beneficial interest, par value $.01 per
share ("Preferred Shares"), which may be convertible into Preferred Shares or
Common Shares and (iii) our warrants exercisable for Common Shares ("Common
Warrants") or Preferred Shares ("Preferred Warrants," and together with Common
Warrants, "Warrants"), with an aggregate initial offering price of up to
$1,500,000,000 in amounts, at prices and on terms determined at the time of
offering. We may offer the Common Shares, Preferred Shares and Warrants
(collectively, the "Securities") separately or together, in separate series in
amounts, at prices and on terms described in one or more supplements to this
Prospectus (each, a "Prospectus Supplement").
We will deliver this Prospectus together with a Prospectus Supplement
setting forth the specific terms of the Securities we are offering. Such terms
will include, where applicable: (i) any initial public offering price of Common
Shares; (ii) the specific title and stated liquidation value, any distribution,
liquidation, redemption, conversion, voting and other rights, and any initial
public offering price of Preferred Shares; and (iii) the specific title and
aggregate number, and the issue price and exercise price and date(s) or
period(s) of Warrants. In addition, such terms shall include limitations on
direct or beneficial ownership and restrictions on transfer of the Securities,
in each case as may be appropriate to assist in maintaining our status as a real
estate investment trust for federal income tax purposes.
The applicable Prospectus Supplement will also contain information, where
applicable, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Securities covered
by such Prospectus Supplement.
We may offer the Securities directly, through agents, or to or through
underwriters or dealers. If any agents or underwriters are involved in the sale
of any of the Securities, their names, and any applicable purchase price, fee,
commission or discount arrangement with them, will be set forth, or will be
calculable from the information set forth, in the applicable Prospectus
Supplement. See "Plan of Distribution" on page 15. No Securities may be sold
without delivery of a Prospectus Supplement describing the method and terms of
the offering of those Securities.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OF THESE SECURITIES, OR DETERMINED IF THIS PROSPECTUS IS
TRUTHFUL OR COMPLETE. IT IS ILLEGAL FOR ANY PERSON TO TELL YOU OTHERWISE.
The date of this Prospectus is July , 1998.
<PAGE> 3
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Information contained in or incorporated by reference into this Prospectus
and the accompanying Prospectus Supplement contains "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"). We intend the forward-looking statements to be covered by the
safe harbor provisions for forward-looking statements contained in Section 27A
of the Securities Act. These forward-looking statements relate to, without
limitation, future economic performance, our plans and objectives for future
operations and projections of revenue and other financial items, which can be
identified by the use of forward-looking terminology such as "may," "will,"
"should," "expect," "anticipate," "estimate" or "continue" or the negative
thereof or other variations thereon or comparable terminology. The cautionary
statements incorporated by reference from our 1997 Annual Report on Form 10-K
under the caption "Risk Factors" and other similar statements contained in this
Prospectus or the accompanying Prospectus Supplement identify important factors
with respect to such forward-looking statements, including certain risks and
uncertainties, that could cause actual results to differ materially from those
in such forward-looking statements.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, is required to file reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information can be inspected and copied at the Public
Reference Room of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's regional offices at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World
Trade Center, Suite 1300, New York, New York 10048. The public may obtain
information on the operation of the Public Reference Room by calling the
Commission at 1-800-SEC-0330. Copies of the reports, proxy statements and other
information can be obtained from the Public Reference Room of the Commission,
Washington, D.C. 20549, upon payment of prescribed rates, or in certain cases by
accessing the Commission's World Wide Web site at http://www.sec.gov. The Common
Shares are listed on the NYSE under the symbol "EOP" and the Series A Preferred
Shares are listed on the NYSE under the symbol "EOPpfA." Such reports, proxy
statements and other information concerning the Company can be inspected at the
offices of the NYSE, 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a registration statement on Form
S-3 (the "Registration Statement"), of which this Prospectus is a part, under
the Securities Act, with respect to the Securities offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement, certain portions of which have been omitted as permitted by the rules
and regulations of the Commission. Statements contained in this Prospectus as to
the contents of any contract or other document are not necessarily complete, and
in each instance, reference is made to the copy of such contract or document
filed as an exhibit to the Registration Statement, each such statement being
qualified in all respects by such reference and the exhibits and schedules
thereto. For further information regarding the Company and the Securities,
reference is hereby made to the Registration Statement and such exhibits and
schedules which may be obtained from the Commission at its principal office in
Washington, D.C. upon payment of the fees prescribed by the Commission. The
Commission maintains a "web site" that contains reports, proxy and information
statements and other information regarding issuers that file electronically with
the Commission. The address of such site is "http://www.sec.gov."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company under the
Exchange Act with the Commission and are incorporated herein by reference:
a. The Company's Annual Report on Form 10-K for the year ended December
31, 1997, as amended to date.
2
<PAGE> 4
b. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998.
c. The Company's Current Report on Form 8-K/A, filed with the Commission
on February 18, 1998 (amending the Company's Current Report on Form
8-K filed with the Commission on December 24, 1997) and the Company's
Current Report on Form 8-K filed with the Commission on June 30,
1998.
d. The Company's Registration Statement on Form 8-A, which incorporates
by reference a description of the Common Shares from the Company's
Registration Statement on Form S-11 (File No. 333-26629).
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of a particular offering of Securities to which this Prospectus
relates shall be deemed to be incorporated by reference in this Prospectus and
to be a part hereof from the date of filing such documents.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained in the
Prospectus (in the case of a statement in a previously filed document
incorporated or deemed to be incorporated by reference herein), in any
applicable Prospectus Supplement relating to a specific offering of Securities,
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus or any accompanying
Prospectus Supplement. Subject to the foregoing, all information appearing in
this Prospectus and each accompanying Prospectus Supplement is qualified in its
entirety by the information appearing in the documents incorporated by
reference.
Copies of all documents which are incorporated herein by reference (not
including the exhibits to such information, unless such exhibits are
specifically incorporated by reference in such information) will be provided
without charge to each person, including any beneficial owner, to whom this
Prospectus is delivered upon written or oral request. Requests should be
directed to Equity Office Properties Trust, Two North Riverside Plaza, Suite
2200, Chicago, Illinois 60606, Attention: Diane Morefield (telephone number:
(312) 466-3300).
3
<PAGE> 5
As used herein and in the accompanying Prospectus Supplement, "Company"
means Equity Office Properties Trust, a Maryland real estate investment trust,
and one or more of its subsidiaries (including EOP Operating Limited
Partnership, a Delaware limited partnership (the "Operating Partnership")), and
predecessors thereof (the "Equity Office Predecessors") or, as the context may
require, Equity Office Properties Trust only or the Operating Partnership only.
All references to the historical activities of the Company prior to July 11,
1997, refer to the activities of the Equity Office Predecessors.
THE COMPANY
The Company was formed to continue and expand the national office property
business organized by Samuel Zell, chairman of the Board of Trustees of the
Company. The Company, a self-administered and self-managed real estate
investment trust ("REIT"), is the managing general partner of the Operating
Partnership. The Company owns all of its assets and conducts substantially all
of its business through the Operating Partnership and its subsidiaries.
The Company's executive offices are located at Two North Riverside Plaza,
Suite 2200, Chicago, Illinois 60606, and its telephone number is (312) 466-3300.
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement, the
Company intends to invest, contribute or otherwise transfer the net proceeds of
any sale of Securities to the Operating Partnership. The Operating Partnership
intends to use such net proceeds for general business purposes, including,
without limitation, the repayment of certain outstanding debt and the
acquisition or development of additional properties.
RATIOS OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED SHARE DISTRIBUTIONS
The Company's ratios of earnings to combined fixed charges and preferred
share distributions are as follows:
<TABLE>
<CAPTION>
EQUITY OFFICE
THREE MONTHS PREDECESSORS EQUITY OFFICE PREDECESSORS
ENDED COMPANY (COMBINED (COMBINED HISTORICAL)
MARCH 31, (HISTORICAL) HISTORICAL) YEARS ENDED DECEMBER 31,
------------ JULY 11, 1997 TO JANUARY 1, 1997 TO --------------------------------
1998 1997 DECEMBER 31, 1997 JULY 10, 1997 1996 1995 1994 1993 1992
----- ----- ----------------- ------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to
Combined Fixed
Charges and
Preferred Share
Distributions....... 1.94 1.90 2.11 1.52 1.49 1.21 1.24 1.23 1.24
</TABLE>
The ratios of earnings to combined fixed charges and preferred share
distributions were computed by dividing earnings by fixed charges. For this
purpose, earnings consist of income (loss) before gains from sales of property
and extraordinary items plus fixed charges. Fixed charges consist of interest
expense (including interest costs capitalized), the amortization of debt
issuance costs, the portion of rental expense deemed to represent interest
expense and preferred share distributions.
DESCRIPTION OF COMMON SHARES
The following description sets forth the general terms of the Common Shares
which may be issued by the Company. The description set forth below and in any
Prospectus Supplement does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, the Company's Articles of Amendment
and Restatement of Declaration of Trust (the "Declaration of Trust") which will
be made available as requested.
4
<PAGE> 6
Pursuant to its Declaration of Trust, the Company is authorized to issue
750 million Common Shares. The Common Shares currently outstanding are listed
for trading on the New York Stock Exchange ("NYSE"). As of June 30, 1998,
252,580,792 Common Shares were issued and outstanding. The Company will apply to
the NYSE to list the additional Common Shares to be sold pursuant to any
Prospectus Supplement, and the Company anticipates that such shares will be so
listed.
All Common Shares will be, when issued against payment therefor, fully paid
and nonassessable. Subject to the preferential rights of any other shares of
beneficial interest and to the provisions of the Company's Declaration of Trust
regarding restrictions on transfers of shares of beneficial interest, holders of
Common Shares are entitled to receive distributions if, as and when authorized
and declared by the Board of Trustees out of assets legally available therefor
and to share ratably in the assets of the Company legally available for
distribution to its shareholders in the event of its liquidation, dissolution or
winding-up after payment of, or adequate provision for, all known debts and
liabilities of the Company. The rights of holders of Common Shares will be
subject to, and may be adversely affected by, the rights of holders of any
Preferred Shares that have been issued and may be issued in the future. The
Board of Trustees of the Company may cause Preferred Shares to be issued to
obtain additional financing, in connection with acquisitions, to officers,
trustees and employees of the Company pursuant to benefit plans or otherwise and
for other proper corporate purposes. The Company currently pays regular
quarterly distributions on the Common Shares, as well as on the Series A
Preferred Shares and the Series B Preferred Shares (as such terms are
hereinafter defined).
Subject to the provisions of the Company's Declaration of Trust regarding
restrictions on transfer of shares of beneficial interest, each outstanding
Common Share entitles the holder to one vote on all matters submitted to a vote
of shareholders, including the election of trustees, and, except as provided
with respect to any other class or series of shares of beneficial interest, the
holders of Common Shares will possess the exclusive voting power. There is no
cumulative voting in the election of trustees, which means that the holders of a
majority of the outstanding Common Shares can elect all of the trustees then
standing for election and the holders of the remaining shares of beneficial
interest, if any, will not be able to elect any trustees.
Holders of Common Shares have no preferences, conversion, sinking fund,
redemption rights or preemptive rights to subscribe for any securities of the
Company. Subject to the provisions of the Company's Declaration of Trust
regarding restrictions on ownership and transfer, Common Shares have equal
distribution, liquidation and other rights.
Pursuant to Title 8 of the Corporations and Associations Article of the
Annotated Code of Maryland, as amended from time to time (the "Maryland REIT
Law"), a Maryland real estate investment trust generally cannot dissolve, amend
its declaration of trust or merge, unless approved by the affirmative vote or
written consent of shareholders holding at least two-thirds of the shares
entitled to vote on the matter unless a lesser percentage (but not less than a
majority of all of the votes entitled to be cast on the matter) is set forth in
the trust's declaration of trust. The Company's Declaration of Trust contains
such a provision providing for a lesser percentage, a majority of outstanding
shares, with respect to transactions pursuant to which the Company's assets will
be combined with those of one or more other entities (whether by merger, sale or
other transfer of assets, consolidation or share exchange).
Under the Maryland REIT Law, a declaration of trust may permit the trustees
by a two-thirds vote to amend the declaration of trust from time to time to
qualify as a REIT under the Internal Revenue Code of 1986, as amended (the
"Code"), or the Maryland REIT Law without the affirmative vote or written
consent of the shareholders. The Company's Declaration of Trust permits such
action by the Board of Trustees. Also under the Maryland REIT Law, a declaration
of trust may permit the board of trustees to amend the declaration of trust to
increase the aggregate number of shares of beneficial interest or the number of
shares of any class without shareholder approval. The Company's Declaration of
Trust authorizes the Board of Trustees to increase or decrease the aggregate
number of shares of beneficial interest of the Company or the number of shares
of beneficial interest of any class of beneficial interest of the Company but
requires that such action be approved by the affirmative vote of a majority of
all the votes cast on the matter at a meeting of shareholders at which a quorum
is present.
5
<PAGE> 7
The Company's Declaration of Trust authorizes the Board of Trustees to
reclassify any unissued Common Shares into other classes or series of beneficial
interest and to establish the number of shares in each class or series and to
set the preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications or terms or
conditions of redemption for each such class or series.
The transfer agent and registrar for the Common Shares is Boston EquiServe
LLP, an affiliate of First National Bank of Boston.
DESCRIPTION OF PREFERRED SHARES
The following description sets forth the general terms of the Preferred
Shares which may be issued by the Company. The description set forth below and
in any Prospectus Supplement does not purport to be complete and is subject to,
and is qualified in its entirety by reference to, the Company's Declaration of
Trust, the applicable Articles Supplementary to the Declaration of Trust
determining the terms of the related series of Preferred Shares (the "Articles
Supplementary"), and the Bylaws of the Company, each of which will be made
available as requested.
Pursuant to its Declaration of Trust, the Company is authorized to issue
100 million Preferred Shares, to classify any unissued Preferred Shares and to
reclassify any previously classified but unissued Preferred Shares of any series
from time to time, in one or more series, as authorized by the Board of
Trustees.
As of June 30, 1998, the Company had outstanding (i) 8,000,000 8.98% Series
A Cumulative Redeemable Preferred Shares, liquidation preference, $25.00 per
share ("Series A Preferred Shares") and (ii) 6,000,000 5.25% Series B
Convertible, Cumulative Redeemable Preferred Shares, liquidation preference of
$50.00 per share ("Series B Preferred Shares").
Series A Preferred Shares. The Series A Preferred Shares rank senior to
the Common Shares and on a parity with the Series B Preferred Shares with
respect to payment of distributions and distributions of assets upon
liquidation, dissolution or winding up of the Company. Holders of the Series A
Preferred Shares are entitled to receive, when and as authorized by the Company,
cumulative cash distributions at the rate of 8.98% of the $25.00 liquidation
preference per annum (equivalent to a fixed annual amount of $2.245 per share).
Such distributions are cumulative and are payable quarterly in arrears on or
before March 15, June 15, September 15 and December 15 of each year. The Series
A Preferred Shares are not convertible or entitled to the benefit of any sinking
fund. On and after June 15, 2002, the Company, at its option, may redeem the
Series A Preferred Shares, in whole or from time to time in part, for cash at a
redemption price of $25.00 per share, plus all accumulated and unpaid
distributions thereon to the date fixed for redemption. However, the redemption
price (other than the portion thereof consisting of accrued and unpaid
distributions) is payable solely out of the sale proceeds of other shares of
beneficial interest of the Company. Upon any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the Series A Preferred
Shares are entitled to a liquidation preference of $25.00 per share, plus
accumulated and unpaid distributions to the date of payment, before any
distribution of assets is made to holders of Common Shares and any other class
or series of shares of the Company ranking junior to the Series A Preferred
Shares as to liquidation rights.
Series B Preferred Shares. The Series B Preferred Shares rank senior to
the Common Shares and on a parity with the Series A Preferred Shares with
respect to the payment of distributions and amounts upon liquidation,
dissolution or winding up of the Company. Distributions on the Series B
Preferred Shares are cumulative and are payable quarterly on or about the
fifteenth day of February, May, August and November of each year, at the rate of
5.25% of the $50.00 liquidation preference per annum (equivalent to $2.625 per
annum per share), subject to increase if the Company fails to satisfy certain
obligations to file a registration statement to register resales of the Series B
Preferred Shares and the Common Shares issuable upon redemption or conversion of
the Series B Preferred Shares and to file an application with the NYSE to list
the Series B Preferred Shares and Common Shares issuable upon redemption or
conversion of the Series B Preferred Shares on the NYSE, in each case, on or
before August 10, 1998. Upon any voluntary or involuntary liquidation,
dissolution or winding up of the Company, the Series B Preferred Shares are
entitled to a
6
<PAGE> 8
liquidation preference of $50.00 per share, plus accumulated and unpaid
distributions to the date of payment, before any distribution of assets is made
to holders of Common Shares and any other class or series of shares of the
Company ranking junior to the Series B Preferred Shares as to liquidation
rights.
The Series B Preferred Shares are convertible at any time, at the option of
the holder, unless previously redeemed, into Common Shares at a conversion price
of $35.70 per Common Share (equivalent to a conversion rate of 1.40056 Common
Shares for each Series B Preferred Share), subject to adjustment in certain
circumstances (the "Conversion Price"). The Series B Preferred Shares are
subject to mandatory redemption on February 15, 2008 at a price of $50.00 per
Series B Preferred Share, plus accumulated and unpaid distributions to the
redemption date. The Series B Preferred Shares are not redeemable prior to
February 15, 2003. On and after February 15, 2003, the Series B Preferred Shares
will be redeemable by the Company, in whole or from time to time in part, at the
option of the Company, for such number of Common Shares as are issuable at the
Conversion Price (the "Share Redemption Right"). The Company may exercise the
Share Redemption Right only if for 20 trading days within any period of 30
consecutive trading days, including the last day of such period, the closing
price of the Common Shares on the NYSE exceeds $41.055 per share, subject to
adjustment in certain circumstances. On and after February 15, 2003, the Series
B Preferred Shares may be redeemed at the option of the Company for cash (the
"Cash Redemption Right"), in whole or from time to time in part, initially at
$51.1667 per Series B Preferred Share and thereafter at prices declining to
$50.00 per Series B Preferred Share on and after February 15, 2007, plus in each
case accumulated and unpaid distributions, if any, to the redemption date. The
Company will not exercise its Cash Redemption Right unless the redemption price
(other than the portion thereof consisting of accumulated and unpaid
distributions) for the exercise of the Cash Redemption Right is paid solely out
of the sale proceeds of other shares of beneficial interest of the Company,
which may include other series of Preferred Shares, and from no other source. In
addition, in certain circumstances relating to the preservation of the Company's
status as a REIT for federal income tax purposes, the Company may redeem Series
B Preferred Shares at any time.
In connection with the offering of the Series B Preferred Shares, the Board
of Trustees determined that the Ownership Limit (as defined herein) with respect
to the Series B Preferred Shares means the greater of (i) 9.9% of the Series B
Preferred Shares (in value or number, whichever is more restrictive) or (ii)
such number of Series B Preferred Shares such that five Persons who are
considered individuals pursuant to Section 542 of the Code, as modified by
Section 856(h)(3) of the Code (taking into account all Excepted Holders (as
defined in the Declaration of Trust)), could not Beneficially Own (as defined in
the Declaration of Trust), in the aggregate, more than 49.5% of the value of the
outstanding shares of beneficial interest of the Company.
The Prospectus Supplement relating to any Preferred Shares offered thereby
will contain the specific terms thereof, including, without limitation:
(1) The title, series and stated value of the Preferred Shares;
(2) The number of Preferred Shares offered, the liquidation preference per
share and the initial offering price or prices of the Preferred
Shares;
(3) The distribution rate(s), period(s) and/or payment date(s) (or
method(s) of calculation thereof) applicable to the Preferred Shares;
(4) Whether distributions on the Preferred Shares are cumulative or
non-cumulative and, if cumulative, the dates from which distributions
will begin to accumulate;
(5) The procedures for auction and remarketing, if any, for the Preferred
Shares;
(6) The provisions for a sinking fund, if any, for the Preferred Shares;
(7) The provisions for redemption, if applicable, of the Preferred Shares;
(8) Any listing of the Preferred Shares on any securities exchange;
7
<PAGE> 9
(9) The terms and conditions, if applicable, upon which the Preferred
Shares will be convertible into Common Shares of the Company,
including the conversion price (or manner of calculation thereof);
(10) The relative ranking and preferences of the Preferred Shares as to
distribution rights and rights upon liquidation, dissolution or
winding up of the affairs of the Company if other than as described in
this Prospectus;
(11) Any limitations on issuance of any other series of Preferred Shares
ranking senior to or on a parity with Preferred Shares as to
distribution rights and rights upon liquidation, dissolution or
winding up of the affairs of the Company;
(12) Any limitations on direct or beneficial ownership and restrictions on
transfer, in each case as may be appropriate to preserve the status of
the Company as a REIT.
(13) A discussion of all material federal income tax considerations, if
any, applicable to the Preferred Shares that are not discussed in this
Prospectus; and
(14) Any other specific terms, preferences, rights, limitations or
restrictions of the Preferred Shares (which shall not be inconsistent
with the provisions of the Company's Declaration of Trust or the
applicable Articles Supplementary).
Rank. Unless otherwise specified in the applicable Prospectus Supplement,
the Preferred Shares will, with respect to distribution rights and rights upon
liquidation, dissolution or winding up of the Company, rank (i) senior to all
classes or series of Common Shares of the Company and to all equity securities
the terms of which specifically provide that such equity securities rank junior
to such Preferred Shares; (ii) on a parity with all equity securities issued by
the Company other than referred to in clauses (i) and (iii); and (iii) junior to
all equity securities issued by the Company the terms of which specifically
provide that such equity securities rank senior to such Preferred Shares. The
term "equity securities" does not include convertible debt securities.
Distributions. Holders of the Preferred Shares of each series will be
entitled to receive, when, as and if declared by the Board of Trustees of the
Company, out of assets of the Company legally available for payment to
shareholders, cash distributions (or distributions in kind or in other property
if expressly permitted and described in the applicable Prospectus Supplement) at
such rates and on such dates as will be set forth in the applicable Prospectus
Supplement. Each such distribution shall be payable to holders of record as they
appear on the share transfer books of the Company on such record dates as shall
be fixed by the Board of Trustees of the Company.
Distributions on any series of Preferred Shares, if cumulative, will be
cumulative from and after the date set forth in the applicable Prospectus
Supplement. If the Board of Trustees of the Company fails to declare a
distribution payable on a distribution payment date on any series of the
Preferred Shares for which distributions are non-cumulative, then the holders of
such series of the Preferred Shares will have no right to receive a distribution
in respect of the distribution period ending on such distribution payment date,
and the Company will have no obligation to pay the distribution accumulated for
such period, whether or not distributions on such series are declared payable on
any future distribution payment date.
Unless otherwise specified in the applicable Prospectus Supplement, if any
Preferred Shares of any series are outstanding, no full distributions shall be
declared or paid or set apart for payment on any shares of beneficial interest
of the Company of any other series ranking, as to distributions, on a parity
with or junior to the Preferred Shares of such series for any period unless (i)
if such series of Preferred Shares has a cumulative distribution, full
cumulative distributions have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for such payment
on the Preferred Shares of such series for all past distribution periods and the
then current distribution period or (ii) if such series of Preferred Shares does
not have a cumulative distribution, full distributions for the then current
distribution period have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for such payment
on the Preferred Shares of such series. When distributions are not paid in full
(or a sum sufficient for such full payment is not so set apart) upon Preferred
Shares of any series and the shares of
8
<PAGE> 10
any other series of Preferred Shares ranking on a parity as to distributions
with the Preferred Shares of such series, all distributions declared upon
Preferred Shares of such series and any other series of Preferred Shares ranking
on a parity as to distributions with such Preferred Shares shall be declared pro
rata so that the amount of distributions declared per share of Preferred Shares
of such series and such other series of Preferred Shares shall in all cases bear
to each other the same ratio that accumulated distributions per share on the
Preferred Shares of such series and such other series of Preferred Shares (which
shall not include any accumulation in respect of unpaid distributions for prior
distribution periods if such Preferred Shares do not have a cumulative
distribution) bear to each other. No interest, or sum of money in lieu of
interest, shall be payable in respect of any distribution payment or payments on
Preferred Shares of such series which may be in arrears.
Except as provided in the immediately preceding paragraph, unless (i) if
such series of Preferred Shares has a cumulative distribution, full cumulative
distributions on the Preferred Shares of such series 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 distribution periods and the
then current distribution period, and (ii) if such series of Preferred Shares
does not have a cumulative distribution, full distributions on the Preferred
Shares of such series have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for payment for
the then current distribution period, no distributions (other than in Common
Shares or other shares of beneficial interest ranking junior to the Preferred
Shares of such series as to distributions and upon liquidation) shall be
declared or paid or set aside for payment or other distribution upon the Common
Shares, or any other shares of beneficial interest of the Company ranking junior
to or on a parity with the Preferred Shares of such series as to distributions
or upon liquidation, nor shall any Common Shares, or any other shares of
beneficial interest of the Company ranking junior to or on a parity with the
Preferred Shares of such series as to distributions or upon liquidation, 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 Company (except by conversion into or exchange for other shares
of beneficial interest of the Company ranking junior to the Preferred Shares of
such series as to distributions and upon liquidation).
If, for any taxable year, the Company elects to designate as "capital gain
dividends" (as defined in Section 857 of the Code) any portion (the "Capital
Gains Amount") of the dividends (within the meaning of the Code) paid or made
available for the year to holders of all classes of shares of beneficial
interest (the "Total Dividends"), then the portion of the Capital Gains Amount
that will be allocable to the holders of Preferred Shares will be the Capital
Gains Amount multiplied by a fraction, the numerator of which will be the total
dividends (within the meaning of the Code) paid or made available to the holders
of the Preferred Shares for the year and the denominator of which shall be the
Total Dividends.
Redemption. If so provided in the applicable Prospectus Supplement, the
Preferred Shares will be subject to mandatory redemption or redemption at the
option of the Company, in whole or in part, in each case upon the terms, at the
times and at the redemption prices set forth in such Prospectus Supplement.
The Prospectus Supplement relating to a series of Preferred Shares that is
subject to mandatory redemption will specify the number of such Preferred Shares
that shall be redeemed by the Company on the date(s) or during the period(s) to
be specified, at a redemption price per share to be specified, together with an
amount equal to all accumulated and unpaid distributions thereon (which shall
not, if such Preferred Shares do not have a cumulative distribution, include any
accumulation in respect of unpaid distributions for prior distribution periods)
to the date of redemption. The redemption price may be payable in cash or other
property, as specified in the applicable Prospectus Supplement. If the
redemption price for Preferred Shares of any series is payable only from the net
proceeds of the issuance of shares of beneficial interest of the Company, the
terms of such Preferred Shares may provide that, if no such shares of beneficial
interest shall have been issued or to the extent the net proceeds from any
issuance are insufficient to pay in full the aggregate redemption price then
due, such Preferred Shares shall automatically and mandatorily be converted into
the applicable shares of beneficial interest of the Company pursuant to
conversion provisions specified in the applicable Prospectus Supplement.
Notwithstanding the foregoing, unless (i) if such series of Preferred
Shares has a cumulative distribution, full cumulative distributions on all
Preferred Shares of such series have been or contemporaneously are
9
<PAGE> 11
declared and paid or declared and a sum sufficient for the payment thereof set
apart for payment for all past distribution periods and the current distribution
period and (ii) if such series of Preferred Shares does not have a cumulative
distribution, full distributions on the Preferred Shares of such series have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof set apart for payment for the then current distribution
period, no Preferred Shares of any series shall be redeemed unless all
outstanding Preferred Shares of such series are simultaneously redeemed;
provided, however, that the foregoing shall not prevent the redemption, purchase
or acquisition of Preferred Shares of such series to preserve the REIT status of
the Company or pursuant to a purchase or exchange offer made on the same terms
to holders of all outstanding Preferred Shares of such series. In addition,
unless (i) if such series of Preferred Shares has a cumulative distribution,
full cumulative distributions on all Preferred Shares of such series 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 distributions periods and
the then current distribution period, and (ii) if such series of Preferred
Shares does not have a cumulative distribution, full distributions on the
Preferred Shares of such series have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for
payment for the then current distribution period, the Company shall not purchase
or otherwise acquire directly or indirectly any Preferred Shares of such series
(except by conversion into or exchange for shares of beneficial interest of the
Company ranking junior to the Preferred Shares of such series as to
distributions and upon liquidation); provided, however, that the foregoing shall
not prevent the redemption, purchase or acquisition of Preferred Shares of such
series to assist in maintaining the REIT status of the Company or pursuant to a
purchase or exchange offer made on the same terms to holders of all outstanding
Preferred Shares of such series.
If fewer than all of the outstanding Preferred Shares of any series are to
be redeemed, the number of shares to be redeemed will be determined by the
Company 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 or for which
redemption is requested by such holder (with adjustments to avoid redemption of
fractional shares) or by lot in a manner determined by the Company.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of record of Preferred Shares of
any series to be redeemed at the address shown on the share transfer books of
the Company. Each notice shall state: (i) the redemption date; (ii) the number
and series of Preferred Shares to be redeemed; (iii) the place or places where
certificates for such Preferred Shares are to be surrendered for payment of the
redemption price; (iv) that distributions on the shares to be redeemed will
cease to accrue on such redemption date; and (v) the date upon which the
holders' conversion rights, if any, as to such shares shall terminate. If fewer
than all of the Preferred Shares of any series are to be redeemed, the notice
mailed to each such holder thereof shall also specify the number of Preferred
Shares to be redeemed from each such holder. If notice of redemption of any
Preferred Shares has been given and if the funds necessary for such redemption
have been set aside by the Company in trust for the benefit of the holders of
any Preferred Shares so called for redemption, then from and after the
redemption date distributions will cease to accumulate on such Preferred Shares,
and all rights of the holders of such shares will terminate, except the right to
receive the redemption price.
Liquidation Preference. Upon any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Company, then, before any
distribution or payment shall be made to the holders of any Common Shares or any
other class or series of shares of beneficial interest of the Company ranking
junior to the Preferred Shares in the distribution of assets upon any
liquidation, dissolution or winding up of the Company, the holders of each
series of Preferred Shares shall be entitled to receive out of assets of the
Company legally available for distribution to shareholders liquidating
distributions in the amount of the liquidation preference per share (set forth
in the applicable Prospectus Supplement), plus an amount equal to all
distributions accumulated and unpaid thereon (which shall not include any
accumulation in respect of unpaid distributions for prior distribution periods
if such Preferred Shares do not have a cumulative distribution). After payment
of the full amount of the liquidating distributions to which they are entitled,
the holders of Preferred Shares will have no right or claim to any of the
remaining assets of the Company. If, upon any such voluntary or involuntary
liquidation, dissolution or winding up, the available assets of the Company are
insufficient to pay
10
<PAGE> 12
the amount of the liquidating distributions on all outstanding Preferred Shares
and the corresponding amounts payable on all shares of other classes or series
of shares beneficial interest of the Company ranking on a parity with the
Preferred Shares in the distribution of assets, then the holders of the
Preferred Shares and all other such classes or series of shares of beneficial
interest shall share ratably in any such distribution of assets in proportion to
the full liquidating distributions to which they would otherwise be respectively
entitled.
If liquidating distributions shall have been made in full to all holders of
Preferred Shares, the remaining assets of the Company shall be distributed among
the holders of any other classes or series of shares of beneficial interest
ranking junior to the Preferred Shares upon liquidation, dissolution or winding
up, according to their respective rights and preferences and in each case
according to their respective number of shares. For such purposes, the
consolidation or merger of the Company with or into any other corporation, trust
or entity, or the sale, lease or conveyance of all or substantially all of the
property or business of the Company, shall not be deemed to constitute a
liquidation, dissolution or winding up of the Company.
Voting Rights. Holders of Preferred Shares will not have any voting
rights, except as set forth below or as otherwise from time to time required by
law or as indicated in the applicable Prospectus Supplement.
Whenever distributions on any Preferred Shares shall be in arrears for six
or more quarterly periods, the holders of such Preferred Shares (voting together
as a single class with all other series of Preferred Shares 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 Company at a special meeting
called by the holders of record of at least ten percent (10%) of any series of
Preferred Shares so in arrears (unless such request is received less than 90
days before the date fixed for the next annual or special meeting of the
shareholders) or at the next annual meeting of shareholders, and at each
subsequent annual meeting until (i) if such series of Preferred Shares has a
cumulative distribution, all distributions accumulated on such series of
Preferred Shares for the past distribution periods and the then current
distribution period shall have been fully paid or declared and a sum sufficient
for the payment thereof set aside for payment or (ii) if such series of
Preferred Shares do not have a cumulative distribution, four consecutive
quarterly distributions shall have been fully paid or declared and a sum
sufficient for the payment thereof set aside for payment. In such case, the
entire Board of Trustees of the Company will be increased by two Trustees.
Unless provided otherwise for any series of Preferred Shares, so long as
any Preferred Shares remain outstanding, the Company will not, without the
affirmative vote or consent of the holders of at least two-thirds of each series
of Preferred Shares outstanding at the time, given in person or by proxy, either
in writing or at a meeting (such series voting together as a single class), (i)
authorize or create, or increase the authorized or issued amount of, any class
or series of shares of beneficial interest ranking senior to such series of
Preferred Shares with respect to the payment of distributions or the
distribution of assets upon liquidation, dissolution or winding up or reclassify
any authorized shares of beneficial interest of the Company into 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 Company's Declaration of Trust or the Articles
Supplementary for such series of Preferred Shares, whether by merger,
consolidation or otherwise (an "Event"), so as to materially and adversely
affect any right, preference, privilege or voting power of such series of
Preferred Shares or the holders thereof; provided, however, with respect to the
occurrence of any of the Events set forth in (ii) above, so long as the
Preferred Shares remain outstanding with the terms thereof materially unchanged,
taking into account that upon the occurrence of an Event, the Company may not be
the surviving entity, the occurrence of any such Event shall not be deemed to
materially and adversely affect such rights, preferences, privileges or voting
powers of holders of Preferred Shares; and provided further that (x) any
increase in the amount of the authorized Preferred Shares or the creation or
issuance of any other series of Preferred Shares, or (y) any increase in the
amount of authorized shares of such series or any other series of Preferred
Shares, in each case ranking on a parity with or junior to the Preferred Shares
of such series with respect to payment of distributions and the distribution of
assets upon liquidation, dissolution or winding up of the Company, shall not be
deemed to materially and adversely affect such rights, preferences, privileges
or voting powers.
11
<PAGE> 13
The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding Preferred Shares of such series shall have been
converted or redeemed or called for redemption and sufficient funds shall have
been deposited in trust to effect such redemption.
Conversion Rights. The terms and conditions, if any, upon which any series
of Preferred Shares is convertible into Common Shares will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include the
number of Common Shares into which the Preferred Shares are convertible, the
conversion price (or manner of calculation thereof), the conversion date(s) or
period(s), provisions as to whether conversion will be at the option of the
holders of the Preferred Shares or the Company, the events requiring an
adjustment of the conversion price and provisions affecting conversion in the
event of the redemption of such series of Preferred Shares.
Registrar and Transfer Agent. The registrar and transfer agent for the
Preferred Shares will be set forth in the applicable Prospectus Supplement.
DESCRIPTION OF WARRANTS
The Company may issue Common Warrants or Preferred Warrants for the
purchase of Common Shares or Preferred Shares, respectively. Warrants may be
issued independently or together with any other Securities offered by any
Prospectus Supplement and may be attached to or separate from such Securities.
Each series of Warrants will be issued under a separate warrant agreement (each,
a "Warrant Agreement") to be entered into between the Company and a warrant
agent specified in the applicable Prospectus Supplement (the "Warrant Agent").
The Warrant Agent will act solely as an agent of the Company in connection with
the Warrants of such series and will not assume any obligation or relationship
of agency or trust for or with any holders or beneficial owners of Warrants. The
following sets forth certain general terms and provisions of the Warrants
offered hereby. Further terms of the Warrants and the applicable Warrant
Agreements will be set forth in the applicable Prospectus Supplement.
The applicable Prospectus Supplement will describe the terms of the
Warrants in respect of which this Prospectus is being delivered, including,
where applicable, the following:
(1) The title of the Warrants;
(2) The aggregate number of the Warrants;
(3) The price or prices at which the Warrants will be issued;
(4) The designation, number and terms of the Common Shares or Preferred
Shares, as the case may be, purchasable upon exercise of the Warrants;
(5) The designation and terms of the other Securities offered thereby with
which the Warrants are issued and the number of the Warrants issued
with each such Security offered thereby:
(6) The date, if any, on and after which the Warrants and the related
Common Shares or Preferred Shares, as the case may be, will be
separately transferable;
(7) The price per share at which the Common Shares or Preferred Shares, as
the case may be, purchasable upon exercise of the Warrants may be
purchased;
(8) The date(s) on which or the period(s) during which the right to
exercise the Warrants will commence and the date on which the right
shall expire;
(9) The minimum or maximum number of Warrants which may be exercised at
any one time;
(10) Information with respect to book entry procedures, if any;
(11) A discussion of certain federal income tax considerations, if any; and
(12) Any other terms of the Warrants, including terms, procedures and
limitations relating to the exchange and exercise of the Warrants.
12
<PAGE> 14
RESTRICTIONS ON OWNERSHIP AND TRANSFER
For the Company to qualify as a REIT under the Code, no more than 50% in
value of its outstanding shares of beneficial interest may be owned, actually or
constructively, by five or fewer individuals (as defined in the Code to include
certain entities) during the last half of a taxable year (other than the first
year for which an election to be treated as a REIT has been made) or during a
proportionate part of a shorter taxable year. In addition, if the Company, or an
owner of 10% or more of the Company, actually or constructively owns 10% or more
of a tenant of the Company (or a tenant of any partnership in which the Company
is a partner), the rent received by the Company (either directly or through any
such partnership) from such tenant will not be qualifying income for purposes of
the REIT gross income tests of the Code. A REIT's shares also must be
beneficially owned by 100 or more persons during at least 335 days of a taxable
year of 12 months or during a proportionate part of a shorter taxable year
(other than the first year for which an election to be treated as a REIT has
been made).
Because the Board of Trustees believes it is desirable for the Company to
qualify as a REIT, the Declaration of Trust, subject to certain exceptions as
discussed below, provides that no holder may own, or be deemed to own by virtue
of the attribution provisions of the Code, more than 9.9% in value or number
(whichever is more restrictive) of the Common Shares or of any series of the
Preferred Shares (the "Ownership Limit"). The ownership attribution rules under
the Code are complex and may cause Common Shares or any series of Preferred
Shares owned actually or constructively by a group of related individuals and/or
entities to be owned constructively by one individual or entity. As a result,
the acquisition of less than 9.9% of the Common Shares or any series of
Preferred Shares (or the acquisition of an interest in an entity that owns,
actually or constructively, Common Shares or any series of Preferred Shares) by
an individual or entity, could, nevertheless cause that individual or entity, or
another individual or entity, to own constructively in excess of 9.9% of the
outstanding Common Shares or the applicable series of Preferred Shares, as the
case may be, and thus subject such Common Shares or Preferred Shares to the
Ownership Limit. The Board of Trustees will grant an exemption from the
Ownership Limit with respect to one or more persons who would not be treated as
"individuals" for purposes of the Code if it is satisfied, based upon the advice
of counsel or a ruling from the IRS, that such ownership will not cause a person
who is an individual to be treated as owning Common Shares in excess of the
Ownership Limit, applying the applicable constructive ownership rules, and will
not otherwise jeopardize the Company's status as a REIT. As a condition of such
waiver, the Board of Trustees may require undertakings or representations from
the applicant with respect to preserving the REIT status of the Company. Under
certain circumstances, the Board of Trustees may, in its sole and absolute
discretion, grant an exemption for individuals to acquire Preferred Shares in
excess of the Ownership Limit, provided that certain conditions are met and any
representations and undertakings that may be required by the Board of Trustees
are made.
The Declaration of Trust permits the Board of Trustees to increase the
Ownership Limit with respect to any class or series of shares of beneficial
interest of the Company; provided, however, that, after giving effect to such
increase, five beneficial owners of Common Shares may not beneficially own in
the aggregate more than 49.5% of the outstanding Common Shares.
The Declaration of Trust further prohibits (a) any person from actually or
constructively owning shares of beneficial interest of the Company that would
result in the Company being "closely held" under Section 856(h) of the Code or
otherwise cause the Company to fail to qualify as a REIT and (b) any person from
transferring shares of beneficial interest of the Company if such transfer would
result in shares of beneficial interest of the Company being owned by fewer than
100 persons.
Any person who acquires or attempts or intends to acquire actual or
constructive ownership of shares of beneficial interest of the Company that will
or may violate any of the foregoing restrictions on transferability and
ownership is required to give notice immediately to the Company and provide the
Company with such other information as the Company may request in order to
determine the effect of such transfer on the Company's status as a REIT.
If any purported transfer of shares of beneficial interest of the Company
or any other event would otherwise result in any person violating the Ownership
Limit or the other restrictions in the Declaration of
13
<PAGE> 15
Trust, then any such purported transfer will be void and of no force or effect
with respect to the purported transferee (the "Prohibited Transferee") as to
that number of shares that exceeds the Ownership Limit (referred to as "excess
shares") and the Prohibited Transferee will acquire no right or interest (or, in
the case of any event other than a purported transfer, the person or entity
holding record title to any such shares in excess of the Ownership Limit (the
"Prohibited Owner") will cease to own any right or interest) in such excess
shares. Any such excess shares described above will be transferred
automatically, by operation of law, to a trust, the beneficiary of which will be
a qualified charitable organization selected by the Company (the "Beneficiary").
Such automatic transfer will be deemed to be effective as of the close of
business on the Business Day (as defined in the Declaration of Trust) prior to
the date of such violating transfer. Within 20 days of receiving notice from the
Company of the transfer of shares to the trust, the trustee of the trust (who
will be designated by the Company and be unaffiliated with the Company and any
Prohibited Transferee or Prohibited Owner) will be required to sell such excess
shares to a person or entity who could own such shares without violating the
Ownership Limit, and distribute to the Prohibited Transferee an amount equal to
the lesser of the price paid by the Prohibited Transferee for such excess shares
or the sales proceeds received by the trust for such excess shares. In the case
of any excess shares resulting from any event other than a transfer, or from a
transfer for no consideration (such as a gift), the trustee will be required to
sell such excess shares to a qualified person or entity and distribute to the
Prohibited Owner an amount equal to the lesser of the fair market value of such
excess shares as of the date of such event or the sales proceeds received by the
trust for such excess shares. In either case, any proceeds in excess of the
amount distributable to the Prohibited Transferee or Prohibited Owner, as
applicable, will be distributed to the Beneficiary. Prior to a sale of any such
excess shares by the trust, the trustee will be entitled to receive, in trust
for the Beneficiary, all dividends and other distributions paid by the Company
with respect to such excess shares, and also will be entitled to exercise all
voting rights with respect to such excess shares. Subject to Maryland law,
effective as of the date that such shares have been transferred to the trust,
the trustee will have the authority (at the trustee's sole discretion and
subject to applicable law) (i) to rescind as void any vote cast by a Prohibited
Transferee prior to the discovery by the Company that such shares have been
transferred to the trust and (ii) to recast such vote in accordance with the
desires of the trustee acting for the benefit of the Beneficiary. However, if
the Company has already taken irreversible corporate action, then the trustee
will not have the authority to rescind and recast such vote. Any dividend or
other distribution paid to the Prohibited Transferee or Prohibited Owner (prior
to the discovery by the Company that such shares had been automatically
transferred to a trust as described above) will be required to be repaid to the
trustee upon demand for distribution to the Beneficiary. If the transfer to the
trust as described above is not automatically effective (for any reason) to
prevent violation of the Ownership Limit, then the Declaration of Trust provides
that the transfer of the excess shares will be void.
In addition, shares of beneficial interest of the Company held in the trust
shall be deemed to have been offered for sale to the Company, or its designee,
at a price per share equal to the lesser of (i) the price per share in the
transaction that resulted in such transfer to the trust (or, in the case of a
devise or gift, the market value at the time of such devise or gift) and (ii)
the market value of such shares on the date of the Company, or its designee,
accepts such offer. The Company shall have the right to accept such offer until
the trustee has sold the shares of beneficial interest held in the Company. Upon
such a sale to the Company, the interest of the Beneficiary in the shares sold
shall terminate and the trustee shall distribute the net proceeds of the sale to
the Prohibited Owner.
The foregoing restrictions on transferability and ownership will not apply
if the Board of Trustees determines that it is no longer in the best interests
of the Company to attempt to qualify, or to continue to qualify, as a REIT.
All certificates representing shares of beneficial interest shall bear a
legend referring to the restrictions described above.
All persons who own, directly or by virtue of the attribution provisions of
the Code, more than 5% (or such other percentage between 1/2 of 1% and 5% as
provided in the rules and regulations promulgated under the Code) of the lesser
of the number or value of the outstanding shares of beneficial interest of the
Company must give a written notice to the Company by January 31 of each year. In
addition, each shareholder will,
14
<PAGE> 16
upon demand, be required to disclose to the Company in writing such information
with respect to the direct, indirect and constructive ownership of shares of
beneficial interest as the Board of Trustees deems reasonably necessary to
comply with the provisions of the Code applicable to a REIT, to comply with the
requirements of any taxing authority or governmental agency or to determine any
such compliance.
These ownership limitations could have the effect of delaying, deferring or
preventing a takeover or other transaction in which holders of some, or a
majority, of the Company's shares of beneficial interest might receive a premium
for their shares over the then prevailing market price or which such holders
might believe to be otherwise in their best interest.
PLAN OF DISTRIBUTION
The Company may sell the Securities to one or more underwriters for public
offering and sale by them or may sell the Securities to investors directly or
through agents. Any such underwriter or agent involved in the offer and sale of
the Securities will be named in the applicable Prospectus Supplement.
The Company may offer and sell the Securities at a fixed price or prices,
which may be changed, at prices related to the prevailing market prices at the
time of sale or at negotiated prices for cash or assets in transactions that do
not constitute a business combination within the meaning of Rule 145 promulgated
under the Securities Act. The Company also may, from time to time, authorize
underwriters acting as the Company's agents to offer and sell the Securities
upon the terms and conditions as are set forth in the applicable Prospectus
Supplement. In connection with the sale of the Securities, underwriters may be
deemed to have received compensation from the Company in the form of
underwriting discounts or commissions and may also receive commissions from
purchasers of the Securities for whom they may act as agent. Underwriters may
sell Securities to or through dealers, and such dealers may receive compensation
in the form of discounts, concessions or commissions from the underwriters
and/or commissions from the purchasers from whom they may act as agent.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of the Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in the applicable Prospectus Supplement. Underwriters, dealers
and agents participating in the distribution of the Securities may be deemed to
be underwriters, and any discounts and commissions received by them and any
profit realized by them on resale of the Securities may be deemed to be
underwriting discounts and commissions, under the Securities Act. Underwriters,
dealers and agents may be entitled, under agreements entered into with the
Company, to indemnification against and contribution toward certain civil
liabilities, including liabilities under the Securities Act.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize dealers acting as the Company's agents to solicit offers by certain
institutions to purchase Securities from the Company at the public offering
price set forth in such Prospectus Supplement pursuant to Delayed Delivery
Contracts ("Contracts") providing for payment and delivery on the date or dates
stated in such Prospectus Supplement. Each Contract will be for an amount not
less than, and the aggregate principal amount of Securities sold pursuant to
Contracts shall be not less nor more than, the respective amounts stated in the
applicable Prospectus Supplement. Institutions with whom Contracts, when
authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions, and other institutions but will in all cases be subject to the
approval of the Company. Contracts will not be subject to any conditions except
(i) the purchase by an institution of the Securities covered by its Contracts
shall not at the time of delivery be prohibited under the laws of any
jurisdiction in the United States to which such institution is subject, and (ii)
if the Securities are being sold to underwriters, the Company shall have sold to
such underwriters the total principal amount of the Securities less the
principal amount thereof covered by Contracts.
Certain of the underwriters and their affiliates may engage in transactions
with and perform services for the Company and its subsidiaries in the ordinary
course of business.
15
<PAGE> 17
EXPERTS
The consolidated financial statements of Equity Office Properties Trust
appearing in Equity Office Property Trust's Annual Report (Form 10-K, as amended
by Form 10-K/A) for the year ended December 31, 1997, have been audited by Ernst
& Young LLP, independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Beacon Properties Corporation,
appearing in the Current Report on Form 8-K/A of Equity Office Properties Trust
filed with the Commission on February 18, 1998, have been audited by
PricewaterhouseCoopers LLP, independent auditors, as set forth in their reports
included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
reports given upon the authority of such firm as experts in accounting and
auditing.
LEGAL MATTERS
The legality of the Securities will be passed upon for the Company by Hogan
& Hartson L.L.P., Washington, D.C. Certain tax matters will be passed upon by
Hogan & Hartson L.L.P., Washington, D.C., special tax counsel to the Company.
16
<PAGE> 18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated fees and expenses payable by
the Company in connection with the issuance and distribution of the securities
being registered:
<TABLE>
<S> <C>
Registration Fee........................................ $442,500
Printing and Duplicating Expenses....................... 50,000
Legal Fees and Expenses................................. 50,000
Accounting Fees and Expenses............................ 50,000
Miscellaneous........................................... 50,000
--------
Total................................................. $642,500
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Title 8 of the Corporations and Associations Article of the Annotated Code
of Maryland, as amended from time to time (the "Maryland REIT Law"), permits a
Maryland REIT to include in its declaration of trust a provision limiting the
liability of its trustees and officers to the trust and its shareholders for
money damages except for liability resulting from (a) actual receipt of an
improper benefit or profit in money, property or services or (b) active and
deliberate dishonesty established by a final judgment as being material to the
cause of action. The Company's declaration of trust, as amended from time to
time, and as filed with the State Department of Assessments and Taxation of
Maryland (the "Declaration of Trust"), contains such a provision which
eliminates such liability to the maximum extent permitted by the Maryland REIT
law.
The Declaration of Trust authorizes the Company, to the maximum extent
permitted by Maryland law, to obligate itself to indemnify and to pay or
reimburse reasonable expenses in advance of final disposition of a proceeding to
(a) any present or former trustee or officer or (b) any individual who, while a
trustee of the Company and at the request of the company, serves or has served
as a director, officer, partner, trustee, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or any
other enterprise from and against any claim or liability to which such person
may become subject or which such person may incur by reason of his or her status
as a present or former trustee or officer of the Company. The Bylaws obligate
the Company, to the maximum extent permitted by Maryland law, to indemnify and
to pay or reimburse reasonable expenses in advance of final disposition of a
proceeding to (a) any present or former trustee or officer who is made party to
the proceeding by reason of his service in that capacity or (b) any individual
who, while a trustee or officer of the Company and at the request of the
Company, serves or has served another corporation, partnership, joint venture,
trust, employee benefit plan or any other enterprise as a trustee, director,
officer or partner of such corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise and who is made a party to the
proceeding by reason of his service in that capacity, against any claim or
liability to which he may become subject by reason of such status. The
Declaration of Trust and Bylaws also permit the Company to indemnify and advance
expenses to any person who served a predecessor of the Company in any of the
capacities described above and to any employee or agent of the Company or a
predecessor of the Company. The Bylaws require the Company to indemnify a
trustee or officer (or any former trustee or officer) who has been successful,
on the merits or otherwise, in the defense of any proceeding to which he is made
a party by reason of his service in that capacity against reasonable expenses
incurred in connection with the proceeding.
The Maryland REIT Law permits a Maryland REIT to indemnify and advance
expenses to its trustees, officers, employees and agents to the same extent as
permitted by the Maryland General Corporation Law, as amended from time to time
(the "MGCL"), for directors and officers of Maryland corporations. The MGCL
permits a corporation to indemnify its present and former directors and
officers, among others, against judgments, penalties, fines, settlements and
reasonable expenses actually incurred by them in connection with
II-1
<PAGE> 19
any proceeding to which they may be made a party by reason of their service in
those or other capacities unless it is established that (a) the act or omission
of the director or officer was material to the matter giving rise to the
proceeding and (i) was committed in bad faith or (ii) was the result of active
and deliberate dishonesty, (b) the director or officer actually received an
improper personal benefit in money, property or services or (c) in the case of
any criminal proceeding, the director or officer had reasonable cause to believe
that the act or omission was unlawful. The foregoing limitations on
indemnification are expressly set forth in the Bylaws. However, under the MGCL,
a Maryland corporation may not indemnify for any adverse judgment in a suit by
or in the right of the corporation or for a judgment of liability on the basis
that a personal benefit was improperly received, unless, in either case, a court
orders indemnification and then only for expenses. Under the MGCL, as a
condition to advancing expenses, as required by the Bylaws, the Company must
first receive (a) a written affirmation by the trustee or officer of his good
faith belief that he has met the standard of conduct necessary for
indemnification by the Company and (b) a written undertaking by or on his behalf
to repay the amount paid or reimbursed by the Company if it shall ultimately be
determined that the standard of conduct was not met. In addition, Mr. Dobrowski
will be indemnified by GMIMCO and will be covered by an insurance policy
maintained by GM, of which GMIMCO is a subsidiary, in connection with serving on
the Board.
The limited partnership agreement of the Operating Partnership (the
"Partnership Agreement") also provides for indemnification of the Company and
its officers and trustees to the same extent that indemnification is provided to
officers and trustee of the Company in its Declaration of Trust, and limits the
liability of the Company and its officers and trustees to the Operating
Partnership and its respective partners to the same extent that the Declaration
of Trust limits the liability of the officers and trustees of the Company to the
Company and its shareholders.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to trustees, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Act and is therefore unenforceable.
ITEM 16. EXHIBITS
<TABLE>
<S> <C>
1.1* Form of Underwriting Agreement
5.1 Opinion of Hogan & Hartson L.L.P. regarding the legality of
the securities being registered.
8.1 Opinion of Hogan & Hartson L.L.P. regarding certain tax
matters.
12.1** Statement of Computation of Ratios
23.1 Consent of Hogan & Hartson L.L.P. (included as part of
Exhibit 5.1)
23.2 Consent of Hogan & Hartson L.L.P. (included as part of
Exhibit 8.1)
23.3 Consent of Ernst & Young LLP
23.4 Consent of PricewaterhouseCoopers LLP
24.1 Power of Attorney (included in signature page)
</TABLE>
- ---------------
* Incorporated herein by reference to the same-numbered exhibit to the
Company's Registration Statement on Form S-11 (Commission File No.
333-26629).
** Incorporated herein by reference to the same numbered exhibit to the
Company's Annual Report on Form 10-K, as amended, for the fiscal year ended
December 31, 1997.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
II-2
<PAGE> 20
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in this registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in this
registration statement;
provided, however, that subparagraphs (i) and (ii) above shall not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in the periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the Securities
offered herein, and the offering of such Securities at that time shall
be deemed to be the initial bona fideoffering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the Securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby further undertakes that, for the purposes
of determining any liability under the Securities Act of 1933, each filing
of the Registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 that is incorporated by reference in
this registration statement shall be deemed to be a new registration
statement relating to the Securities offered herein, and the offering of
such Securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to existing provisions or arrangements whereby the
Registrant may indemnify a director, officer or controlling person of the
Registrant against liabilities arising under the Securities Act of 1933, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of
such issue.
II-3
<PAGE> 21
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Chicago, Illinois, on this 7th day of July, 1998.
EQUITY OFFICE PROPERTIES TRUST
/s/ TIMOTHY H. CALLAHAN
By:
--------------------------------------
Timothy H. Callahan
President and Chief Executive
Officer
POWER OF ATTORNEY
We, the undersigned trustees and officers of Equity Office Properties
Trust, do hereby constitute and appoint Samuel Zell and Timothy H. Callahan and
each and either of them, our true and lawful attorneys-in-fact and agents, to do
any and all acts and things in our names and our behalf in our capacities as
trustees and officers and to execute any and all instruments for us and in our
name in the capacities indicated below, which said attorneys and agents, or
either of them, may deem necessary or advisable to enable said Trust to comply
with the Securities Act of 1933 and any rules, regulations and requirements of
the Securities and Exchange Commission, in connection with this registration
statement, or any registration statement for this offering that is to be
effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933,
including specifically, but without limitation, any and all amendments
(including post-effective amendments) hereto; and we hereby ratify and confirm
all that said attorneys and agents, or either of them, shall do or cause to be
done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated as of the 7th day of July, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ TIMOTHY H. CALLAHAN President, Chief Executive Officer and
- ----------------------------------------------------- Trustee (principal executive officer)
Timothy H. Callahan
/s/ RICHARD D. KINCAID Chief Financial Officer (principal financial
- ----------------------------------------------------- officer and principal accounting officer)
Richard D. Kincaid
/s/ SAMUEL ZELL Chairman of the Board of Trustees
- -----------------------------------------------------
Samuel Zell
/s/ SHELI Z. ROSENBERG Trustee
- -----------------------------------------------------
Sheli Z. Rosenberg
/s/ THOMAS E. DOBROWSKI Trustee
- -----------------------------------------------------
Thomas E. Dobrowski
</TABLE>
II-4
<PAGE> 22
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ JAMES D. HARPER, JR. Trustee
- -----------------------------------------------------
James D. Harper, Jr.
/s/ PETER LINNEMAN Trustee
- -----------------------------------------------------
Peter Linneman
/s/ JERRY M. REINSDORF Trustee
- -----------------------------------------------------
Jerry M. Reinsdorf
/s/ WILLIAM M. GOODYEAR Trustee
- -----------------------------------------------------
William M. Goodyear
/s/ DAVID K. MCKOWN Trustee
- -----------------------------------------------------
David K. McKown
/s/ H. JON RUNSTAD Trustee
- -----------------------------------------------------
H. Jon Runstad
/s/ EDWIN N. SIDMAN Trustee
- -----------------------------------------------------
Edwin N. Sidman
/s/ D. J. A. DE BOCK Trustee
- -----------------------------------------------------
D. J. A. de Bock
</TABLE>
II-5
<PAGE> 23
INDEX TO EXHIBITS
<TABLE>
<S> <C>
1.1* Form of Underwriting Agreement
5.1 Opinion of Hogan & Hartson L.L.P. regarding the legality of
the securities being registered.
8.1 Opinion of Hogan & Hartson L.L.P. regarding certain tax
matters.
12.1** Statement of Computation of Ratios
23.1 Consent of Hogan & Hartson L.L.P. (included as part of
Exhibit 5.1)
23.2 Consent of Hogan & Hartson L.L.P. (included as part of
Exhibit 8.1)
23.3 Consent of Ernst & Young LLP
23.4 Consent of PricewaterhouseCoopers LLP
24.1 Power of Attorney (included in signature page)
</TABLE>
- ---------------
* Incorporated herein by reference to the same-numbered exhibit to the
Company's Registration Statement on Form S-11 (Commission File No.
333-26629).
** Incorporated herein by reference to the same numbered exhibit to the
Company's Annual Report on Form 10-K, as amended, for the fiscal year ended
December 31, 1997.
II-6
<PAGE> 1
EXHIBIT 5.1
[LETTERHEAD OF HOGAN & HARTSON L.L.P.]
July 7, 1998
Board of Trustees
Equity Office Properties Trust
Two North Riverside Plaza
Suite 2200
Chicago, IL 60606
Ladies and Gentlemen:
We are acting as counsel to Equity Office Properties Trust, a Maryland real
estate investment trust (the "Company"), in connection with its registration
statement on Form S-3 (the "Registration Statement") filed with the Securities
and Exchange Commission relating to the proposed public offering of up to
$1,500,000,000 in aggregate amount of one or more series of (i) common shares of
beneficial interest, $.01 par value per share (the "Common Shares"), (ii)
preferred shares of beneficial interest, $.01 par value per share (the
"Preferred Shares"), (iii) warrants to purchase Common Shares (the "Common Share
Warrants") or (iv) warrants to purchase Preferred Shares (the "Preferred Share
Warrants" and, together with the Common Shares, Preferred Shares and Common
Share Warrants, the "Securities"), all of which Securities may be offered and
sold by the Company from time to time as set forth in the prospectus which forms
a part of the Registration Statement (the "Prospectus"), and as to be set forth
in one or more supplements to the Prospectus (each, a "Prospectus Supplement").
This opinion letter is furnished to you at your request to enable you to fulfill
the requirements of Item 601(b)(5) of Regulation S-K, 17 C.F.R. sec.
229.601(b)(5), in connection with the Registration Statement.
For purposes of this opinion letter, we have examined copies of the
following documents:
1. An executed copy of the Registration Statement.
2. The Articles of Amendment and Restatement of Declaration of Trust of
the Company (the "Declaration of Trust"), as certified by the
Secretary of State of the State of Maryland on July 2, 1998 and as
certified by the Secretary of the Company on the date hereof as then
being complete, accurate and in effect.
3. The Bylaws of the Company, as certified by the Secretary of the
Company on the date hereof as then being complete, accurate and in
effect.
4. Resolutions of the Executive Committee of the Board of Trustees of
the Company adopted on July 2, 1998, as certified by the Secretary of
the Company on the date hereof as then being complete, accurate and
in effect, relating to the filing of the Registration Statement and
related matters.
In our examination of the aforesaid documents, we have assumed the
genuineness of all signatures, the legal capacity of all natural persons, the
accuracy and completeness of all documents submitted to us, the authenticity of
all original documents and the conformity to authentic original documents of all
documents submitted to us as copies (including telecopies). This opinion letter
is given, and all statements herein are made, in the context of the foregoing.
<PAGE> 2
For purposes of this opinion letter, we have assumed that (i) the issuance,
sale, amount and terms of the Securities to be offered from time to time will be
duly authorized and established by proper action of the Board of Trustees of the
Company (each, a "Board Action") and in accordance with the Company's
Declaration of Trust and applicable Maryland law; (ii) prior to any issuance of
Preferred Shares, appropriate articles supplementary shall be filed for
recordation with the Maryland State Department of Assessments and Taxation
(each, "Articles Supplementary"); and (iii) any Common Share Warrants and
Preferred Share Warrants, as the case may be, will be issued under one or more
warrant agreements (each, a "Warrant Agreement"), each to be between the Company
and a financial institution identified therein as a warrant agent (each, a
"Warrant Agent").
This opinion letter is based as to matters of law solely on applicable
provisions of Maryland law and the contract law of the State of New York (but
not including any statutes, ordinances, administrative decisions, rules, or
regulations of any political subdivision of the State of New York). We express
no opinion herein as to any other laws, statutes, regulations or ordinances or
as to compliance with the securities (or "blue sky") laws or the real estate
syndication laws of Maryland.
Based upon, subject to and limited by the foregoing, we are of the opinion
that, as of the date hereof:
(a) When the Registration Statement has become effective under the Act,
upon due authorization by Board Action of an issuance of Common Shares, and upon
issuance and delivery of certificates for Common Shares against payment therefor
in accordance with the terms of such Board Action and any applicable
underwriting agreement or purchase agreement, and as contemplated by the
Registration Statement and/or the applicable Prospectus Supplement or upon the
exercise of any Common Share Warrants in accordance with the terms thereof, or
conversion or exchange of Preferred Shares that, by their terms, are convertible
into or exchangeable for Common Shares, and receipt by the Company of any
additional consideration payable upon such conversion, exchange or exercise, the
Common Shares represented by such certificates will be validly issued, fully
paid and non-assessable.
(b) When (i) the Registration Statement has become effective under the
Act, (ii) a series of the Preferred Shares has been duly authorized and
established by applicable Board Action, in accordance with the terms of the
Declaration of Trust and applicable law, (iii) appropriate Articles
Supplementary have been filed, and (iv) the issuance of such Preferred Shares
has been appropriately authorized by applicable Board Action, and, upon issuance
and delivery of certificates for such series of Preferred Shares against payment
therefor in accordance with the terms of such Board Action and any applicable
underwriting or purchase agreement, and as contemplated by the Registration
Statement and/or the applicable Prospectus Supplement, such Preferred Shares
will be validly issued, fully paid and non-assessable.
(c) When (i) the Registration Statement has become effective under the Act
, (ii) a Warrant Agreement conforming to the description thereof in the
Registration Statement and/or the applicable Prospectus Supplement has been duly
authorized by applicable Board Action and delivered by the Company and the
Warrant Agent named therein, (iii) Common Share Warrants or Preferred Share
Warrants, as the case may be, conforming to the requirements of the related
Warrant Agreement have been duly authenticated by the Warrant Agent and duly
executed and delivered on behalf of the Company against payment therefor in
accordance with the terms of such Board Action, any applicable underwriting
agreement or purchase agreement and the applicable Warrant Agreement and as
contemplated by the Registration Statement and/or the applicable Prospectus
Supplement, the Common Share Warrants or Preferred Share Warrants, as the case
may be, will constitute valid and binding obligations of the Company,
enforceable in accordance with their terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights (including, without limitation, the effect of statutory and
other law regarding fraudulent conveyances, fraudulent transfers and
preferential transfers) and as may be limited by the exercise of judicial
discretion and the application of principles of equity, including, without
limitation, requirements of good faith, fair dealing, conscionability and
materiality (regardless of whether the Common Share Warrants or Preferred Share
Warrants, as the case may be, are considered in a proceeding in equity or at
law).
To the extent that the obligations of the Company under any Warrant
Agreement may be dependent upon such matters, we assume for purposes of this
opinion that the applicable Warrant Agent is duly
<PAGE> 3
organized, validly existing and in good standing under the laws of its
jurisdiction of organization; that the Warrant Agent is duly qualified to engage
in the activities contemplated by the Warrant Agreement; that the Warrant
Agreement has been duly authorized, executed and delivered by the Warrant Agent
and constitutes the valid and binding obligation of the Warrant Agent
enforceable against the Warrant Agent in accordance with its terms; that the
Warrant Agent is in compliance, with respect to acting as a Warrant Agent under
the Warrant Agreement, with all applicable laws and regulations; and that the
Warrant Agent has the requisite organizational and legal power and authority to
perform its obligations under the Warrant Agreement.
The opinions expressed in Paragraph (c) above shall be understood to mean
only that if there is a default in performance of an obligation, (i) if a
failure to pay or other damage can be shown and (ii) if the defaulting party can
be brought into a court which will hear the case and apply the governing law,
then, subject to the availability of defenses, and to the exceptions set forth
in Paragraph (c), the court will provide a money damage (or perhaps injunctive
or specific performance) remedy.
We assume no obligation to advise you of any changes in the foregoing
subsequent to the delivery of this opinion letter. This opinion letter has been
prepared solely for your use in connection with the filing of the Registration
Statement on the date of this opinion letter and should not be quoted in whole
or in part or otherwise be referred to, nor filed with or furnished to any
governmental agency or other person or entity, without the prior written consent
of this firm.
We hereby consent to the filing of this opinion letter as Exhibit 5.1 to
the Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the prospectus constituting a part of the Registration
Statement. In giving this consent, we do not thereby admit that we are an
"expert" within the meaning of the Securities Act of 1933, as amended.
Very truly yours,
/s/ Hogan & Hartson L.L.P.
HOGAN & HARTSON L.L.P.
<PAGE> 1
EXHIBIT 8.1
[LETTERHEAD OF HOGAN & HARTSON L.L.P.]
July 7, 1998
Equity Office Properties Trust
Two North Riverside Plaza
Chicago, Illinois 60606
Ladies and Gentlemen:
We have acted as special tax counsel to Equity Office Properties Trust (the
"Company"), a Maryland real estate investment trust, in connection with the
registration by the Company of one or more series or classes (i) common shares
of beneficial interest, par value $.01 per share ("Common Shares"), (ii)
preferred shares of beneficial interest, par value $.01 per share ("Preferred
Shares"), and (iii) warrants exercisable for Common Shares or Preferred Shares
(in either case, "Warrants"), with an aggregate offering price of up to
$1,500,000,000, as more fully described in the Company's Registration Statement
on Form S-3 filed with the Securities and Exchange Commission on or about the
date hereof (the "Registration Statement," which includes the "Prospectus"). In
connection with such registration, we have been asked to provide you with an
opinion regarding certain federal income tax matters related to the Company.
Unless otherwise defined herein or the context hereof otherwise requires, each
term used herein with initial capitalized letters has the meaning given to such
term in the Prospectus.
BASES FOR OPINIONS
The opinions set forth in this letter are based on relevant current
provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
Treasury Regulations thereunder (including proposed and temporary Treasury
Regulations), and interpretations of the foregoing as expressed in court
decisions, legislative history, and administrative determinations of the
Internal Revenue Service (the "IRS") (including its practices and policies in
issuing private letter rulings, which are not binding on the IRS, except with
respect to a taxpayer that receives such a ruling), all as of the date hereof.
These provisions and interpretations are subject to changes, which may or may
not be retroactive in effect, that might result in material modifications of our
opinions. Our opinion does not foreclose the possibility of a contrary
determination by the IRS or a court of competent jurisdiction or of a contrary
position by the IRS or the Treasury Department in regulations or rulings issued
in the future. In this regard, although we believe that our opinions set forth
herein will be sustained if challenged, an opinion of counsel with respect to an
issue is not binding on the IRS or the courts, and is not a guarantee that the
IRS will not assert a contrary position with respect to such issue or that a
court will not sustain such a position asserted by the IRS.
In rendering the following opinions, we have examined such statutes,
regulations, records, certificates and other documents as we have considered
necessary or appropriate as a basis for such opinions, including the following:
(1) the Prospectus; (2) the Amended and Restated Agreement of Limited
Partnership of the Operating Partnership, dated as of July 3, 1997, as amended
to the date hereof; (3) the Articles of Amendment and Restatement of Declaration
of Trust of the Company dated as of July 8, 1997, as amended to the date hereof
(the "Declaration of Trust") and, with respect to each series of Preferred
Shares of the Company, the Articles Supplementary establishing and fixing the
rights and preferences of such series of preferred shares; (4) the agreements of
limited partnership, as amended to the date hereof, of each of the Opportunity
Partnerships; (5) the form of partnership agreement or limited liability company
operating
<PAGE> 2
agreement, as applicable, used by Operating Partnership and/or the Opportunity
Partnerships to organize and operate the partnerships and limited liability
companies in which one or more of the Opportunity Partnerships owns an interest
(collectively, the "Partnership Subsidiaries"); (6) the articles of organization
and stock ownership records of each corporation in which one or more of the
Operating Partnership or the Opportunity Partnerships owns stock, directly or
indirectly, including BeaMetFed, Inc., Equity Office Properties Management
Corp., EOP Office Company, Beacon Properties Management Corporation, Beacon
Design Corporation and Beacon Construction Company, Inc. (collectively, the
"Corporate Entities"); (7) stock ownership information for Tenant Services
Corp.; and (8) other necessary documents as we have deemed necessary in order to
render the opinions set forth in this letter. The opinions set forth in this
letter also are premised on certain written representations of (i) each of the
ZML REITs and each of the Opportunity Partnerships contained in a letter to us
dated July 7, 1997, which letter was reconfirmed to us by the Company, as the
successor to the ZML REITs, as of the date hereof, regarding the assets,
operations and activities of each of the ZML REITs prior to July 11, 1997 and
(ii) the Company and the Operating Partnership contained in a letter to us dated
as of the date hereof, regarding the assets, operations and activities of the
Company and the Operating Partnership in the past and as to the contemplated
assets, operations and activities of the Company in the future (collectively,
the "Management Representation Letters").
For purposes of rendering our opinion, we have not made an independent
investigation or audit of the facts set forth in any of the above-referenced
documents, including the Management Representation Letters. We consequently have
relied upon representations in the Management Representation Letters that the
information presented in such documents or otherwise furnished to us is accurate
and complete in all material respects. We are not, however, aware of any
material facts or circumstances contrary to, or inconsistent with, the
representations we have relied upon as described herein or other assumptions set
forth herein.
Moreover, we have assumed that, insofar as relevant to the opinions set
forth herein, (1) each of the Company, the Operating Partnership, the
Opportunity Partnerships, the Partnership Subsidiaries, and the Corporate
Entities in which an Opportunity Partnership owns an interest has been and will
be operated in the manner described in the Prospectus and in the relevant
partnership agreement, articles (or certificate) of incorporation, declaration
of trust or other organizational documents; (2) as represented by the Company,
there are no agreements or understandings between (a) the Company or the
Operating Partnership and (b) either (i) Equity Office Holdings L.L.C., the
entity that owns 100% of the voting stock of Equity Office Properties Management
Corp. and EOP Office Company, or with such corporations themselves, that are
inconsistent, or will be inconsistent, with Equity Office Holdings L.L.C. being
considered to be both the record and beneficial owner of 100% of the outstanding
voting stock of Equity Office Properties Management Corp. and EOP Office
Company, or (ii) Equity Office Properties Management Corp., the entity that owns
100% of the voting stock of Beacon Properties Management Corporation, Beacon
Design Corporation, and Beacon Construction Company, Inc., or with such
corporations themselves that are inconsistent or will be inconsistent, with
Equity Office Properties Management Corp. being considered to be both the record
and beneficial owner of 100% of the outstanding voting stock of each of Beacon
Properties Management Corporation, Beacon Design Corporation, and Beacon
Construction Company, Inc.; (3) as represented by the Company, the Company will
take measures to ensure that any services provided to tenants of the Properties
by Tenant Services Corp. will be considered "usually or customarily rendered"
and any other services provided to the tenants of the Properties will be either
"usually or customarily rendered" or provided by an entity that qualifies as an
"independent contractor" as defined in Section 856 of the Code and the Treasury
Regulations thereunder; and (4) the Company is a validly organized and duly
incorporated real estate investment trust under the laws of the State of
Maryland, each of the Corporate Entities is a validly organized and duly
incorporated corporation under the laws of the state in which it is purported to
be organized, Operating Partnership is a duly organized and validly existing
limited partnership under the laws of the State of Delaware, each of the
Opportunity Partnerships is a duly organized and validly existing limited
partnership under the laws of the State of Illinois, and each of the Partnership
Subsidiaries is a duly organized and validly existing partnership or limited
liability company, as the case may be, under the applicable laws of the state in
which it is purported to be organized.
<PAGE> 3
In our review, we have assumed that all of the representations and
statements set forth in the documents that we reviewed (including the Management
Representation Letters) are true and correct, and all of the obligations imposed
by any such documents on the parties thereto, including obligations imposed
under the Declaration of Trust, have been and will continue to be performed or
satisfied in accordance with their terms. We also have assumed the genuineness
of all signatures, the proper execution of all documents, the authenticity of
all documents submitted to us as originals, the conformity to originals of
documents submitted to us as copies, and the authenticity of the originals from
which any copies were made.
OPINIONS
Based upon, subject to, and limited by the assumptions and qualifications
set forth herein, we are of the opinion that:
1. the Company is organized, as of the date hereof, in conformity with
the requirements for qualification and taxation as a real estate
investment trust ("REIT") under the Code, and the Company's proposed
method of operation (as described in the Prospectus and the
Management Representation Letters) will enable the Company to
continue to meet the requirements for qualification and taxation as a
REIT for the taxable year ending December 31, 1998, and for
subsequent taxable years; and
2. the discussion in the Company's Annual Report on Form 10-K, as
amended, for the fiscal year ended December 31, 1997, as incorporated
by reference in the Prospectus, under the caption "Federal Income Tax
Considerations," to the extent that it discusses matters of law or
legal conclusions or purports to describe certain provisions of the
federal tax laws, is a correct summary of the matters discussed
therein as of the date hereof.
We assume no obligation to advise you of any changes in our opinion or of
any new developments in the application or interpretation of the federal income
tax laws subsequent to date of this letter. The Company's qualification and
taxation as a REIT depend upon both (i) the satisfaction in the past by Beacon
and the ZML REITs of the requirements for qualification and taxation as a REIT;
(ii) the Company's ability to meet on a continuing basis, through actual annual
operating and other results, the various requirements under the Code, as
described in the Prospectus with regard to, among other things, the sources of
its gross income, the composition of its assets, the level of its distributions
to shareholders, and the diversity of its stock ownership; and (iii) the
satisfaction, at all time since the Company has owned an interest in BeaMetFed,
Inc. and on a continuing basis, by BeaMetFed, Inc. of the requirements for
qualification and taxation as a REIT. Hogan & Hartson L.L.P. will not review the
Company's compliance with these requirements on a continuing basis. Accordingly,
no assurance can be given that the actual results of the Company's operations,
the sources of its income, the nature of its assets, the level of its
distributions to shareholders and the diversity of its share ownership for any
given taxable year will satisfy the requirements under the Code for
qualification and taxation as a REIT.
In rendering the opinions herein, Hogan & Hartson L.L.P. has relied upon
representations of the Company and the Operating Partnership with respect to
REIT qualification matters, including those set forth in the Management
Representation Letters. In addition, Hogan & Hartson L.L.P. has relied upon the
representations of the Company and the Operating Partnership regarding the
qualification of BeaMetFed, Inc. as a REIT.
<PAGE> 4
This letter has been prepared solely for your use in connection with the
filing of the Registration Statement and should not be quoted in whole or in
part or otherwise referred to, or be filed with or furnished to any governmental
agency or other person, without the prior written consent of this firm. We
hereby consent to the filing of this opinion letter as Exhibit 8.1 to the
Registration Statement and to the reference to Hogan & Hartson L.L.P. under the
caption "Legal Matters" in the Prospectus. In giving this consent, we do not
thereby admit that we are an "expert" within the meaning of the Securities Act
of 1933, as amended.
Very truly yours,
/s/ Hogan & Hartson L.L.P.
Hogan & Hartson L.L.P.
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Equity Office
Properties Trust for the registration of common shares of beneficial interest,
preferred shares of beneficial interest, common share warrants and preferred
share warrants and to the incorporation by reference therein of our report dated
February 23, 1998, except for Note 25, as to which the date is March 18, 1998,
with respect to the consolidated financial statements of Equity Office
Properties Trust included in its Annual Report (Form 10-K, as amended by Form
10-K/A) for the year ended December 31, 1997, filed with the Securities and
Exchange Commission.
/s/ ERNST & YOUNG LLP
Chicago, IL
July 6, 1998
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration
Statement of Equity Office Properties Trust on Form S-3 of our reports dated
January 28, 1997, on our audits of the financial statements and financial
statement schedules of Beacon Properties Corporation, which reports were filed
with the Securities and Exchange Commission on the Form 8-K/A of Equity Office
Properties Trust on February 18, 1998. We also consent to the reference to our
firm under the caption "Experts."
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
July 6, 1998
