<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 3, 1998
REGISTRATION NO. 333-61469
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
EOP OPERATING LIMITED PARTNERSHIP
(Exact name of registrant as specified in its governing instrument)
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DELAWARE 6798 36-4156801
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
TWO NORTH RIVERSIDE PLAZA, SUITE 2200
CHICAGO, ILLINOIS 60606
(Address of principal executive offices)
------------------------
STANLEY M. STEVENS
EXECUTIVE VICE PRESIDENT-CHIEF LEGAL COUNSEL
EQUITY OFFICE PROPERTIES TRUST
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: As soon as
practicable after this Registration Statement becomes effective.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) 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 this form is a post-effective amendment filed pursuant to Rule 462(d)
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. [ ]
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CALCULATION OF REGISTRATION FEE
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AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES BEING OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
BEING REGISTERED REGISTERED SECURITY(1) PRICE(1) FEE
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6.375% Notes due 2003(2).................................. $ 100,000 100% $ 100,000
6.50% Notes due 2004...................................... 250,000,000 100% 250,000,000
6.763% Notes due 2007..................................... 300,000,000 100% 300,000,000
6.750% Notes due 2008(2).................................. 100,000 100% 100,000
7.25% Notes due 2028...................................... 225,000,000 100% 225,000,000
6.376% MandatOry Par Put Remarketed Securities(SM) due
2012(2)................................................. 345,000 100% 345,000
Debt Warrants to Purchase 6.763% Notes due 2008........... 300,000 $8.00 $ 2,400,000
Total Notes and Debt Warrants........................... $777,945,000 $ 229,494(3)
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</TABLE>
(1) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(a).
(2) Previously registered with the Commission pursuant to Reg. No. 333-47347.
(3) Includes $229,333 paid upon the initial filing of this Registration
Statement on August 14, 1998 and $161 of the fee paid in connection with
Reg. No. 333-47347.
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, THE
PROSPECTUS WHICH CONSTITUTES PART OF THIS REGISTRATION STATEMENT ALSO RELATES TO
AND INCLUDES AN AGGREGATE PRINCIPAL AMOUNT OF $545,000 OF SECURITIES PREVIOUSLY
REGISTERED ON FORM S-4, REG. NO. 333-47347.
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.
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<PAGE> 2
PROSPECTUS
EOP OPERATING LIMITED PARTNERSHIP
OFFER TO EXCHANGE
$100,000 6.375% NOTES DUE 2003 FOR ANY AND ALL OUTSTANDING 6.375% NOTES DUE 2003
$250,000,000 6.50% NOTES DUE 2004 FOR ANY AND ALL OUTSTANDING 6.50% NOTES DUE
2004
$300,000,000 6.763% NOTES DUE 2007 FOR ANY AND ALL OUTSTANDING 6.763% NOTES DUE
2007
$100,000 6.750% NOTES DUE 2008 FOR ANY AND ALL OUTSTANDING 6.750% NOTES DUE 2008
$345,000 6.376% MANDATORY PAR PUT REMARKETED SECURITIES(SM) DUE 2012 FOR ANY AND
ALL
OUTSTANDING 6.376% MANDATORY PAR PUT REMARKETED SECURITIES(SM) DUE 2012
$225,000,000 7.25% NOTES DUE 2028 FOR ANY AND ALL OUTSTANDING 7.25% NOTES DUE
2028
300,000 DEBT WARRANTS TO PURCHASE $300,000,000 6.763% NOTES DUE 2008 FOR ANY AND
ALL
OUTSTANDING DEBT WARRANTS TO PURCHASE $300,000,000 6.763% NOTES DUE 2008
------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON OCTOBER
13, 1998 UNLESS EXTENDED.
------------------------
EOP Operating Limited Partnership, a Delaware limited partnership (the
"Company"), is making this Exchange Offer (the "Exchange Offer") to exchange its
outstanding 6.375% Notes due 2003 (the "2003 Notes"), 6.50% Notes due 2004 (the
"2004 Notes"), 6.763% Notes due 2007 (the "2007 Notes"), 6.750% Notes due 2008
("the 2008 Notes"), 6.376% MandatOry Par Put Remarketed Securities(SM) due 2012
(the "MOPPRS(SM)"), 7.25% Notes due 2028 (the "2028 Notes" and collectively with
the 2003 Notes, the 2004 Notes, the 2007 Notes, the 2008 Notes and the MOPPRS,
the "Private Notes") and Debt Warrants (the "Private Warrants") to Purchase
$300,000,000 6.763% Notes due 2008 (the "Underlying Notes"), which are not
freely transferable, for its 6.375% Notes due 2003 (the "2003 Exchange Notes"),
6.50% Notes due 2004 (the "2004 Exchange Notes"), 6.763% Notes due 2007 (the
"2007 Exchange Notes"), 6.750% Notes due 2008 (the "2008 Exchange Notes"),
6.376% MandatOry Par Put Remarketed Securities(SM) due 2012 (the "Exchange
MOPPRS"), 7.25% Notes due 2028 (the "2028 Exchange Notes" and collectively with
the 2003 Exchange Notes, the 2004 Exchange Notes, the 2007 Exchange Notes, the
2008 Exchange Notes and the Exchange MOPPRS, the "Exchange Notes") and Debt
Warrants to Purchase $300,000,000 6.763% Notes due 2008 (the "Exchange
Warrants") offered hereby, which will be subject to fewer restrictions on
transfer, as described below. The 2003 Exchange Notes, the 2008 Exchange Notes
and the Exchange MOPPRS are sometimes collectively referred to as the "February
Exchange Notes." The 2004 Exchange Notes, the 2007 Exchange Notes and the 2028
Exchange Notes are sometimes collectively referred to as the "June Exchange
Notes." The Private Notes, the Underlying Notes and the Exchange Notes are
sometimes collectively referred to as the "Notes." The Private Warrants and the
Exchange Warrants are sometimes collectively referred to as the "Warrants."
SEE "RISK FACTORS" COMMENCING ON PAGE 16 FOR A DISCUSSION OF MATERIAL RISKS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH THE EXCHANGE OFFER AND AN
INVESTMENT IN THE EXCHANGE NOTES OR THE EXCHANGE WARRANTS, INCLUDING:
- Restrictions on transfer of the Private Notes and the Private Warrants
will continue for holders who do not exchange such Private Notes and
Private Warrants in the Exchange Offer;
- Payments due under the Notes will be effectively subordinated to mortgages
and other secured indebtedness of the Company, as well as to indebtedness
and other liabilities of the Company's subsidiaries;
- The Exchange Notes and the Exchange Warrants will not be listed on any
exchange. A public market for the Exchange Notes and the Exchange Warrants
may not develop, which could make it difficult or impossible to sell the
Exchange Notes and the Exchange Warrants, or, if such a market were to
develop, the Exchange Notes and the Exchange Warrants could trade at
prices that may be higher or lower than the initial offering prices of the
Private Notes and the Private Warrants, respectively;
[Cover page continued on next page]
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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 September , 1998.
<PAGE> 3
[Cover page continued from prior page]
- If the Internal Revenue Service treats the Exchange MOPPRS as having
contingent interest for federal income tax purposes, holders of Exchange
MOPPRS would have to include original issue discount in their taxable
income; and
- The Exchange Notes (other than the Exchange MOPPRS) are subject to
provisions that allow them to be redeemed at any time prior to the stated
maturity date at the option of the Company, and the Exchange MOPPRS are
subject to mandatory tender on the Remarketing Date (as defined below).
The 2003 Exchange Notes will mature on February 15, 2003; the 2004 Exchange
Notes will mature on June 15, 2004; the 2007 Exchange Notes will mature on June
15, 2007; the 2008 Exchange Notes will mature on February 15, 2008; the Exchange
MOPPRS will mature on February 15, 2012; and the 2028 Exchange Notes will mature
on June 15, 2028. The Exchange Notes other than the Exchange MOPPRS will be
redeemable at any time at the option of the Company, in whole or in part, at a
redemption price equal to the sum of (i) the principal amount of the Exchange
Notes being redeemed plus accrued interest to the redemption date and (ii) the
Make-Whole Amount (as defined in "Description of the Exchange Notes -- Optional
Redemption"), if any. The Exchange MOPPRS will be redeemed or repurchased on
February 15, 2002 (the "Remarketing Date"). The Exchange MOPPRS are subject to
mandatory tender on the Remarketing Date to Merrill Lynch, Pierce, Fenner &
Smith Incorporated, as Remarketing Dealer (the "Remarketing Dealer"), at 100% of
their principal amount, except in limited circumstances. If the Remarketing
Dealer for any reason does not purchase all tendered Exchange MOPPRS on the
Remarketing Date or elects not to remarket the Exchange MOPPRS, or in certain
other, limited circumstances, the Company will be required to repurchase the
Exchange MOPPRS at 100% of the principal amount thereof plus accrued interest.
The Exchange Notes will not be subject to any mandatory sinking fund. See
"Description of the Exchange Notes."
Interest on the February Exchange Notes offered hereby will be payable
semiannually in arrears on February 15 and August 15 of each year, commencing
February 15, 1999. Interest on the June Exchange Notes will be payable
semiannually in arrears on June 15 and December 15 of each year, commencing
December 15, 1998.
The Private Notes are, and the Exchange Notes and the Underlying Notes will
be, senior unsecured obligations of the Company and will rank equal with each
other and with the Company's other unsecured and unsubordinated indebtedness.
The Private Notes are, and the Exchange Notes and Underlying Notes will be,
effectively subordinated to mortgages and other secured indebtedness of the
Company as well as to indebtedness and other liabilities of the Company's
subsidiaries.
The Company will accept for exchange any and all validly tendered Private
Notes and Private Warrants not withdrawn prior to 5:00 p.m., New York City time,
on October 13, 1998 (the "Expiration Date"), unless the Exchange Offer is
extended by the Company in its sole discretion. The Company believes that the
Exchange Notes and the Exchange Warrants issued pursuant to the Exchange Offer
in exchange for the Private Notes and Private Warrants, respectively, may be
offered for resale, resold and otherwise transferred by a holder thereof (other
than by (i) a broker-dealer who purchased the Private Notes or the Private
Warrants, as applicable, directly from the Company or (ii) a person that is an
affiliate of the Company within the meaning of Rule 405 under the Securities Act
of 1933, as amended (the "Securities Act")), without compliance with the
registration and prospectus delivery requirements of the Securities Act,
provided that the holder is acquiring Exchange Notes or Exchange Warrants, as
applicable, in the ordinary course of its business and is not participating,
does not intend to participate, and has no arrangement or understanding with any
person to participate, in the distribution of the Exchange Notes or Exchange
Warrants, as applicable. Holders of Private Notes or Private Warrants, as
applicable, wishing to accept the Exchange Offer must represent to the Company
that such conditions have been met. This Prospectus, as it may be amended or
supplemented from time to time, also may be used by a broker-dealer in
connection with any resale of the Exchange Notes and the Exchange Warrants
received for Private Notes or Private Warrants, respectively, where such Private
Notes or Private Warrants were acquired by a broker-dealer as a result of
market-making or other trading activities. The Company has agreed that for a
period of 180 days after the Expiration Date, it will make this
ii
<PAGE> 4
Prospectus, as may be amended or supplemented from time to time, available to
any broker-dealer for use in connection with any such resales. See "Plan of
Distribution."
Any beneficial owner whose Private Notes or Private Warrants, as
applicable, are registered in the name of a broker, dealer, commercial bank,
trust company or other nominee and who wishes to tender such Private Notes or
Private Warrants in the Exchange Offer should contact such registered holder
promptly and instruct such registered holder to tender on the beneficial owner's
behalf. Any such beneficial owner that wishes to tender on its own behalf must,
prior to completing and executing the letter of transmittal delivered herewith
and delivering its Private Notes or Private Warrants, as applicable, either make
appropriate arrangements to register ownership of the Private Notes or the
Private Warrants, as applicable, in its own name, if permitted pursuant to the
terms of such Private Notes or Private Warrants, as applicable, or obtain a
properly completed bond power from the registered holder. The transfer of
registered ownership may take considerable time, and it may not be possible to
complete the transfer prior to the Expiration Date.
THIS PROSPECTUS INCORPORATES BY REFERENCE IMPORTANT BUSINESS AND FINANCIAL
INFORMATION ABOUT THE COMPANY THAT IS NOT INCLUDED HEREIN OR DELIVERED HEREWITH.
COPIES OF THIS 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 EOP OPERATING LIMITED
PARTNERSHIP, C/O EQUITY OFFICE PROPERTIES TRUST, TWO NORTH RIVERSIDE PLAZA,
SUITE 2200, CHICAGO, ILLINOIS 60606, ATTENTION: DIANE MOREFIELD (TELEPHONE
NUMBER: (312) 466-3300). TO ENSURE TIMELY DELIVERY, REQUESTS MUST BE MADE NO
LATER THAN OCTOBER 5, 1998.
iii
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
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PAGE
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Available Information................... 2
Incorporation of Certain Documents by
Reference............................. 2
Summary................................. 4
The Company........................... 4
The Exchange Offer.................... 5
The Exchange Notes.................... 8
The Exchange Warrants................. 10
No Cash Proceeds to the Company....... 11
Summary Risk Factors.................. 11
Summary Selected Financial
Information........................ 12
Risk Factors............................ 15
Restrictions on Transfer of Private
Notes and Private Warrants Will
Continue If Private Notes or
Private Warrants, As Applicable,
Are Not Tendered or Are Not
Accepted for Exchange.............. 15
There Is No Current Public Market for
Exchange Notes or Exchange
Warrants........................... 15
The Notes Are Effectively Subordinated
to Our Secured Indebtedness and
Certain Other Indebtedness of Our
Subsidiaries....................... 16
The Exchange Notes May Not Remain
Outstanding for Their Full Terms to
Maturity; the Exchange MOPPRS Must
Be Tendered on the Remarketing
Date............................... 16
Holders of Exchange MOPPRS Might Have
to Include Original Issue Discount
in Their Taxable Income............ 16
The Company............................. 18
No Cash Proceeds to the Company......... 18
Ratios of Earnings to Fixed Charges..... 18
Capitalization.......................... 19
Selected Financial Information.......... 20
The Exchange Offer...................... 23
Purpose of the Exchange Offer......... 23
Terms of the Exchange Offer........... 24
</TABLE>
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PAGE
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Expiration Date; Extensions;
Amendments......................... 25
Interest on the Exchange Notes and
Accrued Interest on the Private
Notes.............................. 25
Resale of the Exchange Notes and the
Exchange Warrants.................. 26
Procedures for Tendering.............. 27
Return of Private Notes and Private
Warrants........................... 29
Book-Entry Transfer................... 29
Guaranteed Delivery Procedures........ 29
Withdrawal of Tenders................. 30
Termination of Certain Rights......... 30
Exchange Agent........................ 31
Fees and Expenses..................... 31
Consequences of Failure to Exchange... 31
Accounting Treatment.................. 32
Description of the Exchange Notes....... 33
General............................... 33
Principal and Interest................ 33
Optional Redemption................... 34
Tender of Exchange MOPPRS;
Remarketing........................ 35
Repurchase of Exchange MOPPRS......... 39
Redemption of Exchange MOPPRS......... 39
Certain Indenture Covenants........... 39
Merger, Consolidation or Sale......... 43
Events of Default, Notice and
Waiver............................. 43
Modification of the Indenture......... 45
Satisfaction and Discharge............ 46
No Conversion Rights.................. 46
Global Securities..................... 46
Description of the Exchange Warrants.... 48
Certain Federal Income Tax
Consequences.......................... 51
Plan of Distribution.................... 55
Experts................................. 56
Legal Matters........................... 56
Glossary................................ 57
</TABLE>
iv
<PAGE> 6
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 filed with the Commission by the Company 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 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.
b. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1998 and June 30, 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 30, 1997), and the Company's
Current Reports on Form 8-K filed with the Commission on March 18, 1998,
July 10, 1998 and September 3, 1998.
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
2
<PAGE> 7
Prospectus and any 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 EOP Operating Limited Partnership, c/o Equity Office Properties
Trust, Two North Riverside Plaza, Suite 2200, Chicago, Illinois 60606,
Attention: Diane Morefield (telephone number: (312) 466-3300).
3
<PAGE> 8
SUMMARY
The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and financial data, including
the financial statements and notes thereto, included elsewhere in this
Prospectus or incorporated herein by reference. The offer by the Company to
exchange the Exchange Notes and the Exchange Warrants, which have been
registered under the Securities Act, for an equal principal amount of its
outstanding Private Notes and an equal number of its outstanding Private
Warrants, respectively, is referred to as the "Exchange Offer." As used herein,
"Company" means EOP Operating Limited Partnership, a Delaware limited
partnership, and one or more of its subsidiaries, and the predecessors thereof.
The Company is the "operating partnership" of Equity Office Properties Trust
(the "Trust"), a Maryland real estate investment trust and managing general
partner of the Company. See "Glossary" for the meanings of other terms used
herein. All references to the historical activities of the Trust or the Company
prior to July 11, 1997 refer to the activities of the Equity Office
Predecessors.
Information contained in this Prospectus contains "forward-looking
statements" which relate to, without limitation, future economic performance,
plans and objectives of management for future operations and projections of
revenue and other financial items, and 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 set
forth under the caption "Risk Factors" and elsewhere in this Prospectus 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.
THE COMPANY
The Company and the Trust were formed to continue and expand the national
office property business organized by Samuel Zell, Chairman of the Board of
Trustees of the Trust. The Trust, a self-administered and self-managed real
estate investment trust ("REIT"), is the managing general partner of, and
controls a majority of the partnership interests in, the Company. The Trust owns
all of its assets and conducts substantially all of its business through the
Company and its subsidiaries.
The Company was formed on November 1, 1996, as a limited partnership under
the Delaware Revised Uniform Limited Partnership Act. 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.
The following diagram depicts in summary form the Company's structure:
COMPANY'S STRUCTURE DIAGRAM
4
<PAGE> 9
THE EXCHANGE OFFER
The following is a summary of the principal terms of the Exchange Offer. A
more detailed description is contained herein under the caption "The Exchange
Offer."
The Exchange Offer............ The Company is hereby offering to exchange the
Exchange Notes and the Exchange Warrants for an
equal aggregate principal amount of Private
Notes and an equal number of Private Warrants,
respectively, that are properly tendered and
accepted.
Holders of Private Notes or Private Warrants
who do not validly tender such notes or
warrants and accept the Exchange Offer will
continue to hold such Private Notes or Private
Warrants and will continue to be subject to the
rights and limitations applicable thereto,
including existing restrictions upon transfer
thereof. The Company will have no further
obligation to provide for the registration
under the Securities Act of any offering of
Private Notes or Private Warrants which
continue to be held after the Exchange Offer.
See "The Exchange Offer -- Consequences of
Failure to Exchange."
Based on interpretations set forth in no-action
letters issued to third parties by the staff of
the Commission, the Company believes that the
Exchange Notes and the Exchange Warrants issued
pursuant to the Exchange Offer in exchange for
Private Notes and Private Warrants,
respectively, may be offered for resale, resold
and otherwise transferred by a holder thereof
without compliance with the registration and
prospectus delivery provisions of the
Securities Act, provided that the holder is
acquiring Exchange Notes or Exchange Warrants,
as applicable, in the ordinary course of its
business, is not participating, does not intend
to participate and has no arrangement or
understanding with any person to participate in
the distribution of the Exchange Notes or
Exchange Warrants, as applicable, is not an
"affiliate" of the Company within the meaning
of Rule 405 under the Securities Act and is not
a broker-dealer who acquired Private Notes or
Private Warrants as a result of market-making
or other trading activities. See "The Exchange
Offer -- Resale of the Exchange Notes and the
Exchange Warrants."
If the Company fails to consummate the Exchange
Offer with respect to the 2004 Notes, the 2007
Notes and the 2028 Notes (collectively, the
"June Private Notes") and the Private Warrants
prior to December 12, 1998 or, if applicable,
fails to fulfill its obligations under a
registration rights agreement to obtain and
maintain effectiveness of a shelf registration
statement to cover resales of the June Private
Notes and the Private Warrants by the holders
thereof during specified time periods, then
liquidated damages will accrue on the principal
amounts of the June Private Notes at an annual
rate of 0.50%. See "The Exchange Offer --
Purpose of the Exchange Offer."
Expiration Date............... The Exchange Offer will expire at 5:00 P.M.,
New York City time, on October 13, 1998 (the
"Expiration Date"), unless the Exchange Offer
is extended by the Company in its sole
discretion, in which case the term "Expiration
Date" shall mean the latest date and time to
which the Exchange Offer is extended. The
Company will
5
<PAGE> 10
announce any extensions of the Exchange Offer
through a press release or other public
announcement. See "The Exchange Offer --
Expiration Date; Extensions; Amendments."
Procedures for Tendering
Private Notes and Private
Warrants...................... Each holder of Private Notes or Private
Warrants wishing to accept the Exchange Offer
must complete, sign and date the letter of
transmittal accompanying this Prospectus (the
"Letter of Transmittal"), or a facsimile
thereof, in accordance with the instructions
contained herein and therein, and mail or
otherwise deliver such Letter of Transmittal,
or such facsimile, together with such Private
Notes or Private Warrants and any other
required documentation, to State Street Bank
and Trust Company, as exchange agent (the
"Exchange Agent"), at the address set forth
under "The Exchange Offer -- Exchange Agent."
By executing the Letter of Transmittal, the
holder will represent to and agree with the
Company that, among other things, (i) any
Exchange Notes or Exchange Warrants acquired in
exchange for Private Notes or Private Warrants,
respectively, are being acquired in the
ordinary course of business of the person
receiving such Exchange Notes or Exchange
Warrants, (ii) the person receiving such
Exchange Notes or Exchange Warrants is not
engaging in and does not intend to engage in a
distribution of such Exchange Notes or Exchange
Warrants, (iii) the person receiving such
Exchange Notes or Exchange Warrants does not
have an arrangement or understanding with any
person to participate in the distribution of
such Exchange Notes or Exchange Warrants and
(iv) neither the holder nor any other person
receiving the Exchange Notes or Exchange
Warrants, as applicable, from the holder is an
"affiliate," as defined in Rule 405 under the
Securities Act, of the Company. Certain
brokers, dealers, commercial banks, trust
companies and other nominees may effect tenders
by book-entry transfer, including an Agent's
Message (defined below) in lieu of a Letter of
Transmittal. See "The Exchange Offer --
Procedures for Tendering."
Special Procedures for
Beneficial Owners............. Any beneficial owner whose Private Notes or
Private Warrants are registered in the name of
a broker, dealer, commercial bank, trust
company or other nominee and who wishes to
tender such Private Notes or Private Warrants
in the Exchange Offer should contact such
registered holder promptly and instruct such
registered holder to tender on such beneficial
owner's behalf. Any such beneficial owner that
wishes to tender on its own behalf must, prior
to completing and executing the Letter of
Transmittal and delivering its Private Notes or
Private Warrants, as applicable, either make
appropriate arrangements to register ownership
of such Private Notes or Private Warrants in
its own name, if permitted pursuant to the
terms of such Private Notes or Private
Warrants, or obtain a properly completed bond
power from the registered holder. The transfer
of registered ownership may take considerable
time, and it may not be possible to complete
the transfer prior to the Expiration Date. See
"The Exchange Offer -- Procedures for
Tendering."
Guaranteed Delivery
Procedures.................... Holders of Private Notes or Private Warrants
who wish to tender their Private Notes or
Private Warrants and whose Private Notes
6
<PAGE> 11
or Private Warrants are not immediately
available or who cannot deliver their Private
Notes or Private Warrants, the Letter of
Transmittal or any other documentation required
by the Letter of Transmittal to the Exchange
Agent prior to the Expiration Date must tender
their Private Notes or Private Warrants
according to the guaranteed delivery procedures
described under "The Exchange Offer --
Guaranteed Delivery Procedures."
Acceptance of the Private
Notes and Private Warrants and
Delivery of Exchange Notes and
Exchange Warrants............. Subject to the satisfaction or waiver of the
conditions to the Exchange Offer, the Company
will accept for exchange any and all Private
Notes and Private Warrants that are properly
tendered in the Exchange Offer prior to the
Expiration Date. The Exchange Notes and
Exchange Warrants issued pursuant to the
Exchange Offer will be delivered on the
earliest practicable date following the
Expiration Date. See "The Exchange Offer --
Terms of the Exchange Offer."
Withdrawal Rights............. Tenders of Private Notes or Private Warrants
may be withdrawn at any time prior to the
Expiration Date by delivering a notice of
withdrawal to the Exchange Agent prior to the
Expiration Date. Any such notice of withdrawal
must (i) specify the name of the person who
deposited the Private Notes or Private Warrants
to be withdrawn, (ii) identify the Private
Notes or Private Warrants to be withdrawn
(including the certificate number or numbers)
and (iii) be signed by the holder in the same
manner as the original signature on the Letter
of Transmittal by which such Private Notes or
Private Warrants were tendered (including any
required signature guarantees). See "The
Exchange Offer -- Withdrawal of Tenders."
Federal Income Tax
Consequences.................. In the opinion of Hogan & Hartson L.L.P.,
special tax counsel to the Company, the
exchange of the Private Notes and the Private
Warrants for the Exchange Notes and the
Exchange Warrants, respectively, will not be a
taxable exchange for federal income tax
purposes, and holders of Private Notes or
Private Warrants will not recognize any taxable
gain or loss or any interest income as a result
of such exchange. See "Certain Federal Income
Tax Consequences -- The Exchange." The federal
income tax treatment of debt obligations such
as the Exchange MOPPRS is not certain. It is
possible that the Exchange MOPPRS might be
characterized as having contingent interest,
which holders of Exchange MOPPRS would have to
include in income as such contingent interest
were deemed to accrue. The Company intends to
treat the Exchange MOPPRS as not having
contingent interest. See "Federal Income Tax
Consequences -- Possible Characterization of
Exchange MOPPRS as Having Contingent Interest."
Exchange Agent................ State Street Bank and Trust Company is serving
as the Exchange Agent in connection with the
Exchange Offer. State Street Bank and Trust
Company also serves as trustee (the "Trustee")
under the indenture relating to the Notes and
as warrant agent (the "Warrant Agent") under
the warrant agreement relating to the Warrants.
See "The Exchange Offer -- Exchange Agent."
7
<PAGE> 12
THE EXCHANGE NOTES
The form and terms of the respective Exchange Notes will be identical in
all material respects to the form and terms of the Private Notes, except that
the Exchange Notes will not bear legends restricting the transfer thereof and
the holders of the Exchange Notes will not be entitled to any of the
registration rights of holders of the Private Notes under any registration
rights agreement, which rights, if any, will terminate upon consummation of the
Exchange Offer. The Exchange Notes will evidence the same indebtedness as the
Private Notes (which they replace) and will be issued under, and be entitled to
the benefits of, an indenture, dated as of September 2, 1997, as amended or
supplemented, between the Company and the Trustee (the "Indenture").
All capitalized terms used herein and not defined herein have the meanings
provided in "Description of the Exchange Notes." For a more complete description
of the terms of the Exchange Notes specified in the following summary, see
"Description of the Exchange Notes."
Issuer........................ EOP Operating Limited Partnership
Exchange Notes................ $100,000 principal amount of 6.375% Notes due
2003
$250,000,000 principal amount of 6.50% Notes
due 2004
$300,000,000 principal amount of 6.763% Notes
due 2007
$100,000 principal amount of 6.750% Notes due
2008
$345,000 principal amount of 6.376% MOPPRS due
2012
$225,000,000 principal amount of 7.25% Notes
due 2028
Maturity...................... Unless, in each case, redeemed prior to
maturity as described below, the 2003 Exchange
Notes will mature February 15, 2003; the 2004
Exchange Notes will mature on June 15, 2004;
the 2007 Exchange Notes will mature on June 15,
2007; the 2008 Exchange Notes will mature
February 15, 2008; and the 2028 Exchange Notes
will mature on June 15, 2028. The stated
maturity date of the Exchange MOPPRS is
February 15, 2012; however, the Exchange MOPPRS
are subject to mandatory tender by the holders
thereof on the Remarketing Date, February 15,
2002, for purchase by the Remarketing Dealer or
the Company, as described below. See
"Description of the Exchange Notes -- General."
Optional Redemption........... The Exchange Notes other than the Exchange
MOPPRS will be redeemable at any time at the
option of the Company, in whole or in part, at
a redemption price equal to the sum of (i) the
principal amount of the Exchange Notes being
redeemed plus accrued interest to the
redemption date and (ii) the Make-Whole Amount,
if any. See "Description of the Exchange Notes
-- Optional Redemption." The Exchange MOPPRS
are subject to redemption from the Remarketing
Dealer, in whole but not in part, at the option
of the Company on the Remarketing Date at the
Optional Redemption Price. The Exchange MOPPRS
are not otherwise subject to redemption by the
Company.
Mandatory Tender of Exchange
MOPPRS; Remarketing and
Repurchase.................... THE EXCHANGE MOPPRS WILL BE REDEEMED OR
REPURCHASED ON THE REMARKETING DATE (WHICH IS
PRIOR TO THE STATED MATURITY DATE). Provided
that the Remarketing Dealer gives notice to the
Company and the Trustee on a Business Day not
later than five Business Days prior to the
Remarketing Date of its intention to purchase
the Exchange MOPPRS for remarketing, each
Exchange
8
<PAGE> 13
MOPPRS will be automatically tendered, or
deemed tendered, to the Remarketing Dealer for
purchase on the Remarketing Date, except in the
circumstances described under "Description of
the Exchange Notes -- Repurchase of Exchange
MOPPRS" or "--Redemption of Exchange MOPPRS."
The purchase price to be paid by the
Remarketing Dealer for the tendered Exchange
MOPPRS will equal 100% of the principal amount
thereof. When the Exchange MOPPRS are tendered
for remarketing, the Remarketing Dealer may
remarket the Exchange MOPPRS for its own
account at varying prices to be determined by
the Remarketing Dealer at the time of each
sale. If the Remarketing Dealer for any reason
does not purchase all tendered Exchange MOPPRS,
or in certain other limited circumstances
described herein, the Company will be required
to repurchase the Exchange MOPPRS from the
Beneficial Owners thereof on the Remarketing
Date, at 100% of the principal amount thereof
plus accrued interest, if any. See "Description
of the Exchange Notes -- Repurchase of Exchange
MOPPRS."
The Remarketing Dealer, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, an investment
banking firm, will not receive any fees or
reimbursements of expenses from the Company in
connection with any remarketing. The
Remarketing Dealer may resign, in which case it
will be the sole obligation of the Company to
appoint a successor. See "Description of the
Exchange Notes -- Tender of Exchange MOPPRS;
Remarketing -- The Remarketing Dealer."
Interest Payment Dates........ Interest on the June Exchange Notes will be
payable semiannually in arrears on each June 15
and December 15, commencing December 15, 1998.
The June Exchange Notes will bear interest from
their date of issuance. Interest on the June
Private Notes will cease to accrue on the day
preceding the date of issuance of the June
Exchange Notes. Interest payable on the first
Interest Payment Date with respect to the June
Exchange Notes will include accrued but unpaid
interest due on the June Private Notes (which
they replace) for the period from the later of
June 15, 1998 or the Interest Payment Date
immediately preceding the date of issuance of
the applicable June Exchange Notes. See
"Description of the Exchange Notes -- Principal
and Interest."
Interest on the February Exchange Notes offered
hereby will be payable semiannually in arrears
on February 15 and August 15 of each year,
commencing February 15, 1999. Interest on the
2003 Notes, the 2008 Notes and the MOPPRS
(collectively, the "February Private Notes")
will cease to accrue on the day immediately
preceding the date of issuance of the February
Exchange Notes. Interest payable on the first
Interest Payment Date with respect to the
February Exchange Notes offered hereby will
include accrued but unpaid interest due on the
February Private Notes (which they replace) for
the period from the later of August 15, 1998 or
the Interest Payment Date immediately preceding
the date of issuance of the applicable February
Exchange Notes. See "Description of the
Exchange Notes -- Principal and Interest."
9
<PAGE> 14
Ranking....................... The Exchange Notes will be senior unsecured
obligations of the Company and will rank
equally with each other and with all other
unsecured and unsubordinated indebtedness of
the Company. The Exchange Notes will be
effectively subordinated to the prior claims of
any secured indebtedness of the Company to the
extent of the value of the property securing
such indebtedness. The Exchange Notes also will
be effectively subordinated to all existing and
future third-party indebtedness and other
liabilities of the Company's Subsidiaries. As
of June 30, 1998, on a Pro Forma Basis, the
secured indebtedness of the Company and all
other liabilities of the Company's Subsidiaries
aggregated approximately $2.7 billion and the
unsecured and unsubordinated indebtedness of
the Company aggregated approximately $3.4
billion. See "Capitalization."
Limitations on Incurrence of
Debt.......................... The Indenture contains various covenants,
including covenants limiting the ability of the
Company and its Subsidiaries to incur
additional secured and unsecured debt unless
certain financial standards are satisfied. See
"Description of the Exchange Notes -- Certain
Covenants." Except as described in "Description
of the Exchange Notes -- Certain Covenants --
Limitations on Incurrence of Debt" and "--
Merger, Consolidation or Sale," the Indenture
does not contain any other provisions that
would limit the ability of the Company to incur
indebtedness or that would afford holders of
Exchange Notes protection in the event of a
highly leveraged transaction involving the
Company and its affiliates, a change in control
of the Company or the Trust or a
reorganization, merger or similar transaction
involving the Company that may severely affect
the holders of the Exchange Notes.
THE EXCHANGE WARRANTS
The form and terms of the Exchange Warrants will be identical in all
material respects to the form and terms of the Private Warrants, except that the
Exchange Warrants will not bear legends restricting the transfer thereof and the
holders of the Exchange Warrants will not be entitled to any of the registration
rights of holders of the Private Warrants under any registration rights
agreement, which rights will terminate upon consummation of the Exchange Offer.
All capitalized terms used herein and not defined herein have the meanings
provided in "Description of the Exchange Warrants." For a more complete
description of the terms of the Exchange Warrants specified in the following
summary, see "Description of the Exchange Warrants."
Issuer........................ EOP Operating Limited Partnership.
Exchange Warrants............. 300,000 Warrants to purchase $300,000,000
principal amount of 6.763% Notes due 2008.
Exercise of Exchange
Warrants...................... Each Exchange Warrant will entitle the holder
to purchase $1,000 principal amount of
Underlying Notes at par on December 15, 1999
(or, in certain circumstances, January 18,
2000). If for any reason the Company does not
deliver the Underlying Notes purchasable upon
exercise of the Exchange Warrants on the
Exercise Date, the Company will pay the Warrant
Make-Whole Amount. See "Description of the
Exchange Warrants."
10
<PAGE> 15
Terms of the Underlying Notes;
Ranking....................... The Underlying Notes will have terms identical
to the Exchange Notes except (i) as to maturity
and the dates on which interest thereon accrues
and interest payments commence and (ii) the
Underlying Notes will be entitled to a special
interest premium if not registered under the
Securities Act at the time of issuance and
delivery and in certain other circumstances.
See "Description of the Warrants." The
Underlying Notes will be senior unsecured
obligations of the Company and will rank
equally with each other and with all other
unsecured and unsubordinated indebtedness of
the Company. The Underlying Notes will be
effectively subordinated to the prior claims of
any secured indebtedness of the Company to the
extent of the value of the property securing
such indebtedness.
NO CASH PROCEEDS TO THE COMPANY
The Company will not receive any proceeds from the issuance of the Exchange
Notes or the Exchange Warrants offered hereby and has agreed to pay the expenses
of the Exchange Offer. Private Notes and Private Warrants surrendered in
exchange for Exchange Notes and Exchange Warrants, respectively, will be retired
and canceled and cannot be reissued. Accordingly, issuance of the Exchange Notes
and the Exchange Warrants will not result in any increase in the outstanding
indebtedness of the Company. The Company used the net proceeds from the issuance
of the Private Notes and Private Warrants to repay indebtedness outstanding
under the Company's credit facilities. See "No Cash Proceeds to the Company."
SUMMARY RISK FACTORS
See "Risk Factors" for a detailed discussion of important risks associated
with an investment in the debt of the Company, including risks associated with
exchanging or not exchanging Private Notes or Private Warrants in the Exchange
Offer. These risks include:
- Holders of Private Notes or Private Warrants who do not exchange those
Private Notes or Private Warrants will hold an investment subject to
restrictions on transfer not applicable to the Exchange Notes and the
Exchange Warrants and may have difficulty selling the Private Notes or
Private Warrants unless a public market for the Private Notes or Private
Warrants develops;
- Payments due under the Exchange Notes will be effectively subordinated to
mortgages and other secured indebtedness of the Company, as well as to
indebtedness and other liabilities of the Company's Subsidiaries;
- The Exchange Notes and the Exchange Warrants will not be listed on any
exchange. A public market for the Exchange Notes and the Exchange
Warrants may not develop, which could make it difficult or impossible to
sell the Exchange Notes and the Exchange Warrants, or, if such a market
were to develop, the Exchange Notes and the Exchange Warrants could trade
at prices that may be higher or lower than the initial offering prices of
the Private Notes and the Private Warrants, respectively;
- If the Internal Revenue Service treats the Exchange MOPPRS as having
contingent interest for federal income tax purposes, holders of Exchange
MOPPRS would have to include original issue discount in their taxable
income; and
- The Exchange Notes other than the Exchange MOPPRS are subject to
provisions that allow them to be redeemed at any time prior to the stated
maturity date at the option of the Company, and the Exchange MOPPRS are
subject to mandatory tender on the Remarketing Date.
11
<PAGE> 16
SUMMARY SELECTED FINANCIAL INFORMATION
The following sets forth summary selected consolidated and combined
financial and operating information on a pro forma basis for the Company and on
an historical basis for the Company and the Company's predecessors ("Equity
Office Predecessors"). The following information should be read in conjunction
with all of the financial statements and notes thereto included in the Quarterly
Report on Form 10-Q for the quarter ended June 30, 1998 and the Annual Report on
Form 10-K for the year ended December 31, 1997, as amended, and Forms 8-K filed
on July 10, 1998 and September 3, 1998, which documents are incorporated by
reference into this Prospectus. The summary selected combined financial and
operating information of Equity Office Predecessors at December 31, 1994 and
1993, and for the year ended December 31, 1993, has been derived from the
historical unaudited combined financial statements of Equity Office
Predecessors.
12
<PAGE> 17
<TABLE>
<CAPTION>
EQUITY OFFICE
PREDECESSORS
COMPANY (COMBINED
PRO FORMA COMPANY FOR HISTORICAL) COMPANY COMPANY FOR
FOR THE THE FOR THE PRO FORMA THE PERIOD
SIX MONTHS SIX MONTHS SIX MONTHS FOR THE YEAR FROM JULY 11,
ENDED ENDED ENDED ENDED 1997 TO
JUNE 30, JUNE 30, JUNE 30, DECEMBER 31, DECEMBER 31,
1998 1998 1997 1997 1997
----------- ------------ ------------- ------------ -------------
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Revenues:
Rental, parking and other............. $ 833,640 $ 764,891 $ 308,212 $ 1,587,490 $ 406,713
----------- ------------ ----------- ----------- -----------
Total revenues..................... $ 844,576 $ 773,764 $ 319,786 $ 1,623,183 $ 412,968
----------- ------------ ----------- ----------- -----------
Expenses:
Interest.............................. $ 192,705 $ 145,954 $ 76,301 $ 386,777 $ 76,675
Depreciation and amortization......... 150,887 140,253 60,409 295,086 70,346
Property operating(1)................. 301,763 276,907 120,109 579,129 155,679
General and administrative............ 28,440 28,440 14,726 76,048 17,690
Provision for value impairment........ -- -- -- -- --
----------- ------------ ----------- ----------- -----------
Total expenses..................... $ 673,795 $ 591,554 $ 271,545 $ 1,377,040 $ 320,390
----------- ------------ ----------- ----------- -----------
Income before (income) loss allocated
to minority interests, income from
investments in unconsolidated joint
ventures and mortgage receivables,
gain on sales of real estate, and
extraordinary items................... $ 170,781 $ 182,210 $ 48,241 $ 286,143 $ 92,578
Minority interests allocation.......... (1,036) (1,036) (879) (1,701) (789)
Income from investments in
unconsolidated joint ventures and
mortgage receivables.................. 6,289 5,026 2,025 13,396 3,173
Gain/(Loss) on sales of real estate and
extraordinary items(2)................ -- (7,506) 12,235 -- (16,240)
----------- ------------ ----------- ----------- -----------
Net income before preferred
distributions......................... 176,034 178,694 61,622 297,838 78,722
Preferred distributions................ (16,891) (14,703) -- (33,710) (649)
----------- ------------ ----------- ----------- -----------
Net income available to Units.......... $ 159,143 $ 163,991 $ 61,622 $ 264,128 $ 78,073
=========== ============ =========== =========== ===========
Net income available per weighted
average Unit outstanding --
Basic................................. $.57 $.59 $.94 $.44
=========== ============ =========== ===========
Net income available per weighted
average Unit outstanding --
Diluted............................... $.56 $.59 $.94 $.43
=========== ============ =========== ===========
Weighted average Units outstanding --
Basic................................. 281,261,000 279,494,438 280,498,000 178,647,562
=========== ============ =========== ===========
Weighted average Units outstanding --
Diluted............................... 282,381,000 280,613,985 282,275,000 180,014,027
=========== ============ =========== ===========
BALANCE SHEET DATA: (at end of period)
Investment in real estate after
accumulated depreciation.............. $12,559,124 $12,217,747 -- -- $10,976,319
Total assets........................... $13,471,511 $12,875,134 -- -- $11,751,672
Mortgage debt, unsecured notes and
lines of credit....................... $ 5,531,452 $ 4,939,449 -- -- $ 4,284,317
Total liabilities...................... $ 5,972,545 $ 5,380,542 -- -- $ 4,591,697
Minority interests..................... $ 29,695 $ 29,695 -- -- $ 29,612
Partners' Capital/Owners' equity....... $ 7,469,271 $ 7,464,897 -- -- $ 7,130,363
OTHER DATA:
General and administrative expenses as
a percentage of total revenues........ 3.4% 3.7% 4.6% 4.7% 4.3%
Number of Office Properties owned at
period end(3)......................... 284 271 90 284 258
Net rentable square feet of Office
Properties(3)......................... 73.5 71.3 31.7 73.5 65.3
Occupancy of Office Properties owned at
period end(3)......................... 95% 95% 92% 95% 94%
Number of Parking Facilities owned at
period end............................ 17 17 14 17 17
Number of spaces at Parking Facilities
owned at period end................... 16,749 16,749 14,608 16,749 16,749
Funds from Operations(4)............... -- $ 315,026 $ 108,381 -- $ 163,253
Cash flow from operating activities.... -- $ 345,691 $ 90,673 -- $ 190,754
Cash flow used for investing
activities............................ -- $(1,275,985) $ (572,633) -- $(1,592,272)
Cash flow from/used for financing
activities............................ -- $ 754,195 $ 314,525 -- $ 1,630,346
<CAPTION>
EQUITY OFFICE PREDECESSORS (COMBINED HISTORICAL)
---------------------------------------------------------------
FOR THE
PERIOD FROM
JANUARY 1,
1997 TO FOR THE YEARS ENDED DECEMBER 31,
JULY 10, -------------------------------------------------
1997 1996 1995 1994 1993
----------- ---- ---- ---- ----
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Revenues:
Rental, parking and other............. $ 327,017 $ 493,396 $ 356,959 $ 230,428 $ 150,315
--------- ---------- ---------- ---------- ----------
Total revenues..................... $ 339,104 $ 508,124 $ 371,457 $ 240,878 $ 159,246
--------- ---------- ---------- ---------- ----------
Expenses:
Interest.............................. $ 80,481 $ 119,595 $ 100,566 $ 59,316 $ 36,755
Depreciation and amortization......... 66,034 96,237 74,156 46,905 29,752
Property operating(1)................. 127,285 201,067 151,488 107,412 74,028
General and administrative............ 17,201 23,145 21,987 15,603 12,012
Provision for value impairment........ -- -- 20,248 -- --
--------- ---------- ---------- ---------- ----------
Total expenses..................... $ 291,001 $ 440,044 $ 368,445 $ 229,236 $ 152,547
--------- ---------- ---------- ---------- ----------
Income before (income) loss allocated
to minority interests, income from
investments in unconsolidated joint
ventures and mortgage receivables,
gain on sales of real estate, and
extraordinary items................... $ 48,103 $ 68,080 $ 3,012 $ 11,642 $ 6,699
Minority interests allocation.......... (912) (2,086) (2,129) 1,437 1,772
Income from investments in
unconsolidated joint ventures and
mortgage receivables.................. 1,982 2,093 2,305 1,778 --
Gain/(Loss) on sales of real estate and
extraordinary items(2)................ 12,236 5,338 31,271 1,705 --
--------- ---------- ---------- ---------- ----------
Net income before preferred
distributions......................... 61,409 73,425 34,459 16,562 8,471
Preferred distributions................ -- -- -- -- --
--------- ---------- ---------- ---------- ----------
Net income available to Units.......... $ 61,409 $ 73,425 $ 34,459 $ 16,562 $ 8,471
========= ========== ========== ========== ==========
Net income available per weighted
average Unit outstanding --
Basic.................................
Net income available per weighted
average Unit outstanding --
Diluted...............................
Weighted average Units outstanding --
Basic.................................
Weighted average Units outstanding --
Diluted...............................
BALANCE SHEET DATA: (at end of period)
Investment in real estate after
accumulated depreciation.............. -- $3,291,815 $2,393,403 $1,815,160 $1,220,268
Total assets........................... -- $3,912,565 $2,650,890 $2,090,933 $1,318,644
Mortgage debt, unsecured notes and
lines of credit....................... -- $1,964,892 $1,434,827 $1,261,156 $ 798,897
Total liabilities...................... -- $2,174,483 $1,529,334 $1,350,552 $ 845,315
Minority interests..................... -- $ 11,080 $ 31,587 $ 9,283 $ (15,298)
Partners' Capital/Owners' equity....... -- $1,727,002 $1,089,969 $ 731,098 $ 488,627
OTHER DATA:
General and administrative expenses as
a percentage of total revenues........ 5.1% 4.6% 5.9% 6.5% 7.5%
Number of Office Properties owned at
period end(3)......................... -- 83 73 63 48
Net rentable square feet of Office
Properties(3)......................... -- 29.2 23.1 18.5 13.6
Occupancy of Office Properties owned at
period end(3)......................... -- 90% 86% 88% 80%
Number of Parking Facilities owned at
period end............................ -- 10 3 -- --
Number of spaces at Parking Facilities
owned at period end................... -- 7,321 3,323 -- --
Funds from Operations(4)............... $ 113,022 $ 160,460 $ 96,104 $ 60,372 --
Cash flow from operating activities.... $ 95,960 $ 165,975 $ 93,878 $ 73,821 --
Cash flow used for investing
activities............................ $(571,068) $ (924,227) $ (380,615) $ (513,965) --
Cash flow from/used for financing
activities............................ $ 245,851 $1,057,551 $ 276,513 $ 514,923 --
</TABLE>
13
<PAGE> 18
- -------------------------
(1) Includes property operating expenses, real estate taxes and insurance, as
well as repair and maintenance expenses.
(2) The column entitled "Company Pro Forma for the year ended December 31, 1997"
and "Company Pro Forma for the six months ended June 30, 1998" excludes the
effect of any gain (loss) on sales of real estate and extraordinary items.
(3) The pro forma number of Office Properties as of June 30, 1998, includes
office properties acquired subsequent to June 30, 1998 and probable
acquisitions.
(4) The White Paper on Funds from Operations approved by the Board of Governors
of the National Association of Real Estate Investment Trusts ("NAREIT") in
March 1995 defines Funds from Operations as net income (loss) (computed in
accordance with GAAP), excluding gains (or losses) from debt restructuring
and sales of properties, plus real estate related depreciation and
amortization and after adjustments for unconsolidated partnerships and joint
ventures. The Company believes that Funds from Operations is helpful to
investors as a measure of the performance of an equity REIT because, along
with cash flow from operating activities, financing activities and investing
activities, it provides investors with an indication of the ability of the
Company to incur and service debt, to make capital expenditures and to fund
other cash needs. The Company computes Funds from Operations in accordance
with standards established by NAREIT, which may not be comparable to Funds
from Operations reported by other REITs that do not define the term in
accordance with the current NAREIT definition or that interpret the current
NAREIT definition differently than the Company. Funds from Operations does
not represent cash generated from operating activities in accordance with
GAAP and should not be considered as an alternative to net income
(determined in accordance with GAAP) as an indication of the Company's
financial performance or to cash flow from operating activities (determined
in accordance with GAAP) as a measure of the Company's liquidity, nor is it
indicative of funds available to fund the Company's cash needs, including
its ability to make cash distributions. For a reconciliation of net income
and Funds from Operations, see "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Funds from Operations"
incorporated herein by reference to the Company's Annual Report on Form 10-K
for the year ended December 31, 1997, as amended.
14
<PAGE> 19
RISK FACTORS
An investment in the Exchange Notes or the Exchange Warrants involves
various risks. Prospective investors should carefully consider the following
material risks in conjunction with the other information contained in this
Prospectus and incorporated herein by reference, including, without limitation,
the risks of an investment in the Company set forth under the caption "Item
1. Business -- Risk Factors" in the Company's Annual Report on Form 10-K for the
year ended December 31, 1997, as amended, before deciding whether to tender
Private Notes or Private Warrants in exchange for Exchange Notes or Exchange
Warrants, respectively, pursuant to the Exchange Offer.
RESTRICTIONS ON TRANSFER OF PRIVATE NOTES AND PRIVATE WARRANTS WILL CONTINUE IF
PRIVATE NOTES OR PRIVATE WARRANTS, AS APPLICABLE, ARE NOT TENDERED OR ARE NOT
ACCEPTED FOR EXCHANGE
We will issue Exchange Notes and Exchange Warrants in exchange for Private
Notes and Private Warrants, respectively, timely received by the Exchange Agent
and accompanied by a properly completed and duly executed Letter of Transmittal
and all other required documentation. Therefore, if you want to tender your
Private Notes or Private Warrants in exchange for Exchange Notes or Exchange
Warrants, respectively, you must properly complete all required documentation
and allow sufficient time to ensure timely delivery. Neither we nor the Exchange
Agent is under any duty to give notification of defects or irregularities with
respect to your tender of Private Notes or Private Warrants for exchange.
If you do not tender your Private Notes or Private Warrants or they are not
accepted by the Exchange Agent, your Private Notes or Private Warrants, as
applicable, will continue to be subject to the existing restrictions upon
transfer thereof even after the Exchange Offer is consummated. Moreover, if you
tender in the Exchange Offer for the purpose of participating in a distribution
of the Exchange Notes or the Exchange Warrants, you will be required, in the
absence of an applicable exemption, to comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale transaction. See "The Exchange Offer."
To the extent that Private Notes or Private Warrants are tendered and
accepted in the Exchange Offer, the trading market for untendered and tendered
but unaccepted Private Notes or Private Warrants could be adversely affected due
to the limited principal amount of the Private Notes or limited number of
Private Warrants, respectively, that is expected to remain outstanding following
the Exchange Offer. A small outstanding amount of Private Notes or Private
Warrants could result in less demand to purchase Private Notes or Private
Warrants, respectively, and could, therefore, result in lower prices for Private
Notes or Private Warrants, respectively. Moreover, if you do not tender your
Private Notes or Private Warrants, you will hold an investment subject to
certain restrictions on transfer not applicable to the Exchange Notes and
Exchange Warrants and, as a result, you may only be able to sell your Private
Notes or Private Warrants at a price that is less than the price available to
sellers of the freely tradeable Exchange Notes or Exchange Warrants,
respectively.
The Exchange Notes and any Private Notes that remain outstanding after
consummation of the Exchange Offer will vote together as a single series for
purposes of determining whether holders of the requisite percentage in principal
amount have taken certain actions or exercised certain rights under the
Indenture.
THERE IS NO CURRENT PUBLIC MARKET FOR EXCHANGE NOTES OR EXCHANGE WARRANTS
We do not intend to apply for listing of the Exchange Notes or the Exchange
Warrants on any securities exchange or to seek approval through any automated
quotation system. A public market for the Exchange Notes or the Exchange
Warrants may not develop, which could make it difficult or impossible to sell
the Exchange Notes or the Exchange Warrants. If such a market were to develop,
the Exchange Notes and the Exchange Warrants could trade at prices that may be
higher or lower than the initial offering prices of the Private Notes or the
Private Warrants, respectively, depending on many factors, including prevailing
interest rates, our operating results and financial condition, the market for
similar securities and other factors beyond our control, including general
economic conditions. If no such market develops, you may not be able to sell
15
<PAGE> 20
your Exchange Notes or Exchange Warrants or you may only be able to sell them at
a price that is less than the initial offering price of the related Private
Notes or Private Warrants, respectively. Further, to the extent that a large
amount of Private Notes or Private Warrants are not tendered or are tendered and
not accepted in the Exchange Offer, the trading market for the Exchange Notes or
the Exchange Warrants, respectively, could be adversely affected. See "Plan of
Distribution."
THE NOTES ARE EFFECTIVELY SUBORDINATED TO OUR SECURED INDEBTEDNESS AND CERTAIN
OTHER INDEBTEDNESS OF
OUR SUBSIDIARIES
We derive substantially all our operating income from our subsidiaries. The
holders of the Exchange Notes will have, and you have, no direct claim against
our subsidiaries for payment under the Notes. We must rely on dividends and
other payments from our subsidiaries or must raise funds in public or private
equity (either directly or through the Trust) or debt offerings or sell assets
to generate the funds necessary to meet our obligations, including the payment
of principal and interest on the Notes. If the dividends and other payments from
subsidiaries were insufficient to meet such obligations, there could be no
assurance that we would be able to obtain such funds on acceptable terms or at
all.
Given a bankruptcy at the subsidiary level, the Exchange Notes, the
Underlying Notes and the Private Notes would be effectively subordinated in
right of payment to all existing and future indebtedness and liabilities of our
subsidiaries. As of June 30, 1998, on a Pro Forma Basis, the total liabilities
of our subsidiaries (after the elimination of loans and advances to us by our
subsidiaries) was approximately $2.7 billion. In addition, the Indenture permits
us and our subsidiaries to incur additional indebtedness, both secured and
unsecured, provided certain conditions are met. See "Description of the Exchange
Notes -- Certain Indenture Covenants." Consequently, in the event of a
bankruptcy, liquidation, dissolution, reorganization or similar proceeding with
respect to our subsidiaries, the holders of any indebtedness of our subsidiaries
will be entitled to payment thereof from the assets of such subsidiaries prior
to the holders of any of our general unsecured obligations, including the Notes.
The Exchange Notes and the Underlying Notes will be, and the Private Notes
are, unsecured and effectively subordinated to any of our secured indebtedness
to the extent of the value of the assets securing such indebtedness. As of June
30, 1998, on a Pro Forma Basis, our total secured indebtedness, including that
of our subsidiaries, was approximately $2.4 billion. The Indenture permits us
and our subsidiaries to incur additional secured indebtedness provided certain
conditions are met. See "Description of the Exchange Notes -- Certain Indenture
Covenants." Consequently, in the event we are involved in a bankruptcy,
liquidation, dissolution, reorganization or similar proceeding, the holders of
any secured indebtedness will be entitled to proceed against the collateral that
secures such secured indebtedness and such collateral will not be available for
satisfaction of any amounts owed under our unsecured indebtedness, including the
Notes.
THE EXCHANGE NOTES MAY NOT REMAIN OUTSTANDING FOR THEIR FULL TERMS TO MATURITY;
THE EXCHANGE MOPPRS MUST BE TENDERED ON THE REMARKETING DATE
We may redeem the Exchange Notes other than the Exchange MOPPRS at any time
at our option. If we choose to redeem your Exchange Notes, you will not be able
to hold such Exchange Notes for their full terms to maturity. In addition, the
Exchange MOPPRS will be automatically deemed tendered to the Remarketing Dealer
for purchase or repurchased by the Company on the Remarketing Date. Thus, you
may only hold your Exchange MOPPRS until the Remarketing Date.
HOLDERS OF EXCHANGE MOPPRS MIGHT HAVE TO INCLUDE ORIGINAL ISSUE DISCOUNT IN
THEIR TAXABLE INCOME
The federal income tax treatment of debt obligations such as the Exchange
MOPPRS is not certain. The Internal Revenue Service (the "IRS") could seek to
treat Exchange MOPPRS as having contingent interest for federal income tax
purposes. The Company does not intend to treat the Exchange MOPPRS as having
contingent interest. If the Exchange MOPPRS are treated as having contingent
interest, a holder of Exchange MOPPRS would be required to include in his
taxable income the original issue discount on the Exchange MOPPRS that would be
deemed to accrue at an estimated yield (based on a projected payment schedule
16
<PAGE> 21
prepared by the Company in accordance with the applicable Treasury Regulations)
during the holder's taxable year. Moreover, because the original issue discount
that a holder might be required to include in taxable income is based on the
estimated yield (described above) and not on actual cash payments received
during the taxable year, it is possible that a holder would be required to pay
federal income tax on an amount of original issue discount that exceeds the
income that he actually received from the Exchange MOPPRS in that taxable year.
See "Federal Income Tax Consequences -- Possible Characterization of Exchange
MOPPRS as Having Contingent Interest."
17
<PAGE> 22
THE COMPANY
The Company and the Trust were formed to continue and expand the national
office property business organized by Mr. Zell, Chairman of the Board of
Trustees of the Trust. The Trust, a self-administered and self-managed REIT, is
the managing general partner of, and controls a majority of the partnership
interests in, the Company. The Trust owns all of its assets and conducts
substantially all of its business through the Company and its subsidiaries.
NO CASH PROCEEDS TO THE COMPANY
The Company will not receive any proceeds from the issuance of the Exchange
Notes or the Exchange Warrants offered hereby and has agreed to pay the expenses
of the Exchange Offer. Private Notes and Private Warrants surrendered in
exchange for Exchange Notes and Exchange Warrants, respectively, will be retired
and canceled and cannot be reissued. Accordingly, issuance of the Exchange Notes
and the Exchange Warrants will not result in any increase in the outstanding
indebtedness of the Company. The Company used the approximately $770 million of
net proceeds from the issuance of the Private Notes and the Private Warrants to
repay indebtedness outstanding under the Company's credit facilities. As of June
30, 1998, the outstanding amounts of indebtedness which were repaid with the
proceeds from the issuance of the Private Notes and the Private Warrants, which
bore interest at various floating rates, had an annual rate of 6.4% and had a
maturity of three years.
RATIOS OF EARNINGS TO FIXED CHARGES
The Company's ratios of earnings to fixed charges are as follows:
<TABLE>
<CAPTION>
SIX EQUITY OFFICE
MONTHS PREDECESSORS EQUITY OFFICE PREDECESSORS
ENDED COMPANY (COMBINED (COMBINED HISTORICAL)
JUNE 30, (HISTORICAL) HISTORICAL) YEARS ENDED DECEMBER 31,
----------- JULY 11, 1997 TO JANUARY 1, 1997 --------------------------------
1998 1997 DECEMBER 31, 1997 TO JULY 10, 1997 1996 1995 1994 1993 1992
---- ---- ----------------- ---------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges....... 1.95 1.56 2.11 1.52 1.49 1.21 1.24 1.23 1.24
</TABLE>
The ratios of earnings to fixed charges 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 and rental expense deemed to represent
interest expense.
18
<PAGE> 23
CAPITALIZATION
The following table sets forth the capitalization of the Company as of June
30, 1998 on a historical basis and a Pro Forma Basis. The information set forth
in the table should be read in conjunction with the financial statements and
notes thereto and "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources" incorporated
herein by reference to the Company's Annual Report on Form 10-K for the year
ended December 31, 1997, as amended.
<TABLE>
<CAPTION>
JUNE 30, 1998
-------------------------
PRO FORMA
HISTORICAL BASIS
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Debt:
Mortgage Debt............................................. $ 2,112,024 $ 2,112,024
Credit Facilities......................................... 367,944 959,947
Notes Payable............................................. 2,459,481 2,459,481
Minority Interest........................................... 29,695 29,695
Owners' Equity.............................................. 7,464,897 7,469,271
----------- -----------
Total Capitalization................................... $12,434,041 $13,030,418
=========== ===========
</TABLE>
19
<PAGE> 24
SELECTED FINANCIAL INFORMATION
The following sets forth selected consolidated and combined financial and
operating information on a pro forma basis for the Company and on a historical
basis for the Company and the Company's predecessors ("Equity Office
Predecessors"). The following information should be read in conjunction with all
of the financial statements and notes thereto included in the Quarterly Report
on Form 10-Q for the quarter ended June 30, 1998 and the Annual Report on Form
10-K for the year ended December 31, 1997, as amended, and Forms 8-K filed on
July 10, 1998 and September 3, 1998, which documents are incorporated by
reference into this Prospectus. The selected combined financial and operating
information of Equity Office Predecessors at December 31, 1994 and 1993, and for
the year ended December 31, 1993, has been derived from the historical unaudited
combined financial statements of Equity Office Predecessors.
20
<PAGE> 25
<TABLE>
<CAPTION>
EQUITY OFFICE
PREDECESSORS
COMPANY PRO (COMBINED COMPANY COMPANY FOR
FORMA FOR COMPANY FOR HISTORICAL) PRO FORMA THE PERIOD
THE SIX THE SIX FOR THE SIX FOR THE YEAR FROM JULY 11,
MONTHS ENDED MONTHS ENDED MONTHS ENDED ENDED 1997 TO
JUNE 30, JUNE 30, JUNE 30, DECEMBER 31, DECEMBER 31,
1998 1998 1997 1997 1997
------------ ------------ ------------- ------------ -------------
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Revenues:
Rental, parking and other......... $ 833,640 $ 764,891 $ 308,212 $ 1,587,490 $ 406,713
----------- ----------- --------- ----------- -----------
Total revenues................. $ 844,576 $ 773,764 $ 319,786 $ 1,623,183 $ 412,968
----------- ----------- --------- ----------- -----------
Expenses:
Interest.......................... $ 192,705 $ 145,954 $ 76,301 $ 386,777 $ 76,675
Depreciation and amortization..... 150,887 140,253 60,409 295,086 70,346
Property operating(1)............. 301,763 276,907 120,109 579,129 155,679
General and administrative........ 28,440 28,440 14,726 76,048 17,690
Provision for value impairment.... -- -- -- -- --
----------- ----------- --------- ----------- -----------
Total expenses................. $ 673,795 $ 591,554 $ 271,545 $ 1,377,040 $ 320,390
----------- ----------- --------- ----------- -----------
Income before (income) loss
allocated to minority interests,
income from investments in
unconsolidated joint ventures and
mortgage receivables, gain on
sales of real estate, and
extraordinary items............... $ 170,781 $ 182,210 $ 48,241 $ 286,143 $ 92,578
Minority interests allocation...... (1,036) (1,036) (879) (1,701) (789)
Income from investments in
unconsolidated joint ventures and
mortgage receivables.............. 6,289 5,026 2,025 13,396 3,173
Gain/(Loss) on sales of real estate
and extraordinary items(2)........ -- (7,506) 12,235 -- (16,240)
----------- ----------- --------- ----------- -----------
Net income before preferred
distributions..................... 176,034 178,694 61,622 297,838 78,722
Preferred distributions............ (16,891) (14,703) -- (33,710) (649)
----------- ----------- --------- ----------- -----------
Net income available to Units...... $ 159,143 $ 163,991 $ 61,622 $ 264,128 $ 78,073
=========== =========== ========= =========== ===========
Net income available per weighted
average Unit outstanding --
Basic............................. $.57 $.59 $.94 $.44
=========== =========== =========== ===========
Net income available per weighted
average Unit outstanding --
Diluted........................... $.56 $.59 $.94 $.43
=========== =========== =========== ===========
Weighted average Units outstanding
-- Basic.......................... 281,261,000 279,494,438 280,498,000 178,647,562
=========== =========== =========== ===========
Weighted average Units outstanding
-- Diluted........................ 282,381,000 280,613,985 282,275,000 180,014,027
=========== =========== =========== ===========
BALANCE SHEET DATA: (at end of
period)
Investment in real estate after
accumulated depreciation.......... $12,559,124 $12,217,747 -- -- $10,976,319
Total assets....................... $13,471,511 $12,875,134 -- -- $11,751,672
Mortgage debt, unsecured notes and
lines of credit................... $ 5,531,452 $ 4,939,449 -- -- $ 4,284,317
Total liabilities.................. $ 5,972,545 $ 5,380,542 -- -- $ 4,591,697
Minority interests................. $ 29,695 $ 29,695 -- -- $ 29,612
Partners' Capital/Owners' equity... $ 7,469,271 $ 7,464,897 -- -- $ 7,130,363
OTHER DATA:
General and administrative expenses
as a percentage of total
revenues.......................... 3.4% 3.7% 4.6% 4.7% 4.3%
Number of Office Properties owned
at period end(3).................. 284 271 90 284 258
Net rentable square feet of Office
Properties owned at period end (in
millions)(3)...................... 73.5 71.3 31.7 73.5 65.3
Occupancy of Office Properties
owned at period end(3)............ 95% 95% 92% 95% 94%
Number of Parking Facilities owned
at period end..................... 17 17 14 17 17
Number of spaces at Parking
Facilities owned at period end.... 16,749 16,749 14,608 16,749 16,749
Funds from Operations(4)........... -- $ 315,026 $ 108,381 -- $ 163,253
Cash flow from operating
activities........................ -- $ 345,691 $ 90,673 -- $ 190,754
Cash flow used for investing
activities........................ -- $(1,275,985) $(572,633) -- $(1,592,272)
Cash flow from/used for financing
activities........................ -- $ 754,195 $ 314,525 -- $ 1,630,346
<CAPTION>
EQUITY OFFICE PREDECESSORS (COMBINED HISTORICAL)
---------------------------------------------------------------
FOR THE
PERIOD FROM
JANUARY 1,
1997 TO FOR THE YEARS ENDED DECEMBER 31,
JULY 10, -------------------------------------------------
1997 1996 1995 1994 1993
----------- ---- ---- ---- ----
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Revenues:
Rental, parking and other......... $ 327,017 $ 493,396 $ 356,959 $ 230,428 $ 150,315
--------- ---------- ---------- ---------- ----------
Total revenues................. $ 339,104 $ 508,124 $ 371,457 $ 240,878 $ 159,246
--------- ---------- ---------- ---------- ----------
Expenses:
Interest.......................... $ 80,481 $ 119,595 $ 100,566 $ 59,316 $ 36,755
Depreciation and amortization..... 66,034 96,237 74,156 46,905 29,752
Property operating(1)............. 127,285 201,067 151,488 107,412 74,028
General and administrative........ 17,201 23,145 21,987 15,603 12,012
Provision for value impairment.... -- -- 20,248 -- --
--------- ---------- ---------- ---------- ----------
Total expenses................. $ 291,001 $ 440,044 $ 368,445 $ 229,236 $ 152,547
--------- ---------- ---------- ---------- ----------
Income before (income) loss
allocated to minority interests,
income from investments in
unconsolidated joint ventures and
mortgage receivables, gain on
sales of real estate, and
extraordinary items............... $ 48,103 $ 68,080 $ 3,012 $ 11,642 $ 6,699
Minority interests allocation...... (912) (2,086) (2,129) 1,437 1,772
Income from investments in
unconsolidated joint ventures and
mortgage receivables.............. 1,982 2,093 2,305 1,778 --
Gain/(Loss) on sales of real estate
and extraordinary items(2)........ 12,236 5,338 31,271 1,705 --
--------- ---------- ---------- ---------- ----------
Net income before preferred
distributions..................... 61,409 73,425 34,459 16,562 8,471
Preferred distributions............ -- -- -- -- --
--------- ---------- ---------- ---------- ----------
Net income available to Units...... $ 61,409 $ 73,425 $ 34,459 $ 16,562 $ 8,471
========= ========== ========== ========== ==========
Net income available per weighted
average Unit outstanding --
Basic.............................
Net income available per weighted
average Unit outstanding --
Diluted...........................
Weighted average Units outstanding
-- Basic..........................
Weighted average Units outstanding
-- Diluted........................
BALANCE SHEET DATA: (at end of
period)
Investment in real estate after
accumulated depreciation.......... -- $3,291,815 $2,393,403 $1,815,160 $1,220,268
Total assets....................... -- $3,912,565 $2,650,890 $2,090,933 $1,318,644
Mortgage debt, unsecured notes and
lines of credit................... -- $1,964,892 $1,434,827 $1,261,156 $ 798,897
Total liabilities.................. -- $2,174,483 $1,529,334 $1,350,552 $ 845,315
Minority interests................. -- $ 11,080 $ 31,587 $ 9,283 $ (15,298)
Partners' Capital/Owners' equity... -- $1,727,002 $1,089,969 $ 731,098 $ 488,627
OTHER DATA:
General and administrative expenses
as a percentage of total
revenues.......................... 5.1% 4.6% 5.9% 6.5% 7.5%
Number of Office Properties owned
at period end(3).................. -- 83 73 63 48
Net rentable square feet of Office
Properties owned at period end (in
millions)(3)...................... -- 29.2 23.1 18.5 13.6
Occupancy of Office Properties
owned at period end(3)............ -- 90% 86% 88% 80%
Number of Parking Facilities owned
at period end..................... -- 10 3 -- --
Number of spaces at Parking
Facilities owned at period end.... -- 7,321 3,323 -- --
Funds from Operations(4)........... $ 113,022 $ 160,460 $ 96,104 $ 60,372 --
Cash flow from operating
activities........................ $ 95,960 $ 165,975 $ 93,878 $ 73,821 --
Cash flow used for investing
activities........................ $(571,068) $ (924,227) $ (380,615) $ (513,965) --
Cash flow from/used for financing
activities........................ $ 245,851 $1,057,551 $ 276,513 $ 514,923 --
</TABLE>
21
<PAGE> 26
- -------------------------
(1) Includes property operating expenses, real estate taxes and insurance, as
well as repair and maintenance expenses.
(2) The column entitled "Company Pro Forma for the year ended December 31, 1997"
and "Company Pro Forma for the six months ended June 30, 1998" excludes the
effect of any gain (loss) on sales of real estate and extraordinary items.
(3) The pro forma number of Office Properties as of June 30, 1998 includes
office properties acquired subsequent to June 30, 1998 and probable
acquisitions.
(4) The White Paper on Funds from Operations approved by the Board of Governors
of NAREIT in March 1995 defines Funds from Operations as net income (loss)
(computed in accordance with GAAP), excluding gains (or losses) from debt
restructuring and sales of properties, plus real estate related depreciation
and amortization and after adjustments for unconsolidated partnerships and
joint ventures. The Company believes that Funds from Operations is helpful
to investors as a measure of the performance of an equity REIT because,
along with cash flow from operating activities, financing activities and
investing activities, it provides investors with an indication of the
ability of the Company to incur and service debt, to make capital
expenditures and to fund other cash needs. The Company computes Funds from
Operations in accordance with standards established by NAREIT, which may not
be comparable to Funds from Operations reported by other REITs that do not
define the term in accordance with the current NAREIT definition or that
interpret the current NAREIT definition differently than the Company. Funds
from Operations does not represent cash generated from operating activities
in accordance with GAAP and should not be considered as an alternative to
net income (determined in accordance with GAAP) as an indication of the
Company's financial performance or to cash flow from operating activities
(determined in accordance with GAAP) as a measure of the Company's
liquidity, nor is it indicative of funds available to fund the Company's
cash needs, including its ability to make cash distributions. For a
reconciliation of net income and Funds from Operations, see "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Funds from Operations" incorporated herein by reference to the Company's
Annual Report on Form 10-K for the year ended December 31, 1997, as amended.
22
<PAGE> 27
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
The Exchange Offer is designed to provide holders of Private Notes and
Private Warrants the opportunity to acquire Exchange Notes and Exchange
Warrants, respectively, which, unlike the Private Notes and the Private
Warrants, will be freely transferable under the Securities Act at all times
(subject to certain exceptions relating to the nature of the holders, as
described below under the caption "-- Resale of the Exchange Notes and the
Exchange Warrants").
The June Private Notes and the Private Warrants were sold by the Company on
June 15, 1998 to the Initial Purchasers (as defined in the Glossary) pursuant to
purchase agreements, dated as of June 10, 1998, among the Company and the
Initial Purchasers. The Initial Purchasers subsequently sold the June Private
Notes and the Private Warrants to "qualified institutional buyers" ("QIBs"), as
defined in Rule 144A under the Securities Act ("Rule 144A"), in reliance on Rule
144A and to institutional "accredited investors" (as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act) in transactions exempt from
registration under the Securities Act. As a condition to the sale of the June
Private Notes and the Private Warrants, the Company and the Initial Purchasers
entered into registration rights agreements, dated as of June 10, 1998 (the
"Registration Rights Agreements"). Pursuant to the Registration Rights
Agreements, the Company agreed that it would use its reasonable best efforts to
(i) cause an exchange offer registration statement under the Securities Act with
respect to the June Exchange Notes and the Exchange Warrants to be filed with
the Commission and (ii) cause such registration statement to remain effective
under the Securities Act until the closing of the Exchange Offer or such date as
is otherwise required by law to consummate the Exchange Offer on or before
December 12, 1998. Copies of the Registration Rights Agreements have been filed
as exhibits to the registration statement of which this Prospectus is a part
(the "Registration Statement"). If, (i) because of any change in law or in
currently prevailing interpretations of the staff of the Commission, the Company
is not permitted to effect the Exchange Offer, (ii) the Exchange Offer is not
consummated within 180 days of the Closing Date, or (iii) in the case of any
holder that participates in the Exchange Offer, such holder does not receive
June Exchange Notes or Exchange Warrants, as applicable, on the date of the
exchange that may be sold without restriction under state and federal securities
laws (other than due solely to the status of such holder as an affiliate of the
Company within the meaning of the Securities Act or as a broker-dealer), then in
each case, the Company will (x) promptly deliver to the holders written notice
thereof and (y) at the Company's sole expense (a) as promptly as practicable
(but in no event more than 60 days after so required or requested pursuant to
the Registration Rights Agreements), file a shelf registration statement
covering resales of the June Private Notes and the Private Warrants (the "Shelf
Registration Statement"), (b) use its reasonable best efforts to cause the Shelf
Registration Statement to be declared effective under the Securities Act and (c)
use its reasonable best efforts to keep effective the Shelf Registration
Statement until the earlier of two years (or, if Rule 144(k) is amended to
provide a shorter restrictive period, such shorter period) after the Closing
Date or such time as all of the applicable June Private Notes and Private
Warrants have been sold thereunder. If the Company fails to consummate the
Exchange Offer with respect to the June Private Notes and the Private Warrants
prior to December 12, 1998 or, if applicable, fails to fulfill its obligations
under the Registration Rights Agreements to obtain and maintain effectiveness of
the Shelf Registration Statement during specified time periods, then liquidated
damages will accrue on the principal amounts of the June Private Notes at an
annual rate of 0.50%.
The Exchange Offer is intended to satisfy the Company's obligations under
the Registration Rights Agreements.
The 2003 Notes and the 2008 Notes, along with certain other debt securities
of the Company, were sold by the Company on February 18, 1998 pursuant to a
purchase agreement dated as of February 12, 1998 among the Company and the
initial purchasers named therein. The Company sold the MOPPRS on February 18,
1998 pursuant to a purchase agreement dated as of February 12, 1998 between the
Company and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial
purchaser. The initial purchasers of the 2003 Notes, the 2008 Notes and the
MOPPRS subsequently sold the 2003 Notes, the 2008 Notes and the MOPPRS to QIBs.
As a condition to the sale of the 2003 Notes, 2008 Notes and the MOPPRS, the
Company entered into
23
<PAGE> 28
a registration rights agreement dated as of February 12, 1998, pursuant to which
the Company agreed, among other things, to use its reasonable best efforts to
(i) cause an exchange offer registration statement under the Securities Act with
respect to the 2003 Notes, the 2008 Notes and the MOPPRS to be filed with the
Commission and (ii) cause such registration statement to remain effective under
the Securities Act until the closing of the exchange offer, on or before August
17, 1998. The Company satisfied its obligations under such registration rights
agreement by causing an exchange offer registration statement on Form S-4
(Registration No. 333-47347) to be declared effective in June 1998 and
consummating the exchange offer described therein and made thereby on July 30,
1998.
Although not obligated to do so by the February 12, 1998 registration
rights agreement, by means of this Prospectus the Company is offering to
exchange February Exchange Notes for the aggregate principal amounts of February
Private Notes which were not exchanged for February Exchange Notes in the prior
exchange offer relating to such securities. Holders of February Private Notes
will not in any event be entitled to receive any liquidated damages on the
February Private Notes still outstanding.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Company will accept any and all Private
Notes and Private Warrants validly tendered and not withdrawn prior to the
Expiration Date.
The Company will issue Exchange Notes and Exchange Warrants in exchange for
an equal aggregate principal amount of outstanding Private Notes and an equal
aggregate number of Private Warrants, respectively, validly tendered pursuant to
the Exchange Offer and not withdrawn prior to the Expiration Date. Private Notes
may only be tendered in minimum denominations of $100,000 aggregate principal
amount and in integral multiples of $1,000 in excess thereof.
The form and terms of the Exchange Notes and the Exchange Warrants will be
the same as the form and terms of the Private Notes and the Private Warrants,
respectively, except that (i) the Exchange Notes and the Exchange Warrants have
been registered under the Securities Act and, therefore, will not bear legends
restricting the transfer thereof and (ii) holders of the June Exchange Notes and
the Exchange Warrants will not be entitled to any of the registration rights of
holders of June Private Notes and Private Warrants under the Registration Rights
Agreements, which rights will terminate upon the consummation of the Exchange
Offer. The Exchange Notes will evidence the same indebtedness as the Private
Notes (which they replace) and will be issued under, and be entitled to the
benefits of, the Indenture, which also authorized the issuance of the Private
Notes, such that each of the 2003 Notes, the 2003 Exchange Notes, the 2004
Notes, the 2004 Exchange Notes, the 2007 Notes, the 2007 Exchange Notes, the
2008 Notes, the 2008 Exchange Notes, the MOPPRS, the Exchange MOPPRS, the 2028
Notes and the 2028 Exchange Notes will respectively be treated as a single
series under the Indenture.
In the Letter of Transmittal, holders of June Private Notes whose June
Private Notes are accepted for exchange will waive the right to receive any
payment in respect of interest on the June Private Notes accrued from the later
of June 15, 1998 or the Interest Payment Date immediately preceding the date of
issuance of the June Exchange Notes to the date of issuance of the June Exchange
Notes. In the Letter of Transmittal, holders of February Private Notes whose
February Private Notes are accepted for exchange will waive the right to receive
any payment in respect of interest on the February Private Notes accrued from
the later of August 15, 1998 or the Interest Payment Date immediately preceding
the date of issuance of the February Exchange Notes to the date of issuance of
the February Exchange Notes.
As of the date of this Prospectus, $100,000 in aggregate principal amount
of 2003 Notes is outstanding, $250 million in aggregate principal amount of the
2004 Notes is outstanding, $300 million in aggregate principal amount of the
2007 Notes is outstanding, $100,000 in aggregate principal amount of 2008 Notes
is outstanding, $345,000 in aggregate principal amount of MOPPRS is outstanding,
$225 million in aggregate principal amount of the 2028 Notes is outstanding, and
300,000 Private Warrants are outstanding. Only a registered holder of the
Private Notes or Private Warrants, as the case may be (or such holder's legal
representative or attorney-in-fact), as reflected on the records of the Trustee
under the Indenture or the
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<PAGE> 29
Warrant Agent under the Warrant Agreement, as applicable, may participate in the
Exchange Offer. There will be no fixed record date for determining registered
holders of the Private Notes and Private Warrants entitled to participate in the
Exchange Offer.
Holders of Private Notes and Private Warrants do not have any appraisal or
dissenters' rights under the Delaware Revised Uniform Limited Partnership Act,
the Indenture or the Warrant Agreement in connection with the Exchange Offer.
The Company intends to conduct the Exchange Offer in accordance with the
provisions of the Registration Rights Agreements and the applicable requirements
of the Securities Act, the Exchange Act and the rules and regulations of the
Commission thereunder.
The Company shall be deemed to have accepted validly tendered Private Notes
and Private Warrants when, and if, the Company has given oral or written notice
of acceptance to the Exchange Agent. The Exchange Agent will act as agent for
the tendering holders of Private Notes and Private Warrants for the purpose of
receiving the Exchange Notes and the Exchange Warrants from the Company.
Holders who tender Private Notes or Private Warrants, as the case may be,
in the Exchange Offer will not be required to pay brokerage commissions or fees
or, subject to the instructions in the Letter of Transmittal, transfer taxes
with respect to the exchange of Private Notes or Private Warrants, as the case
may be, pursuant to the Exchange Offer. The Company will pay all charges and
expenses, other than certain applicable taxes described below, in connection
with the Exchange Offer. See "-- Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
October 13, 1998, unless the Company, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended.
In order to extend the Exchange Offer, the Company will notify the Exchange
Agent of any extension by oral or written notice and will notify the registered
holders through a press release or other public announcement thereof, each prior
to 9:00 a.m., New York City time, on the next business day after the previously
scheduled Expiration Date.
The Company reserves the right, in its sole discretion, (i) to delay
accepting any Private Notes or Private Warrants, (ii) to extend the Exchange
Offer or (iii) if, in the opinion of counsel for the Company, the consummation
of the Exchange Offer would violate any applicable law, rule or regulation or
any applicable interpretation of the staff of the Commission, to terminate or
amend the Exchange Offer by giving oral or written notice of such delay,
extension, termination or amendment to the Exchange Agent. Any such delay,
extension, termination or amendment will be followed as promptly as practicable
by notice thereof to the registered holders through a press release or other
public announcement. If the Exchange Offer is amended in a manner determined by
the Company to constitute a material change, the Company will promptly disclose
such amendment by means of a prospectus supplement that will be distributed to
the registered holders, and the Company will extend the Exchange Offer to the
extent required by the rules promulgated under the Exchange Act.
Without limiting the manner in which the Company may choose to make a
public announcement of any delay, extension, amendment or termination of the
Exchange Offer, the Company shall have no obligation to publish, advertise, or
otherwise communicate any such public announcement, other than as required by
law or by making a timely release to an appropriate news agency.
INTEREST ON THE EXCHANGE NOTES AND ACCRUED INTEREST ON THE PRIVATE NOTES
The 2004 Exchange Notes, the 2007 Exchange Notes and the 2028 Exchange
Notes will bear interest at an annual rate of 6.50%, 6.763% and 7.25%,
respectively, payable semiannually in arrears on June 15 and December 15 of each
year, commencing December 15, 1998. The June Exchange Notes will bear interest
from their date of issuance. Interest on the June Private Notes which are
exchanged for the June Exchange Notes will cease to accrue on the day preceding
the date of issuance of the June Exchange Notes. Interest payable on the first
Interest Payment Date with respect to the June Exchange Notes will include
accrued but
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<PAGE> 30
unpaid interest due on the June Private Notes (which they replace) for the
period from the later of June 15, 1998 or the Interest Payment Date immediately
preceding the date of issuance of the applicable June Exchange Notes to the date
of such issuance and will be paid to the persons in whose names the applicable
June Exchange Notes are registered in the security register applicable to the
June Exchange Notes as of the close of business on the date 15 days prior to
such payment date.
The 2003 Exchange Notes and the 2008 Exchange Notes will bear interest at
an annual rate of 6.375% and 6.750%, respectively, payable semiannually in
arrears on February 15 and August 15 of each year, commencing February 15, 1999.
The annual interest rate on the Exchange MOPPRS to the Remarketing Date is
6.376%, payable semiannually in arrears on February 15 and August 15 of each
year, commencing February 15, 1999. The February Exchange Notes will bear
interest from their date of issuance. Interest on the February Private Notes
which are exchanged for the February Exchange Notes will cease to accrue on the
day preceding the date of issuance of the February Exchange Notes. Interest
payable on the first Interest Payment Date with respect to the February Exchange
Notes will include accrued but unpaid interest due on the February Private Notes
(which they replace) for the period from the later of August 15, 1998 or the
Interest Payment Date immediately preceding the date of issuance of the
applicable February Exchange Notes to the date of such issuance and will be paid
to the persons in whose names the applicable February Exchange Notes are
registered in the applicable security register as of the close of business on
the date 15 days prior to such payment date.
RESALE OF THE EXCHANGE NOTES AND THE EXCHANGE WARRANTS
Based upon interpretations by the staff of the Commission set forth in
certain no-action letters issued to third parties, the Company believes that a
holder who exchanges Private Notes or Private Warrants for Exchange Notes or
Exchange Warrants, respectively, in the ordinary course of business, who is not
participating, does not intend to participate, and has no arrangement with any
person to participate, in a distribution of the Exchange Notes or Exchange
Warrants, as applicable, and who is not an "affiliate" of the Company within the
meaning of Rule 405 of the Securities Act, will be allowed to resell Exchange
Notes or Exchange Warrants, as applicable, to the public without further
registration under the Securities Act and without delivering to the purchasers
of the Exchange Notes or Exchange Warrants, as applicable, a prospectus that
satisfies the requirements of Section 10 of the Securities Act. If, however, any
holder acquires Exchange Notes or Exchange Warrants in the Exchange Offer for
the purpose of distributing or participating in the distribution of the Exchange
Notes or Exchange Warrants, as applicable, such holder cannot rely on the
position of the staff of the Commission enumerated in certain no-action letters
issued to third parties and instead must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale transaction, unless an exemption from registration is otherwise
available. In addition, each broker-dealer that receives Exchange Notes or
Exchange Warrants for its own account in exchange for Private Notes or Private
Warrants, respectively, acquired by such broker-dealer as a result of
market-making or other trading activities must acknowledge that it will deliver
a prospectus in connection with any resale of Exchange Notes or Exchange
Warrants, as applicable. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
Such broker-dealer may use this Prospectus in connection with resales of any
Exchange Notes or Exchange Warrants received in exchange for Private Notes or
Private Warrants, respectively, acquired by such broker-dealer (other than
Private Notes or Private Warrants, respectively, acquired directly from the
Company) as a result of market-making or other trading activities. Pursuant to
the Registration Rights Agreements, the Company has agreed to make this
Prospectus available to any such broker-dealer that requests copies of such
Prospectus in the Letter of Transmittal for use in connection with any such
resale for a period not to exceed 180 days after the closing of the Exchange
Offer. The Company will undertake to update such Prospectus during such 180-day
period. See "Plan of Distribution."
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<PAGE> 31
PROCEDURES FOR TENDERING
Only a registered holder of Private Notes or Private Warrants may tender
such Private Notes or Private Warrants in the Exchange Offer. To tender in the
Exchange Offer, a holder of Private Notes or Private Warrants must complete,
sign and date the Letter of Transmittal, or a facsimile thereof, have the
signatures thereon guaranteed if required by the Letter of Transmittal, and mail
or otherwise deliver such Letter of Transmittal or such facsimile or an Agent's
Message (as defined below) to the Exchange Agent at the address set forth below
under "-- Exchange Agent" for receipt prior to the Expiration Date. In addition,
prior to the Expiration Date, either (i) certificates for such Private Notes or
Private Warrants must be received by the Exchange Agent along with the Letter of
Transmittal, (ii) a timely confirmation of a book-entry transfer (a "Book-Entry
Confirmation") of such Private Notes or Private Warrants, if such procedure is
available, into the Exchange Agent's account at The Depository Trust Company,
New York, New York ("DTC"), pursuant to the procedure for book-entry transfer
described below, must be received by the Exchange Agent or (iii) the holder must
comply with the guaranteed delivery procedures described below.
A tender of Private Notes or Private Warrants by a holder that is not
withdrawn prior to the Expiration Date will constitute an agreement between such
holder and the Company in accordance with the terms and subject to the
conditions set forth herein and in the Letter of Transmittal.
THE METHOD OF DELIVERY OF PRIVATE NOTES OR PRIVATE WARRANTS AND THE LETTER
OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE
ELECTION AND RISK OF THE HOLDER AND DELIVERY WILL BE DEEMED MADE ONLY WHEN
ACTUALLY RECEIVED BY THE EXCHANGE AGENT. INSTEAD OF DELIVERY BY MAIL, IT IS
RECOMMENDED THAT HOLDERS USE AN OVERNIGHT OR HAND DELIVERY SERVICE, PROPERLY
INSURED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO
THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. DO NOT SEND THE LETTER OF
TRANSMITTAL OR ANY PRIVATE NOTES OR PRIVATE WARRANTS TO THE COMPANY. HOLDERS MAY
REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR
NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.
Any beneficial owner of Private Notes or Private Warrants whose Private
Notes or Private Warrants are registered in the name of a broker, dealer,
commercial bank, trust company or other nominee and who wishes to tender such
securities should contact the registered holder promptly and instruct such
registered holder to tender on such beneficial owner's behalf. If such
beneficial owner wishes to tender on such owner's own behalf, such owner either
must make appropriate arrangements to register ownership of the Private Notes or
Private Warrants in such owner's name or must obtain a properly completed bond
power from the registered holder prior to completing and executing the Letter of
Transmittal and delivering such owner's Private Notes or Private Warrants. The
transfer of registered ownership may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal described
below (see "-- Withdrawal of Tenders"), as the case may be, must be guaranteed
by an Eligible Institution (as defined below) unless the Private Notes or
Private Warrants tendered pursuant thereto are tendered (i) by a registered
holder to whom Exchange Notes or Exchange Warrants, as applicable, are to be
issued directly and who has not completed the box titled "Special Delivery
Instructions" nor the box titled "Special Registration Instructions" on the
Letter of Transmittal or (ii) for the account of an Eligible Institution. In the
event that signatures on a Letter of Transmittal or a notice of withdrawal, as
the case may be, are required to be guaranteed, such guarantee must be made by a
member firm of a registered national securities exchange or of the National
Association of Securities Dealers, Inc., a commercial bank or trust company
having an office or correspondent in the United States or an "eligible guarantor
institution" within the meaning of Rule 17Ad-15 under the Exchange Act (an
"Eligible Institution").
If the Letter of Transmittal is signed by a person other than the
registered holder of any Private Notes or Private Warrants listed therein, such
Private Notes or Private Warrants must be endorsed or accompanied by a properly
completed bond power, signed by such registered holder exactly as such
registered holder's name appears on such Private Notes or Private Warrants.
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<PAGE> 32
If the Letter of Transmittal or any Private Notes or Private Warrants or
bond powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing, and,
unless waived by the Company, evidence satisfactory to the Company of their
authority to so act must be submitted with the Letter of Transmittal.
The Exchange Agent and DTC have confirmed that any financial institution
that is a participant in DTC's system may utilize DTC's Automated Tender Offer
Program ("ATOP") to tender Private Notes or Private Warrants. Accordingly,
participants in DTC's ATOP may, in lieu of physically completing and signing the
Letter of Transmittal and delivering it to the Exchange Agent, electronically
transmit their acceptance of the Exchange Offer by causing DTC to transfer the
Private Notes or the Private Warrants to the Exchange Agent in accordance with
DTC's ATOP procedures for transfer. DTC will then send an Agent's Message to the
Exchange Agent.
The term "Agent's Message" means a message transmitted by DTC, received by
the Exchange Agent and forming part of the Book-Entry Confirmation, which states
that DTC has received an express acknowledgment from a participant in DTC's ATOP
that is tendering Private Notes or Private Warrants which are the subject of
such Book-Entry Confirmation, that such participant has received and agrees to
be bound by the terms of the Letter of Transmittal (or, in the case of an
Agent's Message relating to guaranteed delivery, that such participant has
received and agrees to be bound by the applicable notice of guaranteed
delivery), and that the agreement may be enforced against such participant.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of tendered Private Notes and Private
Warrants will be resolved by the Company in its sole discretion, which
determination will be final and binding. The Company reserves the absolute right
to reject any and all Private Notes or Private Warrants not properly tendered or
any Private Notes or Private Warrants the Company's acceptance of which would,
in the opinion of counsel for the Company, be unlawful. The Company also
reserves the right to waive any defects, irregularities or conditions of tender
as to particular Private Notes or Private Warrants. The Company's interpretation
of the terms and conditions of the Exchange Offer (including the instructions in
the Letter of Transmittal) will be final and binding on all parties. Unless
waived, any defects or irregularities in connection with tenders of Private
Notes or Private Warrants must be cured within such time as the Company shall
determine. Although the Company intends to notify holders of defects or
irregularities with respect to tenders of Private Notes or Private Warrants,
none of the Company, the Exchange Agent or any other person shall incur any
liability for failure to give such notification. Tenders of Private Notes or
Private Warrants will not be deemed to have been made until such defects or
irregularities have been cured or waived.
While the Company has no present plan to acquire any Private Notes or
Private Warrants that are not tendered in the Exchange Offer, the Company
reserves the right in its sole discretion to purchase or make offers for any
Private Notes or Private Warrants that remain outstanding subsequent to the
Expiration Date and, to the extent permitted by applicable law, to purchase
Private Notes or Private Warrants in the open market, in privately negotiated
transactions or otherwise. The terms of any such purchases or offers could
differ from the terms of the Exchange Offer.
By tendering, each holder of Private Notes or Private Warrants will
represent to the Company that, among other things, (i) any Exchange Notes or
Exchange Warrants acquired in exchange for Private Notes or Private Warrants,
respectively, tendered thereby are being acquired in the ordinary course of
business of the person receiving such Exchange Notes or Exchange Warrants, (ii)
the person receiving such Exchange Notes or Exchange Warrants is not engaging in
and does not intend to engage in a distribution of such Exchange Notes or
Exchange Warrants, (iii) the person receiving such Exchange Notes or Exchange
Warrants does not have an arrangement or understanding with any person to
participate in the distribution of such Exchange Notes or Exchange Warrants and
(iv) neither the holder nor any other person receiving such Exchange Notes or
Exchange Warrants from the holder is an "affiliate," as defined in Rule 405
under the Securities Act, of the
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<PAGE> 33
Company. If the holder is a broker-dealer that will receive Exchange Notes or
Exchange Warrants for its own account in exchange for Private Notes or Private
Warrants, respectively, that were acquired as a result of market-making
activities or other trading activities, such holder will be required to
acknowledge in the Letter of Transmittal that such holder will deliver a
prospectus in connection with any resale of such Exchange Notes or Exchange
Warrants. Such acknowledgement and prospectus delivery by such holder will not
be deemed to constitute an admission by such holder that it is an "underwriter"
within the meaning of the Securities Act. By tendering, each holder of Private
Notes or Private Warrants will be required to acknowledge that, if it is
participating in the Exchange Offer for the purpose of distributing the Exchange
Notes or Exchange Warrants, (i) it cannot rely on the position of the staff of
the Commission in certain no-action letters and, in the absence of an exemption
therefrom, must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with a secondary resale
transaction of the Exchange Notes or the Exchange Warrants, in which case the
registration statement must contain the selling security holder information
required by Item 507 or Item 508, as applicable, of Regulation S-K of the
Securities Act and (ii) failure to comply with such requirements in such
instance could result in such holder incurring liability under the Securities
Act for which it is not indemnified by the Company.
RETURN OF PRIVATE NOTES AND PRIVATE WARRANTS
If any tendered Private Notes or Private Warrants are not accepted for any
reason set forth in the terms and conditions of the Exchange Offer or if Private
Notes or Private Warrants are withdrawn, such unaccepted, withdrawn or
non-exchanged Private Notes or Private Warrants will be returned without expense
to the tendering holder thereof (or, in the case of Private Notes or Private
Warrants tendered by book-entry transfer into the Exchange Agent's account at
DTC pursuant to the book-entry transfer procedures described below, such Private
Notes or Private Warrants will be credited to an account maintained with DTC) as
promptly as practicable.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect
to the Private Notes and the Private Warrants with DTC for purposes of the
Exchange Offer within two business days after the date of this Prospectus, and
any financial institution that is a participant in DTC's system may make
book-entry delivery of Private Notes or Private Warrants by causing DTC to
transfer such Private Notes or Private Warrants into the Exchange Agent's
account at DTC in accordance with DTC's procedures for transfer. However,
although delivery of Private Notes or Private Warrants may be effected through
book-entry transfer at DTC, the Letter of Transmittal or facsimile thereof, with
any required signature guarantees and any other required documents, must, in any
case, be transmitted to and received by the Exchange Agent at the address set
forth below under "-- Exchange Agent" on or prior to the Expiration Date or
pursuant to the guaranteed delivery procedures described below.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Private Notes or Private Warrants and (i)
whose Private Notes or Private Warrants are not immediately available, (ii) who
cannot deliver their Private Notes, the Private Warrants, the Letter of
Transmittal or any other required documents to the Exchange Agent prior to the
Expiration Date or (iii) who are unable to complete the procedure for book-entry
transfer on a timely basis, may effect a tender if:
(a) The tender is made through an Eligible Institution;
(b) Prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed notice of
guaranteed delivery (a "Notice of Guaranteed Delivery") substantially in
the form provided by the Company (by facsimile transmission, mail or hand
delivery) setting forth the name and address of the holder, the certificate
number(s) of such Private Notes or Private Warrants, as applicable, and the
principal amount of Private Notes or Private Warrants tendered, stating
that the tender is being made thereby and guaranteeing that, within three
(3) New York
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<PAGE> 34
Stock Exchange, Inc. ("NYSE") trading days after the Expiration Date,
either (x) the Letter of Transmittal (or facsimile thereof) together with
the Private Notes or Private Warrants (or a Book-Entry Confirmation) in
proper form for transfer will be deposited by the Eligible Institution with
the Exchange Agent or (y) an Agent's Message will be properly transmitted
to the Exchange Agent; and
(c) Such properly executed Letter of Transmittal (or facsimile
thereof), as well as the certificate(s) for all physically tendered shares
of Private Notes or Private Warrants, as applicable, in proper form for
transfer, or Book-Entry Confirmation, as the case may be, and all other
documents required by the Letter of Transmittal or a properly transmitted
Agent's Message, are received by the Exchange Agent within three (3) NYSE
trading days after the date of execution of the Notice of Guaranteed
Delivery.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their Private Notes or Private Warrants
according to the guaranteed delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Private Notes or Private
Warrants may be withdrawn at any time prior to the Expiration Date. To withdraw
a tender of Private Notes or Private Warrants in the Exchange Offer, a written
or facsimile transmission notice of withdrawal must be received by the Exchange
Agent at its address set forth herein prior to the Expiration Date. Any such
notice of withdrawal must (i) specify the name of the person having deposited
the Private Notes or Private Warrants to be withdrawn, (ii) identify the Private
Notes or Private Warrants to be withdrawn (including the certificate number or
numbers) and (iii) be signed by the holder in the same manner as the original
signature on the Letter of Transmittal by which such Private Notes or Private
Warrants were tendered (including any required signature guarantees). All
questions as to the validity, form and eligibility (including time of receipt)
of such notices will be determined by the Company, in its sole discretion, whose
determination shall be final and binding on all parties. Any Private Notes or
Private Warrants so withdrawn will be deemed not to have been validly tendered
for purposes of the Exchange Offer, and no Exchange Notes or Exchange Warrants
will be issued with respect thereto unless the Private Notes or Private Warrants
so withdrawn are validly retendered. Properly withdrawn Private Notes and
Private Warrants may be retendered by following one of the procedures described
above under "-- Procedures for Tendering" at any time prior to the Expiration
Date.
TERMINATION OF CERTAIN RIGHTS
All registration rights under the Registration Rights Agreements accorded
to holders of the June Private Notes and the Private Warrants eligible to
participate in the Exchange Offer (and all rights to receive additional interest
due to failure to consummate the Exchange Offer on a timely basis, if the
Exchange Offer is not consummated on or before December 12, 1998, with respect
to the June Private Notes and the Private Warrants) will terminate upon
consummation of the Exchange Offer except with respect to the Company's duty to
keep the Registration Statement effective until the closing of the Exchange
Offer and, for a period of 180 days after the closing of the Exchange Offer, to
provide copies of the latest version of the Prospectus to any broker-dealer that
requests copies of such Prospectus in the Letter of Transmittal for use in
connection with any resale by such broker-dealer of June Exchange Notes or
Exchange Warrants received for its own account pursuant to the Exchange Offer in
exchange for June Private Notes or Private Warrants, respectively, that were
acquired for its own account as a result of market-making or other trading
activities.
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<PAGE> 35
EXCHANGE AGENT
State Street Bank and Trust Company has been appointed as Exchange Agent
for the Exchange Offer. Questions and requests for assistance, requests for
additional copies of this Prospectus or of the Letter of Transmittal and
requests for Notice of Guaranteed Delivery should be directed to the Exchange
Agent addressed as follows:
By Facsimile Transmission:
(For Eligible Institutions Only)
(617) 664-5290
Confirm by Telephone:
(617) 664-5249
<TABLE>
<CAPTION>
By Mail: By Overnight Delivery: By Hand:
<S> <C> <C>
State Street Bank and Trust State Street Bank and Trust State Street Bank and Trust
Company Company Company
P.O. Box 778 Two International Place Two International Place
Boston, Massachusetts 4th Floor 4th Floor
02102-0778 Boston, Massachusetts 02110 Boston, Massachusetts 02110
Attention: Corporate Trust Attention: Corporate Trust Window Attention: Corporate Trust
Window Window
</TABLE>
State Street Bank and Trust Company also serves as Trustee under the
Indenture and Warrant Agent under the Warrant Agreement.
FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Company. The
principal solicitation is being made by mail; however, additional solicitations
may be made by telegraph, facsimile transmission, telephone or in person by
officers and regular employees of the Company and their affiliates.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers or others
soliciting acceptances of the Exchange Offer. The Company, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
it for its reasonable, out-of-pocket expenses in connection therewith.
The cash expenses to be incurred in connection with the Exchange Offer will
be paid by the Company and are estimated in the aggregate to be approximately
$500,000. Such expenses include registration fees, fees and expenses of the
Exchange Agent and the Trustee, accounting and legal fees and printing costs,
among others.
The Company will pay all transfer taxes, if any, applicable to the exchange
of Private Notes or Private Warrants pursuant to the Exchange Offer. If,
however, a transfer tax is imposed for any reason other than the exchange of the
Private Notes or Private Warrants pursuant to the Exchange Offer, then the
amount of any such transfer tax (whether imposed on the registered holder or any
other persons) will be payable by the tendering holder. If satisfactory evidence
of payment of such taxes or exemption therefrom is not submitted with the Letter
of Transmittal, the amount of such transfer taxes will be billed directly to
such tendering holder.
CONSEQUENCES OF FAILURE TO EXCHANGE
Participation in the Exchange Offer is voluntary. Holders of Private Notes
or Private Warrants are urged to consult their financial and tax advisors in
making their own decisions on what action to take.
Private Notes and Private Warrants that are not exchanged for Exchange
Notes and Exchange Warrants, respectively, pursuant to the Exchange Offer will
remain "restricted securities" within the meaning of
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<PAGE> 36
Rule 144(a)(3)(iv) of the Securities Act. Accordingly, such Private Notes or
Private Warrants may not be offered, sold, pledged or otherwise transferred
except (i) to a "qualified institutional buyer" within the meaning of Rule 144A
under the Securities Act or to a person whom the seller reasonably believes is a
qualified institutional buyer purchasing for its own account in a transaction
meeting the requirements of Rule 144A, (ii) to the Company or any subsidiary
thereof, (iii) pursuant to an effective registration statement under the
Securities Act or (iv) to institutional accredited investors for investment
purposes and not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act, in a transaction exempt from
the registration requirements of the Securities Act, and, in each case, in
accordance with all other applicable securities laws and the transfer
restrictions set forth in the Indenture or the Warrant Agreement, as applicable.
ACCOUNTING TREATMENT
For accounting purposes, the Company will recognize no gain or loss as a
result of the Exchange Offer. The expenses of the Exchange Offer will be
amortized over the remaining terms of the Notes and the Warrants.
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<PAGE> 37
DESCRIPTION OF THE EXCHANGE NOTES
The Exchange Notes will be issued under the Indenture, a copy of which is
filed as an exhibit to the Registration Statement and which will be made
available upon request. The terms of the Exchange Notes include those provisions
contained in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). The
Exchange Notes are subject to all such terms, and holders of Exchange Notes are
referred to the Indenture and the Trust Indenture Act for a statement thereof.
The following summary of certain provisions of the Exchange Notes and the
Indenture does not purport to be complete and is subject to and qualified in its
entirety by reference to the actual provisions of the Exchange Notes and the
Indenture. As used in this section, the term "Company" means EOP Operating
Limited Partnership and not any of its Subsidiaries unless otherwise expressly
stated or the context otherwise requires.
GENERAL
Each of the 2003 Exchange Notes, the 2004 Exchange Notes, the 2007 Exchange
Notes, the 2008 Exchange Notes, the Exchange MOPPRS and the 2028 Exchange Notes
constitute a separate series of securities under the Indenture and is limited to
an aggregate principal amount of $300 million, $250 million, $300 million, $300
million, $250 million and $225 million, respectively. $299,900,000 in aggregate
principal amount of 2003 Exchange Notes, $299,900,000 in aggregate principal
amount of 2008 Exchange Notes and $249,655,000 in aggregate principal amount of
Exchange MOPPRS are currently outstanding. The Exchange Notes will be direct,
unsecured and unsubordinated obligations of the Company and will rank equally
with each other and with all other unsecured and unsubordinated indebtedness of
the Company from time to time outstanding. The Exchange Notes will be
effectively subordinated to mortgages and other secured indebtedness of the
Company to the extent of the value of the property securing such indebtedness.
The Exchange Notes also will be effectively subordinated, in the context of a
bankruptcy proceeding, to all existing and future third-party indebtedness and
other liabilities of the Company's subsidiaries. As of June 30, 1998, on a Pro
Forma Basis, such secured indebtedness of the Company and its subsidiaries
aggregated approximately $2.4 billion and the total liabilities of the Company's
subsidiaries was approximately $2.7 billion. See "Capitalization." Subject to
certain limitations set forth in the Indenture, and as described under
"-- Certain Covenants -- Limitations on Incurrence of Debt" below, the Indenture
will permit the Company to incur additional secured and unsecured indebtedness.
Such additional indebtedness may consist of, but is not limited to, indebtedness
issued under the Indenture.
Unless redeemed prior to maturity as described under "-- Optional
Redemption," the 2003 Exchange Notes will mature on February 15, 2003; the 2004
Exchange Notes will mature on June 15, 2004; the 2007 Exchange Notes will mature
on June 15, 2007; the 2008 Exchange Notes will mature on February 15, 2008; and
the 2028 Exchange Notes will mature on June 15, 2028 (each, a "Stated Maturity
Date"). The stated maturity date of the Exchange MOPPRS is February 15, 2012
(also a "Stated Maturity Date"); however, the Exchange MOPPRS are subject to
mandatory tender by the holders thereof on the Remarketing Date for purchase by
the Remarketing Dealer or the Company, as the case may be, as described below.
The Exchange Notes are not subject to any sinking fund provisions.
As described under "-- Certain Indenture Covenants -- Limitations on
Incurrence of Debt" and "-- Merger, Consolidation or Sale" below, the Indenture
contains provisions that may limit the ability of the Company to incur
indebtedness or effect a reorganization, restructuring, merger or similar
transaction involving the Company that may adversely affect the holders of the
Exchange Notes.
PRINCIPAL AND INTEREST
The 2004 Exchange Notes, the 2007 Exchange Notes and the 2028 Exchange
Notes will bear interest at an annual rate of 6.50%, 6.763% and 7.25%,
respectively, payable semiannually in arrears on June 15 and December 15 of each
year, commencing December 15, 1998 (each, an "Interest Payment Date"), and on
the applicable Stated Maturity Date or date of earlier redemption or accelerated
payment, as the case may be (each, a "Maturity Date"). The June Exchange Notes
will bear interest from their date of issuance. Interest
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on the June Private Notes which are exchanged for the June Exchange Notes will
cease to accrue on the day preceding the date of issuance of the June Exchange
Notes. Interest payable on the first Interest Payment Date with respect to the
June Exchange Notes will include accrued but unpaid interest due on the Private
Notes (which they replace) for the period from the later of June 15, 1998 or the
Interest Payment Date immediately preceding the date of issuance of the June
Exchange Notes to the date of such issuance and will be paid to the persons in
whose names the applicable June Exchange Notes are registered in the security
register applicable to the June Exchange Notes (the "Holders") as of the close
of business on the date 15 days prior to such payment day, regardless of whether
such day is a Business Day, as defined below (each, a "Regular Record Date").
Interest on the June Exchange Notes will be computed on the basis of a 360-day
year composed of twelve 30-day months.
The 2003 Exchange Notes and the 2008 Exchange Notes offered hereby will
bear interest at an annual rate of 6.375% and 6.750%, respectively, payable
semiannually in arrears on February 15 and August 15 of each year, commencing
February 15, 1999 (each, an "Interest Payment Date"), and on the applicable
Stated Maturity Date or date of earlier redemption or accelerated payment, as
the case may be (each, a "Maturity Date"). The annual interest rate on the
Exchange MOPPRS offered hereby to the Remarketing Date is 6.376%, payable
semiannually in arrears on February 15 and August 15 of each year, commencing
February 15, 1999 (each, also an "Interest Payment Date") and on the applicable
Stated Maturity Date or date of accelerated payment (each, also a "Maturity
Date"). The February Exchange Notes will bear interest from their date of
issuance. Interest on the February Private Notes which are exchanged for the
February Exchange Notes will cease to accrue on the day preceding the date of
issuance of the February Exchange Notes. Interest payable on the first Interest
Payment Date with respect to the February Exchange Notes offered hereby will
include accrued but unpaid interest due on the February Private Notes (which
they replace) for the period from the later of August 15, 1998 or the Interest
Payment Date immediately preceding the date of issuance of the February Exchange
Notes to the date of such issuance and will be paid to the persons in whose
names the applicable February Exchange Notes are registered in the security
register applicable to the February Exchange Notes (the "Holders") as of the
close of business on the date 15 days prior to such payment day, regardless of
whether such day is a Business Day, as defined below (each, also a "Regular
Record Date"). Interest on the February Exchange Notes will be computed on the
basis of a 360-day year composed of twelve 30-day months.
The principal of, and Make-Whole Amount (as defined below), if any, with
respect to, each Exchange Note payable on the applicable Maturity Date will be
paid against presentation and surrender of such Exchange Note at the corporate
trust office of the Trustee, located initially at Two International Place,
Financial Services, Corporate Trust Department, Boston, Massachusetts 02110, or
at the corporate trust window of the Trustee initially maintained at 61
Broadway, Concourse Level, New York, New York 10006, in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts.
If any Interest Payment Date or a Maturity Date falls on a day that is not
a Business Day, the required payment shall be made on the next Business Day as
if it were made on the date such payment was due and no interest shall accrue on
the amount so payable for the period from and after such Interest Payment Date
or such Maturity Date, as the case may be, to such next Business Day. "Business
Day" means any day, other than a Saturday or Sunday, on which banking
institutions in New York, New York, and Boston, Massachusetts, are open for
business.
OPTIONAL REDEMPTION
The Exchange Notes other than the Exchange MOPPRS may be redeemed at any
time at the option of the Company, in whole or from time to time in part, at a
redemption price equal to the sum of (i) 100% of the principal amount of the
Exchange Notes being redeemed plus accrued interest thereon to the redemption
date and (ii) the Make-Whole Amount, if any, with respect to such Exchange Notes
(collectively, the "Redemption Price"); provided, however, that interest
installments due on an Interest Payment Date which is on or prior to the
Redemption Date will be payable to the Holders of such Exchange Notes (or one or
more predecessor Exchange Notes) as of the close of business on the Record Date
preceding such Interest Payment Date.
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If notice has been given as provided in the Indenture and funds for the
redemption of any Exchange Notes called for redemption shall have been made
available on the redemption date referred to in such notice, such Exchange Notes
will cease to bear interest on the date fixed for such redemption specified in
such notice and the only right of the Holders of such Exchange Notes will be to
receive payment of the Redemption Price.
Notice of any optional redemption of any Exchange Notes will be given to
Holders at their addresses, as shown in the security register for the Exchange
Notes, not more than 60 nor less than 30 days prior to the date fixed for
redemption. The notice of redemption will specify, among other items, the
Redemption Price and the principal amount of Exchange Notes held by such Holder
to be redeemed.
If less than all the Exchange Notes are to be redeemed at the option of the
Company, the Company will notify the Trustee at least 45 days prior to giving
notice of redemption (or such shorter period as is satisfactory to the Trustee)
of the series and aggregate principal amount of Exchange Notes to be redeemed
and their redemption date. The Trustee shall select, in such manner as it shall
deem fair and appropriate, Exchange Notes to be redeemed of such series in whole
or in part.
As used herein:
"Make-Whole Amount" means, in connection with any optional redemption
or accelerated payment of any Exchange Notes, the excess, if any, of (i)
the aggregate present value as of the date of such redemption or
accelerated payment of each dollar of principal being redeemed or paid and
the amount of interest (exclusive of interest accrued to the date of
redemption or accelerated payment) that would have been payable in respect
of each such dollar if such redemption or accelerated payment had not been
made, determined by discounting, on a semiannual basis, such principal and
interest at the Reinvestment Rate (determined on the third Business Day
preceding the date such notice of redemption or accelerated payment is
given) from the respective dates on which such principal and interest would
have been payable if such redemption or accelerated payment had not been
made to the date of redemption or accelerated payment, over (ii) the
aggregate principal amount of the Exchange Notes being redeemed or paid.
"Reinvestment Rate" means .25% plus the arithmetic mean of the yields
under the heading "Week Ending" published in the most recent Statistical
Release under the caption "Treasury Constant Maturities" for the maturity
(rounded to the nearest month) corresponding to the remaining life to
maturity, as of the payment date of the principal being redeemed or paid.
If no maturity exactly corresponds to such maturity, yields for the two
published maturities most closely corresponding to such maturity shall be
calculated pursuant to the immediately preceding sentence and the
Reinvestment Rate shall be interpolated or extrapolated from such yields on
a straight-line basis, rounding in each of such relevant periods to the
nearest month. For the purposes of calculating the Reinvestment Rate, the
most recent Statistical Release published prior to the date of
determination of the Make-Whole Amount shall be used. If the format or
content of the Statistical Release changes in a manner that precludes
determination of the Treasury yield in the above manner, then the Treasury
yield shall be determined in the manner that most closely approximates the
above manner, as reasonably determined by the Company.
"Statistical Release" means the statistical release designated
"H.15(519)" or any successor publication which is published weekly by the
Federal Reserve System and which reports yields on actively traded United
States government securities adjusted to constant maturities, or, if such
statistical release is not published at the time of any determination under
the Indenture, then such other reasonably comparable index which shall be
designated by the Company.
TENDER OF EXCHANGE MOPPRS; REMARKETING
The following description sets forth the terms and conditions of the
remarketing of the Exchange MOPPRS, in the event that the Remarketing Dealer
elects to purchase the Exchange MOPPRS and remarkets the Exchange MOPPRS on the
Remarketing Date. In the event the Remarketing Dealer does not
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purchase the Exchange MOPPRS on the Remarketing Date, the Company will purchase
the Exchange MOPPRS on such date.
THE EXCHANGE MOPPRS WILL BE REDEEMED OR REPURCHASED ON THE REMARKETING
DATE.
MANDATORY TENDER. Provided that the Remarketing Dealer gives notice to the
Company and the Trustee on a Business Day not later than five Business Days
prior to the Remarketing Date of its intention to purchase the Exchange MOPPRS
for remarketing (the "Notification Date"), each Exchange MOPPRS will be
automatically tendered, or deemed tendered, to the Remarketing Dealer for
purchase on the Remarketing Date, except in the circumstances described under
"-- Repurchase of Exchange MOPPRS" below. The purchase price for the tendered
Exchange MOPPRS to be paid by the Remarketing Dealer will equal 100% of the
principal amount thereof. See "-- Notification of Results; Settlement" below.
When the Exchange MOPPRS are tendered for remarketing, the Remarketing Dealer
may remarket the Exchange MOPPRS for its own account at varying prices to be
determined by the Remarketing Dealer at the time of each sale. From and after
the Remarketing Date, the Exchange MOPPRS will bear interest at the rate
determined by the Remarketing Dealer equal to the Base Rate plus the Applicable
Spread (each, as defined below) (the "Interest Rate to Maturity"). If the
Remarketing Dealer elects to remarket the Exchange MOPPRS, the obligation of the
Remarketing Dealer to purchase the Exchange MOPPRS on the Remarketing Date is
subject, among other things, to the conditions that, since the Notification
Date, no material adverse change in the condition of the Company and its
Subsidiaries, considered as one enterprise, shall have occurred and that no
Event of Default (as defined in the Indenture), or any event which, with the
giving of notice or passage of time, or both, would constitute an Event of
Default, with respect to the Exchange MOPPRS shall have occurred and be
continuing. If for any reason the Remarketing Dealer does not purchase all
tendered Exchange MOPPRS on the Remarketing Date, the Company will be required
to repurchase the Exchange MOPPRS from the Beneficial Owners thereof at a price
equal to the principal amount thereof plus all accrued and unpaid interest, if
any, on the Exchange MOPPRS to the Remarketing Date. See "-- Repurchase of
Exchange MOPPRS" below.
The Interest Rate to Maturity shall be determined by the Remarketing Dealer
by 3:30 p.m., New York City time, on the third Business Day immediately
preceding the Remarketing Date (the "Determination Date") to the nearest one
hundred-thousandth (0.00001) of one percent per annum and will be equal to
5.488% (the "Base Rate") plus the Applicable Spread (as defined below) which
will be based on the Dollar Price (as defined below) of the Exchange MOPPRS.
The "Applicable Spread" will be the lowest bid indication, expressed as a
spread (in the form of a percentage or in basis points) above the Base Rate,
obtained by the Remarketing Dealer on the Determination Date from the bids
quoted by five Reference Corporate Dealers (as defined below) for the full
aggregate principal amount of the Exchange MOPPRS at the Dollar Price, but
assuming (i) an issue date equal to the Remarketing Date, with settlement on
such date without accrued interest, (ii) a maturity date equal to the Stated
Maturity Date of the Exchange MOPPRS, and (iii) a stated annual interest rate,
payable semiannually on each Interest Payment Date, equal to the Base Rate plus
the spread bid by the applicable Reference Corporate Dealer. If fewer than five
Reference Corporate Dealers bid as described above, then the Applicable Spread
shall be the lowest of such bid indications obtained as described above. The
Interest Rate to Maturity announced by the Remarketing Dealer, absent manifest
error, shall be binding and conclusive upon the Beneficial Owners and Holders of
the Exchange MOPPRS, the Company and the Trustee.
"Dollar Price" means, with respect to the Exchange MOPPRS, the present
value, as of the Remarketing Date, of the Remaining Scheduled Payments (as
defined below) discounted to the Remarketing Date, on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months), at the Treasury
Rate (as defined below).
"Reference Corporate Dealers" mean leading dealers of publicly traded debt
securities of the Company in The City of New York (which may include the
Remarketing Dealer or one of its affiliates) selected by the Remarketing Dealer.
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"Treasury Rate" means, with respect to the Remarketing Date, the rate per
annum equal to the semiannual equivalent yield to maturity or interpolated (on a
day count basis) yield to maturity of the Comparable Treasury Issues (as defined
below), assuming a price for the Comparable Treasury Issues (expressed as a
percentage of its principal amount), equal to the Comparable Treasury Price (as
defined below) for such Remarketing Date.
"Comparable Treasury Issues" means the United States Treasury security or
securities selected by the Remarketing Dealer as having an actual or
interpolated maturity or maturities comparable to the remaining term of the
Exchange MOPPRS being purchased.
"Comparable Treasury Price" means, with respect to the Remarketing Date,
(a) the offer prices for the Comparable Treasury Issues (expressed in each case
as a percentage of its principal amount) on the Determination Date, as set forth
on "Telerate Page 500" (or such other page as may replace Telerate Page 500) or
(b) if such page (or any successor page) is not displayed or does not contain
such offer prices on such Business Day, (i) the average of the Reference
Treasury Dealer Quotations for such Remarketing Date, after excluding the
highest and lowest of such Reference Treasury Dealer Quotations, or (ii) if the
Remarketing Dealer obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such Reference Treasury Dealer Quotations.
"Telerate Page 500" means the display designated as "Telerate Page 500" on Dow
Jones Markets Limited (or such other page as may replace Telerate Page 500 on
such service) or such other service displaying the offer prices specified in (a)
above as may replace Dow Jones Markets Limited. "Reference Treasury Dealer
Quotations" means, with respect to each Reference Treasury Dealer and the
Remarketing Date, the offer prices for the Comparable Treasury Issues (expressed
in each case as a percentage of its principal amount) quoted to the Remarketing
Dealer by such Reference Treasury Dealer by 3:30 p.m., New York City time, on
the Determination Date.
"Reference Treasury Dealer" means each of Credit Suisse First Boston
Corporation, Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated and Salomon Brothers Inc for
their respective affiliates which are primary U.S. Government securities dealers
and their respective successors; provided, however, that if any of the foregoing
or their affiliates shall cease to be a primary U.S. Government securities
dealer in The City of New York (a "Primary Treasury Dealer"), the Remarketing
Dealer shall substitute therefor another Primary Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to the Exchange MOPPRS,
the remaining scheduled payments of the principal thereof and interest thereon,
calculated at the Base Rate only, that would be due after the Remarketing Date
to and including the Stated Maturity Date.
NOTIFICATION OF RESULTS; SETTLEMENT. Provided the Remarketing Dealer has
previously notified the Company and the Trustee on the Notification Date of its
intention to purchase all tendered Exchange MOPPRS on the Remarketing Date, the
Remarketing Dealer will notify the Company, the Trustee and DTC by telephone,
confirmed in writing (which may include facsimile or other electronic
transmission), by 4:00 p.m., New York City time, on the Determination Date, of
the Interest Rate to Maturity.
All of the tendered Exchange MOPPRS will be automatically delivered to the
account of the Trustee, by book-entry through DTC pending payment of the
purchase price therefor, on the Remarketing Date.
In the event that the Remarketing Dealer purchases the tendered Exchange
MOPPRS on the Remarketing Date, the Remarketing Dealer will make or cause the
Trustee to make payment to the DTC Participant of each tendering Beneficial
Owner of Exchange MOPPRS, by book entry through DTC by the close of business on
the Remarketing Date against delivery through DTC of such Beneficial Owner's
tendered Exchange MOPPRS, of 100% of the principal amount of the tendered
Exchange MOPPRS that have been purchased for remarketing by the Remarketing
Dealer. If the Remarketing Dealer does not purchase all of the Exchange MOPPRS
on the Remarketing Date, it will be the obligation of the Company to make or
cause to be made such payment for the Exchange MOPPRS, as described below under
"Repurchase." In any case, the Company will make or cause the Trustee to make
payment of interest to each Beneficial Owner of Exchange MOPPRS due on the
Remarketing Date by book-entry through DTC by the close of business on the
Remarketing Date.
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The transactions described above will be executed on the Remarketing Date
through DTC in accordance with the procedures of DTC, and the accounts of the
respective DTC Participants will be debited and credited and the Exchange MOPPRS
delivered by book entry as necessary to effect the purchases and sales thereof.
Transactions involving the sale and purchase of Exchange MOPPRS remarketed
by the Remarketing Dealer on and after the Remarketing Date will settle in
immediately available funds through DTC's Same-Day Funds Settlement System.
The tender and settlement procedures described above, including provisions
for payment by purchasers of Exchange MOPPRS in the remarketing or for payment
to selling Beneficial Owners of tendered Exchange MOPPRS, may be modified to the
extent required by DTC or to the extent required to facilitate the tender and
remarketing of Exchange MOPPRS in certificated form, if the book-entry system is
no longer available for the Exchange MOPPRS at the time of the remarketing. In
addition, the Remarketing Dealer may, in accordance with the terms of the
Indenture, modify the tender and settlement procedures set forth above in order
to facilitate the tender and settlement process.
As long as DTC's nominee holds the certificates representing any Exchange
MOPPRS in the book-entry system of DTC, no certificates for such Exchange MOPPRS
will be delivered by any selling Beneficial Owner to reflect any transfer of
such Exchange MOPPRS effected in the remarketing. In addition, under the terms
of the Exchange MOPPRS and the Remarketing Agreement (described below), the
Company has agreed that, notwithstanding any provision to the contrary set forth
in the Indenture, (i) it will use its best efforts to maintain the Exchange
MOPPRS in book-entry form with DTC or any successor thereto and to appoint a
successor depositary to the extent necessary to maintain the Exchange MOPPRS in
book-entry form, and (ii) it will waive any discretionary right it otherwise has
under the Indenture to cause the Exchange MOPPRS to be issued in certificated
form.
For further information with respect to transfers and settlement through
DTC, see "-- Global Securities" below.
THE REMARKETING DEALER. The Company and the Remarketing Dealer, Merrill
Lynch, Pierce, Fenner & Smith Incorporated, an investment banking firm, have
entered into a Remarketing Agreement, the general terms and provisions of which
are summarized below.
The Remarketing Dealer will not receive any fees or reimbursement of
expenses from the Company in connection with the remarketing.
The Company has agreed to indemnify the Remarketing Dealer against certain
liabilities, including liabilities under the Securities Act, arising out of or
in connection with its duties under the Remarketing Agreement.
In the event that the Remarketing Dealer elects to remarket the Exchange
MOPPRS as described herein, the obligation of the Remarketing Dealer to purchase
Exchange MOPPRS from tendering Beneficial Owners of Exchange MOPPRS will be
subject to several conditions precedent set forth in the Remarketing Agreement,
including the conditions that, since the Notification Date, no material adverse
change in the condition of the Company and its Subsidiaries, considered as one
enterprise, shall have occurred, and that no Event of Default (as defined in the
Indenture), or any event which, with the giving of notice or passage of time, or
both, would constitute an Event of Default, with respect to the Exchange MOPPRS
shall have occurred and be continuing. In addition, the Remarketing Agreement
provides for the termination thereof, or redetermination of the Interest Rate to
Maturity, by the Remarketing Dealer on or before the Remarketing Date, upon the
occurrence of certain events as set forth in the Remarketing Agreement.
No Holder or Beneficial Owner of any Exchange MOPPRS shall have any rights
or claims under the Remarketing Agreement or against the Remarketing Dealer as a
result of the Remarketing Dealer not purchasing such Exchange MOPPRS.
The Remarketing Agreement also provides that the Remarketing Dealer may
resign at any time as Remarketing Dealer, such resignation to be effective ten
days after the delivery to the Company and the
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Trustee of notice of such resignation. In such case, it shall be the sole
obligation of the Company to appoint a successor Remarketing Dealer.
The Remarketing Dealer, in its individual or any other capacity, may buy,
sell, hold and deal in any of the Exchange MOPPRS. The Remarketing Dealer may
exercise any vote or join in any action which any Beneficial Owner of Exchange
MOPPRS may be entitled to exercise or take with like effect as if it did not act
in any capacity under the Remarketing Agreement. The Remarketing Dealer, in its
individual capacity, either as principal or agent, may also engage in or have an
interest in any financial or other transaction with the Company as freely as if
it did not act in any capacity under the Remarketing Agreement.
REPURCHASE OF EXCHANGE MOPPRS
In the event that (i) the Remarketing Dealer for any reason does not notify
the Company of the Interest Rate to Maturity by 4:00 p.m., New York City time,
on the Determination Date, (ii) prior to the Remarketing Date, the Remarketing
Dealer has resigned and no successor has been appointed on or before the
Determination Date, (iii) since the Notification Date, the Remarketing Dealer
terminates the Remarketing Agreement due to the occurrence of a material adverse
change in the condition of the Company and its Subsidiaries, considered as one
enterprise, or an Event of Default, or any event which, with the giving of
notice or passage of time, or both, would constitute an Event of Default, with
respect to the Exchange MOPPRS, or any other event constituting a termination
event under the Remarketing Agreement, (iv) the Remarketing Dealer elects not to
remarket the Exchange MOPPRS or (v) the Remarketing Dealer for any reason does
not purchase all tendered Exchange MOPPRS on the Remarketing Date, the Company
will repurchase the Exchange MOPPRS as a whole on the Remarketing Date at a
price equal to 100% of the principal amount of the Exchange MOPPRS plus all
accrued and unpaid interest, if any, on the Exchange MOPPRS to the Remarketing
Date. In any such case, payment will be made by the Company to the DTC
Participant of each tendering Beneficial Owner of Exchange MOPPRS, by book-entry
through DTC by the close of business on the Remarketing Date against delivery
through DTC of such Beneficial Owner's tendered Exchange MOPPRS.
REDEMPTION OF EXCHANGE MOPPRS
If the Remarketing Dealer elects to remarket the Exchange MOPPRS on the
Remarketing Date, the Exchange MOPPRS will be subject to mandatory tender to the
Remarketing Dealer for remarketing on such date, in each case subject to the
conditions described above under "-- Tender of Exchange MOPPRS; Remarketing" and
"-- Repurchase of Exchange MOPPRS" and to the Company's right to redeem the
Exchange MOPPRS from the Remarketing Dealer as described in the next sentence.
The Company will notify the Remarketing Dealer and the Trustee, not later than
the Business Day immediately preceding the Determination Date, if the Company
irrevocably elects to exercise its right to redeem the Exchange MOPPRS, in whole
but not in part, from the Remarketing Dealer on the Remarketing Date at the
Optional Redemption Price.
The "Optional Redemption Price" shall be the greater of (i) 100% of the
principal amount of the Exchange MOPPRS and (ii) the Dollar Price, plus in
either case accrued and unpaid interest from the Remarketing Date on the
principal amount being redeemed to the date of redemption. If the Company elects
to redeem the Exchange MOPPRS, it shall pay the redemption price therefor in
same-day funds by wire transfer to an account designated by the Remarketing
Dealer on the Remarketing Date.
CERTAIN INDENTURE COVENANTS
LIMITATIONS ON INCURRENCE OF DEBT. The Company will not, and will not
permit a Subsidiary to, incur any Debt (as defined below), other than
intercompany Debt (representing Debt to which the only parties are the Trust,
the Company and any of their Subsidiaries, but only so long as such Debt is held
solely by any of the Trust, the Company and any Subsidiary and provided that, in
the case of Debt owed to Subsidiaries of the Company, such Debt is subordinate
in right of payment to the Exchange Notes), if, immediately after giving effect
to the incurrence of such additional Debt, the aggregate principal amount of all
outstanding Debt of the
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Company and its Subsidiaries on a consolidated basis determined in accordance
with GAAP is greater than 60% of the sum of (i) Total Assets (as defined below)
as of the end of the fiscal quarter covered in the Company's Annual Report on
Form 10-K or Quarterly Report on Form 10-Q, as the case may be, most recently
filed with the Commission (or, if such filing is not required under the Exchange
Act, with the Trustee) prior to the incurrence of such additional Debt and (ii)
the increase or decrease in Total Assets from the end of such quarter including,
without limitation, any increase in Total Assets resulting from the incurrence
of such additional Debt (such increase or decrease together with the Company's
Total Assets is referred to as the "Adjusted Total Assets") (Indenture Section
1004(a)).
In addition to the foregoing limitations on the incurrence of Debt, the
Company will not, and will not permit any Subsidiary to, incur any Secured Debt
(as defined below) of the Company or any Subsidiary if, immediately after giving
effect to the incurrence of such additional Secured Debt, the aggregate
principal amount of all outstanding Secured Debt of the Company and its
Subsidiaries on a consolidated basis is greater than 40% of Adjusted Total
Assets (Indenture Section 1004(b)).
In addition to the foregoing limitation on the incurrence of Debt, the
Company will not, and will not permit any Subsidiary to, incur any Debt, other
than intercompany Debt (provided that, in the case of Debt owed to Subsidiaries
of the Company, such Debt is subordinate in right of payment to the Exchange
Notes), if the ratio of Consolidated Income Available for Debt Service to the
Annual Debt Service Charge (in each case as defined below) for the period
consisting of the four consecutive fiscal quarters most recently ended prior to
the date on which such additional Debt is to be incurred shall have been less
than 1.5 to 1 on a pro forma basis after giving effect to the incurrence of such
Debt and to the application of the proceeds therefrom, and calculated on the
assumption that (i) such Debt and any other Debt incurred by the Company or its
Subsidiaries since the first day of such four-quarter period, which was
outstanding at the end of such period, had been incurred at the beginning of
such period and continued to be outstanding throughout such period, and the
application of the proceeds of such Debt, including to refinance other Debt, had
occurred at the beginning of such period, (ii) the repayment or retirement of
any other Debt by the Company or its Subsidiaries since the first day of such
four-quarter period had been repaid or retired at the beginning of such period
(except that, in determining the amount of Debt so repaid or retired, the amount
of Debt under any revolving credit facility shall be computed based upon the
average daily balance of such Debt during such period), (iii) in the case of
Acquired Indebtedness or Debt incurred in connection with any acquisition since
the first day of the four-quarter period, the related acquisition had occurred
as of the first day of the period with the appropriate adjustments with respect
to the acquisition being included in the pro forma calculation and (iv) in the
case of any increase or decrease in Total Assets, or any other acquisition or
disposition by the Company or any Subsidiary of any asset or group of assets,
since the first day of such four-quarter period, including, without limitation,
by merger, stock purchase or sale, or asset purchase or sale, such increase,
decrease or other acquisition or disposition or any related repayment of Debt
had occurred as of the first day of such period with the appropriate adjustments
to revenues, expenses and Debt levels with respect to such increase, decrease or
other acquisition or disposition being included in such pro forma calculation
(Indenture Section 1004(c)).
MAINTENANCE OF TOTAL UNENCUMBERED ASSETS. The Company is required at all
times to maintain Total Unencumbered Assets of not less than 150% of the
aggregate outstanding principal amount of all outstanding Unsecured Debt of the
Company and its Subsidiaries on a consolidated basis (Indenture Section
1004(d)).
As used in the Indenture and the description thereof herein:
"Acquired Indebtedness" means Debt of a Person (i) existing at the
time the Person becomes a Subsidiary or (ii) assumed in connection with the
acquisition of assets from the Person, in each case, other than Debt
incurred in connection with, or in contemplation of, the Person becoming a
Subsidiary or that acquisition. Acquired Indebtedness shall be deemed to be
incurred on the date of the related acquisition of assets from any Person
or the date the acquired Person becomes a Subsidiary.
"Annual Debt Service Charge" as of any date means the amount which is
expensed in any 12-month period for Consolidated Interest Expense of the
Company and its Subsidiaries.
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"Consolidated Income Available for Debt Service" for any period means
Consolidated Net Income plus amounts which have been deducted in
determining Consolidated Net Income during such period for (i) Consolidated
Interest Expense, (ii) provision for taxes of the Company and its
Subsidiaries based on income, (iii) amortization (other than amortization
of debt discount) and depreciation, (iv) provisions for losses from sales
or joint ventures, (v) increases in deferred taxes and other noncash items,
(vi) charges resulting from a change in accounting principles, and (vii)
charges for early extinguishment of debt, and less amounts which have been
added in determining Consolidated Net Income during such period for (a)
provisions for gains from sales or joint ventures and (b) decreases in
deferred taxes and other noncash items.
"Consolidated Interest Expense" means, for any period, and without
duplication, all interest (including the interest component of rentals on
leases reflected in accordance with GAAP as capitalized leases on the
Company's consolidated balance sheet, letter of credit fees, commitment
fees and other like financial charges) and all amortization of debt
discount on all Debt (including, without limitation, payment-in-kind, zero
coupon and other securities) of the Company and its Subsidiaries, but
excluding legal fees, title insurance charges and other out-of-pocket fees
and expenses incurred in connection with the issuance of Debt, all
determined in accordance with GAAP.
"Consolidated Net Income" for any period means the amount of net
income (or loss) of the Company and its Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP.
"Debt" of the Company or any Subsidiary means, without duplication,
any indebtedness of the Company and its Subsidiaries, whether or not
contingent, in respect of (i) borrowed money evidenced by bonds, notes,
debentures or similar instruments, (ii) indebtedness secured by any
mortgage, pledge, lien, charge, encumbrance or any security interest
existing on property owned by the Company and its Subsidiaries, (iii) the
reimbursement obligations, contingent or otherwise, in connection with any
letters of credit actually issued or amounts representing the balance
deferred and unpaid of the purchase price of any property except any such
balance that constitutes an accrued expense or trade payable or (iv) any
lease of property by the Company and its Subsidiaries as lessee which is
reflected in the Company's consolidated balance sheet as a capitalized
lease in accordance with GAAP, in the case of items of indebtedness under
(i) through (iii) above to the extent that any such items (other than
letters of credit) would appear as a liability on the Company's
consolidated balance sheet in accordance with GAAP, and also includes, to
the extent not otherwise included, any obligation by the Company or any
Subsidiary to be liable for, or to pay, as obligor, guarantor or otherwise
(other than for purposes of collection in the ordinary course of business),
indebtedness of another person (other than the Company or any Subsidiary)
(it being understood that "Debt" shall be deemed to be incurred by the
Company and its Subsidiaries on a consolidated basis whenever the Company
and its Subsidiaries on a consolidated basis shall create, assume,
guarantee or otherwise become liable in respect thereof; Debt of a
Subsidiary of the Company existing prior to the time it became a Subsidiary
of the Company shall be deemed to be incurred upon such Subsidiary's
becoming a Subsidiary of the Company; and Debt of a person existing prior
to a merger or consolidation of such person with the Company or any
Subsidiary of the Company in which such person is the successor to the
Company or such Subsidiary shall be deemed to be incurred upon the
consummation of such merger or consolidation); provided, however, the term
Debt shall not include any such indebtedness that has been the subject of
an "in substance" defeasance in accordance with GAAP.
"Secured Debt" means, without duplication, Debt secured by any
mortgage, trust deed, deed of trust, deed to secure debt, security
agreement, pledge, conditional sale or other title retention agreement,
capitalized lease, or other like agreement granting or conveying security
title to or a security interest in real property or other tangible assets.
Secured Debt shall be deemed to be incurred (i) on the date the Company or
any Subsidiary creates, assumes, guarantees or otherwise becomes liable in
respect thereof if it is secured in the manner described in the preceding
sentence on such date or (ii) on the date the Company or any Subsidiary
first secures such Debt in the manner described in the preceding sentence
if such Debt was not so secured on the date it was incurred.
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"Subsidiary" means (i) a corporation, partnership, limited liability
company, trust, real estate investment trust or other entity a majority of
the voting power of the voting equity securities of which are owned,
directly or indirectly, by the Company or by one or more Subsidiaries of
the Company, (ii) a partnership, limited liability company, trust, real
estate investment trust or other entity not treated as a corporation for
federal income tax purposes, the majority of the value of the equity
interests of which are owned, directly or indirectly, by the Company or by
one or more other Subsidiaries of the Company and (iii) one or more
corporations which, either individually or in the aggregate, would be
Significant Subsidiaries (as defined below, except that the investment,
asset and equity thresholds for purposes of this definition shall be 5%),
the majority of the value of the equity interests of which are owned,
directly or indirectly, by the Company or by one or more Subsidiaries.
"Total Assets" as of any date means the sum of (i) Undepreciated Real
Estate Assets and (ii) all other assets of the Company and its Subsidiaries
on a consolidated basis determined in accordance with GAAP (but excluding
intangibles and accounts receivable).
"Total Unencumbered Assets" as of any date means the sum of (i) those
Undepreciated Real Estate Assets not securing any portion of Secured Debt
and (ii) all other assets of the Company and its Subsidiaries on a
consolidated basis not securing any portion of Secured Debt determined in
accordance with GAAP (but excluding intangibles and accounts receivable).
"Undepreciated Real Estate Assets" as of any date means the cost
(original cost plus capital improvements) of real estate assets of the
Company and its Subsidiaries on such date, before depreciation and
amortization, determined on a consolidated basis in accordance with GAAP.
"Unsecured Debt" means Debt of the Company or any Subsidiary that is
not Secured Debt.
EXISTENCE. Except as permitted under "-- Merger, Consolidation or Sale"
below, the Company is required to do or cause to be done all things necessary to
preserve and keep in full force and effect its existence, rights and franchises;
provided, however, that the Company shall not be required to preserve any right
or franchise if the Board of Trustees of the Trust determines that the
preservation thereof is no longer desirable in the conduct of the Company's
business and that the loss thereof is not disadvantageous in any material
respect to the Holders (Indenture Section 1006).
MAINTENANCE OF PROPERTIES. The Company is required to cause all of its
material properties used or useful in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and to cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the reasonable judgment of the Company may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that the Company and
its Subsidiaries shall not be prevented from discontinuing the operation and
maintenance of any of the properties if such discontinuance is, in the judgment
of the Company, desirable in the conduct of its business and not disadvantageous
in any material respect to the Holders (Indenture Section 1007).
INSURANCE. The Company is required to, and is required to cause each of
its Subsidiaries to, maintain insurance coverage by financially sound and
reputable insurance companies in such forms and amounts and against such risks
as are customary for companies of established reputation engaged in the same or
a similar business (Indenture Section 1008).
PAYMENT OF TAXES AND OTHER CLAIMS. The Company is required to pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent (i) all material taxes, assessments and governmental charges levied
or imposed upon it or any Subsidiary or upon its income, profits or property or
that of any Subsidiary and (ii) all material lawful claims for labor, materials
and supplies which, if unpaid, might by law become a lien upon the property of
the Company or any Subsidiary; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings so long as appropriate
reserves are established therefor in accordance with GAAP (Indenture Section
1009).
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PROVISION OF FINANCIAL INFORMATION. Whether or not the Company is subject
to Section 13 or 15(d) of the Exchange Act and for so long as any Exchange Notes
are outstanding, the Company will, to the extent permitted under the Exchange
Act, be required to file with the Commission the annual reports, quarterly
reports and other documents which the Company would have been required to file
with the Commission pursuant to such Section 13 or 15(d) if the Company were so
subject (the "Financial Statements"), such documents to be filed with the
Commission on or prior to the respective dates by which the Company would have
been required to file such documents if the Company were so subject (the
"Required Filing Dates"). The Company will also in any event (x) within 15 days
of each Required Filing Date (i) transmit by mail to all Holders of Exchange
Notes, as their names and addresses appear in the security register for the
Exchange Notes, without cost to such Holders, copies of the annual reports and
quarterly reports which the Company would have been required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act if the Company
were subject to such Sections and (ii) file with the Trustee copies of the
annual reports, quarterly reports and other documents which the Company would
have been required to file with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act if the Company were subject to such Sections and (y) if
filing such documents by the Company with the Commission is not made under the
Exchange Act, promptly upon written request and payment of the reasonable cost
of duplication and delivery, supply copies of such documents to any prospective
Holder (Indenture Section 1010).
MERGER, CONSOLIDATION OR SALE
The Company may consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into, any other
corporation, limited liability company, association, partnership, real estate
investment trust, company or business trust (collectively, a "Corporation"),
provided that (a) the Company shall be the continuing Corporation, or the
successor Corporation or its transferees or assignees of such assets (if other
than the Company) formed by or resulting from any such consolidation or merger
or which shall have received the transfer of such assets by lease (subject to
the continuing obligations of the Company set forth in the Indenture) or
otherwise, either directly or indirectly, shall expressly assume payment of the
principal of (and premium or Make-Whole Amount, if any) and interest on all the
debt securities issued by the Company under the Indenture ("Debt Securities")
and the due and punctual performance and observance of all of the covenants and
conditions contained in the Indenture; (b) the successor Corporation formed by
or resulting from any such consolidation or merger or which shall have received
the transfer of assets shall be a United States Corporation; (c) immediately
after giving effect to such transaction and treating any indebtedness which
becomes an obligation of the Company or any Subsidiary of the Company as a
result thereof as having been incurred by the Company or such Subsidiary at the
time of such transaction, no Event of Default under the Indenture, and no event
which, after notice or the lapse of time, or both, would become such an Event of
Default, shall have occurred and be continuing; and (d) an officer's certificate
and legal opinion covering such conditions shall be delivered to the Trustee
(Indenture Sections 801 and 803). The foregoing requirements are applicable
regardless of whether the merger, consolidation or other transaction is
supported by the Company.
EVENTS OF DEFAULT, NOTICE AND WAIVER
The following events are "Events of Default" with respect to the Notes of a
series: (a) default for 30 days in the payment of any installment of interest on
any Note of such series; (b) default in the payment of the principal of (or
premium or Make-Whole Amount, if any, on) any Note at its maturity; (c) default
in the performance of any other covenant of the Company contained in the
Indenture, such default having continued for 60 days after written notice as
provided pursuant to the Indenture; (d) default in the payment of an aggregate
principal amount exceeding $5,000,000 of any evidence of recourse indebtedness
of the Company or any mortgage, indenture or other instrument under which such
indebtedness is issued or by which such indebtedness is secured, such default
having occurred after the expiration of any applicable grace period and having
resulted in the acceleration of the maturity of such indebtedness, but only if
such indebtedness is not discharged or such acceleration is not rescinded or
annulled, such default having continued for a period of 10 days after written
notice as provided pursuant to the Indenture; and (e) certain events of
bankruptcy, insolvency or reorganization, or court appointment of a receiver,
liquidator or trustee of the Company or any
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Significant Subsidiary or any of their respective property. The term
"Significant Subsidiary" means each significant subsidiary (as defined in
Regulation S-X promulgated under the Securities Act) of the Company (Indenture
Section 501).
If an Event of Default under the Indenture occurs and is continuing, then
in every such case the Trustee or the Holders of not less than 25% in principal
amount of the Outstanding Notes of a series may declare the principal amount of
all of the Notes of such series to be due and payable immediately by written
notice thereof to the Company (and to the Trustee if given by the Holders).
However, at any time after such a declaration of acceleration with respect to
such Notes has been made, but before a judgment or decree for payment of the
money due has been obtained by the Trustee, the Holders of not less than a
majority in principal amount of such Outstanding Notes may rescind and annul
such declaration and its consequences if (a) the Company shall have paid or
deposited with the Trustee all required payments of the principal of (and
premium or Make-Whole Amount, if any) and interest on such Notes, plus certain
fees, expenses, disbursements and advances of the Trustee and (b) all Events of
Default, other than the nonpayment of accelerated principal of (or specified
portion thereof) or premium (if any) or interest on such Notes have been cured
or waived as provided in the Indenture (Indenture Section 502). The Indenture
also provides that the Holders of not less than a majority in principal amount
of the Outstanding Notes of a series may waive any past default with respect to
such series and its consequences, except a default (x) in the payment of the
principal of (or premium or Make-Whole Amount, if any) or interest on any such
Note or (y) in respect of a covenant or provision contained in the Indenture
that cannot be modified or amended without the consent of the Holder of each
Outstanding Note affected thereby (Indenture Section 513).
The Trustee will be required to give notice to the Holder of Exchange Notes
within 90 days of a default under the Indenture unless such default has been
cured or waived; provided, however, that the Trustee may withhold notice to the
Holders of any default (except a default in the payment of the principal of (or
premium or Make-Whole Amount, if any) or interest on any Exchange Note or in the
payment of any sinking fund installment in respect of any Exchange Note) if
specified Responsible Officers of the Trustee consider such withholding to be in
the interest of such Holders (Indenture Section 601).
The Indenture provides that no Holder of Exchange Notes may institute any
proceedings, judicial or otherwise, with respect to the Indenture or for any
remedy thereunder, except in the case of failure of the Trustee, for 60 days, to
act after it has received a written request to institute proceedings in respect
of an Event of Default from the Holders of not less than 25% in principal amount
of the Outstanding Notes of a series, as well as an offer of indemnity
reasonably satisfactory to it (Indenture Section 507). This provision will not
prevent, however, any holder of Notes from instituting suit for the enforcement
of payment of the principal of (and premium or Make-Whole Amount, if any) and
interest on such Exchange Notes at the respective due dates thereof (Indenture
Section 508).
Subject to provisions in the Indenture relating to its duties in case of
default, the Trustee is under no obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any Holders of any
Exchange Notes then Outstanding under the Indenture, unless such Holders shall
have offered to the Trustee thereunder reasonable security or indemnity (Section
602). The Holders of not less than a majority in principal amount of the
Outstanding Notes of a series shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
in respect of such Notes, or of exercising any trust or power conferred upon the
Trustee in respect of such Notes. However, the Trustee may refuse to follow any
direction which is in conflict with any law or the Indenture, which may involve
the Trustee in personal liability or which may be unduly prejudicial to the
holders of Notes of such series not joining therein (Indenture Section 512).
Within 120 days after the close of each fiscal year, the Company must
deliver to the Trustee a certificate, signed by one of several specified
officers of the Company, stating whether or not such officer has knowledge of
any default under the Indenture and, if so, specifying each such default and the
nature and status thereof (Indenture Section 1011).
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MODIFICATION OF THE INDENTURE
Modifications and amendments of the Indenture will be permitted to be made
only with the consent of the Holders of not less than a majority in principal
amount of all Outstanding Debt Securities of each series which is affected by
such modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the Holders of each such Debt Security
affected thereby, (a) change the Stated Maturity of the principal of, or premium
or Make-Whole Amount, if any, or any installment of interest on, any such Debt
Security; (b) reduce the principal amount of, or the rate or amount of interest
on, or any premium or Make-Whole Amount, if any, payable on redemption of, any
such Debt Security; (c) change the place of payment, or the coin or currency,
for payment of principal of, or premium or Make-Whole Amount, if any, or
interest on any such Debt Security; (d) impair the right to institute suit for
the enforcement of any payment on or with respect to any such Debt Security; (e)
reduce the above stated percentage in principal amount of Outstanding Debt
Securities of any series necessary to modify or amend the Indenture, to waive
compliance with certain provisions thereof or certain defaults and consequences
thereunder or to reduce the quorum or voting requirements set forth in the
Indenture; or (f) modify any of the foregoing provisions or any of the
provisions relating to the waiver of certain past defaults or certain covenants,
except to increase the required percentage to effect such action or to provide
that certain other provisions may not be modified or waived without the consent
of the Holders of each such Debt Security affected thereby (Indenture Section
902). A Debt Security shall be deemed outstanding ("Outstanding") if it has been
authenticated and delivered under the Indenture unless, among other things, such
Debt Security has been cancelled or redeemed.
The Indenture provides that the Holders of not less than a majority in
principal amount of Outstanding Debt Securities of a series have the right to
waive compliance by the Company with certain covenants in the Indenture in
respect of such Debt Securities (Indenture Section 1013). Compliance with the
covenants described herein and such additional covenants with respect to the
Debt Securities of a series generally may not be waived by the Board of Trustees
of the Trust, as managing general partner of the Company, or by the Trustee.
Modifications and amendments of the Indenture will be permitted to be made
by the Company and the Trustee without the consent of any Holder for any of the
following purposes: (i) to evidence the succession or addition of another Person
to the Company as obligor under the Indenture; (ii) to add to the covenants of
the Company for the benefit of the Holders or to surrender any right or power
conferred upon the Company in the Indenture; (iii) to add Events of Default for
the benefit of the Holders; (iv) to permit or facilitate the issuance of Debt
Securities in uncertificated form, provided, that such action shall not
adversely affect the interests of the Holders in any material respect; (v) to
secure the Debt Securities; (vi) to establish the form or terms of additional
Debt Securities of any series; (vii) to provide for the acceptance of
appointment by a successor Trustee or facilitate the administration of the
trusts under the Indenture by more than one Trustee; (viii) to cure any
ambiguity, defect or inconsistency in the Indenture, provided that such action
shall not adversely affect the interests of Holders in any material respect; or
(ix) to supplement any of the provisions of the Indenture to the extent
necessary to permit or facilitate defeasance and discharge of any series of Debt
Securities under the Indenture, provided that such action shall not adversely
affect the interests of the Holders in any material respect (Indenture Section
901).
The Indenture contains provisions for convening meetings of the Holders of
Debt Securities (Indenture Section 1501). A meeting will be permitted to be
called at any time by the Trustee, and also, upon request, by the Company or the
Holders of at least 10% in principal amount of the Outstanding Debt Securities,
in any such case upon notice given as provided in the Indenture (Indenture
Section 1502). Except for any consent that must be given by the Holder of each
Debt Security affected by certain modifications and amendments of the Indenture,
any resolution presented at a meeting or adjourned meeting duly reconvened at
which a quorum is present will be permitted to be adopted by the affirmative
vote of the Holders of a majority in principal amount of the Outstanding Debt
Securities of that series; provided, however, that, except as referred to above,
any resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that may be made, given or taken by the
Holders of a specified percentage, which is less than a majority, in principal
amount of the Outstanding Debt Securities may be adopted at a meeting or
adjourned
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meeting duly reconvened at which a quorum is present by the affirmative vote of
the Holders of such specified percentage in principal amount of the Outstanding
Debt Securities. Any resolution passed or decision taken at any meeting of
Holders of Debt Securities duly held in accordance with the Indenture will be
binding on all Holders of Debt Securities of such series. The quorum at any
meeting called to adopt a resolution, and at any reconvened meeting, will be
Persons holding or representing a majority in principal amount of the
Outstanding Debt Securities; provided, however, that if any action is to be
taken at such meeting with respect to a consent or waiver which may be given by
the Holders of not less than a specified percentage in principal amount of the
Outstanding Debt Securities of a series, the Persons holding or representing
such specified percentage in principal amount of the Outstanding Debt Securities
of such series will constitute a quorum (Indenture Section 1504).
Notwithstanding the foregoing provisions, if any action is to be taken at a
meeting of Holders of Debt Securities of any series with respect to any request,
demand, authorization, direction, notice, consent, waiver or other action that
the Indenture expressly provides may be made, given or taken by the Holders of a
specified percentage in principal amount of all Outstanding Debt Securities
affected thereby, or of the Holders of such series and one or more additional
series: (i) there shall be no minimum quorum requirement for such meeting and
(ii) the principal amount of the Outstanding Debt Securities that vote in favor
of such request, demand, authorization, direction, notice, consent, waiver or
other action shall be taken into account in determining whether such request,
demand, authorization, direction, notice, consent, waiver or other action has
been made, given or taken under the Indenture (Indenture Section 1504).
SATISFACTION AND DISCHARGE
The Company may discharge certain obligations to Holders of Exchange Notes
that have not already been delivered to the Trustee for cancellation and that
either have become due and payable or will become due and payable within one
year (or scheduled for redemption within one year) by irrevocably depositing
with the Trustee, in trust, funds in such currency or currencies, currency unit
or units or composite currency or currencies in which such Exchange Notes are
payable in an amount sufficient to pay the entire indebtedness on such Exchange
Notes in respect of principal (and premium or Make-Whole Amount, if any) and
interest to the date of such deposit (if such Exchange Notes have become due and
payable) or to the Stated Maturity or Redemption Date, as the case may be
(Indenture Section 401).
The defeasance and covenant defeasance provisions of Article Fourteen of
the Indenture will apply to the Exchange Notes upon satisfaction of certain
conditions specified therein.
NO CONVERSION RIGHTS
The Exchange Notes will not be convertible into or exchangeable for any
equity interest in or debt security of the Trust or equity interest in the
Company.
GLOBAL SECURITIES
Exchange Notes issued in exchange for Private Notes currently evidenced by
one or more fully registered global notes will be evidenced by one or more
global notes of the related series (the "Global Securities"), which will be
deposited upon issuance with, or on behalf of, DTC and registered in the name of
Cede & Co. ("Cede"), as DTC's nominee. Exchange Notes issued in exchange for
Private Notes in non-book-entry-form will be issued in registered, certificated
form.
Holders may hold their interests in any of the Global Securities directly
through DTC, or indirectly through organizations which are participants in DTC
("Participants"). Transfers between Participants will be effected in the
ordinary way in accordance with DTC rules and will be settled in immediately
available funds.
Holders who are not Participants may beneficially own interests in a Global
Security held by DTC only through Participants, including certain banks,
brokers, dealers, trust companies and other parties that clear through or
maintain a custodial relationship with a Participant, either directly or
indirectly, and have indirect access to the DTC system ("Indirect
Participants"). So long as Cede, as the nominee of DTC, is the
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<PAGE> 51
registered owner of any Global Security, Cede for all purposes will be
considered the sole holder of such Global Security. Except as provided below,
owners of beneficial interests in a Global Security will not be entitled to have
certificates registered in their names, will not receive or be entitled to
receive physical delivery of certificates in definitive form, and will not be
considered the holder thereof.
Neither the Company nor the Trustee (nor any registrar or paying agent)
will have any responsibility for the performance by DTC or their Participants or
Indirect Participants of their respective obligations under the rules and
procedures governing their operations. DTC has advised the Company that it will
take any action permitted to be taken by a holder of Notes only at the direction
of one or more Participants whose accounts are credited with DTC interests in a
Global Security.
DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the laws of the State of New York, a "banking
organization" within the meaning of the New York Banking Law, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its Participants and to facilitate the clearance and settlement
of securities transactions, such as transfers and pledges, among Participants in
deposited securities through electronic book-entry changes to accounts of its
Participants, thereby eliminating the need for physical movement of securities
certificates. Participants include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations. Certain of
such Participants (or their representatives), together with other entities, own
DTC. The rules applicable to DTC and its Participants are on file with the
Commission.
DTC has further advised the Company that pursuant to the procedures
established by it, (i) upon deposit of the Global Securities representing
Private Notes, DTC will credit the accounts of its Participants with portions of
the principal amount of the Global Securities representing the Exchange Notes
issued in exchange for the Private Notes that each such Participant has
instructed DTC to surrender for exchange and (ii) ownership of such interests in
the Global Securities will be shown on, and the transfer of ownership thereof
will be effected only through, records maintained by DTC (with respect to the
Participants) or by the Participants and the Indirect Participants (with respect
to other owners of beneficial interests in the Global Securities).
Purchases of Exchange Notes under the DTC system must be made by or through
Participants, which will receive a credit for the Exchange Notes on DTC's
records. The ownership interest of each actual purchaser of each Exchange Note
(a "Beneficial Owner") is in turn to be recorded on the Participant's and
Indirect Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected to
receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Participant or Indirect
Participant through which the Beneficial Owner entered into the transaction.
Transfers of ownership interests in the Exchange Notes are to be accomplished by
entries made on the books of Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership
interests in Exchange Notes, except in the event that use of the book-entry
system for the Exchange Notes is discontinued.
The deposit of Exchange Notes with DTC and their registration in the name
of Cede effect no change in beneficial ownership. DTC has no knowledge of the
actual Beneficial Owners of the Exchange Notes; DTC's records reflect only the
identity of the Participants whose accounts such Exchange Notes are credited,
which may or may not be the Beneficial Owners. The Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
Redemption notices shall be sent to Cede. If less than all of the principal
amount of the Global Securities of the same series is being redeemed, DTC's
practice is to determine by lot the amount of the interest of each Participant
therein to be redeemed.
Conveyance of notices and other communications by DTC to Participants, by
Participants to Indirect Participants and by Participants and Indirect
Participants to Beneficial Owners will be governed by
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arrangements among them, subject to any statutory or regulatory requirements
that may be in effect from time to time.
Principal, Make-Whole Amount, if any, and interest payments on the Exchange
Notes will be made to DTC by wire transfer of immediately available funds. DTC's
practice is to credit Participants' accounts on the payable date in accordance
with their respective holdings shown on DTC's records unless DTC has reason to
believe that it will not receive payment on the payable date. Payments by
Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such Participant and not of DTC or the Company, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payments of principal, Make-Whole Amount, if any, and interest to DTC is the
responsibility of the Company, disbursement of such payments to Participants
shall be the responsibility of DTC, and disbursement of such payments to the
Beneficial Owners shall be the responsibility of Participants and Indirect
Participants. Neither the Company nor the Trustee will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests in the Global Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
DTC may discontinue providing its services as securities depository with
respect to the Exchange Notes at any time by giving reasonable notice to the
Company. In the event that DTC notifies the Company that it is unwilling or
unable to continue as depository for any Global Security or if at any time DTC
ceases to be a clearing agency registered as such under the Exchange Act when
DTC is required to be so registered to act as such depository and no successor
depository shall have been appointed within 90 days of such notification or of
the Company becoming aware of DTC's ceasing to be so registered, as the case may
be, certificates for the relevant Exchange Notes will be printed and delivered
in exchange for interests in such Global Security. Any Global Security that is
exchangeable pursuant to the preceding sentence shall be exchangeable for
relevant Exchange Notes in authorized denominations registered in such names as
DTC shall direct. It is expected that such instruction will be based upon
directions received by DTC from its Participants with respect to ownership of
beneficial interests in such Global Security.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
certificates representing the Exchange Notes will be printed and delivered.
DESCRIPTION OF THE EXCHANGE WARRANTS
The Exchange Warrants will be, and the Private Warrants are, issued
pursuant to a debt warrant agreement (the "Warrant Agreement"), dated as of June
15, 1998, between the Company and State Street Bank and Trust Company, as debt
warrant agent (the "Warrant Agent"), a copy of which is filed as an exhibit to
the Registration Statement and which will be made available upon request. The
following summary of certain provisions of the Warrant Agreement and the
certificates representing the Exchange Warrants (the "Warrant Certificates")
does not purport to be complete and is subject to and qualified in its entirety
by reference to the actual provisions of the Warrant Agreement and the Warrant
Certificates.
The Exchange Warrants will be issued in fully registered form, with (i)
Exchange Warrants issued in exchange for Private Warrants currently evidenced by
one or more fully registered global certificates being represented by one or
more global certificates deposited with the Warrant Agent as custodian for, and
registered in the name of, a nominee of DTC, and (ii) Exchange Warrants issued
in exchange for Private Warrants in non-book-entry-form being represented by
physical certificates. For a discussion of the depositary arrangements with DTC,
see "Description of the Exchange Notes -- Global Securities."
Each Exchange Warrant will entitle the holder thereof to purchase $1,000
principal amount of the Underlying Notes, at an exercise price equal to 100% of
the principal amount thereof (the "Exercise Price"). The Underlying Notes will
have terms identical to the Exchange Notes, except that (i) the maturity of such
Underlying Notes shall be June 15, 2008 (the "Underlying Notes Maturity Date"),
(ii) interest will accrue on
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such Underlying Notes from and including the Exercise Date and will be paid on
such Underlying Notes commencing June 15, 2000, (iii) if the Underlying Notes
issued and delivered upon exercise of the Exchange Warrants are not registered
under the Securities Act, the interest rate per annum on the Underlying Notes
shall be increased by 0.50% until such unregistered Underlying Notes have been
so registered and (iv) the interest rate per annum on the Underlying Notes may
be increased as described in the third succeeding paragraph.
Exchange Warrants may be exercised on December 15, 1999 unless, in
accordance with the Warrant Agreement, the Company notifies holders of the
Exchange Warrants in writing at their registered addresses at least five
Business Days prior to December 15, 1999 that, based on an opinion of counsel,
it is aware of material non-public information with respect to the Company, in
which case the Company may postpone such date to January 18, 2000, or, in each
case, if such day is not a Business Day, the succeeding Business Day (the
"Exercise Date"), upon (i) notice by a holder of an Exchange Warrant of such
holder's intention to exercise its Exchange Warrant submitted to the Warrant
Agent and forwarded by the Warrant Agent to the Company no later than the
Determination Date (as defined below), (ii) delivery to the Warrant Agent at its
corporate trust office or its corporate trust window on or prior to the Exercise
Date of payment of the Exercise Price in the form of certified or official bank
check payable to the order of the Company and (iii) delivery to the Warrant
Agent at its corporate trust office on or prior to the Exercise Date of the
related Warrant Certificate(s) properly completed and duly executed, whereupon
the Company will, on or promptly after the Exercise Date, deliver the Underlying
Notes purchasable upon such exercise; provided, however, that Exchange Warrants
may only be exercised if notice of such exercise has been delivered to the
Company no later than the Determination Date. Notice of a holder's intention to
exercise an Exchange Warrant shall be irrevocable, except that after a
postponement of the date of exercise of the Exchange Warrants under the
conditions specified above such notice shall be null and void. After such
postponement, a holder must redeliver a notice of intention to exercise an
Exchange Warrant no later than the Determination Date immediately preceding
January 18, 2000. After the close of business on the Determination Date,
unexercised Exchange Warrants will become void.
Prior to the delivery of the Underlying Notes purchasable upon exercise of
Exchange Warrants on the Exercise Date, holders of the Exchange Warrants will
not be entitled to any of the rights of holders of the Underlying Notes so
purchasable, including payments in respect thereof.
In the event that the Company postpones the date of the exercise of the
Exchange Warrants to January 18, 2000 in accordance with the Warrant Agreement,
the interest rate per annum on the Underlying Notes will be increased by the
positive value, if any, of the sum of (i) the value (positive or negative,
expressed in the form of a percentage or in basis points), if any, of the result
from subtracting the December 1999 Credit Spread from the January 2000 Credit
Spread and (ii) the value (positive or negative, expressed in the form of a
percentage or in basis points), if any, of the result from subtracting the
December 1999 Treasury Rate from the January 2000 Treasury Rate.
If for any reason the Company elects not to, or fails to, issue and deliver
the Underlying Notes purchasable upon exercise of the Exchange Warrants on the
Exercise Date, then the Company shall promptly pay to the holders who have given
notice of their intention to exercise their Exchange Warrants an amount equal to
the Warrant Make-Whole Amount, as calculated by the Calculation Agent on the
third Business Day prior to December 15, 1999. The "Warrant Make-Whole Amount"
means the present value, as of December 15, 1999, of the Remaining Scheduled
Payments (as defined below) discounted to December 15, 1999, on a semiannual
basis (assuming a 360-day year consisting of twelve 30-day months), at the
Warrant Reinvestment Rate.
As used herein:
"Calculation Agent" means initially Merrill Lynch, Pierce, Fenner & Smith
Incorporated or an affiliate thereof.
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"Comparable Treasury Issues" means the United States Treasury security or
securities selected by the Calculation Agent as having an actual or interpolated
maturity or maturities comparable to the stated term to maturity of the
Underlying Notes.
"Comparable Treasury Price" means, with respect to December 15, 1999 or
January 18, 2000, as applicable, (a) the offer-side prices for the Comparable
Treasury Issues (expressed in each case as a percentage of its principal amount)
on the third Business Day prior to such date, as set forth on "Telerate Page
500", or (b) if "Telerate Page 500" is not displayed or does not contain such
offer-side prices on the third Business Day prior to such date, (i) the average
of three Reference Treasury Dealer Quotations for December 15, 1999 or January
18, 2000, as applicable, after excluding the highest and lowest of five
Reference Treasury Dealer Quotations obtained on the third Business Day prior to
such date, or (ii) if the Calculation Agent obtains fewer than five such
Reference Treasury Dealer Quotations, the average of all such Reference Treasury
Dealer Quotations obtained on the third Business Day prior to such date.
"Telerate Page 500" means the display designated as "Telerate Page 500" on Dow
Jones Markets Limited (or such other page as may replace Telerate Page 500 on
such service) or such other service displaying the offer-side prices specified
in (a) above as may replace Dow Jones Markets Limited.
The "December 1999 Credit Spread" will be the average (arithmetic mean) of
the bid indications, excluding the highest and the lowest bids, expressed as a
spread (in the form of a percentage or in basis points) above the December 1999
Treasury Rate, obtained by the Calculation Agent on the date three Business Days
prior to December 15, 1999, from the bids quoted by five Reference Corporate
Dealers in accordance with customary financial practice in the pricing of a new
issue of publicly registered senior, unsecured indebtedness of the Company for
the full aggregate principal amount of the Underlying Notes purchasable upon the
exercise of all Exchange Warrants, assuming that the Underlying Notes have (i)
an issue price equal to 100%, (ii) an issue date equal to December 15, 1999,
with settlement on such date without accrued interest, (iii) a maturity date
equal to the Underlying Notes Maturity Date, (iv) interest initially payable to
holders thereof commencing June 15, 2000 and (v) a stated annual interest rate,
payable semiannually on each June 15 and December 15, equal to the December 1999
Treasury Rate plus the spread bid by the applicable Reference Corporate Dealer.
If fewer than five Reference Corporate Dealers bid as described above, then the
December 1999 Credit Spread shall be the average (arithmetic mean) of all bid
indications obtained.
"December 1999 Treasury Rate" means, with respect to December 15, 1999, the
rate per annum equal to the semiannual equivalent yield to maturity or
interpolated (on a day count basis) yield to maturity of the Comparable Treasury
Issues, assuming a price for the Comparable Treasury Issues (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
December 15, 1999.
"Determination Date" means three Business Days prior to the Exercise Date.
The "January 2000 Credit Spread" will be the average (arithmetic mean) of
the bid indications, excluding the highest and the lowest bids, expressed as a
spread (in the form of a percentage or in basis points) above the January 2000
Treasury Rate, obtained by the Calculation Agent on the date three Business Days
prior to January 18, 2000, from the bids quoted by five Reference Corporate
Dealers in accordance with customary financial practice in the pricing of a new
issue of publicly registered senior, unsecured indebtedness of the Company for
the full aggregate principal amount of the Underlying Notes purchasable upon the
exercise of all Exchange Warrants, assuming that the Underlying Notes have (i)
an issue price equal to 100%, (ii) an issue date equal to January 18, 2000, with
settlement on such date without accrued interest, (iii) a maturity date equal to
the Underlying Notes Maturity Date, (iv) interest initially payable to holders
thereof commencing June 15, 2000 and (v) a stated annual interest rate, payable
semiannually on each June 15 and December 15, equal to the January 2000 Treasury
Rate plus the spread bid by the applicable Reference Corporate Dealer. If fewer
than five Reference Corporate Dealers bid as described above, then the January
2000 Credit Spread shall be the average (arithmetic mean) of all bid indications
obtained.
"January 2000 Treasury Rate" means, with respect to January 18, 2000, the
rate per annum equal to the semiannual equivalent yield to maturity or
interpolated (on a day count basis) yield to maturity of the
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Comparable Treasury Issues, assuming a price for the Comparable Treasury Issues
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for January 18, 2000.
"Reference Corporate Dealers" means leading dealers of publicly traded debt
securities of the Company in The City of New York (which may include the
Calculation Agent or one of its affiliates) selected by the Calculation Agent.
"Reference Treasury Dealer" means each of Credit Suisse First Boston
Corporation, Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated, and Salomon Brothers Inc (or
their respective affiliates which are primary U.S. Government securities
dealers) and their respective successors; provided, however, that if any of the
foregoing or their affiliates shall cease to be a primary U.S. Government
securities dealer in The City of New York (a "Primary Treasury Dealer"), the
Calculation Agent shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and December 15, 1999 or January 18, 2000, as
applicable, the offer-side prices for the Comparable Treasury Issues (expressed
in each case as a percentage of its principal amount) quoted to the Calculation
Agent by such Reference Treasury Dealer by 3:30 p.m., New York City time, on the
third Business Day prior to such date.
"Remaining Scheduled Payments" means, with respect to the Underlying Notes,
all scheduled payments of the interest thereon, calculated at the interest rate
of the Underlying Notes only, that would accrue from December 15, 1999 and would
be due thereafter to and including the Underlying Notes Maturity Date.
"Warrant Reinvestment Rate" means the per annum rate equal to the December
1999 Treasury Rate plus the December 1999 Credit Spread. The Warrant
Reinvestment Rate announced by the Calculation Agent, absent manifest error,
shall be binding and conclusive upon the holders of the Exchange Warrants, the
Company and the Warrant Agent.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following discussion summarizes, subject to the limitations described
below, the material federal income tax considerations relating to the exchange
of the Private Notes and the Private Warrants for the Exchange Notes and the
Exchange Warrants, respectively, pursuant to the Exchange Offer. The following
description is not exhaustive of all possible tax considerations and is not
intended to be tax advice. For example, this summary addresses only Notes and
Warrants held as capital assets by initial holders who purchased Private Notes
or Private Warrants, as applicable, at the "issue price" (generally, the first
price to the public (excluding bond houses, brokers or similar persons or
organizations acting as underwriters, placement agents or wholesalers) at which
a substantial amount of the issue of which such Private Notes or Private
Warrants, as applicable, were a part was sold for money). This summary does not
purport to deal with persons in special tax situations, such as financial
institutions, insurance companies, regulated investment companies, dealers in
securities or currencies, persons holding Notes or Warrants as a hedge against
currency risk or as a position in a "straddle" for U.S. tax purposes, persons
whose functional currency is not the U.S. dollar, tax-exempt organizations or
foreign corporations and persons who are not citizens or residents of the United
States (except as described under the heading "-- Taxation of Non-U.S.
Holders"). In addition, because the Exchange MOPPRS are subject to mandatory
tender on the Remarketing Date, this summary only addresses the federal income
tax consequences of the Exchange MOPPRS until the Remarketing Date. It does not
give a detailed discussion of any state, local or foreign tax consequences and
does not discuss all aspects of federal income taxation that might be relevant
to a specific holder in light of its particular investment or tax circumstances.
As used herein, the term "U.S. Holder" means a holder of Notes or Warrants
who (for United States federal income tax purposes) (i) is a citizen or resident
of the United States, (ii) is a corporation, partnership or other entity created
or organized in or under the laws of the United States or of any political
subdivision thereof, (iii) is an estate the income of which is subject to United
States federal income taxation regardless of its source or (iv) is a trust whose
administration is subject to the primary supervision of a United States court
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and which has one or more United States persons who have the authority to
control all substantial decisions of the trust. The term "Non-U.S. Holder" means
a holder of Notes or Warrants who is not a U.S. Holder.
The information in this section is based on the Internal Revenue Code of
1986, as amended (the "Code"), current, temporary and proposed Treasury
Regulations thereunder, the legislative history of the Code, current
administrative interpretations and practices of the IRS and court decisions, all
as of the date hereof. No assurance can be given that future legislation,
Treasury Regulations, administrative interpretations and court decisions will
not significantly change current law or adversely affect existing
interpretations of current law. Any such change could apply retroactively to
transactions preceding the date of the change. Thus, no assurance can be
provided that the statements set forth herein (which do not bind the IRS or the
courts) will not be challenged by the IRS or will be sustained by a court if so
challenged.
Hogan & Hartson L.L.P., special tax counsel to the Company, has reviewed
the following discussion and is of the opinion that, to the extent it
constitutes matters of law or legal conclusions or purports to describe certain
provisions of the federal tax laws, the discussion is a correct summary of the
matters discussed therein.
EACH PROSPECTIVE PURCHASER IS STRONGLY URGED TO CONSULT WITH ITS OWN TAX
ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES TO IT OF THE EXCHANGE OF THE
PRIVATE NOTES AND THE PRIVATE WARRANTS FOR THE EXCHANGE NOTES AND THE EXCHANGE
WARRANTS, RESPECTIVELY, IN LIGHT OF ITS SPECIFIC TAX AND INVESTMENT SITUATIONS
AND THE SPECIFIC FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS APPLICABLE TO IT.
THE EXCHANGE
In the opinion of Hogan & Hartson L.L.P., the exchange of Private Notes and
Private Warrants for Exchange Notes and Exchange Warrants, respectively,
pursuant to the Exchange Offer will not be treated as an exchange for federal
income tax purposes because the Exchange Notes and the Exchange Warrants will
not differ materially in kind or extent from the Private Notes and the Private
Warrants, respectively, and because the exchange will occur by operation of the
original terms of the Private Notes and the Private Warrants. As a result,
Holders who exchange their Private Notes and Private Warrants for Exchange Notes
and Exchange Warrants, respectively, will not recognize any income, gain or loss
for federal income tax purposes. A Holder will have the same adjusted basis and
holding period in the Exchange Notes and the Exchange Warrants immediately after
the exchange as it had in the Private Notes and the Private Warrants,
respectively, immediately before the exchange.
TAXATION OF U.S. HOLDERS
INTEREST ON NOTES. Except as described below with respect to Exchange
MOPPRS, interest on the Notes will be taxable to a U.S. Holder as ordinary
interest income at the time such payments are accrued or received (in accordance
with the U.S. Holder's method of tax accounting).
SALE, EXCHANGE OR RETIREMENT OF NOTES. Except as described below with
respect to Exchange MOPPRS, upon the sale, exchange or retirement of a Note, a
U.S. Holder generally will recognize taxable gain or loss equal to the
difference between the amount realized on the sale, exchange or retirement
(other than amounts representing accrued and unpaid interest) and such U.S.
Holder's adjusted tax basis in the Note. A U.S. Holder's adjusted tax basis in a
Note generally will equal such U.S. Holder's initial investment in the Note.
Such gain or loss will be capital if the Note is held as a capital asset. In the
case of a U.S. Holder who is an individual or an estate or trust, such gain or
loss will be long-term capital gain or loss, generally subject to a maximum tax
rate of 20%, if the Notes have been held for more than one year. In the case of
a U.S. Holder that is a corporation, such gain or loss will be long-term capital
gain or loss if the Notes have been held for more than one year.
INTEREST ON EXCHANGE MOPPRS. The federal income tax treatment of debt
obligations such as the Exchange MOPPRS is not certain. Because the Exchange
MOPPRS are subject to mandatory tender on the Remarketing Date, the Company
intends to treat the Exchange MOPPRS as maturing on the Remarketing
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Date for federal income tax purposes. By purchasing the Exchange MOPPRS, the
U.S. Holder agrees to follow such treatment for federal income tax purposes.
There can be no assurance that the IRS will agree with the Company's treatment
of the Exchange MOPPRS and it is possible that the IRS could assert another
treatment. For instance, it is possible that the IRS could seek to treat the
Exchange MOPPRS as maturing on the Stated Maturity Date. See "-- Possible
Characterization of Exchange MOPPRS as Having Contingent Interest" below.
In accordance with such treatment, interest on the Exchange MOPPRS will
constitute "qualified stated interest" and the Exchange MOPPRS will be taxed as
described above under the headings "-- Interest on Notes" and "Sale, Exchange or
Retirement of Notes."
POSSIBLE CHARACTERIZATION OF EXCHANGE MOPPRS AS HAVING CONTINGENT
INTEREST. It is possible that the IRS might seek to treat the Exchange MOPPRS as
maturing on their Stated Maturity Date (instead of on the Remarketing Date, as
discussed under "-- Interest on Exchange MOPPRS" above) for federal income tax
purposes. Pursuant to such treatment, since the Interest Rate to Maturity will
not be determined until the Determination Date, the Exchange MOPPRS would be
treated as having contingent interest under the Code. In such event, under
Treasury Regulations governing debt instruments that provide for contingent
payments (the "Contingent Payment Regulations"), the Company would be required
to construct a projected payment schedule for the Exchange MOPPRS, based upon
the Company's current borrowing costs for comparable debt instruments of the
Company, from which an estimated yield on the Exchange MOPPRS would be
calculated. A U.S. Holder would be required to include in income original issue
discount in an amount equal to the sum of the daily portions of original issue
discount on the Exchange MOPPRS that would be deemed to accrue at this estimated
yield for each day during the U.S. Holder's taxable year on which the U.S.
Holder holds the Exchange MOPPRS. The amount of original issue discount that
would be deemed to accrue in any accrual period would equal the product of this
estimated yield (properly adjusted for the length of the accrual period) and the
Exchange MOPPRS' adjusted issue price (as defined below) at the beginning of the
accrual period. The daily portions of original issue discount would be
determined by allocating to each day in the accrual period the ratable portion
of the original issue discount that would be deemed to accrue during the accrual
period. In general, for these purposes, an Exchange MOPPRS' adjusted issue price
would equal the Exchange MOPPRS' issue price increased by the original issue
discount previously accrued on the Exchange MOPPRS and reduced by all payments
made on the Exchange MOPPRS. As a result of the application of the Contingent
Payment Regulations, it is possible that a U.S. Holder would be required to
include original issue discount in income in excess of actual cash payments
received for certain taxable years.
Under the Contingent Payment Regulations, upon the sale or exchange of an
Exchange MOPPRS (including a sale pursuant to the mandatory tender on the
Remarketing Date), a U.S. Holder would be required to recognize taxable income
or loss in an amount equal to the difference, if any, between the amount
realized by the U.S. Holder upon such sale or exchange and the U.S. Holder's
adjusted tax basis in the Exchange MOPPRS as of the date of disposition. A U.S.
Holder's adjusted tax basis in an Exchange MOPPRS generally would equal such
U.S. Holder's initial investment in the Exchange MOPPRS increased by any
original issue discount previously included in income with respect to the
Exchange MOPPRS by the U.S. Holder and decreased by any payments received by the
U.S. Holder. Any such taxable income generally would be treated as ordinary
income. Any such taxable loss generally would be treated (i) first as an offset
to any interest otherwise includible in income by the U.S. Holder with respect
to the Exchange MOPPRS for the taxable year in which the sale or exchange occurs
to the extent of the amount of such includible interest and (ii) then as an
ordinary loss to the extent of the U.S. Holder's total interest inclusions on
the Exchange MOPPRS in previous taxable years. Any remaining loss in excess of
the amounts described in (i) and (ii) above generally would be treated as
short-term or long term-capital loss (depending upon the U.S. Holder's holding
period for the Exchange MOPPRS). All amounts includible in income by a U.S.
Holder as ordinary interest pursuant to the Contingent Payment Treasury
Regulations would be treated as original issue discount.
THE EXCHANGE WARRANTS. Upon exercise of an Exchange Warrant, a U.S. Holder
will not recognize gain or loss, and will have a tax basis in the Underlying
Note acquired pursuant to such exercise equal to such U.S. Holder's tax basis in
the Exchange Warrant plus the exercise price of the Exchange Warrant. The
holding
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period of such Underlying Note will commence on the day after the date of
exercise of the Exchange Warrant. The sale of an Exchange Warrant will result in
the recognition of capital gain or loss to the U.S. Holder in an amount equal to
the difference between the amount realized and such U.S. Holder's tax basis in
the Exchange Warrant. Such gain or loss will be capital if the Exchange Warrant
is held as a capital asset. In the case of a U.S. Holder who is an individual or
an estate or trust, such gain or loss will be long-term capital gain or loss,
generally subject to a maximum tax rate of 20%, if the Exchange Warrants have
been held for more than one year. In the case of a U.S. Holder that is a
corporation, such gain or loss will be long-term capital gain or loss if the
Exchange Warrants have been held for more than one year. If an Exchange Warrant
expires unexercised, a U.S. Holder will recognize a capital loss equal to such
U.S. Holder's tax basis in the Exchange Warrant. Such capital loss will be
long-term if, at the time of the expiration, the Exchange Warrant was held for
more than one year.
TAXATION OF NON-U.S. HOLDERS
A Non-U.S. Holder will not be subject to federal income taxes on payments
of principal, premium (if any) or interest on a Note unless such Non-U.S. Holder
is a direct or indirect 10% or greater partner of the Company, a controlled
foreign corporation related to the Company or a bank receiving interest
described in section 881(c)(3)(A) of the Code, and provided that the interest
(including original issue discount, if any) is not effectively connected with
the conduct of a trade or business in the United States by the Non-U.S. Holder.
To qualify for the exemption from taxation, the last United States payor in the
chain of payment prior to payment to a Non-U.S. Holder (the "Withholding Agent")
must have received in the year in which a payment of interest or principal
occurs, or in either of the two preceding calendar years, a statement that (i)
is signed by the beneficial owner of the Note under penalties of perjury, (ii)
certifies that such owner is not a U.S. Holder and (iii) provides the name and
address of the beneficial owner. The statement may be made on an IRS Form W-8 or
a substantially similar form, and the beneficial owner must inform the
Withholding Agent of any change in the information on the statement within 30
days of such change. If a Note is held through a securities clearing
organization or certain other financial institutions, the organization or
institution may provide a signed statement to the Withholding Agent. However, in
such case, the signed statement must be accompanied by a copy of the IRS Form
W-8 or the substitute form provided by the beneficial owner to the organization
or institution. The Treasury Department is considering implementation of further
certification requirements aimed at determining whether the issuer of a debt
obligation is related to holders thereof.
Generally, a Non-U.S. Holder will not be subject to federal income taxes on
any amount which constitutes gain upon retirement or disposition of a Note, or
upon disposition of a Warrant, provided the gain is not effectively connected
with the conduct of a trade or business in the United States by the Non-U.S.
Holder. Certain other exceptions may be applicable, and a Non-U.S. Holder should
consult its tax advisor in this regard.
If a Non-U.S. Holder of a Note or Warrant is engaged in a trade or business
in the United States and interest (including original issue discount, if any) or
gain on the Note or gain on the Warrant, as applicable, is effectively connected
with the conduct of such trade or business, such holder, although exempt from
U.S. federal withholding tax as discussed in the preceding paragraph (or by
reason of the delivery of properly completed Form 4224), is subject to U.S.
federal income tax on such interest (including original issue discount) and on
any gain realized on the sale, exchange or other dispositions of a Note or
Warrant in the same manner as if it were a U.S. Holder. In addition, if such
Non-U.S. Holder is a foreign corporation, it may be subject to a branch profits
tax equal to 30% of its effectively connected earnings and profits for that
taxable year, unless it qualifies for a lower rate under an applicable income
tax treaty.
No gain or loss will be recognized by a Non-U.S. Holder of an Exchange
Warrant upon the exercise of the Exchange Warrant.
The Note or Warrant will not be includible in the estate of a Non-U.S.
Holder unless the individual is a direct or indirect 10% or greater partner of
the Company or, at the time of such individual's death, payments in respect of
the Note or Warrant would have been effectively connected with the conduct by
such individual of a trade or business in the United States.
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BACKUP WITHHOLDING AND INFORMATION REPORTING
Backup withholding of federal income tax at a rate of 31% may apply to
payments made in respect of the Notes to registered owners who are not "exempt
recipients" and who fail to provide certain identifying information (such as the
registered owner's taxpayer identification number) in the required manner.
Generally, individuals are not exempt recipients, whereas corporations and
certain other entities generally are exempt recipients. Payments made in respect
of the Notes to a U.S. Holder must be reported to the IRS, unless the U.S.
Holder is an exempt recipient or establishes an exemption. Compliance with the
identification procedures described in the preceding section would establish an
exemption from backup withholding for those Non-U.S. Holders who are not exempt
recipients.
In addition, upon the sale of a Note or Warrant to (or through) a broker,
the broker must withhold 31% of the entire purchase price unless either (i) the
broker determines that the seller is a corporation or other exempt recipient or
(ii) the seller provides, in the required manner, certain identifying
information and, in the case of a Non-U.S. Holder, certifies that such seller is
a Non-U.S. Holder (and certain other conditions are met). Such a sale must also
be reported by the broker to the IRS unless either (i) the broker determines
that the seller is an exempt recipient or (ii) the seller certifies its non-U.S.
status (and certain other conditions are met). Certification of the registered
owner's non-U.S. status would be made normally on an IRS Form W-8 under
penalties of perjury, although in certain cases it may be possible to submit
other documentary evidence.
Any amounts withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States federal income tax provided the required
information is furnished to the IRS.
The United States Treasury has recently finalized regulations regarding the
withholding and information reporting rules discussed above. In general, these
regulations do not alter the substantive withholding and information reporting
requirements but unify certification procedures and forms and clarify and modify
reliance standards. Pursuant to IRS Notice 98-16, these regulations generally
are effective for payments made after December 31, 1999, subject to certain
transition rules. Valid withholding certificates that are held on December 31,
1999 will remain valid until the earlier of December 31, 2000 or the date of
expiration of the certificate under rules currently in effect (unless otherwise
invalidated due to changes in the circumstances of the person whose name is on
such certificate). A Non-U.S. Holder should consult its own advisor regarding
the effect of the new Treasury Regulations.
PLAN OF DISTRIBUTION
This Prospectus, as it may be amended or supplemented from time to time,
may be used by a broker-dealer in connection with resales of any Exchange Notes
or Exchange Warrants received in exchange for Private Notes or Private Warrants,
respectively, acquired by such broker-dealer for its own account as a result of
market-making or other trading activities. Each broker-dealer that receives
Exchange Notes or Exchange Warrants for its own account in exchange for such
Private Notes or Private Warrants pursuant to the Exchange Offer must
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Notes or Exchange Warrants. The Company has agreed that for a
period of up to 180 days after the closing of the Exchange Offer, it will make
this Prospectus, as amended or supplemented, available to any such broker-dealer
that requests copies of this Prospectus in the Letter of Transmittal for use in
connection with any such resale.
The Company will not receive any proceeds from any sale of Exchange Notes
or Exchange Warrants by broker-dealers or any other persons. Exchange Notes or
Exchange Warrants received by broker-dealers for their own account pursuant to
the Exchange Offer may be sold from time to time in one or more transactions in
the over-the-counter market, in negotiated transactions, through the writing of
options on the Exchange Notes or the Exchange Warrants, or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or negotiated prices. Any such resale
may be made directly to purchasers or to or through brokers or dealers who may
receive compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such Exchange
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Notes or Exchange Warrants. Any broker-dealer that resells Exchange Notes or
Exchange Warrants that were received by it for its own account pursuant to the
Exchange Offer and any broker-dealer that participates in a distribution of such
Exchange Notes or Exchange Warrants may be deemed to be an "underwriter" within
the meaning of the Securities Act and any commissions or concessions received by
any such persons may be deemed to be underwriting compensation under the
Securities Act. The Letter of Transmittal states that by acknowledging that it
will deliver and by delivering a prospectus a broker-dealer that receives
Exchange Notes or Exchange Warrants in exchange for Private Notes or Private
Warrants, respectively, acquired by such broker-dealer as a result of
market-making or other trading activities will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act.
The Company has agreed to pay all expenses incident to the Company's
performance of, or compliance with, the Registration Rights Agreements, and will
indemnify the holders of Private Notes and Private Warrants (including any
broker-dealers), and certain parties related to such holders, against certain
liabilities, including liabilities under the Securities Act.
EXPERTS
The consolidated financial statements of EOP Operating Limited Partnership
appearing in EOP Operating Limited Partnership's Annual Report (Form 10-K, as
amended by Form 10-K/A) for the year ended December 31, 1997 and the statements
of revenue and certain expenses for the Denver Post Tower, 301 Howard Street and
215 Fremont Street, the Mountain Properties, Milennium Plaza, Polk & Taylor,
Colonnade I, Colonnade II and the Walker Building and Columbia Seafirst Center
appearing in the Current Report of EOP Operating Limited Partnership on Form 8-K
dated June 26, 1998; have all been audited by Ernst & Young LLP, independent
auditors, as set forth in their reports thereon included therein and
incorporated herein by reference in reliance upon such reports given upon the
authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Beacon Properties, L.P., appearing
in the Current Report on Form 8-K/A of EOP Operating Limited Partnership filed
with the Commission on February 18, 1998, have been audited by
PricewaterhouseCoopers LLP, independent accountants, 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 Exchange Notes and the Exchange Warrants will be passed
upon for the Company by Hogan & Hartson L.L.P., Washington, D.C. In addition,
the description of federal income tax consequences under the heading "Federal
Income Tax Consequences" is based upon the opinion of Hogan & Hartson L.L.P.,
special tax counsel for the Company.
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GLOSSARY
For purposes of this Prospectus, the following capitalized terms shall have
the meanings set forth below:
"Adjusted Total Assets" means Total Assets together with the increase or
decrease in Total Assets, as described in "Description of the Exchange Notes --
Certain Indenture Covenants -- Limitations on Incurrence of Debt."
"Agent's Message" means a message transmitted by DTC, received by the
Exchange Agent and forming part of the Book-Entry Confirmation, which states
that DTC has received an express acknowledgement from a participant in DTC's
ATOP that is tendering Private Notes which are the subject of such Book-Entry
Confirmation, that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal (or, in the case of an Agent's Message
relating to guaranteed delivery, that such participant has received and agrees
to be bound by the applicable notice of guaranteed delivery), and that the
agreement may be enforced against such participant.
"Applicable Spread" means the lowest bid indication, expressed as a spread
(in the form of a percentage or in basis points) above the Base Rate, obtained
by the Remarketing Dealer on the Determination Date from the bids quoted by five
Reference Corporate Dealers for the full aggregate principal amount of the
Exchange MOPPRS at the Dollar Price, but assuming (i) an issue date equal to the
Remarketing Date, with settlement on such date without accrued interest, (ii) a
maturity date equal to the Stated Maturity Date of the Exchange MOPPRS, and
(iii) a stated annual interest rate, payable semiannually on each Interest
Payment Date, equal to the Base Rate plus the spread bid by the applicable
Reference Corporate Dealer. If fewer than five Reference Corporate Dealers bid
as described above, then the Applicable Spread shall be the lowest of such bid
indications obtained as described above. The Interest Rate to Maturity announced
by the Remarketing Dealer, absent manifest error, shall be binding and
conclusive upon the Beneficial Owners and Holders of the Exchange MOPPRS, the
Company and the Trustee.
"ATOP" means Automated Tender Offer Program.
"Beneficial Owner" means an actual purchaser of an Exchange Note.
"Book-Entry Confirmation" means a confirmation of a book-entry transfer.
"Business Day" means any day, other than a Saturday or Sunday, on which
banking institutions in New York, New York, and Boston, Massachusetts, are open
for business.
"Bylaws" means the bylaws adopted by the Board of Trustees of the Trust, as
amended from time to time.
"Cede" means Cede & Co., as DTC's nominee.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission.
"Common Shares" means the common shares of beneficial interest, $.01 par
value per share, of the Trust.
"Company" means either EOP Operating Limited Partnership, a Delaware
limited partnership, alone as an entity, or, as the context may require, the
combined enterprise consisting of EOP Operating Limited Partnership and one or
more of its subsidiaries, and the predecessors thereof, except as defined in
"Description of the Exchange Notes," where "the Company" does not include the
subsidiaries. All references to the historical activities of EOP Operating
Limited Partnership refer to the activities of the Equity Office Predecessors.
"Comparable Treasury Issues" means the United States Treasury security or
securities selected by the Remarketing Dealer as having an actual or
interpolated maturity or maturities comparable to the remaining term of the
Exchange MOPPRS being purchased.
"Comparable Treasury Price" means, with respect to the Remarketing Date,
(a) the offer prices for the Comparable Treasury Issues (expressed in each case
as a percentage of its principal amount) on the
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Determination Date, as set forth on "Telerate Page 500" (or such other page as
may replace Telerate Page 500) or (b) if such page (or any successor page) is
not displayed or does not contain such offer prices on such Business Day, (i)
the average of the Reference Treasury Dealer Quotations for such Remarketing
Date, after excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (ii) if the Remarketing Dealer obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all such Reference Treasury
Dealer Quotations. "Telerate Page 500" means the display designated as "Telerate
Page 500" on Dow Jones Markets Limited (or such other page as may replace
Telerate Page 500 on such service) or such other service displaying the offer
prices specified in (a) above as may replace Dow Jones Markets Limited.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and the Remarketing Date, the offer prices for the Comparable
Treasury Issues (expressed in each case as a percentage of its principal amount)
quoted to the Remarketing Dealer by such Reference Treasury Dealer by 3:30 p.m.,
New York City time, on the Determination Date.
"Contingent Payment Regulations" means Treasury Regulations that govern
debt instruments that provide for contingent payments.
"Debt Securities" means all the debt securities issued by the Company under
the Indenture.
"Debt to Market Capitalization Ratio" means the total consolidated and
unconsolidated debt of the Company as a percentage of the market value of
outstanding Common Shares, Preferred Shares and Units plus total consolidated
and unconsolidated debt, but excluding (i) all nonrecourse consolidated debt in
excess of the Company's proportionate share of such debt and (ii) all
nonrecourse unconsolidated debt of partnerships in which the Company is a
partner in excess of the Company's proportionate share of such debt.
"Declaration of Trust" means the Trust's declaration of trust, as amended
from time to time, and as filed with the State Department of Assessments and
Taxation of Maryland.
"Determination Date" means the third business day immediately preceding the
Remarketing Date.
"Dollar Price" means, with respect to the Exchange MOPPRS, the present
value, as of the Remarketing Date, of the Remaining Scheduled Payments
discounted to the Remarketing Date, on a semiannual basis (assuming a 360-day
year consisting of twelve 30-day months), at the Treasury Rate.
"DTC" means The Depository Trust Company, New York, New York.
"Eligible Institution" means an "eligible guarantor institution" within the
meaning of Rule 17Ad-15 under the Exchange Act.
"Equity Office Predecessors" means, on a combined basis, the office
properties and parking facilities and the management business that were combined
into the Company pursuant to its formation.
"Exchange Agent" means State Street Bank and Trust Company.
"Exchange MOPPRS" means the MOPPRS issued in a registered exchange offer
for the MOPPRS of the same series with terms identical in all material respects
to the MOPPRS.
"Exchange Notes" means the 6.375% Notes due 2003, 6.50% Notes due 2004,
6.763% Notes due 2007, 6.750% Notes due 2008, Exchange MOPPRS and 7.50% Notes
due 2028 offered in this Exchange Offer.
"Exchange Offer" means the offer by the Company to exchange the Exchange
Notes and the Exchange Warrants, which have been registered under the Securities
Act, for an equal principal amount of the Company's outstanding Private Notes
and an equal amount of the Company's outstanding Private Warrants, respectively.
"Exchange Warrants" means the debt warrants of the Company offered in this
Exchange Offer entitling holders thereof to purchase an aggregate of
$300,000,000 in principal amount of the Underlying Notes.
"Expiration Date" means October 6, 1998 unless the Exchange Offer is
extended by the Company.
"February Exchange Notes" means the 2003 Exchange Notes, the 2008 Exchange
Notes and the Exchange MOPPRS.
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"February Private Notes" means the 2003 Notes, the 2008 Notes and the
MOPPRS.
"GAAP" means generally accepted accounting principles in the United States.
"Global Securities" means one or more global notes evidencing each series
of Exchange Notes and the Exchange Warrants in book-entry form.
"Holders" means the persons in whose names the applicable Notes are
registered in the security register applicable to the Notes.
"Indenture" means the indenture, dated as of September 2, 1997, as amended
or supplemented, between the Company and the Trustee.
"Indirect Participants" means Participants, including certain banks,
brokers, dealers, trust companies and other parties that clear through or
maintain a custodial relationship with a Participant, either directly or
indirectly, and have indirect access to the DTC system.
"Initial Purchasers" means, in the case of the 2004 Notes and the 2028
Notes, J.P. Morgan Securities Inc., Lehman Brothers Inc., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated and Salomon
Brothers Inc. In the case of the 2007 Notes and the Private Warrants, "Initial
Purchasers" means Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman,
Sachs & Co., J.P. Morgan Securities Inc. and NationsBanc Montgomery Securities
LLC.
"Interest Payment Date" means, with respect to the June Private Notes, the
June Exchange Notes, and the Underlying Notes, the semiannual dates June 15 and
December 15, commencing, with respect to the June Private Notes and the June
Exchange Notes, December 15, 1998, and June 15, 2000, with respect to the
Underlying Notes, and, with respect to the February Private Notes and the
February Exchange Notes, the semiannual dates February 15 and August 15.
"IRS" means the United States Internal Revenue Service.
"June Exchange Notes" means the 2004 Exchange Notes, the 2007 Exchange
Notes and the 2028 Exchange Notes.
"June Private Notes" means the 2004 Notes, the 2007 Notes and the 2028
Notes.
"Letter of Transmittal" means the letter of transmittal accompanying this
Prospectus.
"LIBOR" means the London Interbank Offering Rate.
"Maturity Date" means the applicable Stated Maturity Date or date of
earlier redemption or acceleration, as the case may be, of the Notes.
"MOPPRS" means the $100,000 of 6.376% MandatOry Par Put Remarketed
Securities(SM) due 2012.
"Notes" means the Private Notes, the Underlying Notes and the Exchange
Notes.
"Notice of Guaranteed Delivery" means a properly completed and duly
executed notice of guaranteed delivery.
"Notification Date" means a Business Day not later than five Business Days
prior to the Remarketing Date on which the Remarketing Dealer gives notice to
the Company and the Trustee of its intention to purchase the MOPPRS for
remarketing.
"NYSE" means the New York Stock Exchange, Inc.
"Outstanding" means the Debt Security has been authenticated and delivered
under the Indenture unless, among other things, such Debt Security has been
cancelled or redeemed.
"Participants" means organizations which are participants in DTC.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, joint-stock company, trust, unincorporated organization,
real estate investment trust, or government or any agency or political
subdivision thereof.
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"Private Notes" means the 2003 Notes, the 2004 Notes, the 2007 Notes, the
2008 Notes, the MOPPRS and the 2028 Notes.
"Private Warrants" means the debt warrants of the Company entitling holders
thereof to purchase, on the eighteen month anniversary of the date of issuance,
an aggregate of $300,000,000 in principal amount of the Underlying Notes.
"Pro Forma Basis" means giving effect to the following transactions which
occurred subsequent to June 30, 1998: (i) the acquisition or probable
acquisition of 13 office properties; (ii) the purchase of a mortgage receivable
for $245.0 million; and (iii) the $50.0 million investment in preferred shares
of Capital Trust.
"Prospectus" means this prospectus, as the same may be amended or
supplemented from time to time.
"QIB" means "qualified institutional buyer," as defined in Rule 144A.
"Redemption Price" means the sum of (i) the principal amount of the
Exchange Notes other than the Exchange MOPPRS being redeemed plus accrued
interest thereon the redemption date and (ii) the Make-Whole Amount, if any,
with respect to such Exchange Notes.
"Reference Corporate Dealers" means leading dealers of publicly traded debt
securities of the Company in the City of New York (which may include the
Remarketing Dealer or one of its affiliates) selected by the Remarketing Dealer.
"Reference Treasury Dealer" means each of Credit Suisse First Boston
Corporation, Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co., Incorporated and Salomon Brothers Inc or
their respective affiliates which are primarily U.S. Government securities
dealers and their respective successors; provided, however, that if any of the
foregoing or their affiliates shall cease to be a Primary Treasury Dealer, the
Remarketing Dealer shall substitute therefor another Primary Treasury Dealer.
"Registration Rights Agreements" means the registration rights agreements
among the Company and the Initial Purchasers, dated as of June 10, 1998.
"Registration Statement" means the registration statement of the Company on
Form S-4, together with all amendments and exhibits, of which this Prospectus is
a part.
"Regular Record Date" means the date 15 calendar days prior to such payment
day, regardless of whether such day is a Business Day.
"REIT" means a real estate investment trust as defined under Sections 856
through 860 of the Code and applicable Treasury regulations.
"Remaining Scheduled Payments" means, with respect to the Exchange MOPPRS,
the remaining scheduled payments of the principal thereof and interest thereon,
calculated at the Base Rate only, that would be due after the Remarketing Date
to and including the Stated Maturity Date.
"Remarketing Date" means February 15, 2002.
"Remarketing Dealer" means Merrill Lynch, Pierce, Fenner & Smith
Incorporated.
"Rule 144A" means Rule 144A under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Shelf Registration Statement" means the shelf registration statement
covering resales of the Private Notes and the Private Warrants.
"Staff" means the staff of the Commission.
"Stated Maturity Date" means February 15, 2003 in the case of the 2003
Exchange Notes; June 15, 2004, in the case of the 2004 Exchange Notes; June 15,
2007, in the case of the 2007 Exchange Notes; June 15, 2008, in the case of the
Underlying Notes; February 15, 2008 in the case of the 2008 Exchange Notes;
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February 15, 2012 in the case of the Exchange MOPPRS; and June 15, 2028, in the
case of the 2028 Exchange Notes.
"Treasury Rate" means, with respect to the Remarketing Date, the rate per
annum equal to the semiannual equivalent yield to maturity or interpolated (on a
day count basis) yield to maturity of the Comparable Treasury Issues, assuming a
price for the Comparable Treasury Issues (expressed as a percentage of its
principal amount), equal to the Comparable Treasury Price for such Remarketing
Date.
"Trust" means Equity Office Properties Trust, a Maryland real estate
investment trust.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Trustee" means State Street Bank and Trust Company.
"2003 Exchange Notes" means the Company's 6.375% Notes due 2003 offered in
this Exchange Offer.
"2004 Exchange Notes" means the Company's 6.50% Notes due 2004 offered in
this Exchange Offer.
"2007 Exchange Notes" means the Company's 6.763% Notes due 2007 offered in
this Exchange Offer.
"2008 Exchange Notes" means the Company's 6.750% Notes due 2008 offered in
this Exchange Offer.
"2028 Exchange Notes" means the Company's 7.25% Notes due 2028 offered in
this Exchange Offer.
"2003 Notes" means the Company's 6.375% Notes due 2003.
"2004 Notes" means the Company's 6.50% Notes due 2004.
"2007 Notes" means the Company's 6.763% Notes due 2007.
"2008 Notes" means the Company's 6.750% Notes due 2008.
"2028 Notes" means the Company's 7.25% Notes due 2028.
"Underlying Notes" means the Company's 6.763% Notes due 2008.
"Warrant Agent" means State Street Bank and Trust Company.
"Warrant Agreement" means that certain debt warrant agreement, dated June
15, 1998, between the Company and the Warrant Agent.
"Warrants" means the Private Warrants and the Exchange Warrants.
"Withholding Agent" means the last U.S. payor in the chain of payment prior
to payment to a non-U.S. holder.
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, THE EXCHANGE NOTES IN ANY JURISDICTION WHERE,
OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN
THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
Available Information.................. 2
Incorporation of Certain Documents by
Reference............................ 2
Summary................................ 4
Risk Factors........................... 15
The Company............................ 18
No Cash Proceeds to the Company........ 18
Ratios of Earnings to Fixed Charges.... 18
Capitalization......................... 19
Selected Financial Information......... 20
The Exchange Offer..................... 23
Description of the Exchange Notes...... 33
Description of the Exchange Warrants... 48
Certain Federal Income Tax
Consequences......................... 51
Plan of Distribution................... 55
Experts................................ 56
Legal Matters.......................... 56
Glossary............................... 57
</TABLE>
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EOP OPERATING
LIMITED PARTNERSHIP
OFFER TO EXCHANGE
$100,000 6.375% NOTES DUE 2003 FOR ANY
AND ALL OUTSTANDING 6.375% NOTES DUE 2003
$250,000,000 6.50% NOTES DUE 2004 FOR ANY
AND ALL OUTSTANDING 6.50% NOTES DUE 2004
$300,000,000 6.763% NOTES DUE 2007 FOR ANY
AND ALL OUTSTANDING 6.763% NOTES DUE 2007
$100,000 6.750% NOTES DUE 2008 FOR ANY
AND ALL OUTSTANDING 6.750% NOTES DUE 2008
$345,000 6.376% MANDATORY PAR PUT REMARKETED SECURITIES(SM) DUE 2012 FOR ANY AND
ALL OUTSTANDING 6.376% MANDATORY PAR PUT REMARKETED SECURITIES(SM) DUE 2012
$225,000,000 7.25% NOTES DUE 2028 FOR ANY
AND ALL OUTSTANDING 7.25% NOTES DUE 2028
300,000 DEBT WARRANTS TO PURCHASE
$300,000,000 6.763% NOTES DUE 2008
FOR ANY AND ALL OUTSTANDING DEBT WARRANTS
TO PURCHASE $300,000,000 6.763% NOTES DUE 2008
------------------------
PROSPECTUS
------------------------
SEPTEMBER , 1998
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF TRUSTEES AND OFFICERS
Pursuant to its Agreement of Limited Partnership, the Company is obligated
to indemnify, to the fullest extent provided by law, any person or entity made a
party to a proceeding by reason of its status as a general partner or a limited
partner of the Company or a trustee, director or officer of any general partner
and such other persons or entities as the Trust may designate from time to time
in its sole discretion (an "Indemnitee") from and against any and all losses,
claims, damages, liabilities, joint or several, expenses (including without
limitation, attorneys fees and other legal fees and expenses), judgments, fines,
settlements and other amounts arising from or in connection with any and all
claims, demands, actions, suits or proceedings, civil, criminal, administrative
or investigative, incurred by the Indemnitee and relating to the Company or the
general partners or the operation of, or the ownership of property by, any of
them as set forth in the Partnership Agreement in which any such Indemnitee may
be involved, or is threatened to be involved, as a party or otherwise, unless it
is established by a final determination of a court of competent jurisdiction
that: (i) the act or omission of the Indemnitee was material to the matter
giving rise to the proceeding and either was committed in bad faith or was the
result of active and deliberate dishonesty, (ii) the Indemnitee actually
received an improper personal benefit in money, property or services or (iii) in
the case of any criminal proceeding, the Indemnitee had reasonable cause to
believe that the act or omission was unlawful. Any indemnification shall be made
only out of the assets of the Company, and any insurance proceeds from the
liability policy covering the general partners and any Indemnitee, and neither a
general partner nor any limited partner shall have any obligation to contribute
to the capital of the Company or otherwise provide funds to enable the Company
to fund its indemnity obligations. The Company is obligated to advance amounts
to an Indemnitee for expenses upon receipt of (i) a written affirmation of the
Indemnitee that it believes it has met the standard of conduct necessary to
entitle it to indemnification and (ii) a written undertaking of the Indemnitee
that it will repay any such advances if it shall be ultimately determined that
it did not meet such standard of conduct. The foregoing indemnification rights
are in addition to any other rights afforded to an Indemnitee under any other
agreement, by vote of the partners, under applicable law or otherwise, and shall
continue as to an Indemnitee who has ceased to serve in such capacity unless
otherwise provided in a written agreement pursuant to which such Indemnitees are
indemnified. The Company is authorized to purchase and maintain insurance on
behalf of the Indemnitees with respect to the foregoing matters. The Company
shall be deemed to have requested an Indemnitee to serve as fiduciary of an
employee benefit plan whenever the performance by it of its duties to the
Company also imposes duties on, or otherwise involves services by, it to the
plan or participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall constitute fines; and actions taken or omitted by the Indemnitee with
respect to an employee benefit plan in the performance of its duties for a
purpose reasonably believed by it to be in the interest of the participants and
beneficiaries of the plan shall be deemed to be for a purpose which is not
opposed to the best interests of the Company. An Indemnitee shall not be denied
indemnification in whole or in part because the Indemnitee had an interest in
the transaction with respect to which the indemnification applies if the
transaction was otherwise permitted by the terms of the Partnership Agreement.
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ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<S> <C> <C>
4.1* -- Indenture, dated as of September 2, 1997, between the
Registrant and State Street Bank and Trust Company, as
supplemented.
4.2* -- First Supplemental Indenture, dated as of February 2, 1998,
between the Company and State Street Bank and Trust Company
4.3** -- Form of 2004 Exchange Note.
4.4** -- Form of 2007 Exchange Note.
4.5** -- Form of 2028 Exchange Note.
4.6** -- Registration Rights Agreement, dated as of June 10, 1998,
among the Company and the Initial Purchasers named therein
relating to the 2004 Notes and the 2028 Notes.
4.7** -- Registration Rights Agreement, dated as of June 10, 1998,
among the Company and the Initial Purchasers named therein
relating to the 2007 Notes and the Private Warrants.
4.8** -- Debt Warrant Agreement, dated as of June 15, 1998, between
the Company and the Warrant Agent.
4.9** -- Form of Global Debt Warrant Certificate representing
Exchange Warrants.
4.10 -- Form of 2003 Exchange Note.
4.11 -- Form of 2008 Exchange Note.
4.12 -- Form of Exchange MOPPRS.
5.1 -- Opinion of Hogan & Hartson L.L.P. regarding the validity of
the securities being registered.
8.1 -- Opinion of Hogan & Hartson L.L.P. regarding certain tax
matters.
10.1* -- Agreement of Limited Partnership of the Registrant.
10.2 -- Contribution Agreement, dated as of April 30, 1997, among
the Company and the persons named therein (incorporated
herein by reference to Exhibit 10.4 to the Trust's Annual
Report on Form 10-K, as amended, for the fiscal year ended
December 31, 1997).
10.3 -- Agreement and Plan of Merger, dated September 15, 1997, as
amended among the Registrant, the Trust, Beacon and Beacon
Partnership (incorporated herein by reference to Exhibit 2.1
to the Trust's Current Report or Form 8-K dated September
15, 1997.)
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 the Signature Page).
25.1*** -- Statement of Eligibility of the Trustee on Form T-1.
99.1** -- Form of Letter of Transmittal.
99.2** -- Form of Notice of Guaranteed Delivery.
</TABLE>
- ---------------
* Incorporated herein by reference to the same-numbered exhibit to the Trust's
Annual Report on Form 10-K, as amended, for the fiscal year ended December 31,
1997.
** Previously filed.
*** Incorporated herein by reference to the same-numbered exhibit to the
Company's Registration Statement on Form S-4, File No. 333-47347.
II-2
<PAGE> 69
ITEM 22. UNDERTAKINGS
The 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:
(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 the 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, such
changes in volume and price represent no more than a 20% change in the
maximum aggregated offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(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 the 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
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering 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.
(4) 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 the foregoing provisions,
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 Act 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 Act and will be governed by the final
adjudication of such issue.
(5) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this
form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding
to the request.
(6) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration statement when
it became effective.
(7) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c), such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other items of the applicable form.
II-3
<PAGE> 70
(8) That every prospectus: (i) that is filed pursuant to paragraph (1)
immediately preceding, or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part of an amendment to
the registration statement and will not be used until such amendment is
effective, and that, for purposes 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
therein, and the offering of such securities at that time shall be deemed
to the initial bona fide offering thereof.
II-4
<PAGE> 71
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Chicago, Illinois, on this 31st day
of August, 1998.
EOP Operating Limited Partnership
By: Equity Office Properties Trust
By: /s/ SAMUEL ZELL
------------------------------------
Samuel Zell
Chairman of the Board
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 31st day of August, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <C> <S>
* President, Chief Executive Officer and
- -------------------------------------------------------- Trustee (principal executive officer)
Timothy H. Callahan
* Chief Financial Officer (principal
- -------------------------------------------------------- financial officer and principal
Richard D. Kincaid accounting officer)
/s/ SAMUEL ZELL Chairman of the Board and Trustee
- --------------------------------------------------------
Samuel Zell
* Trustee
- --------------------------------------------------------
Sheli Z. Rosenberg
* Trustee
- --------------------------------------------------------
Thomas E. Dobrowski
Trustee
- --------------------------------------------------------
James D. Harper, Jr.
Trustee
- --------------------------------------------------------
Jerry M. Reinsdorf
Trustee
- --------------------------------------------------------
William M. Goodyear
Trustee
- --------------------------------------------------------
David K. McKown
Trustee
- --------------------------------------------------------
H. Jon Runstad
* Trustee
- --------------------------------------------------------
Edwin N. Sidman
</TABLE>
II-5
<PAGE> 72
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <C> <S>
* Trustee
- --------------------------------------------------------
D. J. A. de Bock
* Pursuant to Power of Attorney
By: /s/ SAMUEL ZELL
- --------------------------------------------------------
Samuel Zell
Attorney-in-Fact
</TABLE>
II-6
<PAGE> 73
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
NO. DESCRIPTION OF EXHIBIT NO.
- ------- ---------------------- ----
<C> <C> <S> <C>
4.1* -- Indenture, dated as of September 2, 1997, between the
Registrant and State Street Bank and Trust Company.
4.2* -- First Supplemental Indenture, dated as of February 2, 1998,
between the Company and State Street Bank and Trust Company
4.3** -- Form of 2004 Exchange Note.
4.4** -- Form of 2007 Exchange Note.
4.5** -- Form of 2028 Exchange Note.
4.6** -- Registration Rights Agreement, dated as of June 10, 1998,
among the Company and the Initial Purchasers named therein
relating to the 2004 Notes and the 2028 Notes.
4.7** -- Registration Rights Agreement, dated as of June 10, 1998,
among the Company and the Initial Purchasers named therein
relating to the 2007 Notes and the Private Warrants.
4.8** -- Debt Warrant Agreement, dated as of June 15, 1998, between
the Company and the Warrant Agent.
4.9** -- Form of Global Debt Warrant Certificate representing
Exchange Warrants.
4.10 -- Form of 2003 Exchange Note.
4.11 -- Form of 2008 Exchange Note.
4.12 -- Form of Exchange MOPPRS.
5.1 -- Opinion of Hogan & Hartson L.L.P. regarding the validity of
the securities being registered.
8.1 -- Opinion of Hogan & Hartson L.L.P. regarding certain tax
matters.
10.1* -- Agreement of Limited Partnership of the Registrant.
10.2 -- Contribution Agreement, dated as of April 30, 1997, among
the Company and the persons named therein (incorporated
herein by reference to Exhibit 10.4 to the Trust's Annual
Report on Form 10-K, as amended, for the fiscal year ended
December 31, 1997).
10.3 -- Agreement and Plan of Merger, dated September 15, 1997, as
amended, among the Registrant, the Trust, Beacon and Beacon
Partnership (incorporated herein by reference to Exhibit 2.1
to the Trust's Current Report on Form 8-K dated September
15, 1997).
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 L.L.P.
23.4 -- Consent of PricewaterhouseCoopers LLP
24.1** -- Power of Attorney (included in the Signature Page).
25.1*** -- Statement of Eligibility of the Trustee on Form T-1.
99.1** -- Form of Letter of Transmittal.
99.2** -- Form of Notice of Guaranteed Delivery.
</TABLE>
- ---------------
* Incorporated herein by reference to the same-numbered exhibit to the Trust's
Annual Report on Form 10-K, as amended, for the fiscal year ended December 31,
1997.
** Previously filed.
*** Incorporated herein by reference to the same-numbered exhibit to the
Company's Registration Statement on Form S-4, File No. 333-47347.
II-7
<PAGE> 1
EXHIBIT 4.10
EOP OPERATING LIMITED PARTNERSHIP
6.375% NOTES DUE 2003
NO. 001 PRINCIPAL AMOUNT
CUSIP NO. $
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC AND ANY PAYMENT IS MADE TO CEDE & CO., OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC,
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
UNLESS AND UNTIL THIS NOTE IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO
A NOMINEE THEREOF OR BY A NOMINEE THEREOF TO DTC OR ANOTHER NOMINEE OF DTC OR
BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH
SUCCESSOR.
THE NOTE WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM
DENOMINATIONS OF $1,000 AND INTEGRAL MULTIPLES OF $1,000 IN EXCESS THEREOF.
EOP Operating Limited Partnership, a Delaware limited partnership (the
"Issuer," which term includes any successor under the Indenture hereinafter
referred to), for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ___________________ Dollars on
February 15, 2003 (the "Stated Maturity Date"), (or any Redemption Date (as
defined on the reverse hereof) or any earlier date of acceleration of maturity,
(each such date being referred to as the "Maturity Date" with respect to the
principal repayable on such date) and to pay interest thereon from February 18,
1998 (or from the most recent Interest Payment Date (as defined below) to which
interest has been paid or duly provided for), semiannually in arrears on
February 15 and August 15 of each year, commencing on August 15, 1998 (each, an
"Interest Payment Date"), and on the Maturity Date, at a rate of 6.375% per
annum, until payment of said principal sum has been made or duly provided for.
Interest on this Note will be computed on the basis of a 360-day year of twelve
30-day months.
The interest so payable and punctually paid or duly provided for on an
Interest Payment Date will, subject to certain exceptions described below, be
paid to the Holder in whose name this Note (or one or more predecessor Notes)
is registered at the close of business on the "Regular Record Date" for such
payment, which will be the date 15 calendar days (regardless of whether such
day is a Business Day (as defined below)) next preceding such Interest Payment
Date. Any interest not so punctually paid or duly provided for on an Interest
Payment Date ("Defaulted Interest") shall forthwith cease to be payable to the
Holder on such Regular Record Date, and shall be paid to the Holder in whose
name this Note (or one or more predecessor Notes) is registered at the close of
business on a special record date
<PAGE> 2
(the "Special Record Date") for the payment of such Defaulted Interest to be
fixed by the Trustee hereinafter referred to, notice whereof shall be given to
the Holder of this Note by the Trustee not less than 10 calendar days prior to
such Special Record Date or may be paid at any time in any other lawful manner,
all as more fully provided for in the Indenture.
The principal of and Make-Whole Amount, if any, with respect to this Note
payable on the Maturity Date will be paid against presentation and surrender of
this Note at the office or agency of the Issuer maintained for that purpose in
Boston, Massachusetts with a drop facility maintained in New York, New York.
The Issuer hereby initially designates the Corporate Trust Office of the
Trustee in Boston, Massachusetts as the office to be maintained by it where
Notes may be presented for payment, registration of transfer, or exchange and
where notices or demands to or upon the Issuer in respect of the Notes or the
Indenture may be served.
Interest payable on this Note on any Interest Payment Date and on the
Maturity Date, as the case may be, will be the amount of interest accrued
during the applicable Interest Period (as defined below).
An "Interest Period" is each period from and including the immediately
preceding Interest Payment Date (or from and including February 18, 1998, in
the case of the initial Interest Period) to but excluding the applicable
Interest Payment Date or the Maturity Date, as the case may be. If any
Interest Payment Date or Maturity Date falls on a day that is not a Business
Day, principal, Make Whole Amount, if any, and interest payable on such date
will be paid on the succeeding Business Day with the same force and effect as
if it were paid on the date such payment was due, and no interest will accrue
on the amount so payable for the period from and after such date to such
succeeding Business Day. "Business Day" means any day, other than a Saturday
or a Sunday, on which banking institutions in New York, New York and Boston,
Massachusetts are not required or authorized by law or executive order to
close.
Payments of principal, Make Whole Amount, if any, and interest in respect
of this Note will be made by U.S. dollar check or by wire transfer (such a wire
transfer to be made only to a Holder of an aggregate principal amount of Notes
in excess of $10,000,000, and only if such Holder shall have furnished wire
instructions in writing to the Trustee no later than 15 days prior to the
relevant payment date and acknowledged that a wire transfer fee shall be
payable) of immediately available funds in such coin or currency of the United
States of America as at the time of payment is legal tender for the payment of
public and private debts.
Reference is made to the further provisions of this Note set forth on the
reverse hereof. Such further provisions shall for all purposes have the same
effect as though fully set forth at this place. Capitalized terms used herein,
including on the reverse hereof, and not defined herein or on the reverse
hereof shall have the respective meanings given to such terms in the Indenture.
This Note shall not be entitled to the benefits of the Indenture or be
valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been signed by the Trustee.
2
<PAGE> 3
IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually
or by facsimile by duly authorized officers of the General Partner.
Dated: ___________, 1998 EOP OPERATING LIMITED PARTNERSHIP,
as Issuer
By: EQUITY OFFICE PROPERTIES TRUST, not
individually but as General Partner
By:
-------------------------------------
Timothy H. Callahan
Its: President and Chief Executive
Officer
and By:
-------------------------------------
Richard D. Kincaid
Its: Chief Financial Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series designated herein referred to in the
within-mentioned Indenture.
Dated: _______________, 1998 STATE STREET BANK AND TRUST COMPANY
By:
-------------------------------------
Authorized Officer
3
<PAGE> 4
[REVERSE OF NOTE]
EOP OPERATING LIMITED PARTNERSHIP
6.375% NOTES DUE 2003
This Note is one of a duly authorized issue of senior Notes of the Issuer
(hereinafter called the "Notes") of the series hereinafter specified, all
issued or to be issued under and pursuant to an Indenture dated as of September
2, 1997 (herein called the "Indenture"), duly executed and delivered by the
Issuer to State Street Bank and Trust Company, as Trustee (herein called the
"Trustee," which term includes any successor trustee under the Indenture with
respect to the series of Notes of which this Note is a part), to which
Indenture and all indentures supplemental thereto reference is hereby made for
a description of the rights, limitations of rights, obligations, duties, and
immunities thereunder of the Trustee, the Issuer, and the Holders of the Notes,
and of the terms upon which the Notes are, and are to be, authenticated and
delivered. The Notes may be issued in one or more series, which different
series may be issued in various aggregate principal amounts, may mature at
different times, may bear interest (if any) at different rates, may be subject
to different redemption provisions (if any), and may otherwise vary as provided
in the Indenture. This Note is one of a series designated as the 6.375% Notes
due 2003 of the Issuer (the "Notes"), limited in aggregate principal amount to
$299,900,000 subject to the provisions in the Indenture.
In case an Event of Default with respect to the Notes shall have occurred
and be continuing, the principal hereof and Make Whole Amount (if any) may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect, and subject to the conditions provided in the
Indenture.
The Issuer may redeem this Note, at any time in whole or from time to time
in part, at the election of the Issuer, at a redemption price equal to the sum
of (i) the principal amount being redeemed plus accrued interest thereon to the
date fixed for redemption (the "Redemption Date") and (ii) the Make-Whole
Amount with respect hereto (the "Redemption Price"); provided, however, that
interest installments due on an Interest Payment Date which is on or prior to
the Redemption Date will be payable to the Holder hereof (or one or more
predecessor Notes) as of the close of business on the Record Date preceding
such Interest Payment Date. If notice has been given as provided in the
Indenture and funds for the redemption of this Note or any part thereof called
for redemption shall have been made available on the Redemption Date, this Note
or such part thereof will cease to bear interest on the Redemption Date
referred to in such notice and the only right of the Holder will be to receive
payment of the Redemption Price. Notice of any optional redemption of any Notes
will be given to the Holder hereof (in accordance with the provisions of the
Indenture), not more than 60 nor less than 30 days prior to the Redemption
Date. In the event of redemption of this Note in part only, a new Note of like
tenor for the unredeemed portion hereof and otherwise having the same terms and
provisions as this Note shall be issued by the Issuer in the name of the Holder
hereof upon the presentation and surrender hereof.
The Indenture contains provisions for defeasance of (i) the entire
indebtedness of the Notes or (ii) certain covenants and Events of Default with
respect to the Notes, in each case upon compliance with certain conditions set
forth therein, which provisions apply to the Notes.
The Indenture contains provisions permitting the Issuer and the Trustee,
with the consent of the Holders of not less than a majority of the aggregate
principal amount of the Notes at the time
4
<PAGE> 5
Outstanding of all series to be affected (voting as one class), evidenced as
provided in the Indenture, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or modifying in any manner the
rights of the Holders of the Notes of each series; provided, however, that no
such supplemental indenture shall, without the consent of the Holder of each
Note at the time Outstanding so affected, (i) change the final maturity of any
Note, or reduce the principal amount thereof or any premium or Make-Whole
Amount thereon, if any, or reduce the rate or extend the time of payment of any
interest thereon, or impair or affect the rights of any Holder to institute
suit for the payment on any Note, or (ii) reduce the percentage in principal
amount of Outstanding Notes, the Holders of which are required to consent to
any such supplemental indenture, or (iii) reduce the percentage in principal
amount of Outstanding Notes, the Holders of which are required to consent to
any waiver of compliance with certain provisions of the Indenture or any waiver
of certain defaults thereunder. It is also provided in the Indenture that,
with respect to certain defaults or Events of Default regarding the Notes of
any series, the Holders of a majority in aggregate principal amount Outstanding
of the Notes of such series (or, in the case of certain defaults or Events of
Default, all series of Notes) may on behalf of the Holders of all the Notes of
such series (or all of the Notes, as the case may be) waive any such past
default or Event of Default and its consequences, prior to any declaration
accelerating the maturity of such Notes, or, subject to certain conditions, may
rescind a declaration of acceleration and its consequences with respect to such
Notes. The preceding sentence shall not, however, apply to a default in or
Event of Default relating to, the payment of the principal of or premium or
Make-Whole Amount, if any, or interest on any of the Notes or in respect of a
covenant or provision contained in the Indenture that cannot be modified or
amended without the consent of the Holders of each Note at the time Outstanding
affected thereby. Any such consent or waiver by the Holder of this Note
(unless revoked as provided in the Indenture) shall be conclusive and binding
upon such Holder and upon all future Holders and owners of this Note and any
Notes that may be issued in exchange or substitution herefor, irrespective of
whether or not any notation thereof is made upon this Note or such other Notes.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and any Make-Whole Amount
and interest on this Note in the manner, at the respective times, at the rate
and in the coin or currency herein prescribed.
This Note is issuable only in registered form without coupons in
denominations of U.S.$1,000 and integral multiples of $1,000 thereof. Notes
may be exchanged for a like aggregate principal amount of Notes of this series
of other authorized denominations at the office or agency of the Issuer in
Boston, Massachusetts, in the manner and subject to the limitations provided
herein and in the Indenture, but without the payment of any service charge
except for any tax or other governmental charge imposed in connection
therewith.
Upon due presentment for registration of transfer of this Note at the
office or agency of the Issuer in Boston, Massachusetts, one or more new Notes
of authorized denominations in an equal aggregate principal amount will be
issued to the transferee in exchange therefor, subject to the limitations
provided in the Indenture, but without the payment of any service charge except
for any tax or other governmental charge imposed in connection therewith.
This Note is not subject to a sinking fund requirement.
5
<PAGE> 6
No recourse under or upon any obligation, covenant or agreement contained
in the Indenture, or any Note, or because of any indebtedness evidenced hereby
or thereby (including, without limitation, any obligation or indebtedness
relating to the principal of, or premium or Make-Whole Amount, if any, interest
or any other amounts due, or claimed to be due, on this Note), or for any claim
based thereon or otherwise in respect thereof, shall be had (i) against the
General Partner or any other partner, or any Person which owns an interest,
directly or indirectly, in any partner, in the Issuer, or (ii) against any
promoter, as such, or against any past, present or future shareholder, officer,
trustee or partner, as such, of the Issuer or the General Partner or of any
successor, either directly or through the Issuer or the General Partner or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance hereof and as part of the consideration for the issue hereof.
Prior to due presentation of this Note for registration of transfer, the
Issuer, the Trustee, and any authorized agent of the Issuer or the Trustee may
deem and treat the Person in whose name this Note is registered as the absolute
owner of this Note (whether or not this Note shall be overdue and
notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment of, or on account of, the principal hereof and
Make-Whole Amount, if any, and subject to the provisions herein and on the face
hereof, interest hereon, and for all other purposes, and neither the Issuer nor
the Trustee nor any authorized agent of the Issuer or the Trustee shall be
affected by any notice to the contrary, except as required by law.
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
6
<PAGE> 7
ASSIGNMENT FORM AND CERTIFICATE OF TRANSFER
To assign this Note fill in the form below:
(I) or (we) assign and transfer this Note to
- --------------------------------------------------------------------------------
(Insert assignee's social Note or tax identification number, if any)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
Your signature:
-----------------------------------------------------------
(Sign exactly as your name appears on the other side of this Note)
Date:
----------------------------------------
Signature Guarantee:*
------------------------
- -------------------------
* Signature must be guaranteed by a commercial bank, trust company or member
firm or a major stock exchange
7
<PAGE> 1
EXHIBIT 4.11
EOP OPERATING LIMITED PARTNERSHIP
6.750% NOTES DUE 2008
NO. 001 PRINCIPAL AMOUNT
CUSIP NO. $
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC AND ANY PAYMENT IS MADE TO CEDE & CO., OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC,
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
UNLESS AND UNTIL THIS NOTE IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO
A NOMINEE THEREOF OR BY A NOMINEE THEREOF TO DTC OR ANOTHER NOMINEE OF DTC OR
BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH
SUCCESSOR.
THIS NOTE WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM
DENOMINATIONS OF $1,000 AND INTEGRAL MULTIPLES OF $1,000 IN EXCESS THEREOF.
EOP Operating Limited Partnership, a Delaware limited partnership (the
"Issuer," which term includes any successor under the Indenture hereinafter
referred to), for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ____________________ Dollars on
February 15, 2008 (the "Stated Maturity Date"), (or any Redemption Date (as
defined on the reverse hereof) or any earlier date of acceleration of maturity,
(each such date being referred to as the "Maturity Date" with respect to the
principal repayable on such date) and to pay interest thereon from February 18,
1998 (or from the most recent Interest Payment Date (as defined below) to which
interest has been paid or duly provided for), semiannually in arrears on
February 15 and August 15 of each year, commencing on August 15, 1998 (each, an
"Interest Payment Date"), and on the Maturity Date, at a rate of 6.750% per
annum, until payment of said principal sum has been made or duly provided for.
Interest on this Note will be computed on the basis of a 360-day year of twelve
30-day months.
The interest so payable and punctually paid or duly provided for on an
Interest Payment Date will, subject to certain exceptions described below, be
paid to the Holder in whose name this Note (or one or more predecessor Notes)
is registered at the close of business on the "Regular Record Date" for such
payment, which will be the date 15 calendar days (regardless of whether such
day is a Business Day (as defined below)) next preceding such Interest Payment
Date. Any interest not so punctually paid or duly provided for on an Interest
Payment Date ("Defaulted Interest") shall forthwith cease to be payable to the
Holder on such Regular Record Date, and shall be paid to the Holder in whose
name this Note (or one or more predecessor Notes) is registered at the close of
business on a special record date (the "Special Record Date") for the payment
of such Defaulted Interest to be fixed by the Trustee hereinafter referred to,
notice whereof shall be given to the Holder of this Note by the Trustee not
less
<PAGE> 2
than 10 calendar days prior to such Special Record Date or may be paid at any
time in any other lawful manner, all as more fully provided for in the
Indenture.
The principal of and Make-Whole Amount, if any, with respect to this Note
payable on the Maturity Date will be paid against presentation and surrender of
this Note at the office or agency of the Issuer maintained for that purpose in
Boston, Massachusetts with a drop facility maintained in New York, New York.
The Issuer hereby initially designates the Corporate Trust Office of the
Trustee in Boston, Massachusetts as the office to be maintained by it where
Notes may be presented for payment, registration of transfer, or exchange and
where notices or demands to or upon the Issuer in respect of the Notes or the
Indenture may be served.
Interest payable on this Note on any Interest Payment Date and on the
Maturity Date, as the case may be, will be the amount of interest accrued
during the applicable Interest Period (as defined below).
An "Interest Period" is each period from and including the immediately
preceding Interest Payment Date (or from and including February 18, 1998, in
the case of the initial Interest Period) to but excluding the applicable
Interest Payment Date or the Maturity Date, as the case may be. If any
Interest Payment Date or Maturity Date falls on a day that is not a Business
Day, principal, Make Whole Amount, if any, and interest payable on such date
will be paid on the succeeding Business Day with the same force and effect as
if it were paid on the date such payment was due, and no interest will accrue
on the amount so payable for the period from and after such date to such
succeeding Business Day. "Business Day" means any day, other than a Saturday
or a Sunday on which banking institutions in New York, New York and Boston,
Massachusetts are required or authorized by law or executive order to close.
Payments of principal, Make Whole Amount, if any, and interest in respect
of this Note will be made by U.S. dollar check or by wire transfer (such a wire
transfer to be made only to a Holder of an aggregate principal amount of Notes
in excess of $10,000,000, and only if such Holder shall have furnished wire
instructions in writing to the Trustee no later than 15 days prior to the
relevant payment date and acknowledged that a wire transfer fee shall be
payable) of immediately available funds in such coin or currency of the United
States of America as at the time of payment is legal tender for the payment of
public and private debts.
Reference is made to the further provisions of this Note set forth on the
reverse hereof. Such further provisions shall for all purposes have the same
effect as though fully set forth at this place. Capitalized terms used herein,
including on the reverse hereof, and not defined herein or on the reverse
hereof shall have the respective meanings given to such terms in the Indenture.
This Note shall not be entitled to the benefits of the Indenture or be
valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been signed by the Trustee.
2
<PAGE> 3
IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually
or by facsimile by duly authorized officers of the General Partner.
Dated: _____________, 1998 EOP OPERATING LIMITED PARTNERSHIP,
as Issuer
By: EQUITY OFFICE PROPERTIES TRUST, not
individually but as General Partner
By:
-------------------------------------
Timothy H. Callahan
Its: President and Chief Executive Officer
and By:
-------------------------------------
Richard D. Kincaid
Its: Chief Financial Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series designated herein referred to in the
within-mentioned Indenture.
Dated: ___________, 1998 STATE STREET BANK AND TRUST COMPANY
By:
---------------------------------------
Authorized Officer
3
<PAGE> 4
[REVERSE OF NOTE]
EOP OPERATING LIMITED PARTNERSHIP
6.750% NOTES DUE 2008
This Note is one of a duly authorized issue of senior Notes of the Issuer
(hereinafter called the "Notes") of the series hereinafter specified, all
issued or to be issued under and pursuant to an Indenture dated as of September
2, 1997 (herein called the "Indenture"), duly executed and delivered by the
Issuer to State Street Bank and Trust Company, as Trustee (herein called the
"Trustee," which term includes any successor trustee under the Indenture with
respect to the series of Notes of which this Note is a part), to which
Indenture and all indentures supplemental thereto reference is hereby made for
a description of the rights, limitations of rights, obligations, duties, and
immunities thereunder of the Trustee, the Issuer, and the Holders of the Notes,
and of the terms upon which the Notes are, and are to be, authenticated and
delivered. The Notes may be issued in one or more series, which different
series may be issued in various aggregate principal amounts, may mature at
different times, may bear interest (if any) at different rates, may be subject
to different redemption provisions (if any), and may otherwise vary as provided
in the Indenture. This Note is one of a series designated as the 6.750% Notes
due 2008 of the Issuer (the "Notes"), limited in aggregate principal amount to
$299,900,000 subject to the provisions in the Indenture.
In case an Event of Default with respect to the Notes shall have occurred
and be continuing, the principal hereof and Make Whole Amount (if any) may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect, and subject to the conditions provided in the
Indenture.
The Issuer may redeem this Note, at any time in whole or from time to time
in part, at the election of the Issuer, at a redemption price equal to the sum
of (i) the principal amount being redeemed plus accrued interest thereon to the
date fixed for redemption (the "Redemption Date") and (ii) the Make-Whole
Amount with respect hereto (the "Redemption Price"); provided, however, that
interest installments due on an Interest Payment Date which is on or prior to
the Redemption Date will be payable to the Holder hereof (or one or more
predecessor Notes) as of the close of business on the Record Date preceding
such Interest Payment Date. If notice has been given as provided in the
Indenture and funds for the redemption of this Note or any part thereof called
for redemption shall have been made available on the Redemption Date, this Note
or such part thereof will cease to bear interest on the Redemption Date
referred to in such notice and the only right of the Holder will be to receive
payment of the Redemption Price. Notice of any optional redemption of any Notes
will be given to the Holder hereof (in accordance with the provisions of the
Indenture), not more than 60 nor less than 30 days prior to the Redemption
Date. In the event of redemption of this Note in part only, a new Note of like
tenor for the unredeemed portion hereof and otherwise having the same terms and
provisions as this Note shall be issued by the Issuer in the name of the Holder
hereof upon the presentation and surrender hereof.
The Indenture contains provisions for defeasance of (i) the entire
indebtedness of the Notes or (ii) certain covenants and Events of Default with
respect to the Notes, in each case upon compliance with certain conditions set
forth therein, which provisions apply to the Notes.
The Indenture contains provisions permitting the Issuer and the Trustee,
with the consent of the Holders of not less than a majority of the aggregate
principal amount of the Notes at the time Outstanding of all series to be
affected (voting as one class), evidenced as provided in the Indenture, to
execute supplemental indentures adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying in any manner the
4
<PAGE> 5
rights of the Holders of the Notes of each series; provided, however, that no
such supplemental indenture shall, without the consent of the Holder of each
Note at the time Outstanding so affected, (i) change the final maturity of any
Note, or reduce the principal amount thereof or any premium or Make-Whole
Amount thereon, if any, or reduce the rate or extend the time of payment of any
interest thereon, or impair or affect the rights of any Holder to institute
suit for the payment on any Note, or (ii) reduce the percentage in principal
amount of Outstanding Notes, the Holders of which are required to consent to
any such supplemental indenture, or (iii) reduce the percentage in principal
amount of Outstanding Notes, the Holders of which are required to consent to
any waiver of compliance with certain provisions of the Indenture or any waiver
of certain defaults thereunder. It is also provided in the Indenture that,
with respect to certain defaults or Events of Default regarding the Notes of
any series, the Holders of a majority in aggregate principal amount Outstanding
of the Notes of such series (or, in the case of certain defaults or Events of
Default, all series of Notes) may on behalf of the Holders of all the Notes of
such series (or all of the Notes, as the case may be) waive any such past
default or Event of Default and its consequences, prior to any declaration
accelerating the maturity of such Notes, or, subject to certain conditions, may
rescind a declaration of acceleration and its consequences with respect to such
Notes. The preceding sentence shall not, however, apply to a default in or
Event of Default relating to, the payment of the principal of or premium or
Make-Whole Amount, if any, or interest on any of the Notes or in respect of a
covenant or provision contained in the Indenture that cannot be modified or
amended without the consent of the Holders of each Note at the time Outstanding
affected thereby. Any such consent or waiver by the Holder of this Note
(unless revoked as provided in the Indenture) shall be conclusive and binding
upon such Holder and upon all future Holders and owners of this Note and any
Notes that may be issued in exchange or substitution herefor, irrespective of
whether or not any notation thereof is made upon this Note or such other Notes.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and any Make-Whole Amount
and interest on this Note in the manner, at the respective times, at the rate
and in the coin or currency herein prescribed.
This Note is issuable only in registered form without coupons in
denominations of U.S.$1,000 and integral multiples of $1,000 thereof. Notes
may be exchanged for a like aggregate principal amount of Notes of this series
of other authorized denominations at the office or agency of the Issuer in
Boston, Massachusetts, in the manner and subject to the limitations provided
herein and in the Indenture, but without the payment of any service charge
except for any tax or other governmental charge imposed in connection
therewith.
Upon due presentment for registration of transfer of this Note at the
office or agency of the Issuer in Boston, Massachusetts, one or more new Notes
of authorized denominations in an equal aggregate principal amount will be
issued to the transferee in exchange therefor, subject to the limitations
provided in the Indenture, but without the payment of any service charge except
for any tax or other governmental charge imposed in connection therewith.
This Note is not subject to a sinking fund requirement.
No recourse under or upon any obligation, covenant or agreement contained
in the Indenture, or any Note, or because of any indebtedness evidenced hereby
or thereby (including, without limitation, any obligation or indebtedness
relating to the principal of, or premium or Make-Whole Amount, if any, interest
or any other amounts due, or claimed to be due, on this Note), or for any claim
based thereon or otherwise in respect thereof, shall be had (i) against the
General Partner or any other partner, or any Person which owns an interest,
directly or indirectly, in any partner, in the
5
<PAGE> 6
Issuer, or (ii) against any promoter, as such, or against any past, present or
future shareholder, officer, trustee or partner, as such, of the Issuer or the
General Partner or of any successor, either directly or through the Issuer or
the General Partner or any successor, under any rule of law, statute or
constitutional provision or by the enforcement of any assessment or by any
legal or equitable proceeding or otherwise, all such liability being expressly
waived and released by the acceptance hereof and as part of the consideration
for the issue hereof.
Prior to due presentation of this Note for registration of transfer, the
Issuer, the Trustee, and any authorized agent of the Issuer or the Trustee may
deem and treat the Person in whose name this Note is registered as the absolute
owner of this Note (whether or not this Note shall be overdue and
notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment of, or on account of, the principal hereof and
Make-Whole Amount, if any, and subject to the provisions herein and on the face
hereof, interest hereon, and for all other purposes, and neither the Issuer nor
the Trustee nor any authorized agent of the Issuer or the Trustee shall be
affected by any notice to the contrary, except as required by law.
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
6
<PAGE> 7
ASSIGNMENT FORM AND CERTIFICATE OF TRANSFER
To assign this Note fill in the form below:
(I) or (we) assign and transfer this Note to
- --------------------------------------------------------------------------------
(Insert assignee's social Note or tax identification number, if any)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
Your signature:
-----------------------------------------------------------
(Sign exactly as your name appears on the other side of this Note)
Date:
----------------------------------------
Signature Guarantee:*
------------------------
- --------------
* Signature must be guaranteed by a commercial bank, trust company or member
firm or a major stock exchange
7
<PAGE> 1
EXHIBIT 4.12
THIS MOPPRS IS ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM DENOMINATIONS
OF $1,000 AND INTEGRAL MULTIPLES OF $1,000 IN EXCESS THEREOF.
UNLESS THIS MOPPRS IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC") (55 WATER STREET, NEW YORK, NEW YORK) TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC AND ANY PAYMENT IS MADE TO
CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
CERTIFICATED FORM, THIS MOPPRS MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC
TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC OR
BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY.
No. 001 PRINCIPAL
CUSIP No.: AMOUNT: $___________
EOP OPERATING LIMITED PARTNERSHIP
6.376% MandatOry Par Put Remarketed Securities(SM) ("MOPPRS(SM)") due
February 15, 2012
ISSUE DATE: INTEREST RATE STATED MATURITY DATE:
________, 1998 TO REMARKETING February 15, 2012
DATE: 6.376%
REMARKETING DATE: INTEREST RATE
February 15, 2002 TO MATURITY: To be determined as provided
herein and set forth in the
records of the Trustee
AUTHORIZED DENOMINATION: INTEREST PAYMENT DATE(S):
$1,000 and integral multiples February 15 and August 15
of $1,000 in excess thereof
EOP OPERATING LIMITED PARTNERSHIP, a Delaware limited partnership (the
"Company"), which term includes any successor under the Indenture hereinafter
referred to, for value received, hereby promises to pay to Cede & Co., a
nominee of The Depository Trust Company ("DTC"), or its registered assigns, the
principal amount of _________________ Dollars ($______________), on the Stated
Maturity Date specified above (or any earlier redemption date or repurchase
date) (each such Stated Maturity Date, redemption date or repurchase date being
hereinafter referred to as the "Maturity
<PAGE> 2
Date" with respect to the principal repayable on such date) and to pay interest
thereon (and on any overdue principal, premium and/or interest to the extent
legally enforceable) at the Interest Rate per annum specified above to February
15, 2002 (the "Remarketing Date"), and thereafter, subject to the terms and
conditions set forth herein, at the Interest Rate determined by the Remarketing
Dealer (as defined below) in accordance with the procedures set forth below
(the "Interest Rate to Maturity"), until the principal hereof is paid or duly
made available for payment. The Company will pay interest in arrears on each
Interest Payment Date, if any, specified above (each, an "Interest Payment
Date"), commencing with the first Interest Payment Date next succeeding the
Issue Date specified above, and on the Maturity Date. Interest on this MOPPRS
will be computed on the basis of a 360-day year of twelve 30-day months.
If, pursuant to the Remarketing Agreement, dated as of February 12, 1998
(the "Remarketing Agreement"), between Merrill Lynch, Pierce, Fenner & Smith
Incorporated, as Remarketing Dealer (the "Remarketing Dealer"), and the
Company, the Remarketing Dealer elects to remarket the MOPPRS, then, except as
otherwise set forth herein, (i) this MOPPRS shall be subject to mandatory
tender to the Remarketing Dealer for remarketing on the Remarketing Date, on
the terms and subject to the conditions set forth herein, and (ii) on and after
the Remarketing Date, this MOPPRS shall bear interest at the Interest Rate to
Maturity determined by the Remarketing Dealer in accordance with the procedures
set forth in Section 3 herein. The Remarketing Dealer's duties set forth herein
shall be performed pursuant to the Remarketing Agreement.
Interest on this MOPPRS will accrue from, and including, the immediately
preceding Interest Payment Date to which interest has been paid or duly
provided for (or from, and including, the Original Issue Date, if no interest
has been paid or duly provided for) to, but excluding, the applicable Interest
Payment Date or the Maturity Date, as the case may be. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will,
subject to certain exceptions described herein, be paid to the person in whose
name this MOPPRS (or one or more predecessor MOPPRS) is registered at the close
of business on the fifteenth calendar day (whether or not a Business Day, as
defined below) immediately preceding such Interest Payment Date (the "Record
Date"). Any such interest not so punctually paid or duly provided for on any
Interest Payment Date other than the Maturity Date ("Defaulted Interest") shall
forthwith cease to be payable to the Holder on any Record Date, and, instead,
shall be paid to the person in whose name this MOPPRS is registered at the
close of business on a special record date (the "Special Record Date") for the
payment of such Defaulted Interest to be fixed by the Trustee hereinafter
referred to, notice whereof shall be given to the Holder of this MOPPRS by the
Trustee not less than 10 calendar days prior to such Special Record Date or may
be paid at any time in any other lawful manner, all as more fully provided for
in the Indenture.
Payment of principal and premium, if any, in respect of this MOPPRS due on
the Maturity Date will be made in immediately available funds upon presentation
and surrender of the MOPPRS at the office or agency maintained by the Company
for that purpose in Boston, Massachusetts with a drop
_______________
"Mandatory Par Put Remarketed Securities(SM)" and "MOPPRS(SM)" are service marks
owned by Merrill Lynch & Co., Inc.
<PAGE> 3
facility maintained in New York, New York. The Company hereby initially
designates the Corporate Trust Office of the Trustee in Boston, Massachusetts
as the office to maintained by it where MOPPRS may be presented for payment,
registration of transfer, or exchange and where notices or demands to or upon
the Company in respect of the MOPPRS or the Indenture referred to on the
reverse hereof may be served. Payment of interest due on any Interest Payment
Date will be made at the aforementioned office or agency maintained by the
Company or, at the option of the Company, by check mailed to the address of the
person entitled thereto as such address shall appear in the Security Register
maintained by the Trustee; provided, however, that a Holder of U.S. $10,000,000
or more in aggregate principal amount of MOPPRS (whether having identical or
different terms and provisions) will be entitled to receive interest payments
on such Interest Payment Date by wire transfer of immediately available funds
if appropriate wire transfer instructions have been received in writing by the
Trustee not less than 15 calendar days prior to such Interest Payment Date. Any
such wire transfer instructions received by the Trustee shall remain in effect
until revoked by such Holder. Notwithstanding the foregoing or any provision
hereof, if this MOPPRS is a global security (as evidenced by the legend first
set forth above and provided in the Indenture), and is held in book-entry form
through the facilities of DTC, payments on this MOPPRS will be made to DTC or
its nominee in accordance with the arrangements then in effect between the
Trustee and DTC.
If any Interest Payment Date or Maturity Date falls on a day that is not a
Business Day, the required payment of principal, premium, if any, and/or
interest shall be made on the next succeeding Business Day with the same force
and effect as if it were made on the date such payment was due, and no interest
shall accrue with respect to such payment for the period from and after such
Interest Payment Date or the Maturity Date, as the case may be, to the date of
such payment on the next succeeding Business Day.
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law, regulation or executive order to close in
New York, New York or Boston, Massachusetts.
The Company is obligated to make all payments of principal, premium, if
any, and interest in respect of this MOPPRS in such coin or currency of the
United States of America as at the time of such payment is legal tender for the
payment of public and private debts in the United States of America.
Reference is hereby made to the further provisions of this MOPPRS set
forth on the reverse hereof, which further provisions shall have the same force
and effect as if set forth on the face hereof.
Unless the Certificate of Authentication hereon has been executed by the
Trustee by manual signature, this MOPPRS shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
3
<PAGE> 4
IN WITNESS WHEREOF, EOP OPERATING LIMITED PARTNERSHIP has caused this
MOPPRS to be duly executed by one of its duly authorized officers.
Dated: _______________, 1998 EOP OPERATING LIMITED PARTNERSHIP,
as Issuer
By: EQUITY OFFICE PROPERTIES TRUST, not
individually but as General Partner
By: ____________________________________
Timothy H. Callahan
Its: President and Chief Executive Officer
and By: ____________________________________
Richard D. Kincaid
Its: Chief Financial Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated herein
referred to in the within-mentioned Indenture.
Dated: _______________, 1998 STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: _____________________________________
Authorized Officer
4
<PAGE> 5
[REVERSE OF CERTIFICATE]
EOP OPERATING LIMITED PARTNERSHIP
6.376% MandatOry Par Put Remarketed Securities(SM) ("MOPPRS(SM)") due
February 15, 2012
1. Indenture. (a) This MOPPRS is one of a duly authorized series of Debt
Securities (the "Debt Securities") of the Company issued and to be issued under
an Indenture, dated as of September 2, 1997, as amended or supplemented (the
"Indenture"), between the Company and State Street Bank and Trust Company, as
Trustee (the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Debt Securities, and of the terms upon which the Debt Securities
are, and are to be, authenticated and delivered. This security is one of the
series of Debt Securities designated as "6.376% MandatOry Par Put Remarketed
Securities(SM) due February 15, 2012" ("MOPPRS(SM)"), which MOPPRS are limited
to $249,655,000 aggregate principal amount. All terms used but not defined in
this MOPPRS shall have the meanings assigned to such terms in the Indenture.
Except where the context otherwise requires, all references in this MOPPRS to
"this MOPPRS", "this Security", "herein" or "hereof" or similar terms shall
include the Indenture.
(b) The MOPPRS are issuable only in registered form without coupons in
minimum denominations of U.S. $1,000 and integral multiples of U.S. $1,000 in
excess thereof.
(c) This MOPPRS will not be subject to any sinking fund and will not be
repayable at the option of the Holder hereof prior to the Stated Maturity Date.
2. Mandatory Tender. Provided that on a Business Day not later than five
Business Days prior to the Remarketing Date the Remarketing Dealer notifies the
Company and the Trustee of its election to purchase the MOPPRS on the
Remarketing Date for remarketing (the "Notification Date"), this MOPPRS shall
be subject to mandatory tender to the Remarketing Dealer, and the Remarketing
Dealer shall be obligated to purchase the MOPPRS, for remarketing on the
Remarketing Date, subject in each case to the conditions described herein and
set forth in the Remarketing Agreement. The purchase price for the tendered
MOPPRS shall equal 100% of the principal amount thereof. From and after the
Remarketing Date, the MOPPRS shall bear interest at the Interest Rate to
Maturity determined pursuant to Section 3 hereof. If the Remarketing Dealer
elects to remarket the MOPPRS, the obligation of the Remarketing Dealer to
purchase this MOPPRS on the Remarketing Date is subject to the conditions
specified in Section 8 of the Remarketing Agreement. If for any reason the
Remarketing Dealer does not purchase all tendered MOPPRS on the Remarketing
Date, the Company shall be required to repurchase from the Beneficial Owners
thereof, and the Beneficial Owners will be required to sell to the Company, all
the MOPPRS at a price equal to the principal amount thereof plus all accrued
and unpaid interest, if any, on the MOPPRS to the Remarketing Date as provided
in Section 4 hereof.
"Beneficial Owner" shall mean each person who acquires an interest in the
MOPPRS which is reflected on the records of the DTC through its participants.
3. Determination of Interest Rate to Maturity. (a) Subject to the
Remarketing Dealer's election to remarket the MOPPRS as provided in Section 2
hereof and the Remarketing Agreement, the Interest Rate to Maturity shall be
determined by the Remarketing Dealer by 3:30 p.m., New York City time, on and
as of the third Business Day immediately preceding the Remarketing Date (the
5
<PAGE> 6
"Determination Date") to the nearest one hundred-thousandth (0.00001) of one
percent per annum, and will be equal to the sum of 5.488% (the "Base Rate")
plus the Applicable Spread, which will be based on the Dollar Price of the
MOPPRS.
The "Applicable Spread" will be the lowest bid indication, expressed as a
spread (in the form of a percentage or in basis points) above the Base Rate,
obtained by the Remarketing Dealer on the Determination Date from the bids
quoted by five Reference Corporate Dealers for the full aggregate principal
amount of the MOPPRS at the Dollar Price, but assuming (i) an issue date equal
to the Remarketing Date, with settlement on such date without accrued interest,
(ii) a maturity date equal to the Stated Maturity Date of the MOPPRS, and (iii)
a stated annual interest rate, payable semiannually on each Interest Payment
Date, equal to the Base Rate plus the spread bid by the applicable Reference
Corporate Dealer. If fewer than five Reference Corporate Dealers bid as
described above, then the Applicable Spread shall be the lowest of such bid
indications obtained as described above. The Interest Rate to Maturity
announced by the Remarketing Dealer, absent manifest error, shall be binding
and conclusive upon the Beneficial Owners and Holders of the MOPPRS, the
Company and the Trustee.
"Dollar Price" means, with respect to the MOPPRS, the present value, as of
the Remarketing Date, of the Remaining Scheduled Payments discounted to the
Remarketing Date, on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months), at the Treasury Rate.
"Reference Corporate Dealers" means leading dealers of publicly traded
debt securities of the Company in The City of New York (which may include the
Remarketing Dealer or one of its affiliates) selected by the Remarketing
Dealer.
"Treasury Rate" means, with respect to the Remarketing Date, the rate per
annum equal to the semiannual equivalent yield to maturity or interpolated (on
a day count basis) yield to maturity of the Comparable Treasury Issues,
assuming a price for the Comparable Treasury Issues (expressed as a percentage
of its principal amount), equal to the Comparable Treasury Price for the
Remarketing Date.
"Comparable Treasury Issues" means the United States Treasury security or
securities selected by the Remarketing Dealer as having an actual or
interpolated maturity or maturities comparable to the remaining term of the
MOPPRS being purchased.
"Comparable Treasury Price" means, with respect to the Remarketing Date,
(a) the offer prices for the Comparable Treasury Issues (expressed in each case
as a percentage of its principal amount) on the Determination Date, as set
forth on "Telerate Page 500" (or such other page as may replace Telerate Page
500), or (b) if such page (or any successor page) is not displayed or does not
contain such offer prices on the Determination Date, (i) the average of the
Reference Treasury Dealer Quotations for the Remarketing Date, after excluding
the highest and lowest of such Reference Treasury Dealer Quotations, or (ii) if
the Remarketing Dealer obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such Reference Treasury Dealer Quotations,
"Telerate Page 500" means the display designated as "Telerate Page 500" on Dow
Jones Markets Limited (or such other page as may replace Telerate Page 500 on
such service) or such other service displaying the offer prices specified in
(a) above as may replace Dow Jones Markets Limited.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and the Remarketing Date, the offer prices for the
Comparable Treasury Issues (expressed in each case as a percentage of its
principal amount) quoted to the Remarketing Dealer by such Reference Treasury
Dealer by 3:30 p.m., New York City time, on the Determination Date.
6
<PAGE> 7
"Reference Treasury Dealer" means each of Credit Suisse First Boston
Corporation, Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated and Salomon Brothers Inc. and
their respective successors; provided, however, that if any of the foregoing or
their affiliates shall cease to be a primary U.S. Government securities dealer
in The City of New York (a "Primary Treasury Dealer"), the Remarketing Dealer
shall substitute therefor another Primary Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to the MOPPRS, the
remaining scheduled payments of the principal thereof and interest thereon,
calculated at the Base Rate only, that would be due after the Remarketing Date
to and including the Stated Maturity Date; provided, however, that if the
Remarketing Date is not an Interest Payment Date with respect to the MOPPRS,
the amount of the next succeeding scheduled interest payment thereon,
calculated at the Base Rate only, will be reduced by the amount of interest
accrued thereon, calculated at the Base Rate only, to the Remarketing Date.
(b) Provided that the Remarketing Dealer has previously notified the
Company and the Trustee on the Notification Date of its intention to purchase
all tendered MOPPRS on the Remarketing Date, the Remarketing Dealer will notify
the Company, the Trustee and DTC by telephone, confirmed in writing (which may
include facsimile or other electronic transmission), by 4:00 p.m., New York
City time, on the Determination Date, of the Interest Rate to Maturity. All of
the tendered MOPPRS shall be automatically delivered to the account of the
Trustee, by book-entry through DTC pending payment of the purchase price
therefor, on the Remarketing Date.
In the event that the Remarketing Dealer purchases the tendered MOPPRS on
the Remarketing Date, the Remarketing Dealer shall make or cause the Trustee to
make payment (from monies deposited with it by the Remarketing Dealer or the
Company) to the DTC Participant of each tendering Beneficial Owner of MOPPRS,
by book-entry through DTC by the close of business on the Remarketing Date
against delivery through DTC of such Beneficial Owner's tendered MOPPRS, of
100% of the principal amount of the tendered MOPPRS that have been purchased
for remarketing by the Remarketing Dealer. If the Remarketing Dealer does not
purchase all of the MOPPRS on the Remarketing Date, it shall be the obligation
of the Company to make or cause to be made such payment for the MOPPRS, as
provided in Section 4 hereof. In any case, the Company shall make or cause the
Trustee to make payment of interest to each Beneficial Owner of MOPPRS due on
the Remarketing Date by book-entry through DTC by the close of business on the
Remarketing Date.
"DTC Participant" shall mean any person that has an account with DTC
through which Beneficial Owner's acquire, directly or indirectly, an interest
in the MOPPRS.
The transactions set forth in this Section shall be executed on the
Remarketing Date through DTC in accordance with the procedures of DTC, and the
accounts of the representative DTC Participants will be debited and credited
and the MOPPRS delivered by book entry as necessary to effect the purchases and
sales thereof.
Transactions involving the sale and purchase of MOPPRS remarketed by the
Remarketing Dealer on and after the Remarketing Date shall settle in
immediately available funds through DTC's Same-Day Funds Settlement System.
The tender and settlement procedures set forth above, including provisions
for payment by purchasers of MOPPRS in the remarketing or for payment to
selling Beneficial Owners of tendered
7
<PAGE> 8
MOPPRS, may be modified to the extent required by DTC or to the extent required
to facilitate the tender and remarketing of MOPPRS in certificated form, if the
book-entry system is no longer available for the MOPPRS at the time of the
remarketing. In addition, the Remarketing Dealer may, in accordance with the
terms of the Indenture, modify the tender and settlement procedures set forth
above in order to facilitate the tender and settlement process.
As long as DTC's nominee holds the certificates representing any MOPPRS in
the book-entry system of DTC, no certificates for such MOPPRS will be delivered
by any selling Beneficial Owner to reflect any transfer of such MOPPRS effected
in the remarketing.,
(c) Notwithstanding any provision herein to the contrary, upon the
occurrence of any event as specified in Section 11(b) of the Remarketing
Agreement, the Remarketing Dealer, in its sole discretion at any time between
the Determination Date and 3:30 p.m., New York City time, on the Business Day
immediately preceding the Remarketing Date, may elect to purchase the MOPPRS
for remarketing and determine a new Interest Rate to Maturity in the manner
provided in Section 3(a) hereof, except that for purposes of determining the
new Interest Rate to Maturity pursuant to this paragraph, the Determination
Date referred to therein shall be the date of such election and
redetermination. The Remarketing Dealer shall notify the Company, the Trustee
and DTC by telephone, confirmed in writing (which may include facsimile or
other electronic transmission), by 4:00 p.m., New York City time, on the date
of such election, of the new Interest Rate to Maturity applicable to the
MOPPRS. Thereupon, such new Interest Rate to Maturity shall supersede and
replace any Interest Rate to Maturity previously determined by the Remarketing
Dealer and, absent manifest error, shall be binding and conclusive upon the
record and Beneficial Owners and Holders of the MOPPRS on or after the
Remarketing Date, the Company and the Trustee.
4. Repurchase. In the event that (i) the Remarketing Dealer for any
reason does not notify the Company of the Interest Rate to Maturity by 4:00
p.m., New York City time, on the Determination Date, or (ii) prior to the
Remarketing Date, the Remarketing Dealer has resigned and no successor has been
appointed on or before the Determination Date, or (iii) any event or failure of
conditions as set forth in Section 8 or Section 11 of the Remarketing Agreement
shall have occurred at any time after the Remarketing Dealer elects on the
Notification Date to remarket the MOPPRS, or (iv) the Remarketing Dealer for
any reason does not elect to purchase the MOPPRS for remarketing on the
Remarketing Date, or (v) the Remarketing Dealer for any reason does not
purchase all tendered MOPPRS on the Remarketing Date, the Company shall
repurchase all the MOPPRS as a whole on the Remarketing Date at a price equal
to 100% of the principal amount of the MOPPRS plus all accrued and unpaid
interest, if any, on the MOPPRS to the Remarketing Date. In any such case,
payment will be made by the Company through the Trustee to the DTC Participant
of each tendering Beneficial Owner of MOPPRS, by book entry through DTC by the
close of business on the Remarketing Date against delivery through DTC of such
Beneficial Owner's tendered MOPPRS.
5. Redemption. If the Remarketing Dealer elects to remarket the MOPPRS on
the Remarketing Date, the MOPPRS shall be subject to redemption at the option
of the Company from the Remarketing Dealer, as a whole but not in part, as set
forth in this Section. The Company shall notify the Remarketing Dealer and the
Trustee, not later than the Business Day immediately preceding the
Determination Date, if the Company irrevocably elects to exercise its right to
redeem the MOPPRS, in whole but not in part, from the Remarketing Dealer on the
Remarketing Date at the Optional Redemption Price. If the Company so elects, it
shall redeem the MOPPRS by payment to the Remarketing Dealer as provided in the
Remarketing Agreement.
8
<PAGE> 9
The "Optional Redemption Price" shall be greater of (i) 100% of the
principal amount of the MOPPRS and (ii) the sum of the present values of the
Remaining Scheduled Payments thereon, as determined by the Remarketing Dealer,
discounted to the Remarketing Date on a semiannual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Treasury Rate, plus in either
case accrued and unpaid interest from the Remarketing Date on the principal
amount being redeemed to the date of redemption. If the Company elects of
redeem the MOPPRS, it shall pay such Optional Redemption Price in same-day
funds by wire transfer to an account designated by the Remarketing Dealer on
the Remarketing Date.
6. Effect of Events of Default. If an Event of Default, as defined in the
Indenture, shall occur and be continuing, the principal of this MOPPRS may, and
in certain cases shall, be accelerated in the manner and with the effect
provided in the Indenture.
7. Defeasance. The Indenture contains provisions for defeasance of (i) the
entire indebtedness of certain Debt Securities or (ii) certain covenants and
Events of Default with respect to the Debt Securities, in each case upon
compliance with certain conditions set forth therein. Except as otherwise
permitted herein and in the Remarketing Agreement, prior to the Remarketing
Date, neither the Company nor any of its subsidiaries or affiliates shall
defease, purchase or otherwise acquire, or enter into any agreement to defease,
purchase or otherwise acquire, any of the MOPPRS prior to the remarketing
thereof by the Remarketing Dealer; provided, however, that the provisions in
Article Fourteen of the Indenture relating to covenant defeasance shall apply
to the MOPPRS at all times.
8. Maintenance in Book-Entry Form. Notwithstanding any provision to the
contrary set forth in the Indenture, the Company (i) shall use its reasonable
best efforts to maintain the MOPPRS in book-entry form with DTC or any
successor thereto and to appoint a successor depositary to the extent necessary
to maintain the MOPPRS in book-entry form, and (ii) waives any discretionary
right it otherwise has under the Indenture to cause the MOPPRS to be issued in
certificated form.
9. Tax Treatment. Each Holder and Beneficial Owner of this MOPPRS or any
interest therein prior to the remarketing on the Remarketing Date, by its
purchase of this MOPPRS or any interest therein, agrees to treat this MOPPRS as
maturing on the Remarketing Date for United States federal income tax purposes.
10. Amendment and Modification. The Indenture permits, with certain
exceptions as therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the Holders of the
Debt Securities at any time by the Company and the Trustee with the consent of
the Holders of a majority of the aggregate principal amount of all Debt
Securities at the time outstanding and affected thereby. The Indenture also
contains provisions permitting the Holders of a majority of the aggregate
principal amount of the outstanding Debt Securities of any series, on behalf of
the Holders of all such Debt Securities, to waive compliance by the Company
with certain provisions of the Indenture. Furthermore, provisions in the
Indenture permit the Holders of a majority of the aggregate principal amount of
the outstanding Debt Securities of any series, in certain instances, to waive,
on behalf of all of the Holders of Debt Securities of such series, certain past
defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this MOPPRS shall be conclusive and binding upon such
Holder and upon all future Holders of this MOPPRS and other MOPPRS issued upon
the registration of transfer hereof or in exchange heretofore or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
MOPPRS.
9
<PAGE> 10
11. Obligation to Pay Principal, Premium, if any, and Interest. No
reference herein to the Indenture and no provision of this MOPPRS or of the
Indenture shall alter and impair the obligation of the Company, which is
absolute and unconditional, to pay principal, premium, if any, and interest in
respect of this MOPPRS at the times, places and rate or formula, and in the
manner and coin or currency, herein prescribed.
12. Transfer and Exchange. As provided in the Indenture and subject to
certain limitations therein and herein set forth, the transfer of this MOPPRS
is registrable in the Security Register of the Company upon surrender of this
MOPPRS for registration of transfer at the office or agency of the Company in
any place where the principal hereof and any premium or interest hereon are
payable, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Security Registrar duly executed
by, the Holder hereof or by his attorney duly authorized in writing, and
thereupon one or more new MOPPRS having the same terms and provisions, of
authorized denominations and for the same aggregate principal amount, will be
issued by the Company to the designated transferee or transferees.
As provided in the Indenture and subject to certain limitations therein
and herein set forth, this MOPPRS is exchangeable for a like aggregate
principal amount of MOPPRS of different authorized denominations but otherwise
having the same terms and provisions, as requested by the Holder hereof
surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this MOPPRS for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Holder as the owner hereof for all purposes, whether or not this MOPPRS be
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary, except as required by law.
13. No Recourse to General Partner. No recourse under or upon any
obligation, covenant or agreement contained in the Indenture, in this MOPPRS or
coupon appertaining thereto, or because of any indebtedness evidenced hereby or
thereby (including, without limitation, any obligation or indebtedness relating
to the principal of, or premium, or Liquidated Damages, if any, interest or any
other amounts due, or claimed to be due, on this MOPPRS), or for any claim
based thereon or otherwise in respect thereof, shall be had (i) against the
General Partner or any other partner, or any Person which owns an interest,
directly or indirectly, in any partner, in the Company, or (ii) against any
promoter, as such, or against any past, present or future shareholder, officer,
trustee or partner, as such, of the Company or the General Partner or of any
successor, either directly or through the Company or the General Partner or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance hereof and as part of the consideration for the issue hereof.
14. [Intentionally Omitted].
15. Liquidated Damages. Whenever in this MOPPRS there is a reference, in
any context, to the payment of the principal of, premium, if any, or interests
on, or in respect of, the MOPPRS, such mention shall be deemed to include
mention of the payment Liquidated Damages payable as described above to the
extent that, in such context, Liquidated Damages are, were or would be payable
in respect of
10
<PAGE> 11
the Note and express mention of the payment of Liquidated Damages in any
provisions of this MOPPRS shall not be construed as excluding Liquidated
Damages in those provisions of this MOPPRS were such express mention is not
made.
16. Governing Law. The Indenture and this MOPPRS shall be governed by,
and construed in accordance with, the laws of the State of New York without
regard to conflict of law principles.
11
<PAGE> 12
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this MOPPRS, shall be construed as though they were written out in full
according to applicable laws or regualtions:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - _______ Custodian _______
(Cust) (minor)
under Uniform Gifts to Minors Act
________________________(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right
of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
_____________________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
___________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
_____________________________________________________________this MOPPRS and
all rights thereunder hereby irrevocably constituting and appointing
__________________________________________________Attorney to transfer this
MOPPRS on the books of the Trustee, with full power of substitution in the
premises.
Dated: ___________ __________________________________________________
__________________________________________________
Notice: The signature(s) on this Assignment must
correspond with the name(s) written upon the
face of this MOPPRS in every particular, without
alteration or enlargement or any change whatsoever.
12
<PAGE> 1
EXHIBIT 5.1
[LETTERHEAD OF HOGAN & HARTSON L.L.P.]
September 1, 1998
EOP Operating Limited Partnership
Two North Riverside Plaza
Suite 2200
Chicago, Illinois 60606
Dear Ladies and Gentlemen:
We are acting as counsel to EOP Operating Limited
Partnership, a Delaware limited partnership (the "COMPANY"), in connection with
its registration statement on Form S-4 (the "REGISTRATION STATEMENT") filed with
the Securities and Exchange Commission relating to the proposed public offering
of up to (i) $775,545,000 in aggregate principal amount of the Company's
6.375% Notes due 2003, 6.50% Notes due 2004, 6.763% Notes due 2007, 6.750%
Notes due 2008, 6.376% MandatOry Par Put Remarketed Securities(SM) due 2012 and
7.25% Notes due 2028 (collectively, the "EXCHANGE NOTES") in exchange for up to
$775,545,000 in aggregate principal amount of the Company's outstanding
6.375% Notes due 2003, 6.50% Notes due 2004, 6.763% Notes due 2007, 6.750%
Notes due 2008, 6.376% MandatOry Par Put Remarketed Securities(SM) due 2012
and 7.25% Notes due 2028 (collectively, the "PRIVATE NOTES") and (ii) 300,000 of
the Company's Warrants to Purchase $300,000,000 6.763% Notes due 2008 (the
"EXCHANGE WARRANTS") in exchange for up to 300,000 of the Company's
outstanding Warrants to Purchase $300,000,000 6.763% Notes due 2008 (the
"PRIVATE WARRANTS"). 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. Section 229.601(b)(5), in connection with the Registration Statement.
For purposes of the opinions expressed in this letter, we
have examined copies of the following documents:
1. An executed copy of the Registration Statement.
<PAGE> 2
EOP Operating Limited Partnership
September 1, 1998
Page 2
2. An executed copy of the Indenture, dated September
2, 1997, between the Company and State Street Bank and
Trust Company, as Trustee (the "Trustee"), as
supplemented by the Supplemental Indenture, dated
February 2, 1998, between the Company and the
Trustee (together, the "INDENTURE").
3. An executed copy of the Warrant Agreement, dated
as of June 15, 1998, between the Company and State
Street Bank and Trust Company, as warrant agent (the
"WARRANT AGREEMENT").
4. The Certificate of Limited Partnership of the
Company, as certified by the Secretary of State
of the State of Delaware on July 6, 1998, and
by the Secretary of Equity Office Properties Trust
(the "TRUST"), as managing general partner of the
Company, on the date hereof as then being complete,
accurate and in effect.
5. The Agreement of Limited Partnership of the Company,
as certified by the Secretary of the Trust, as
managing general partner of the Company, on the date
hereof as then being complete, accurate and in effect.
6. The Articles of Amendment and Restatement of
Declaration of Trust of the Trust, as certified by the
Maryland State Department of Assessments and Taxation
on August 3, 1998, and by the Secretary of the Trust on
the date hereof as then being complete, accurate and in
effect.
7. The Bylaws of the Trust, as certified by the Secretary
of the Trust on the date hereof as then being
complete, accurate and in effect.
8. Certain resolutions of the Board of Trustees of the
Trust, as managing general partner of the Company,
adopted by unanimous written consent on February 4
and February 12, 1998, and at a meeting duly held on
June 10, 1998, and certain resolutions of the
Pricing Committee of the Board of Trustees of the
Trust adopted by unanimous written consent on
February 12, 1998, and at a meeting duly held on June
10, 1998, as
<PAGE> 3
EOP Operating Limited Partnership
September 1, 1998
Page 3
certified by the Assistant Secretary of the Trust on
the date hereof as then being complete, accurate
and in effect, relating, among other things, to the
issuance and sale of the Exchange Notes and Exchange
Warrants and arrangements in connection therewith.
9. Forms of Exchange Notes to be issued pursuant to
the Indenture, as filed as Exhibits 4.3, 4.4, 4.5,
4.10, 4.11 and 4.12 to the Registration Statement.
10. Form of Global Debt Warrant Certificate
representing Exchange Warrants to be issued pursuant
to the Warrant Agreement, as filed as Exhibit 4.9 to
the Registration Statement.
In our examination of the aforesaid certificates, documents
and agreements, 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). We also have assumed the authenticity, accuracy and
completeness of the foregoing certifications (of public officials and corporate
officers) and statements of fact, on which we are relying, and have made no
independent investigations thereof. This opinion letter is given, and all
statements herein are made, in the context of the foregoing.
This opinion letter is based as to matters of law solely on
the Delaware Revised Uniform Limited Partnership Act, as amended, Title 8 of the
Corporations and Associations Article of the Annotated Code of Maryland 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, ordinances, rules or regulations.
Based upon, subject to and limited by the foregoing, we are
of the opinion that:
(a) Following (i) execution, authentication, issuance and
delivery of the Exchange Notes in accordance with the terms of the Indenture and
as described in the Registration Statement, (ii) effectiveness of the
Registration Statement, and
<PAGE> 4
EOP Operating Limited Partnership
September 1, 1998
Page 4
(iii) receipt by the Company of the Private Notes in exchange for the Exchange
Notes as specified in the resolutions of the Board of Trustees referred to in
paragraph 8 above, the Exchange Notes will constitute 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 Exchange Notes
are considered in a proceeding in equity or at law).
(b) Following (i) execution, authentication and delivery
in accordance with the terms of the Warrant Agreement and as described in
the Registration Statement, (ii) effectiveness of the Registration Statement,
and (iii) receipt Exchange Warrants as specified in the resolutions of the
Board of Trustees referred to in paragraph's above, the Exchange Warrants will
constitute valid and legally binding obligations of the Company, entitled to
the benefits of the Warrant Agreement and enforceable against the Company in
accordance with their terms, except as the enforcement thereof 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 enforcement is considered in a proceeding in
equity or at law).
The opinions set forth in paragraphs (a) and (b) 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 above, 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
<PAGE> 5
EOP Operating Limited Partnership
September 1, 1998
Page 5
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.]
September 1, 1998
EOP Operating Limited Partnership
Two North Riverside Plaza
Chicago, Illinois 60606
Ladies and Gentlemen:
We have acted as special tax counsel to EOP Operating Limited
Partnership (the "Company"), a Delaware limited partnership, in connection
with the exchange offer (the "Exchange Offer") to provide holders of its
outstanding 6.375% Notes due 2003, 6.50% Notes due 2004, 6.763% Notes due 2007,
6.750% Notes due 2008, 6.376% MandatOry Par Put Remarketed Securities(SM) due
2012, and 7.250% Notes due 2028 (collectively, the "Private Notes") and
Debt Warrants (the "Private Warrants") to Purchase $300,000,000 6.763%
Notes due 2008 the opportunity to exchange such Private Notes and Private
Warrants for the 6.375% Notes due 2003, 6.50% Notes due 2004, 6.763% Notes
due 2007, 6.750% Notes due 2008, 6.376% MandatOry Par Put Remarketed
Securities(SM) due 2012, and 7.250% Notes due 2028 (collectively, the
"Exchange Notes") and Debt Warrants (the "Exchange Warrants") to
Purchase $300,000,000 6.763% Notes due 2008, respectively, as more
fully described in the Registration Statement on Form S-4 containing the
Prospectus of the Company addressed to holders of the Private Notes and the
Private Warrants (the "Prospectus") filed with the Securities and Exchange
Commission on September 1, 1998, as amended through the date hereof. 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.
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
<PAGE> 2
EOP Operating Limited Partnership
September 1, 1998
Page 2
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 opinion, including the
following: (1) the Prospectus, (2) the forms of the Private Notes, the Private
Warrants, the Exchange Notes and the Exchange Warrants, and (3) the
Registration Rights Agreements.
For purposes of rendering our opinions, we have not made an
independent investigation or audit of the facts set forth in any of the above
referenced documents, including the Prospectus. We consequently have relied on
the assumption that all such representations and 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.
In our review, we have assumed that all of the representations
and statements set forth in the documents that we reviewed are true and correct,
and all of the obligations imposed by any such documents on the parties thereto
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.
Based upon, subject to, and limited by the assumptions and
qualifications set forth herein, we are of the opinion that:
1. the discussion in the Prospectus under the caption
"Federal Income Tax Consequences," to the extent that it
discusses matters of law or
<PAGE> 3
EOP Operating Limited Partnership
September 1, 1998
Page 3
legal conclusions or purports to describe certain provisions
of the federal tax laws, is a correct summary of the matters
discussed therein; and
2. the exchange of the Private Notes and the Private
Warrants for the Exchange Notes and the Exchange
Warrants, respectively, pursuant to the Exchange Offer will
not be treated as an exchange for federal income tax purposes
and holders of Private Notes and Private Warrants will
not recognize any income, gain or loss as a result of
such exchange, because the Exchange Notes and the
Exchange Warrants will not differ materially in kind or
extent from the Private Notes and the Private Warrants,
respectively, and because the exchange will occur by
operation of the original terms of the Private Notes and
the Private Warrants.
We assume no obligation to advise you of any changes in our
opinions or of any new developments in the application or interpretation of the
federal income tax laws subsequent to date of this letter. This opinion letter
has been prepared solely for you use in connection with the filing of the
Registration Statement on the date of the opinion letter and should not be
quoted in whole or in part or otherwise referred to, or filed with or furnished
to any government 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 an
Exhibit to the Registration Statement and to the reference to Hogan & Hartson
L.L.P. under the captions "Summary - - The Exchange Offer," "Legal Matters" and
"Federal Income Tax Consequences" 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 12.1
EOP OPERATING LIMITED PARTNERSHIP AND
EQUITY OFFICE PREDECESSORS
STATEMENTS REGARDING COMPUTATION OF RATIOS
(DOLLARS IN 000'S)
<TABLE>
<CAPTION>
Equity Office
Predecessors
EOP Operating Combined EOP Operating Equity Office
Limited Partnership Historical Limited Partnership Predecessors for
for the six for the six for the period the period from
months ended months ended from July 11, 1997 January 1,, 1997
June 30, 1998 June 30, 1998 to Dec. 31, 1997 to July 10, 1997
------------------ ----------------- ------------------ ------------------
<S> <C> <C> <C> <C>
Net income before preferred dividends, $ 187,355 $ 49,387 $ 94,962 $ 49,173
gains from sales of property, provision for
value impairment, taxes and extraordinary items
Plus Fixed Charges:
Interest expense 145,954 76,301 76,675 80,481
Interest expense from unconsolidated subsidiaries 4,126 -- -- --
Loan amortization cost 3,545 1,954 4,179 2,771
---------- ---------- ---------- ------------
Earnings $ 340,980 $ 127,642 $ 175,816 $ 132,425
========== ========== ========== ============
Fixed Charges:
Interest expense $ 145,954 $ 76,301 $ 76,675 $ 80,481
Interest expense from unconsolidated subsidiaries 4,126 -- -- --
Capitalized interest 6,465 3,476 1,890 3,669
Loan amortization cost 3,545 1,954 4,179 2,771
Preferred dividends 14,703 -- 649 --
---------- ---------- ---------- ------------
Total Fixed Charges $ 174,793 $ 81,731 $ 83,393 $ 86,921
========== ========== ========== ============
Ratio of Fixed Charges to Earnings 1.95 1.56 2.11 1.52
========== ========== ========== ============
<CAPTION>
Equity Office Predecessors
Combined Historical
Years Ended December 31,
1996 1995 1994 1993 1992
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net income before preferred dividends, $ 68,087 $ 23,436 $ 14,857 $ 8,471 $ 6,330
gains from sales of property, provision for
value impairment, taxes and extraordinary items
Plus Fixed Charges;
Interest expense 119,595 100,566 59,316 36,755 25,775
Interest expense from unconsolidated subsidiaries -- -- -- -- --
Loan amortization cost 4,275 2,025 1,568 636 500
---------- ---------- ---------- --------- ---------
Earnings $ 191,957 $ 126,027 $ 75,741 $ 45,862 $ 32,605
========== ========== ========== ========= =========
Fixed Charges:
Interest expense $ 119,595 $ 100,566 $ 59,316 $ 36,755 $ 25,775
Interest expense from unconsolidated subsidiaries -- -- -- -- --
Capitalized interest 4,640 1,682 -- -- --
Loan amortization cost 4,275 2,025 1,568 636 500
Preferred dividends -- -- -- -- --
---------- ---------- ---------- --------- ---------
Total Fixed Charges $ 128,610 $ 104,273 $ 60,884 $ 37,391 $ 26,275
========== ========== ========== ========= =========
Ratio of Fixed Charges to Earnings 1.49 1.21 1.24 1.23 1.24
========== ========== ========== ========= =========
</TABLE>
<PAGE> 1
EXHIBIT 23.3
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement (Form S-4) and related
Prospectus of EOP Operating Limited Partnership for the registration of debt
securities and warrants exercisable for debt securities and to the
incorporation by reference therein of our reports indicated below with respect
to the financial statements indicated below included in EOP Operating Limited
Partnership's filings as indicated below, filed with the Securities and
Exchange Commission.
Financial Statements Date of Auditors' Report
-------------------- ------------------------
Consolidated financial statements of EOP February 23, 1998, except
Operating Limited Partnership included in its for Note 25, as to which the
Annual Report (Form 10-K, as amended by Form date is March 18, 1998
10-K/A) for the year ended December 31, 1997
The following reports are included in the
Current Report of EOP Operating Limited
Partnership on Form 8-K dated June 26, 1998:
Statement of Revenue and Certain Expenses of
Denver Post Tower for the year ended
December 31, 1997 April 28, 1998
Combined Statement of Revenue and Certain
Expenses 301 Howard Street and 215 Fremont
Street for the year ended October 31, 1997 April 29, 1998
Combined Statement of Revenue and Certain
Expenses of the Mountain Properties for the
year ended December 31, 1997 April 28, 1998
Statement of Revenue and Certain Expenses of
Millennium Plaza for the year ended
December 31, 1997 June 22, 1998
Statement of Revenue and Certain Expenses of
Polk & Taylor for the year ended
December 31, 1997 June 18, 1998
Combined Statement of Revenue and Certain
Expenses of Colonnade I, Colonnade II, and the
Walker Building for the year ended
December 31, 1997 June 12, 1998
Statement of Revenue and Certain Expenses of
Columbia Seafirst Center for the year ended
December 31, 1997 July 1, 1998
/s/ Ernst & Young LLP
---------------------
Ernst & Young LLP
Chicago, Illinois
August 31, 1998
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement of
EOP Operating Limited Partnership on Amendment No. 1 to Form S-4
(Registration No. 333-61469) of our reports dated January 21,1997, on our
audits of the financial statements and financial statement schedules of Beacon
Properties, L.P., which reports were filed with Securities and Exchange
Commission on the Form 8-K/A of EOP Operating Limited Partnership on February
18, 1998. We also consent to the reference to our firm under the caption
"Experts".
/S/ PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
August 31,1998
