SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 6, 1996
BEACON PROPERTIES CORPORATION
(Exact name of Registrant as specified in its Charter)
Maryland
(State of Incorporation)
1-12926 04-3224258
(Commission File Number) (IRS Employer Id. Number)
50 Rowes Wharf
Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
(617) 330-1400
(Registrant's telephone number, including area code)
<PAGE>
Item 7. Financial Statements and Exhibits
(b) Pro Forma Financial Statements
Pro Forma Condensed Consolidated Balance Sheet as of June 30, 1996
(Unaudited)
Pro Forma Condensed Consolidated Statement of Operations for the Year Ended
December 31, 1995 (Unaudited)
Pro Forma Condensed Consolidated Statement of Operations for the Six Months
Ended June 30, 1996 (Unaudited)
(c) Exhibits
1.1 Underwriting Agreement dated August 6, 1996
2
<PAGE>
BEACON PROPERTIES CORPORATION
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma Condensed Consolidated Balance Sheet of
Beacon Properties Corporation (the "Company") as of June 30, 1996, is presented
as if the acquisition of the Pending Acquisitions had occurred on June 30, 1996.
The pro forma Condensed Consolidated Statements of Operations are presented as
if the Offering, the acquisition of the Properties acquired since January 1,
1995 (including Perimeter Center) and the closing of the MetLife Mortgage loan,
the acquisition of the Pending Acquisitions and related assumption of debt had
occurred as of January 1, 1995; the Company qualified as a REIT, distributed all
of its taxable income and, therefore, incurred no income tax expense during the
period.
In management's opinion, all adjustments necessary to reflect the above
discussed transactions have been made. The unaudited pro forma Condensed
Consolidated Balance Sheet and Statement of Operations are not necessarily
indicative of what actual results of operations of the Company would have been
for the period, nor does it purport to represent the Company's results of
operations for future periods.
F-1
<PAGE>
BEACON PROPERTIES CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Beacon
Properties
Corporation Pro Forma Pro Forma
Historical Adjustments Consolidated
----------- ----------- ------------
(dollars in thousands)
<S> <C> <C> <C>
Assets
Real estate, net $ 746,007 $227,000 (A) $ 973,007
Deferred financing and leasing costs, net 14,730 14,730
Cash and cash equivalents 37,978 (26,975)(B) 11,003
Mortgage notes receivable 51,486 51,486
Other assets 20,554 (2,000)(C) 18,554
Investments in and note receivable from joint
ventures and corporations 57,082 57,082
--------- -------- -----------
Total assets $ 927,837 $198,025 $1,125,862
========= ======== ===========
Liabilities and Stockholders' Equity
Mortgage notes payable $ 403,218 $ 37,374 (D) $ 440,592
Note payable, Credit Facility 18,016 (E) 18,016
Other liabilities 24,335 24,335
Investment in joint ventures 24,303 24,303
--------- -------- -----------
Total liabilities 451,856 55,390 507,246
Minority interest in Operating Partnership 49,051 21,610 (F) 70,661
Stockholders' equity 426,930 121,025 (G) 547,955
--------- -------- -----------
Total liabilities and stockholders' equity $ 927,837 $198,025 $1,125,862
========= ======== ===========
</TABLE>
Notes:
(A) Acquisition of Pending Acquisitions.
(B) Cash utilized.
(C) Application of deposit on Fairfax County Portfolio. (D) Fairfax County
Portfolio debt assumed.
(E) Credit Facility utilized to acquire certain properties ($68,016) net of
proceeds ($50,000) from Offering.
(F) Value of units issued to seller of Fairfax County Portfolio.
(G) Net increase in stockholders' equity:
Proceeds of Offering $128,750
Expenses of Offering (7,725)
--------
$121,025
========
F-2
<PAGE>
BEACON PROPERTIES CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
Beacon Properties
Properties Acquired Perimeter Pending
Corporation In 1995 Center Acquisitions Pro Forma Pro Forma
Historical (A) (B) (F) Adjustments Consolidated
------------ ----------- --------- ------------ ----------- ------------
(dollars in thousands except per share amounts and shares outstanding)
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Rental income $71,050 $5,339 $52,117 $30,623 $ 159,129
Management fees 2,203 $ 723(H) 2,926
Recoveries from tenants 9,742 1,193 2,244 6,308 19,487
Mortgage interest income 2,546 3,027(I) 5,573
Other income 5,502 26 862 1,111 7,501
------- ------ ------- ------- ------- -----------
Total revenue 91,043 6,558 55,223 38,042 3,750 194,616
------- ------ ------- ------- ------- -----------
Expenses:
Property expenses 18,090 1,560 12,376 7,485 39,511
Real estate taxes 10,217 949 4,107 2,680 17,953
General and
administrative 9,755 111 2,116 1,254 750(J) 13,986
Mortgage interest expense 15,226 15,434(C) 4,438(G) (1,783)(K) 33,315
Interest--amortization of
financing costs 1,370 120(D) 1,490
Depreciation and
amortization 17,428 1,047(E) 9,571(E) 6,810(E) 34,856
------- ------ ------- ------- ------- -----------
Total expenses 72,086 3,666 43,724 22,667 (1,033) 141,110
------- ------ ------- ------- ------- -----------
Income from operations 18,957 2,892 11,499 15,375 4,783 53,506
Equity in net income of joint
ventures and corporations 3,222 1,338 4,560 (1)
------- ------ ------- ------- ------- -----------
Income before minority
interest 22,179 4,230 11,499 15,375 4,783 58,066
Minority interest in
Operating Partnership (4,119) (3,795)(L) (7,914)
------- ------ ------- ------- ------- -----------
Net income before
extraordinary items $18,060 $4,230 $11,499 $15,375 $ 988 $ 50,152 (2)
======= ====== ======= ======= ======= ===========
Common shares outstanding 32,368,263
Net income per common share $ 1.55
(1) Includes:
Depreciation and amortization $ 3,895
Amortization of financing costs $ 896
(2) Company share of Operating Partnership is 86.37%
</TABLE>
See accompanying notes to pro forma
condensed consolidated statement of operations.
F-3
<PAGE>
BEACON PROPERTIES CORPORATION
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
(Unaudited)
(A) Results of operations of properties acquired during 1995 for the period
prior to their acquisitions:
<TABLE>
<CAPTION>
Wellesley Westlakes 75-101 2 Oliver Ten Canal
Building 8 Building 2 Federal St. Street Park Total
---------- ---------- ---------- ------- --------- -----
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Rental income $308 $1,010 $2,474 $1,547 $5,339
Management fees
Recoveries from tenants 425 112 656 1,193
Mortgage interest income
Other income 7 15 4 26
---- ------ ------ ------ ------ ------
Total revenue 308 1,442 2,601 2,207 6,558
---- ------ ------ ------ ------ ------
Expenses:
Property expenses 61 413 573 513 1,560
Real estate taxes 20 89 505 335 949
General and
administrative 8 27 18 58 111
Mortgage interest expense
Interest--amortization of
financing costs
Depreciation and
amortization 50 239 404 354 1,047
---- ------ ------ ------ ------ ------
Total expenses 138 768 1,500 1,260 3,666
---- ------ ------ ------ ------ ------
Income from operations 170 674 1,101 947 2,892
Equity in net income of joint
ventures and corporations $1,338 1,338
---- ------ ------ ------ ------ ------
Income before minority
interest 170 674 1,338 1,101 947 4,230
Minority interest in
Operating Partnership
---- ------ ------ ------ ------ ------
Net income before
extraordinary item $170 $ 674 $1,338 $1,101 $ 947 $4,230
==== ====== ====== ====== ====== ======
</TABLE>
(B) Results of operations of Perimeter Center for 1995.
(C) Interest expense associated with the MetLife Mortgage Loan in the amount of
$218 million based on a 7.08% interest rate.
(D) Amortization of the costs of obtaining the permanent financing at $1.2
million over 10 years.
F-4
<PAGE>
BEACON PROPERTIES CORPORATION
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
(Unaudited)
(E) Detail of depreciation expense by property is presented as follows:
Basis Life Depreciation
------- ----- ------------
Previously Acquired Properties:
Wellesley Building 8 $ 4,500 30 yrs $ 50
Westlakes Building 2 12,306 30 yrs 239
2 Oliver Street 16,174 30 yrs 404
Ten Canal Park 10,609 30 yrs 354
------
$1,047
======
Perimeter Center $287,130 30 yrs $9,571
======
Pending Acquisitions:
Fairfax County Portfolio $ 69,300 30 yrs $2,310
The New York Life Portfolio 135,000 30 yrs 4,500
------
$6,810
======
(F) Results of operations of the Fairfax County Portfolio and the New York Life
Portfolio for 1995.
(G) Fairfax County Portfolio interest expense on debt assumed:
Principal Rate Expense
--------- ---- -------
JOHN MARSHALL 21,068 8.38% 1,764
EJ RANDOLPH (1) 18,016 8.25% 1,486
NORTHRIDGE 16,306 7.28% 1,187
------ -----
55,390 4,438
====== =====
(1) Paid off by Credit Facility proceeds at closing.
(H) Management fee from 75-101 Federal Street.
(I) Interest income related to the acquisition of the Rowes Wharf mortgage.
(J) Additional general and administrative expense attributable to acquisitions.
(K) Credit facility activity:
<TABLE>
<CAPTION>
Draw Expense
Source/Use Date (Repayment) (Savings)
- ---------- ----------- ----------- ---------
<S> <C> <C> <C>
Offering proceeds March 20 ($ 58,000) ($ 1,065)
Rowes Wharf mortgage Various 23,700 780
Westlakes Building 2 July 26 13,500 632
Offering proceeds August 31 (66,500) (3,652)
75-101 Federal Street and 2 Oliver Street September 29 39,000 2,397
Ten Canal Park December 21 11,000 882
March 1996 offering proceeds Full year (21,300) (1,757)
-------
($ 1,783)
=======
</TABLE>
(L) Reflects decrease for minority interest (13.63%) in Operating Partnership.
F-5
<PAGE>
BEACON PROPERTIES CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS For the
Six Months Ended June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Beacon
Properties
Corporation Perimeter Pending Pro Forma Pro Forma
Historical Center (A) Acquisitions (B) Adjustments Consolidated
----------- ---------- ---------------- ----------- ------------
(dollars in thousands except per share amounts and shares outstanding)
<S> <C> <C> <C> <C> <C>
Revenue:
Rental income $60,051 $6,420 $14,864 $ 81,335
Management fees 1,517 1,517
Recoveries from tenants 6,782 304 3,002 10,088
Mortgage interest income 2,165 $ 611(G) 2,776
Other income 4,591 208 673 5,472
------- ------ ------- ------- -----------
Total revenue 75,106 6,932 18,539 611 101,188
------- ------ ------- ------- -----------
Expenses:
Property expenses 14,770 1,562 3,806 20,138
Real estate taxes 7,831 591 1,346 9,768
General and administrative 7,362 378 646 188(H) 8,574
Mortgage interest expense 13,661 1,461(C) 2,146(F) (462)(I) 16,805
Interest--amortization of financing costs 1,184 15(D) 1,199
Depreciation and amortization 13,346 1,196(E) 3,405(E) 17,947
------- ------ ------- ------- -----------
Total expenses 58,154 5,203 11,349 (274) 74,431
------- ------ ------- ------- -----------
Income from operations 16,952 1,729 7,190 886 26,757
Equity in net income of joint ventures and
corporations 1,582 1,582 (1)
------- ------ ------- ------- -----------
Income before minority interest 18,534 1,729 7,190 886 28,339
Minority interest in Operating Partnership (2,681) (1,181)(J) (3,862)
------- ------ ------- ------- -----------
Net income before extraordinary items $15,853 $1,729 $ 7,190 ($ 296) $ 24,476 (2)
======= ====== ======= ======= ===========
Common shares outstanding 32,368,263
Net income per common share $ 0.76
(1) Includes:
Depreciation and amortization $ 1,994
Amortization of financing costs $ 448
(2) Company share of Operating Partnership
is 86.37%
</TABLE>
See accompanying notes to pro forma condensed
consolidated statement of operations.
F-6
<PAGE>
BEACON PROPERTIES CORPORATION
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1996
(Unaudited)
(A) Results of operations of Perimeter Center for the period ended February 14,
1996.
(B) Results of operations of the Fairfax County Portfolio and the New York Life
Portfolio.
(C) Net interest expense associated with the MetLife Mortgage Loan in the amount
of $218 million based on a 7.08% interest rate for the period ended prior to
March 15, 1996.
(D) Amortization of the costs of obtaining the permanent financing at $1.2
million over 10 years.
(E) Detail of depreciation expense by property is presented as follows:
Basis Life Depreciation
----- ---- ------------
Perimeter Center $287,130 30 yrs $1,196
======
Pending Acquisitions:
Fairfax County Portfolio $ 69,300 30 yrs $1,155
The New York Life 135,000 30 yrs 2,250
------
$3,405
======
(F) Fairfax County Portfolio interest expense on debt assumed:
Principal Rate Expense
--------- ---- -------
JOHN MARSHALL 21,068 8.38% 882
EJ RANDOLPH (1) 18,016 7.44% 670
NORTHRIDGE 16,306 7.28% 594
------ -----
55,390 2,146
====== =====
(1) Paid off by Credit Facility proceeds at closing.
(G) Interest income related to the acquisition of the Rowes Wharf mortgage.
(H) Additional general and administrative expense attributable to acquisitions.
(I) Decrease in Credit Facility interest expense as the result of $21,300
repayment from proceeds of March 1996 offering.
(J) Reflects decrease for minority interest (13.63%) in Operating Partnership.
F-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BEACON PROPERTIES CORPORATION
/s/ Robert J. Perriello
--------------------------------
Robert J. Perriello,
Senior Vice President,
and Chief Financial Officer
Date: August 6, 1996
BEACON PROPERTIES CORPORATION
(a Maryland Corporation)
Common Stock
UNDERWRITING AGREEMENT
August 6, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
New York, New York 10281-1305
Dear Sirs:
Beacon Properties Corporation, a Maryland corporation (the "Company"),
proposes to issue and sell shares of Common Stock, $.01 par value (the "Common
Stock" or the "Securities"), from time to time, in one or more offerings on
terms to be determined at the time of sale. As used herein, "you" and "your",
unless the context otherwise requires, shall mean the parties to whom this
underwriting agreement (this "Agreement") is addressed together with the other
parties, if any, identified in the applicable Terms Agreement (as defined
herein) as additional co- managers with respect to Underwritten Securities (as
hereinafter defined) purchased pursuant thereto. It is understood that the net
proceeds of an offering of securities to which this Agreement relates will be
contributed to Beacon Properties, L.P., a Delaware limited partnership (the
"Operating Partnership") in exchange for interests in the Operating Partnership.
Whenever the Company determines to make an offering of Securities through
you or through an underwriting syndicate managed by you, the Company will enter
into an agreement (the "Terms Agreement") providing for the sale of such
Securities (the "Underwritten Securities") to, and the purchase and offering
thereof by, you and such other underwriters, if any, selected by you as have
authorized you to enter into such Terms Agreement on their behalf (the
"Underwriters", which term shall include you whether acting alone in the sale of
the Underwritten Securities or as a member of an underwriting syndicate and any
Underwriter substituted pursuant to Section 10 hereof). The Terms Agreement
relating to the offering of Underwritten Securities shall specify
<PAGE>
the number of Underwritten Securities to be initially issued (the "Initial
Underwritten Securities"), the names of the Underwriters participating in such
offering (subject to substitution as provided in Section 10 hereof), the number
of Initial Underwritten Securities which each such Underwriter severally agrees
to purchase, the names of such of you or such other Underwriters acting as
co-managers, if any, in connection with such offering, the price at which the
Initial Underwritten Securities are to be purchased by the Underwriters from the
Company, the initial public offering price, if any, the time, date and place of
delivery and payment and any delayed delivery arrangements of the Initial
Underwritten Securities. In addition, each Terms Agreement shall specify whether
the Company has agreed to grant to the Underwriters an option to purchase
additional Underwritten Securities to cover over-allotments, if any, and the
number of Underwritten Securities subject to such option (the "Option
Securities"). As used herein, the term "Underwritten Securities" shall include
the Initial Underwritten Securities and all or any portion of the Option
Securities agreed to be purchased by the Underwriters as provided herein, if
any. The Terms Agreement, which shall be substantially in the form of Exhibit A
hereto, may take the form of an exchange of any standard form of written
telecommunication between you and the Company. Each offering of Underwritten
Securities through you or through an underwriting syndicate managed by you will
be governed by this Agreement, as supplemented by the applicable Terms
Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-2544) for the
registration of the Securities, under the Securities Act of 1933, as amended
(the "1933 Act"), and the offering thereof from time to time in accordance with
Rule 415 of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations"), and the Company has filed such amendments thereto as
may have been required prior to the execution of the applicable Terms Agreement.
Such registration statement (as amended, if applicable) has been declared
effective by the Commission. Such registration statement and the prospectus
constituting a part thereof, in each case as supplemented by a prospectus
supplement relating to the offering of Underwritten Securities (the "Prospectus
Supplement"), including in each case all documents incorporated therein by
reference and the information, if any, deemed to be a part thereof pursuant to
Rule 430A(b) or Rule 434 of the 1933 Act Regulations as from time to time
amended or supplemented pursuant to the 1933 Act, the Securities Exchange Act of
1934, as amended (the "1934 Act"), or otherwise, are collectively referred to
herein as the "Registration Statement" and the "Prospectus", respectively;
provided, however, that a Prospectus Supplement shall be deemed to have
supplemented the Prospectus only with respect to the offering of Underwritten
Securities to which it
2
<PAGE>
relates. All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to mean and include the
filing of any document under the 1934 Act which is or is deemed to be
incorporated by reference in the Registration Statement or the Prospectus, as
the case may be. If the Company elects to rely on Rule 434 under the 1933 Act
Regulations, all references to the Prospectus shall be deemed to include,
without limitation, the form of prospectus and the abbreviated term sheet, taken
together, provided to the Underwriters by the Company in reliance on Rule 434
under the 1933 Act (the "Rule 434 Prospectus"). If the Company files a
registration statement to register a portion of the Securities and relies on
Rule 462(b) for such registration statement to become effective upon filing with
the Commission (the "Rule 462 Registration Statement"), then any reference to
"Registration Statement" herein shall be deemed to be to both the registration
statement referred to above (No. 333-2544) and the Rule 462 Registration
Statement, as each such registration statement may be amended pursuant to the
1933 Act.
Section 1. Representations and Warranties.
(a) The Company and the Operating Partnership each severally represents
and warrants to you, as of the date hereof, and to you and each other
Underwriter named in the applicable Terms Agreement, as of the date thereof (in
each case, a "Representation Date"), as follows:
(i) The Registration Statement and the Prospectus, at the time
the Registration Statement became effective and at each time thereafter on
which the Company filed an Annual Report on Form 10-K with the Commission,
complied, and as of each Representation Date will comply, in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations; the Registration Statement, at the time the Registration
Statement became effective and at each time thereafter on which the
Company filed an Annual Report on From 10-K with the Commission, did not,
and at each time thereafter on which any amendment to the Registration
Statement becomes effective or the Company files an Annual Report on Form
10-K with the Commission and as of each Representation Date, and at the
Closing Time (as hereinafter defined), will not, contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements
3
<PAGE>
therein not misleading; and the Prospectus, as of the date hereof, does
not, and as of each Representation Date will not, include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or Prospectus
made in reliance upon and in conformity with information furnished to the
Company in writing by any Underwriter through you expressly for use in the
Registration Statement or Prospectus.
(ii) The accountants who certified the financial statements and
supporting schedules included or incorporated by reference in the
Registration Statement and the Prospectus are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(iii) The historical financial statements of the Company and the
historical combined financial statements of the Predecessor (as defined in
Note 1 to the Financial Statements of the Company and the Predecessor)
including the notes thereto, included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the financial
position of the Company and the Predecessor, as at the dates indicated and
the results of operations for the periods specified. If applicable, the
historical financial information including the notes thereto for
properties or other assets included in or incorporated by reference into
the Registration Statement and Prospectus present fairly the stated
financial information for such specific property or asset. Except as
otherwise stated in the Registration Statement, said historical financial
statements of the Company, the Predecessor, and, if applicable, the
specific properties or other assets, have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved, and all adjustments necessary for a fair
presentation of results for such periods have been made. The supporting
schedules included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the information required to be
stated therein; and the selected financial data (both historical and pro
forma) included or incorporated by reference in the Registration Statement
and the Prospectus present fairly the information shown therein and have
been compiled on a basis consistent with the related financial statements
presented therein.
(iv) The unaudited pro forma condensed consolidated financial
statements included or incorporated by reference in the Registration
Statement and the Prospectus present
4
<PAGE>
fairly the pro forma financial position of the Company as of the dates
indicated and the results of its operations for the periods specified; and
such unaudited pro forma financial statements have been prepared in
accordance with generally accepted accounting principles applied on a
basis substantially consistent with the audited financial statements of
the Company and the Predecessor included or incorporated by reference in
the Registration Statement and the Prospectus, the assumptions on which
such pro forma financial statements have been prepared are reasonable and
are set forth in the notes thereto, and such pro forma financial
statements have been prepared, and the pro forma adjustments set forth
therein have been applied, in accordance with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations, and such pro
forma adjustments have been properly applied to the historical amounts in
the compilation of such statements.
(v) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as otherwise
stated therein, (a) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company, the Operating Partnership and its
subsidiaries considered as one enterprise, or any of the real property or
improvements thereon owned by either the Company, the Operating
Partnership or any of its subsidiaries (each individually a "Property" and
collectively the "Properties"), whether or not arising in the ordinary
course of business, (b) no material casualty loss or material condemnation
or other material adverse event with respect to any of the Properties has
occurred, (c) there have been no transactions entered into or acquisitions
by the Company, or the Operating Partnership or any of its subsidiaries,
other than those in the ordinary course of business or disclosed in the
Prospectus, which are material with respect to the Company, the Operating
Partnership and its subsidiaries considered as one enterprise, and (d)
except for regular quarterly dividends on the Company's Common Stock,
there has been no dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock or by the Operating
Partnership or any of its subsidiaries with respect to its partnership
interests or any class of its capital stock. As used in this Agreement,
the term subsidiary as it relates to the Operating Partnership includes
the Subsidiary Corporations (as such term is defined in the Prospectus),
Beacon Property Management, L.P. (the "Management Partnership") and Beacon
Design, L.P. (the "Design Partnership") as well as any corporation,
limited liability company, limited or general partnership, joint venture
or other entity through which the Operating
5
<PAGE>
Partnership owns an interest, either directly or indirectly, in a
Property.
(vi) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Maryland, with corporate power and authority to own, lease and operate its
Properties and to conduct its business as described in the Prospectus and
to enter into and perform its obligations under this Agreement and the
Terms Agreement and the Company is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure
to so qualify or to be in good standing would not have a material adverse
effect on the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company, the Operating Partnership
and its subsidiaries considered as one enterprise or the Properties,
collectively; and, except with respect to the Operating Partnership, and
with respect to BCN Management, LLC, BCN Center Plaza, LLC, BCN Crystal,
LLC, and BCN Acquisition, LLC, each a limited liability company in which
the Company and the Operating Partnership hold a 1% and a 99% membership
interest, respectively, and with respect to Wellesley Holding, L.P.,
Wellesley Holding II, L.P., Wellesley Holding III, L.P., Crystal Holdings,
L.P., Rowes Wharf Holdings, L.P., Center Plaza Associates, L.P.,
BeaMetFed, Inc., the Subsidiary Corporations, the Management Partnership
and the Design Partnership (collectively, the "Subsidiary Entities"), the
Company owns no material amounts of stock or other beneficial interest in
any corporation, limited liability company, partnership, joint ventures or
other business entity.
(vii) The Agreement of Limited Partnership of the Operating
Partnership (the "Partnership Agreement") has been duly and validly
authorized, executed and delivered by the Company and is a valid and
binding agreement, enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting creditors'
rights generally and by general principles of equity. The Partnership
Agreement has been duly executed and delivered by the other parties
thereto and, to the Company's knowledge, is a valid and binding agreement,
enforceable against such parties in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights generally
and by general principles of equity. The Operating Partnership and each of
its subsidiaries has been duly formed and is validly
6
<PAGE>
existing as a limited partnership, limited liability company or
corporation, as the case may be, in good standing under the laws of its
state of organization with partnership, limited liability company or
corporate power and authority, as the case may be, to own, lease and
operate its properties, to conduct the business in which it is engaged or
proposes to engage as described in the Prospectus and to enter into and
perform its obligations under this Agreement. The Operating Partnership
and each of its subsidiaries is duly qualified or registered as a foreign
partnership, limited liability company or corporation, as the case may be,
and is in good standing in each jurisdiction in which such qualification
or registration is required, whether by reason of the ownership or leasing
of property or the conduct of business, except where the failure to so
qualify or register would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company, the Operating Partnership and its
subsidiaries considered as one enterprise or the Properties, collectively.
The Company is the sole general partner of the Operating Partnership. The
Operating Partnership has no subsidiaries other than the entities through
which it owns interests in the Properties, the Subsidiary Corporations,
the Management Partnership and the Design Partnership. Except as otherwise
stated in the Prospectus, all of the issued and outstanding capital stock
or other ownership interests in each Subsidiary Entity have been duly
authorized and validly issued, are fully paid and non-assessable and,
except for a 90% limited partner interest in Crystal Holdings, L.P., a 24%
limited partner interest in Center Plaza Associates, L.P., 19% of the
voting stock and 49% of the nonvoting stock of BeaMetFed, Inc. and 99% of
the voting stock of each of the Subsidiary Corporations, are owned by the
Company or the Operating Partnership, directly or indirectly, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity, except for security interests granted in respect of
indebtedness of the Company or the Operating Partnership or any of its
subsidiaries as described in the Prospectus and except for security
interests which would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Company, the Operating Partnership, or any of its
subsidiaries considered as one enterprise or the Properties, collectively.
(viii) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under "Capitalization" (except
for subsequent issuances, if any, pursuant to reservations, agreements,
employee benefit plans, dividend reinvestment plans, employee and director
stock option plans or upon the exercise of options or
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convertible securities referred to in the Prospectus); and such shares of
capital stock have been duly authorized and validly issued and are fully
paid and non-assessable and are not subject to preemptive or other similar
rights. The Company has duly reserved a sufficient number of shares of
Common Stock for issuance upon exchange of outstanding units of limited
partner interest in the Operating Partnership (the "Units").
(ix) The issued and outstanding Units have been duly authorized
and validly issued by the Operating Partnership and are fully paid and
non-assessable. The Units have been sold in compliance with all applicable
laws (including, without limitation, federal and state securities laws).
(x) The Underwritten Securities being sold pursuant to this
Agreement and the applicable Terms Agreement have, as of each
Representation Date, been duly authorized for issuance and sale pursuant
to this Agreement and such Terms Agreement and such Underwritten
Securities, when issued and delivered by the Company pursuant to this
Agreement against payment of the consideration set forth in such Terms
Agreement or any Delayed Delivery Contract (as hereinafter defined), will
be validly issued, fully paid and non-assessable, and the issuance of such
Underwritten Securities will not be subject to preemptive or other similar
rights; and the Underwritten Securities being sold pursuant to the
applicable Terms Agreement conform in all material respects to all
statements relating thereto contained in the Prospectus. The form of stock
certificate used to evidence the Underwritten Securities is in due and
proper form and complies with all applicable legal requirements.
(xi) None of the Company, the Operating Partnership or any of its
subsidiaries is in violation of its charter, by-laws, agreement of limited
liability company, agreement of limited partnership or other
organizational documents or in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company, the Operating Partnership or any of its
subsidiaries is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company, the Operating
Partnership or any of its subsidiaries is subject, except for any such
violation or default that would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company, the Operating Partnership or its
subsidiaries considered as one enterprise and the execution, delivery and
performance of this Agreement, the applicable Terms Agreement, if any, and
the consummation of the
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transactions contemplated herein and therein and compliance by the Company
and the Operating Partnership (with respect to this Agreement), each
severally, with obligations hereunder and thereunder have been duly
authorized by all necessary action, and will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company, the Operating Partnership or any of its subsidiaries
pursuant to, any contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Company, the Operating Partnership
or any of its subsidiaries is a party or by which any of them may be
bound, or to which any of the property or assets of the Company, the
Operating Partnership or any of its subsidiaries is subject, except for
any such violation or default that would not have a material adverse
effect on the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company, the Operating Partnership or
its subsidiaries considered as one enterprise, nor will such action result
in any violation of the charter, by-laws, the agreement of limited
partnership or other organizational documents of the Company, the
Operating Partnership or any of its subsidiaries or any applicable law,
administrative regulation or administrative or court decree, except for
any such violation or default that would not have a material adverse
effect on the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company, the Operating Partnership or
its subsidiaries considered as one enterprise.
(xii) Commencing with the Company's first taxable year ended
December 31, 1994, the Company has been organized in conformity with the
requirements for qualification as a real estate investment trust ("REIT")
under the Internal Revenue Code of 1986, as amended (the "Code"), and the
Company's method of operation will enable it to meet the requirements for
taxation as a REIT under the Code.
(xiii) Neither the Company, the Operating Partnership nor any of
its subsidiaries is required to be registered under the Investment Company
Act of 1940, as amended (the "1940 Act").
(xiv) Other than as disclosed or incorporated by reference into
the Prospectus, there is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Company or the Operating Partnership
threatened against or affecting the Company, the Operating Partnership or
any of its subsidiaries which is required to be disclosed in the
Prospectus (other than as disclosed therein), or
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which might result in any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company, the Operating Partnership and its subsidiaries
considered as one enterprise, or which might materially and adversely
affect the property or assets thereof and the Properties, collectively, or
which might materially and adversely affect the consummation of this
Agreement or the applicable Terms Agreement, or the transactions
contemplated herein or therein; all pending legal or governmental
proceedings to which the Company, the Operating Partnership or any of its
subsidiaries is a party or of which any property or assets of the Company,
the Operating Partnership or any of its subsidiaries or the Properties is
subject which are not described in or incorporated by reference into the
Prospectus, including ordinary routine litigation incidental to the
business, are, considered in the aggregate, not material; and there are no
contracts or documents of the Company, the Operating Partnership or any of
its subsidiaries which are required to be filed as exhibits to the
Registration Statement by the 1933 Act or by the 1933 Act Regulations
which have not been so filed.
(xv) Each of the Company, the Operating Partnership and its
subsidiaries are not required to own or possess any trademarks, service
marks, trade names or copyrights in order to conduct the business to be
operated by them.
(xvi) No authorization, approval or consent of any court or
governmental authority or agency is required that has not been obtained in
connection with the consummation by the Company or the Operating
Partnership of the transactions contemplated by this Agreement or the
applicable Terms Agreement, except such as may be required under the 1933
Act or the 1933 Act Regulations, state securities laws, real estate
syndication laws or under the rules and regulations of the National
Association of Securities Dealers, Inc.
(xvii) Each of the Company, the Operating Partnership and its
subsidiaries possess such certificates, authorities or permits issued by
the appropriate state, federal or foreign regulatory agencies or bodies
necessary to conduct the businesses to be conducted by it, and neither the
Company, nor the Operating Partnership or any of its subsidiaries has
received any written notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would materially and adversely affect the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company, the Operating
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Partnership and its subsidiaries considered as one enterprise.
(xviii) The Company has full right, power and authority to enter
into this Agreement, the applicable Terms Agreement and the Delayed
Delivery Contracts (as defined below), if any, and this Agreement has
been, and as of each Representation Date, the applicable Terms Agreement
and the Delayed Delivery Contracts, if any, will have been, duly
authorized, executed and delivered by the Company.
(xix) The Operating Partnership has full right, power and
authority to enter into this Agreement and this Agreement has been duly
authorized, executed and delivered by the Operating Partnership.
(xx) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, at the time they were or hereafter are filed
with the Commission, complied and will comply in all material respects
with the requirements of the 1934 Act and the rules and regulations of the
Commission under the 1934 Act (the "1934 Act Regulations"), and, when read
together with the other information in the Prospectus, at the time the
Registration Statement became effective and as of the applicable
Representation Date or Closing Time (as defined herein) or during the
period specified in Section 3(f), did not and will not include an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(xxi) (A) The following is a complete list of registration rights
agreements entered into by the Company and currently in effect: (1)
agreement dated May 26, 1994 with Richard L. Friedman and John L. Hall II;
(2) agreement dated May 26, 1994 with certain holders of Units; (3)
agreement dated October 27, 1994 with Wellesley Office Realty Corp. and
Federal 175 Realty Corp.; and (4) agreement dated February 15, 1996 with
TMPC, L.P. (B) No person has exercised registration or other similar
rights to have any securities registered pursuant to the Registration
Statement.
(xxii) (a) The Operating Partnership or its subsidiary, as the case
may be, has good and marketable title to all items of real property owned
by them, in each case free and clear of all liens, encumbrances, claims,
security interests and defects, other than those referred to in the
Prospectus or which are not material in amount; (b) all liens, charges,
encumbrances, claims, or restrictions on
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or affecting the properties and assets owned by the Operating Partnership
or any of its subsidiaries which are required to be disclosed in the
Prospectus are disclosed therein; (c) except as disclosed in the
Prospectus, none of the Company, the Operating Partnership or any of its
subsidiaries, or, to the best of the knowledge of the Company and the
Operating Partnership, any lessee under a lease relating to any of the
Properties, is in default under any of the leases relating to the
Properties and neither the Company nor the Operating Partnership knows of
any event which, but for the passage of time or the giving of notice, or
both, would constitute a default under any of such leases, except such
defaults that would not have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business affairs or business
prospects of the Company, the Operating Partnership and its subsidiaries
considered as one enterprise; (d) no tenant under any of the leases
pursuant to which the Company, the Operating Partnership or any of its
subsidiaries leases any of its real property or improvements has an option
to purchase the premises demised under such lease; (e) each of the
Properties is in compliance with all applicable codes and zoning laws and
regulations, except for such failures to comply which would not
individually or in the aggregate have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business affairs or
business prospects of the Company, the Operating Partnership and its
subsidiaries considered as one enterprise; and (f) except with respect to
a potential taking of Russia Wharf, neither the Company nor the Operating
Partnership has knowledge of any pending or threatened condemnation,
zoning change, or other proceeding or action that will in any manner
affect the size of, use of, improvements on, construction on, or access to
the Properties, except such proceedings or actions that would not have a
material adverse effect on the condition, financial or otherwise, or on
the earnings, business affairs or business prospects of the Company, the
Operating Partnership and its subsidiaries considered as one enterprise.
(xxiii) The Operating Partnership or its subsidiaries have obtained
title insurance on all the Properties described in the Prospectus as owned
by the Operating Partnership or its subsidiaries in an amount at least
equal to the greater of (a) the cost of acquisition of such Property and
(b) the cost of construction of the improvements located on such
Properties.
(xxiv) Except as disclosed in the Prospectus, each of the Company
and the Operating Partnership has no knowledge of (a) the unlawful
presence of any substance, material or waste which is regulated by any
federal, state or local
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governmental or quasi-governmental authority, including, without
limitation, (i) any substance, material or waste defined, used or listed
as a "hazardous waste", "extremely hazardous waste", "restricted hazardous
waste", "hazardous substance", "hazardous material", "toxic substance" or
other similar terms as defined or used in any Environmental Law (as
defined below), (ii) any petroleum products, asbestos, polychlorinated
biphenyls, lead-based paint, flammable explosives or radioactive materials
and (iii) any additional substances or materials which are hazardous or
toxic substances under any Environmental Law relating to the Properties
(collectively, "Hazardous Materials") on any of the Properties or of (b)
any spill, release, discharge or disposal of Hazardous Materials that have
occurred or are presently occurring at, from or onto any of the Properties
or any properties near or adjacent to the Properties, which presence or
occurrence would materially adversely affect the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company, the Operating Partnership and its subsidiaries considered as one
enterprise. Except as disclosed in the Prospectus, in connection with the
construction on or operation and use of the Properties, the Company and
the Operating Partnership represent that, as of the date of this
Agreement, each of the Company and the Operating Partnership has no
knowledge of any material failure to comply with all applicable local,
state and federal environmental laws, regulations, ordinances and
administrative and judicial orders relating to the use, generation,
recycling, reuse, sale, storage, handling, transport and disposal of any
Hazardous Materials (collectively, "Environmental Laws") that would have a
material adverse effect on the condition, financial or otherwise, or on
the earnings, business affairs or business prospects of the Company, the
Operating Partnership and its subsidiaries considered as one enterprise.
(xxv) Each of the Company and the Operating Partnership does no
business with any person or affiliate located in Cuba within the meaning
of Florida Rule 3E- 900.001.
(b) Any certificate signed by any officer of the Company in such capacity
or as general partner of the Operating Partnership and delivered to you or to
counsel for the Underwriters in connection with the offering of the Underwritten
Securities shall be deemed a representation and warranty by the Company or the
Operating Partnership, as the case may be, to each Underwriter participating in
such offering as to the matters covered thereby on the date of such certificate
and, unless subsequently amended or supplemented, at each Representation Date
subsequent thereto.
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Section 2. Purchase and Sale.
(a) The several commitments of the Underwriters to purchase the
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to have been made on the basis of the representations and warranties
herein contained and shall be subject to the terms and conditions herein set
forth.
(b) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
may grant, if so provided in the applicable Terms Agreement relating to the
Initial Underwritten Securities, an option to the Underwriters named in such
Terms Agreement, severally and not jointly, to purchase up to the number of
Option Securities set forth therein at the same price per Option Security as is
applicable to the Initial Underwritten Securities. Such option, if granted, will
expire 30 days or such lesser number of days as may be specified in the
applicable Terms Agreement after the Representation Date relating to the Initial
Underwritten Securities, and may be exercised in whole or in part from time to
time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial Underwritten
Securities upon notice by you to the Company setting forth the number of Option
Securities as to which the several Underwriters are then exercising the option
and the time, date and place of payment and delivery for such Option Securities.
Any such time and date of delivery (a "Date of Delivery") shall be determined by
you, but shall not be later than three full business days and not be earlier
than two full business days after the exercise of said option, unless otherwise
agreed upon by you and the Company. If the option is exercised as to all or any
portion of the Option Securities, each of the Underwriters, acting severally and
not jointly, will purchase that proportion of the total number of Option
Securities then being purchased which the number of Initial Underwritten
Securities each such Underwriter has severally agreed to purchase as set forth
in the applicable Terms Agreement bears to the total number of Initial
Underwritten Securities (except as otherwise provided in the applicable Terms
Agreement), subject to such adjustments as you in your discretion shall make to
eliminate any sales or purchases of fractional Initial Underwritten Securities.
(c) Payment of the purchase price for, and delivery of, the Underwritten
Securities to be purchased by the Underwriters shall be made at the offices of
Brown & Wood LLP, One World Trade Center, New York, New York 10048-0557, or at
such other place as shall be agreed upon by you and the Company, at 10:00 A.M.,
New York City time, on the third business day (unless postponed in accordance
with the provisions of Section 10) following the date of the applicable Terms
Agreement or, if pricing takes place after 4:30 p.m. New York City time on the
date of the applicable
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Terms Agreement, on the fourth business day (unless postponed in accordance with
the provisions of Section 10) following the date of the applicable Terms
Agreement or at such other time as shall be agreed upon by you and the Company
(each such time and date being referred to as a "Closing Time"). In addition, in
the event that any or all of the Option Securities are purchased by the
Underwriters, payment of the purchase price for, and delivery of certificates
representing, such Option Securities, shall be made at the above-mentioned
offices of Brown & Wood LLP, or at such other place as shall be agreed upon by
you and the Company on each Date of Delivery as specified in the notice from you
to the Company. Unless otherwise specified in the applicable Terms Agreement,
payment shall be made to the Company by wire transfer of immediately available
funds to a bank account designated by the Company, against delivery to you for
the respective accounts of the Underwriters for the Underwritten Securities to
be purchased by them. The Underwritten Securities shall be in such authorized
denominations and registered in such names as you may request in writing at
least one business day prior to the applicable Closing Time or Date of Delivery,
as the case may be. The Underwritten Securities, which may be in temporary form,
will be made available for examination and packaging by you on or before the
first business day prior to the Closing Time or Date of Delivery, as the case
may be.
If authorized by the applicable Terms Agreement, the Underwriters named
therein may solicit offers to purchase Underwritten Securities from the Company
pursuant to delayed delivery contracts ("Delayed Delivery Contracts")
substantially in the form of Exhibit B hereto with such changes therein as the
Company may approve. As compensation for arranging Delayed Delivery Contracts,
the Company will pay to you at Closing Time, for the respective accounts of the
Underwriters, a fee specified in the applicable Terms Agreement for each of the
Underwritten Securities for which Delayed Delivery Contracts are made at the
Closing Time as is specified in the applicable Terms Agreement. Any Delayed
Delivery Contracts are to be with institutional investors of the types described
in the Prospectus. At the Closing Time, the Company will enter into Delayed
Delivery Contracts (for not less than the minimum number of Underwritten
Securities per Delayed Delivery Contract specified in the applicable Terms
Agreement) with all purchasers proposed by the Underwriters and previously
approved by the Company as provided below, but not for an aggregate number of
Underwritten Securities in excess of that specified in the applicable Terms
Agreement. The Underwriters will not have any responsibility for the validity or
performance of Delayed Delivery Contracts.
You shall submit to the Company, at least two business days prior to the
Closing Time, the names of any institutional investors with which it is proposed
that the Company will enter into Delayed Delivery Contracts and the number of
Underwritten
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Securities to be purchased by each of them, and the Company will advise you, at
least two business days prior to the Closing Time, of the names of the
institutions with which the making of Delayed Delivery Contracts is approved by
the Company and the number of Underwritten Securities to be covered by each such
Delayed Delivery Contract.
The number of Underwritten Securities agreed to be purchased by the
several Underwriters pursuant to the applicable Terms Agreement shall be reduced
by the number of Underwritten Securities covered by Delayed Delivery Contracts,
as to each Underwriter as set forth in a written notice delivered by you to the
Company; provided, however, that the total number of Underwritten Securities to
be purchased by all Underwriters shall be the total number of Underwritten
Securities covered by the applicable Terms Agreement, less the number of
Underwritten Securities covered by Delayed Delivery Contracts.
SECTION 3. Covenants of the Company and the Operating Partnership. Each of
the Company and the Operating Partnership covenants with you, and with each
Underwriter participating in the offering of Underwritten Securities, as
follows:
(a) Immediately following the execution of the applicable Terms Agreement,
the Company will prepare a Prospectus Supplement setting forth the number of
Underwritten Securities covered thereby and their terms not otherwise specified
in the Prospectus pursuant to which the Underwritten Securities are being
issued, the names of the Underwriters participating in the offering and the
number of Underwritten Securities which each severally has agreed to purchase,
the names of the Underwriters acting as co- managers in connection with the
offering, the price at which the Underwritten Securities are to be purchased by
the Underwriters from the Company, the initial public offering price, if any,
the selling concession and reallowance, if any, any delayed delivery
arrangements, and such other information as you and the Company deem appropriate
in connection with the offering of the Underwritten Securities; and the Company
will, by the close of business in New York on the business day immediately
succeeding the date of the applicable Terms Agreement, transmit copies of the
Prospectus Supplement to the Commission for filing pursuant to Rule 424(b) of
the 1933 Act Regulations and will furnish to the Underwriters named therein as
many copies of the Prospectus (including such Prospectus Supplement) as you
shall reasonably request. If the Company elects to rely on Rule 434 under the
1933 Act Regulations, the Company will prepare an abbreviated term sheet that
complies with the requirements of Rule 434 under the 1933 Act Regulations and
will provide the Underwriters with copies of the form of Rule 434 Prospectus, in
such number as the Underwriters may reasonably request, and file or transmit for
filing with the Commission the form of Prospectus complying with Rule 434(c)(2)
of the 1933 Act Regulations in accordance with
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Rule 424(b) of the 1933 Act Regulations by the close of business in New York on
the business day immediately succeeding the date of the applicable Terms
Agreement.
(b) The Company will notify you immediately, and confirm such notice in
writing, of (i) the effectiveness of any amendment to the Registration
Statement, (ii) the transmittal to the Commission for filing of any Prospectus
Supplement or other supplement or amendment to the Prospectus or any document to
be filed pursuant to the 1934 Act, (iii) the receipt of any comments from the
Commission, (iv) any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, and (v) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose. The Company will make every reasonable effort
to prevent the issuance of any such stop order and, if any stop order is issued,
to obtain the lifting thereof at the earliest possible moment.
(c) At any time when the Prospectus is required to be delivered under the
1933 Act or the 1934 Act in connection with sales of the Underwritten
Securities, the Company will give you notice of its intention to file or prepare
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus, whether pursuant to the 1933 Act, 1934 Act or otherwise,
(including any revised Prospectus which the Company proposes for use by the
Underwriters in connection with an offering of Underwritten Securities which
differs from the Prospectus on file at the Commission at the time the
Registration Statement first becomes effective, whether or not such revised
Prospectus is required to be filed pursuant to Rule 424(b) of the 1933 Act
Regulations, or any abbreviated term sheet prepared in reliance on Rule 434 of
the 1933 Act Regulations) and will furnish you with copies of any such amendment
or supplement a reasonable amount of time prior to such proposed filing or
preparation, as the case may be, and will not file or prepare any such amendment
or supplement or other documents in a form to which you or counsel for the
Underwriters shall reasonably object.
(d) The Company will deliver to each Underwriter as many signed and
conformed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) as such Underwriter reasonably requests.
(e) The Company will furnish to each Underwriter, from time to time during
the period when the Prospectus is required to be delivered under the 1933 Act or
the 1934 Act in connection with sales of the Underwritten Securities, such
number of copies of
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the Prospectus (as amended or supplemented) as such Underwriter may reasonably
request for the purposes contemplated by the 1933 Act, the 1933 Act Regulations,
the 1934 Act or the 1934 Act Regulations.
(f) If at any time when the Prospectus is required to be delivered under
the 1933 Act or the 1934 Act in connection with sales of the Underwritten
Securities any event shall occur or condition exist as a result of which it is
necessary, in the opinion of counsel for the Underwriters or counsel for the
Company, to amend or supplement the Prospectus in order that the Prospectus will
not include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time it is delivered to a purchaser,
or if it shall be necessary, in the opinion of either such counsel, at any such
time to amend or supplement the Registration Statement or the Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, then the Company will promptly prepare and file with the Commission
such amendment or supplement, whether by filing documents pursuant to the 1933
Act, the 1934 Act or otherwise, as may be necessary to correct such untrue
statement or omission or to make the Registration Statement and Prospectus
comply, in the opinion of Counsel to the Underwriters, with such requirements,
and the Company will furnish to the Underwriters a reasonable number of copies
of such amendment or supplement.
(g) The Company will endeavor, in cooperation with the Underwriters, to
qualify the Underwritten Securities for offering and sale under the applicable
securities laws and real estate syndication laws of such states and other
jurisdictions of the United States as you may designate; provided, however, that
the Company shall not be obligated to qualify as a foreign corporation in any
jurisdiction where it is not so qualified. In each jurisdiction in which the
Underwritten Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such jurisdiction to
continue such qualification in effect for so long as may be required for the
distribution of the Underwritten Securities; provided, however, that the Company
shall not be obligated to qualify as a foreign corporation in any jurisdiction
where it is not so qualified.
(h) With respect to each sale of Underwritten Securities, the Company will
make generally available to its security holders as soon as practicable, but not
later than 60 days after the close of the period covered thereby, an earnings
statement (in form complying with the provisions of Rule 158 of the 1933 Act
Regulations) covering a twelve month period beginning not later than the first
day of the Company's fiscal quarter next following
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the "effective date" (as defined in such Rule 158) of the Regis-
tration Statement.
(i) The Company will use its best efforts to meet the requirements to
qualify as a "real estate investment trust" under the Code for the taxable year
in which sales of the Underwritten Securities are to occur.
(j) The Company will use the net proceeds received by it from the sale of
the Underwritten Securities in the manner specified in the Prospectus under the
caption "Use of Proceeds."
(k) The Company, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act in connection with sales of the
Underwritten Securities, will file all documents required to be filed with the
Commission pursuant to Section 13, 14 or 15 of the 1934 Act within the time
periods prescribed by the 1934 Act and the 1934 Act Regulations.
(l) Neither the Company nor the Operating Partnership will, during a
period of 90 days from the date of the applicable Terms Agreement, with respect
to the Underwritten Securities covered thereby, without your prior written
consent, directly or indirectly, sell, offer to sell, grant any option for the
sale of, or otherwise dispose of, any of the Company's or the Operating
Partnership's equity securities (other than the Underwritten Securities which
are to be sold pursuant to such Terms Agreement) or any securities convertible
into or exchangeable into or exercisable for equity securities of either the
Company or the Operating Partnership, except in accordance with this Agreement,
pursuant to a dividend reinvestment plan, pursuant to employee or director stock
option plans, or as partial or full payment for properties to be acquired by the
Operating Partnership.
(m) If applicable, the Company will use its best efforts to list the
shares of Common Stock on the New York Stock Exchange or such other national
exchange on which the Company's shares of Common Stock are then listed.
Section 4. Payment of Expenses. The Company will pay all expenses incident
to the performance of its obligations under this Agreement or the applicable
Terms Agreement, including (i) the printing and filing of the Registration
Statement as originally filed and of each amendment thereto, (ii) the cost of
reproducing and distributing to you copies of this Agreement and the applicable
Terms Agreement, (iii) the preparation, issuance and delivery of the
Underwritten Securities to the Underwriters, (iv) the fees and disbursements of
the Company's counsel and accountants, (v) the qualification of the Underwritten
Securities under securities laws and real estate syndication laws in accordance
with the provisions of Section 3(g), including filing
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fees and the fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
Survey, (vi) the printing, reproduction and delivery to the Underwriters copies
of the Blue Sky Survey, (vii) the printing and delivery to the Underwriters of
copies of the Registration Statement as originally filed and of each amendment
thereto, each preliminary prospectus and of the Prospectus and any amendments or
supplements thereto, (viii) the fees and expenses, if any, incurred with respect
to the listing of the Underwritten Securities on any national securities
exchange, and (ix) the fees and expenses, if any, incurred with respect to any
filing with the National Association of Securities Dealers, Inc.
If the applicable Terms Agreement is terminated by you in accordance with
the provisions of Section 5, Section 9(b)(i) or 9(b)(ii), the Company shall
reimburse the Underwriters named in such Terms Agreement for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
Section 5. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase Underwritten Securities pursuant to
the applicable Terms Agreement are subject to the accuracy of the
representations and warranties of the Company and the Operating Partnership
herein contained, the performance by each of the Company and the Operating
Partnership of all of its covenants and other obligations hereunder, and to the
following further conditions:
(a) At Closing Time, (i) no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and (ii) there shall not
have come to your attention any facts that would cause you to believe that the
Prospectus, together with the applicable Prospectus Supplement, at the time it
was required to be delivered to purchasers of the Underwritten Securities,
included an untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in light of the
circumstances existing at such time, not misleading.
(b) At Closing Time, you shall have received:
(1) The favorable opinion, dated as of Closing Time, of Goodwin,
Procter & Hoar LLP, counsel for the Company and the Operating Partnership,
in form and substance satisfactory to counsel for the Underwriters, to the
effect that:
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(i) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the
State of Maryland.
(ii) The Operating Partnership has been duly formed and is
validly existing as a limited partnership in good standing under the
laws of the State of Delaware. All of the issued and outstanding
partnership interests of the Operating Partnership have been duly
authorized and validly issued to the Company and the entities or
persons described in the Prospectus and are fully paid. The Company
is the sole general partner of the Operating Partnership.
(iii) Each subsidiary of the Operating Partnership has been
duly organized and is validly existing as a partnership, limited
liability company or corporation, as the case may be, in good
standing under the laws of its state of organization.
(iv) Each of the Company, the Operating Partnership and its
subsidiaries has full corporate, limited liability company or
partnership power and authority, as the case may be, to own, lease
and operate its properties and to conduct its respective business as
described in the Prospectus.
(v) Each of the Company, the Operating Partnership and its
subsidiaries, respectively, is duly qualified or registered as a
foreign corporation, limited liability company or partnership, as
the case may be, to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or to be in good
standing would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or
business prospects of the Company, the Operating Partnership and its
subsidiaries considered as one enterprise.
(vi) The authorized issued and outstanding capital stock of
the Company is as set forth in the Prospectus under "Capitalization"
(as of the date set forth therein) and such stock has been duly
authorized, validly issued, fully paid and non-assessable.
(vii) Each of this Agreement and the applicable Terms
Agreement has been duly authorized, executed and delivered by the
Company.
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(viii) This Agreement has been duly authorized, executed and
delivered by the Operating Partnership.
(ix) The Underwritten Securities being sold pursuant to this
Agreement and the applicable Terms Agreement have been duly
authorized for issuance and sale pursuant to this Agreement and such
Terms Agreement; and such Underwritten Securities, when issued and
delivered by the Company pursuant to this Agreement against payment
of the consideration set forth in such Terms Agreement or any
Delayed Delivery Contract, will be validly issued, fully paid and
non-assessable, and the issuance of such Underwritten Securities
will not be subject to preemptive or other similar rights arising
out of the operation of law or, to their knowledge, otherwise.
(x) The Registration Statement has been declared effective
under the 1933 Act and, to the best of their knowledge and
information, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission.
(xi) The Registration Statement and the Prospectus, excluding
the documents incorporated by reference therein, as of their
respective effective or issue dates, comply as to form in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations; it being understood, however, that no opinion need
be rendered with respect to the financial statements, schedules and
other financial and statistical data included or incorporated by
reference in the Registration Statement or the Prospectus. If
applicable, the Rule 434 Prospectus conforms to the requirements of
Rule 434 under the 1933 Act Regulations.
(xii) Each document filed pursuant to the 1934 Act (other than
the financial statements, schedules and other financial and
statistical data included therein, as to which no opinion need be
rendered) and incorporated or deemed to be incorporated by reference
in the Prospectus complied when so filed as to form in all material
respects with the 1934 Act and the 1934 Act Regulations.
(xiii) To their knowledge, no authorization, approval or
consent of any court or governmental authority or agency is required
that has not been obtained in connection with the consummation by
the Company, the Operating Partnership or any of its
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subsidiaries of the transactions contemplated by this Agreement and
the applicable Terms Agreement except such as may be required under
the 1933 Act, the 1934 Act and state securities laws or real estate
syndication laws.
(xiv) None of the Company, the Operating Partnership or any of
its subsidiaries is required to be registered under the Investment
Company Act of 1940.
(xv) To the best of such counsel's knowledge (A) the following
is a complete list of registration rights agreements entered into by
the Company and currently in effect: (1) agreement dated May 26,
1994 with Richard L. Friedman and John L. Hall II; (2) agreement
dated May 26, 1994 with certain holders of Units; (3) agreement
dated October 27, 1994 with Wellesley Office Realty Corp. and
Federal 175 Realty Corp.; and (4) agreement dated February 15, 1996
with TMPC, L.P. (B) no persons have exercised registration or other
similar rights to have any securities registered pursuant to the
Registration Statement.
(xvi) Commencing with the Company's first taxable year ended
December 31, 1994, the Company has been organized in conformity with
the requirements for qualifications as a REIT under the Code and the
Company's method of operation will enable it to meet the
requirements for taxation as a REIT under the Code.
(xvii) The Underwritten Securities conform in all material
respects to the statements relating thereto contained in the
Prospectus and the form of certificate used to evidence the
Underwritten Securities is in due and proper form and complies in
all material respects with all applicable statutory requirements.
(xviii) The statements set forth in the Prospectus under the
captions "Description of Common Stock," "Restrictions on Transfers
of Capital Stock" and "Federal Income Tax Considerations", to the
extent such statements constitute matters of law, or legal
conclusions, have been reviewed by them and are correct in all
material respects.
(2) The favorable opinion, dated as of Closing Time, of Goulston &
Storrs, P.C., special counsel for the Company and the Operating
Partnership, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
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(i) To the best of their knowledge, there are no legal or
governmental proceedings pending or threatened against the Company,
the Operating Partnership or any of its subsidiaries which are
required to be disclosed in the Prospectus, other than those
disclosed therein, and all pending legal or governmental proceedings
to which the Company, the Operating Partnership or any of its
subsidiaries is a party or of which any of the Properties or assets
of the Company, the Operating Partnership or any of its subsidiaries
is the subject which are not described in the Prospectus, including
ordinary routine litigation incidental to the business, are,
considered in the aggregate, not material.
(ii) To the best of their knowledge, there are no contracts,
indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the
Registration Statement or the Prospectus or to be filed as exhibits
thereto other than those described or referred to therein or filed
as exhibits thereto other than those described or referred to
therein or filed as exhibits thereto and the descriptions thereof or
references thereto are correct in all material respects, and, to the
best of their knowledge and information, no default exists in the
due performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument so
described, referred to or filed.
(iii) The execution and delivery of this Agreement and the
applicable Terms Agreement and the consummation of the transactions
contemplated herein and therein and compliance by each of the
Company, the Operating Partnership or any of its subsidiaries with
its obligations hereunder and thereunder will not conflict with or
constitute a breach of, or default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any Property
or assets of the Company, the Operating Partnership or any of its
subsidiaries pursuant to any contract, indenture, mortgage, loan
agreement, to which the Company, the Operating Partnership or any of
its subsidiaries is a party or by which it or any of them may be
bound or to which any of the Properties or assets of the Company,
the Operating Partnership or any of its subsidiaries is subject, nor
will such action result in violation of the provisions of the
charter, by-laws, agreement of limited partnership or other
organizational documents of the Company, the Operating Partnership
or any of its
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subsidiaries or any applicable law, administrative
regulation or administrative or court order or decree.
(3) The favorable opinion, dated as of Closing Time, of Brown & Wood
LLP, counsel for the Underwriters, with respect to the matters set forth
in (i), (vii) to (xiii), inclusive and (xix), of subsection (b)(1).
(4) In giving their opinions required by subsections (b)(1), (b)(2)
and (b)(3), respectively, of this Section, Goodwin, Procter & Hoar LLP,
Goulston & Storrs, P.C. and Brown & Wood LLP shall each additionally state
that nothing has come to their attention that would lead them to believe
that the Registration Statement or any amendment thereto, (except for
financial statements and schedules and other financial and statistical
data, as to which counsel need make no statement) at the time it became
effective (or, if an amendment to the Registration Statement or an Annual
Report on Form 10-K has been filed by the Company with the Commission,
subsequent to the effectiveness of the Registration Statement, then at the
time such amendment becomes effective or at the time of the most recent
filing of such Annual Report, as the case may be) or at the Representation
Date, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to
make the statements therein not misleading or that the Prospectus or any
amendment or supplement thereto, (except for financial statements and
schedules and other financial and statistical data, as to which such
counsel need make no statement) at the Representation Date or at Closing
Time, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. In giving their opinions required by
subsections (b)(1), (b)(2) and (b)(3), respectively, of this Section,
Goodwin, Procter & Hoar LLP, Goulston & Storrs, P.C. and Brown & Wood LLP
may rely, (1) as to all matters of fact, upon certificates and written
statements of officers and employees of and accountants for the Company
and Operating Partnership, (2) with respect to certain other matters, upon
certificates of appropriate government officials in such jurisdiction, and
(3) Brown & Wood LLP may additionally rely, as to matters involving the
laws of the State of Maryland, upon the opinion of Goodwin, Procter & Hoar
LLP (or other counsel reasonably satisfactory to counsel for the
Underwriters) in form and substance satisfactory to counsel for the
Underwriters.
(c) At Closing Time, there shall not have been, since the date of the
applicable Terms Agreement or since the respective dates as of which information
is given in the Prospectus, any
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material adverse change in the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company, the Operating
Partnership and its subsidiaries considered as one enterprise, or the
Properties, collectively, whether or not arising in the ordinary course of
business, from that set forth in the Prospectus; no proceedings shall be pending
or, to the knowledge of the Company or Operating Partnership, threatened against
the Company, the Operating Partnership or any of its subsidiaries or any of the
Properties before or by any Federal, state or other commission, board or
administrative agency wherein an unfavorable decision, ruling or finding would
materially and adversely affect the business, property, financial condition or
income of the Company, the Operating Partnership and its subsidiaries considered
as one enterprise or the Properties, collectively, other than as set forth in
the Prospectus or incorporated therein by reference; and you shall have received
a certificate of the President and Chief Executive Officer and of the Chief
Financial Officer of the Company in such capacity, and of the general partner of
the Operating Partnership, dated as of such Closing Time, to the effect that (i)
there has been no such material adverse change and (ii) the representations and
warranties in Section 1 are true and correct with the same force and effect as
though such Closing Time were a Representation Date. As used in this Section
5(c), the term "Prospectus" means the Prospectus in the form first used to
confirm sales of the Underwritten Securities.
(d) At the time of execution of the applicable Terms Agreement, you shall
have received a letter dated such date from Coopers & Lybrand L.L.P., in form
and substance satisfactory to you, to the effect that (i) they are independent
public accountants with respect to the Company and the Predecessor within the
meaning of the 1933 Act and the 1933 Act Regulations thereunder; (ii) it is
their opinion that the financial statements and financial statement schedules
included or incorporated by reference in the Registration Statement and the
Prospectus and covered by their opinions therein comply as to form in all
material respects with the applicable accounting requirements of the 1933 Act
and the 1933 Act Regulations; (iii) they have performed limited procedures, not
constituting an audit, including a reading of the latest available interim
financial statements of the Company, a reading of the minute books of the
Company, inquiries of officials of the Company who have responsibility for
financial and accounting matters and such other inquiries and procedures as may
be specified in such letter, and on the basis of such limited review and
procedures (which shall include, without limitation, the procedures specified by
the American Institute of Certified Public Accountants for a review of interim
financial information as described in SAS No. 71, Interim Financial Information,
with respect to the unaudited condensed consolidated financial statement of the
Company and its subsidiaries included or
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incorporated by reference in the Registration Statement), nothing has come to
their attention which causes them to believe (A) that any material modifications
should be made to the unaudited condensed financial statements of the Company
included in the Registration Statement for them to be in conformity with
generally accepted accounting principles or that such unaudited financial
statements do not comply as to form in all material respects with the applicable
accounting requirements of the 1934 Act and the 1934 Act Regulations, (B) the
unaudited financial data of the Company included or incorporated by reference in
the Registration Statement and the Prospectus under the caption "Selected
Financial Information" was not determined on a basis substantially consistent
with that used in determining the corresponding amounts in the audited financial
statements included or incorporated by reference in the Registration Statement
and the Prospectus, (C) the pro forma financial information included or
incorporated by reference in the Registration Statement was not prepared in
accordance with the requirements of the 1933 Act and the 1933 Act Regulations or
that the pro forma financial information included in or incorporated by
reference in the Registration Statement and the Prospectus has not been properly
applied to the historical amounts in the compilation of those statements, and
(D) at a specified date not more than three days prior to the date of the
applicable Terms Agreement, there has been any change in the capital stock of
the Company or any increase in the debt of the Company or any decrease in the
net assets of the Company, as compared with the amounts shown in the most recent
consolidated balance sheet included or incorporated by reference in the
Registration Statement and the Prospectus or, during the period from the date of
the most recent consolidated statement of operations included or incorporated by
reference in the Registration Statement and the Prospectus to a specified date
not more than three days prior to the date of the applicable Terms Agreement,
there were any decreases, as compared with the corresponding period in the
preceding year, in consolidated revenues, operating income, funds from
operations, net income or net income per share of the Company, except in all
instances for changes, increases or decreases which the Registration Statement
and the Prospectus disclose have occurred or may occur; and (iv) in addition to
the examination referred to in their opinion and the limited procedures referred
to in clause (iii) above, they have carried out certain specified procedures,
not constituting an audit, with respect to certain amounts, percentages and
financial information which are included or incorporated by reference in the
Registration Statement and Prospectus and which are specified by you, and have
found such amounts, percentages and financial information to be in agreement
with the relevant accounting, financial and other records of the Company
identified in such letter.
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(e) At Closing Time, you shall have received a letter, dated as of Closing
Time, from Coopers & Lybrand L.L.P. to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (d) of this
Section, except that the "specified date" referred to shall be a date not more
than three days prior to such Closing Time.
(f) At the time of the execution of the applicable Terms Agreement, you
shall have received a letter dated such date from such independent accountants
that have prepared historical financial statements included in or incorporated
by reference into the Registration Statement and Prospectus which financial
statements relate to properties or assets acquired or to be acquired by the
Company, in form and substance satisfactory to the Underwriters, to the effect
that (i) they are independent accountants with respect to the Company and such
properties or assets within the meaning of the 1933 Act and the 1933 Act
Regulations; and (ii) it is their opinion that the historical financial
statements for such properties or assets that have been audited by them and
covered by their opinions included or incorporated by reference into the
Registration Statement and the Prospectus comply in form in all material
respects with the applicable accounting requirements of the 1933 Act and the
1933 Act Regulations.
(g) At Closing Time, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may reasonably require for
the purpose of enabling them to pass upon the issuance and sale of the
Underwritten Securities as herein contemplated and related proceedings, or in
order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the
Underwritten Securities, as herein contemplated shall be reasonably satisfactory
in form and substance to you and counsel for the Underwriters.
(h) In the event that the Underwriters exercise their option provided in a
Terms Agreement as set forth in Section 2(b) hereof to purchase all or any
portion of the Option Securities, the representations and warranties of the
Company and the Operating Partnership contained herein and the statements in any
certificates furnished by the Company and the Operating Partnership hereunder
shall be true and correct as of each Date of Delivery and, at the relevant Date
of Delivery, you shall have received:
(1) A certificate, dated such Date of Delivery, of the President and
Chief Executive Officer or a Vice President of the Company and of the
chief financial or chief accounting officer of the Company on behalf of
the Company and on behalf of the Company in its capacity as general
partner of
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the Operating Partnership confirming that the certificate delivered at the
Closing Time pursuant to Section 5(c) hereof remains true and correct as
of such Date of Delivery.
(2) The favorable opinion of Goodwin, Procter & Hoar LLP, counsel
for the Company and the Operating Partnership, in form and substance
reasonably satisfactory to counsel for the Underwriters, dated such Date
of Delivery, relating to the Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion required
by Sections 5(b)(1) and 5(b)(4) hereof.
(3) The favorable opinion of Goulston & Storrs, P.C., special
counsel for the Company and the Operating Partnership in form and
substance reasonably satisfactory to counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Shares and otherwise to the
same extent as the opinion required by Sections 5(b)(2) and 5(b)(4)
hereof.
(4) The favorable opinion of Brown & Wood LLP, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Sections 5(b)(3) and 5(b)(4)
hereof.
(5) A letter from Coopers & Lybrand L.L.P., in form and substance
satisfactory to you and dated such Date of Delivery, substantially the
same in scope and substance as the letter furnished to you pursuant to
Section 5(d) hereof, except that the "specified date" in the letter
furnished pursuant to this Section 5(h)(5) shall be a date not more than
three days prior to such Date of Delivery.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, the applicable Terms Agreement may be
terminated by you by notice to the Company at any time at or prior to the
Closing Time or Date of Delivery, as the case may be, and such termination shall
be without liability of any party to any other party except as provided in
Section 4 hereof.
Section 6. Indemnification. (a) The Company and the Operating Partnership,
jointly and severally, hereby agree to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act as follows:
(1) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any
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amendment thereto), including the information deemed to be part of the
Registration Statement pursuant to Rule 430A(b) or Rule 434 of the 1933
Act Regulations, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus (or any amendment or supplement thereto) or the omission, or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(2) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the indemnifying party; and
(3) against any and all expense whatsoever (including, the
reasonable fees and disbursements of counsel chosen by you) reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceedings by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (1) or (2)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through you expressly for use in the Registration Statement (or any
amendment thereto) and the Prospectus (or any amendment or supplement thereto);
and provided, further, that neither the Company nor the Operating Partnership
will be liable to any Underwriter or any person controlling such Underwriter
with respect to any untrue statement or omission or alleged untrue statement or
omission made in any preliminary prospectus which is corrected in the Prospectus
(or any amendment or supplement thereto) if the Company or the Operating
Partnership sustains the burden of proving that such Underwriter sold
Underwritten Securities to the person asserting any such loss, claim, damage or
liability without sending or giving, at or prior to the written confirmation of
the sale of such Underwritten Securities to such person, a copy of the
Prospectus (or any
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amendment or supplement thereto), if the Company had previously furnished copies
thereof to such Underwriter.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company and the Operating Partnership, the directors, each of the officers who
signed the Registration Statement and each person, if any, who controls the
Company or the Operating Partnership within the meaning of Section 15 of the
1933 Act, against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto) or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto) or any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action. If it so elects within a reasonable time after receipt of such notice,
an indemnifying party, jointly with any other indemnifying parties receiving
such notice, may assume the defense of such action with counsel chosen by it and
approved by the indemnified parties defendant in such action, unless such
indemnified parties reasonably object to such assumption on the ground that
there may be legal defenses available to them which are different from or in
addition to those available to such indemnifying party. If an indemnifying party
assumes the defense of such action, the indemnifying parties shall not be liable
for any fees and expenses of counsel for the indemnified parties incurred
thereafter in connection with such action. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to
any local counsel) separate from their own counsel for all indemnified parties
in connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances.
(d) For purposes of this Section 6, all references to the Registration
Statement, any preliminary prospectus or the Prospectus, or any amendment or
supplement to any of the foregoing, shall be deemed to include, without
limitation, any electronically transmitted copies thereof, including, without
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limitation, any copies filed with the Commission pursuant to
EDGAR.
Section 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company, the Operating
Partnership and the Underwriters with respect to the offering of the
Underwritten Securities shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity
agreement incurred by the Company, the Operating Partnership and one or more of
the Underwriters in respect of such offering, as incurred, in such proportions
that the Underwriters are responsible for that portion represented by the
percentage that the underwriting discount appearing on the cover page of the
Prospectus in respect of such offering bears to the initial public offering
price appearing thereon and the Company and the Operating Partnership are
responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. Notwithstanding the provisions of this
Section 7, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Underwritten Securities
purchased by it pursuant to the applicable Terms Agreement and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay in respect of such losses,
liabilities, claims, damages and expenses. For purposes of this Section, each
person, if any, who controls an Underwriter within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company or the
Operating Partnership within the meaning of Section 15 of the 1933 Act shall
have the same rights to contribution as the Company and the Operating
Partnership, respectively. The Underwriter's obligations to contribute pursuant
to this Section 7 are several in proportion to their respective underwriting
commitments and not joint. For purposes of this Section 7, the Company, the
Operating Partnership and its subsidiaries shall be deemed one party jointly and
severally liable for any obligations hereunder.
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Section 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or
the applicable Terms Agreement, or contained in certificates of officers of the
Company and the Operating Partnership submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any termination of this
Agreement or the applicable Terms Agreement, or investigation made by or on
behalf of any Underwriter or any controlling person, or by or on behalf of the
Company or the Operating Partnership, and shall survive delivery of and payment
for the Underwritten Securities.
Section 9. Termination of Agreement. (a) This Agreement (excluding the
applicable Terms Agreement) may be terminated for any reason at any time by the
Company, the Operating Partnership or by you upon the giving of 30 days' written
notice of such termination to the other parties hereto.
(b) You may also terminate the applicable Terms Agreement, by notice to
the Company, at any time at or prior to the Closing Time (i) if there has been,
since the date of such Terms Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company, the Operating Partnership and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or any outbreak of
hostilities or escalation thereof or other calamity or crisis the effect of
which on the financial markets of the United States is such as to make it, in
your judgment, impracticable to market the Underwritten Securities or enforce
contracts for the sale of the Underwritten Securities, or (iii) if trading in
any of the securities of the Company has been suspended or limited by the
Commission, or the New York Stock Exchange, or if trading generally on either
the New York Stock Exchange or the American Stock Exchange has been suspended,
or minimum or maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by either of said exchanges or by
order of the Commission or any other governmental authority, or if a banking
moratorium has been declared by Federal or New York authorities. As used in this
Section 9(b), the term "Prospectus" means the Prospectus in the form first used
to confirm sales of the Underwritten Securities.
(c) In the event of any such termination, (x) the covenants set forth in
Section 3 with respect to any offering of Underwritten Securities shall remain
in effect so long as any Underwriter owns any such Underwritten Securities
purchased from the Company pursuant to the applicable Terms Agreement and (y)
the covenant set forth in Section 3(h) hereof, the provisions of
33
<PAGE>
Section 4 hereof, the indemnity and contribution agreements set forth in
Sections 6 and 7 hereof, and the provisions of Sections 8 and 13 hereof shall
remain in effect.
Section 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at the Closing Time to purchase the Underwritten
Securities which it or they are obligated to purchase under the applicable Terms
Agreement (the "Defaulted Securities"), then you shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, you shall not have completed such
arrangements within such 24-hour period, then:
(a) if the total number of Defaulted Securities does not exceed 10% of the
total number of Underwritten Securities to be purchased pursuant to such Terms
Agreement, the non-defaulting Underwriters named in such Terms Agreement shall
be obligated, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(b) if the total number of Defaulted Securities exceeds 10% of the total
number of Underwritten Securities to be purchased pursuant to such Terms
Agreement, the applicable Terms Agreement shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default under this Agreement and
the applicable Terms Agreement.
In the event of any such default which does not result in a termination of
the applicable Terms Agreement, either you or the Company shall have the right
to postpone the Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or the Prospectus or
in any other documents or arrangements.
Section 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed c/o Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Merrill Lynch World Headquarters, North Tower,
World Financial Center, New York, New York 10281-1305, attention of John Brady,
Managing Director; and notices to the Company and the Operating Partnership
shall be directed to them at Beacon Properties Corporation, 50 Rowes Wharf,
Boston, Massachusetts 02110, attention of Alan M. Leventhal, President.
34
<PAGE>
Section 12. Parties. This Agreement and the applicable Terms Agreement
shall each inure to the benefit of and be binding upon you and the Company, the
Operating Partnership and any Underwriter who becomes a party to such Terms
Agreement, and their respective successors. Nothing expressed or mentioned in
this Agreement or the applicable Terms Agreement is intended or shall be
construed to give any person, firm or corporation, other than those referred to
in Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or such
Terms Agreement or any provision herein or therein contained. This Agreement and
the applicable Terms Agreement and all conditions and provisions hereof and
thereof are intended to be for the sole and exclusive benefit of the parties
hereto and thereto and their respective successors and said controlling persons
and officers and directors and their heirs and legal representatives, and for
the benefit of no other person, firm or corporation. No purchaser of
Underwritten Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.
Section 13. Governing Law and Time. This Agreement and the
applicable Terms Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State. Specified
times of day refer to New York City time.
Section 14. Counterparts. This Agreement and the
applicable Terms Agreement may be executed in one or more
counterparts, and if executed in more than one counterpart the
executed counterparts shall constitute a single instrument.
35
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument, along with all counterparts will become a binding agreement between
you, the Company and the Operating Partnership in accordance with its terms.
Very truly yours,
BEACON PROPERTIES L.P.
By: /s/ Alan M. Leventhal
-------------------------------------
Name: Alan M. Leventhal
Title: President
BEACON PROPERTIES CORPORATION
By: Beacon Properties Corporation
(its general partner)
By: /s/ Alan M. Leventhal
-------------------------------------
Name: Alan M. Leventhal
Title: President
CONFIRMED AND ACCEPTED,
as of the date first
above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ John C. Brady
--------------------------------------
John C. Brady
Director
36
<PAGE>
Exhibit A
BEACON PROPERTIES CORPORATION
(a Maryland Corporation)
[Title of Securities]
TERMS AGREEMENT
Dated: , 199_
To: BEACON PROPERTIES CORPORATION
50 Rowes Wharf
Boston, Massachusetts 02110
Attention: Chairman of the Board of Directors
Dear Sirs:
We (the "Representative") understand that Beacon Properties Corporation, a
Maryland corporation (the "Company"), proposes to issue and sell the number of
shares of its Common Stock, $.01 par value, set forth below (such Common Stock
being hereinafter referred to as the "Underwritten Securities"). Subject to the
terms and conditions set forth or incorporated by reference herein, the
underwriters named below (the "Underwriters") offer to purchase, severally and
not jointly, the respective numbers of Initial Underwritten Securities (as
defined in the Underwriting Agreement referred to below) set forth below
opposite their respective names, and a proportionate share of Option Securities
(as defined in the Underwriting Agreement referred to below) to the extent any
are purchased) at the purchase price set forth below.
A-1
<PAGE>
Number of Shares
of Initial
Underwritten Securities
Underwriter
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
----------
----------
Total
=====
A-2
<PAGE>
The Underwritten Securities shall have the following terms:
Title of Securities:
Number of Shares:
Public offering price per share: $
Purchase price per share: $
Number of Option Securities, if any, that may be purchased by the Underwriters:
Delayed Delivery Contracts: [authorized] [not authorized]
[Date of Delivery:
Minimum Contract:
Maximum number of Shares:
Fee: ]
Additional co-managers, if any:
Other terms:
Closing date and location:
All the provisions contained in the document attached as Annex A hereto
entitled "Beacon Properties Corporation - Common Stock - Underwriting Agreement"
are hereby incorporated by reference in their entirety herein and shall be
deemed to be a part of this Terms Agreement to the same extent as if such
provisions had been set forth in full herein. Terms defined in such document are
used herein as therein defined.
A-3
<PAGE>
Please accept this offer no later than o'clock P.M. (New York City time)
on by signing a copy of this Terms Agreement in the space set forth below and
returning the signed copy to us.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By
---------------------------------
Acting on behalf of itself and the other named
Underwriters.
Accepted:
BEACON PROPERTIES CORPORATION
By ---------------------------
Name:
Title:
A-4
<PAGE>
Exhibit B
BEACON PROPERTIES CORPORATION
(a Maryland corporation)
[Title of Securities]
DELAYED DELIVERY CONTRACT
, 199_
Beacon Properties Corporation
50 Rowes Wharf
Boston, Massachusetts 02110
Attention: Chairman of the Board of Directors
Dear Sirs:
The undersigned hereby agrees to purchase from Beacon Properties
Corporation (the "Company"), and the Company agrees to sell to the undersigned
on __________, 19__ (the "Delivery Date"),
of the Company's [insert title of security] (the "Securities"), offered by the
Company's Prospectus dated __________, 19__, as supplemented by its Prospectus
Supplement dated ___________, 19__, receipt of which is hereby acknowledged at a
purchase price of [$__________] to the Delivery Date, and on the further terms
and conditions set forth in this contract.
Payment for the Securities which the undersigned has agreed to purchase on
the Delivery Date shall be made to the Company or its order by certified or
official bank check in New York Clearing House funds at the office of
, on the Delivery Date, upon delivery
to the undersigned of the Securities to be purchased by the undersigned in
definitive form and in such denominations and registered in such names as the
undersigned may designate by written or telegraphic communication addressed to
the Company not less than five full business days prior to the Delivery Date.
The obligation of the undersigned to take delivery of and make payment for
Securities on the Delivery Date shall be subject only to the conditions that (1)
the purchase of Securities to be
B-1
<PAGE>
made by the undersigned shall not on the Delivery Date be prohibited under the
laws of the jurisdiction to which the undersigned is subject and (2) the
Company, on or before __________, 19__, shall have sold to the Underwriters of
the Securities (the "Underwriters") such principal amount of the Securities as
is to be sold to them pursuant to the Terms Agreement dated __________, 19__
between the Company and the Underwriters. The obligation of the undersigned to
take delivery of and make payment for Securities shall not be affected by the
failure of any purchaser to take delivery of and make payments for Securities
pursuant to other contracts similar to this contract. The undersigned represents
and warrants to you that its investment in the Securities is not, as of the date
hereof, prohibited under the laws of any jurisdiction to which the undersigned
is subject and which govern such investment.
Promptly after completion of the sale to the Underwriters, the Company
will mail or deliver to the undersigned at its address set forth below notice to
such effect, accompanied by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith.
By the execution hereof, the undersigned represents and warrants to the
Company that all necessary corporate action for the due execution and delivery
of this contract and the payment for and purchase of the Securities has been
taken by it and no further authorization or approval of any governmental or
other regulatory authority is required for such execution, delivery, payment or
purchase, and that, upon acceptance hereof by the Company and mailing or
delivery of a copy as provided below, this contract will constitute a valid and
binding agreement of the undersigned in accordance with its terms.
This contract will inure to the benefit of and binding upon the parties
hereto and their respective successors, but will not be assignable by either
party hereto without the written consent of the other.
It is understood that the Company will not accept Delayed Delivery
Contracts for a number of Securities in excess of ________ and that the
acceptance of any Delayed Delivery Contract is in the Company's sole discretion
and, without limiting the foregoing, need not be on a first-come, first-served
basis. If this contract is acceptable to the Company, it is requested that the
Company sign the form of acceptance on a copy hereof and mail or deliver a
signed copy hereof to the undersigned at its address set forth below. This will
become a binding contract between the Company and the undersigned when such copy
is so mailed or delivered.
B-2
<PAGE>
This Agreement shall be governed by the laws of the State of New York.
Yours very truly,
-----------------------------
(Name of Purchaser)
By
---------------------------
(Title)
-----------------------------
-----------------------------
(Address)
Accepted as of the date first above written.
BEACON PROPERTIES CORPORATION
By
---------------------------
(Title)
PURCHASER-PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone number of the representative of the Purchaser with
whom details of delivery on the Delivery Date may be discussed are as follows:
(Please print.)
Telephone No.
(including
Name Area Code)
----------- -------------
B-3
