As filed with the Securities and Exchange Commission on August 1, 1997
Registration Statement No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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BEACON PROPERTIES CORPORATION
AND BEACON PROPERTIES, L.P.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Beacon Properties Corporation--Maryland Beacon Properties Corporation--04-3224258
Beacon Properties L.P.--Delaware Beacon Properties, L.P.--04-3224259
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
50 Rowes Wharf
Boston, Massachusetts 02110
(617) 330-1400
(Address and Telephone Number of Principal Executive Offices)
Alan M. Leventhal
President and Chief Executive Officer
and
William A. Bonn, Esq.
General Counsel
50 Rowes Wharf
Boston, Massachusetts 02110
(617) 330-1400
(Name, Address and Telephone Number, Including Area Code, of Agent for Service)
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copies to:
Gilbert G. Menna, P.C.
Kathryn I. Murtagh, Esq.
Goodwin, Procter & Hoar LLP
Exchange Place, Boston, MA 02109
(617) 570-1000
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Approximate date of commencement of proposed sale to public: As soon as
practicable after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
The Prospectus contained in this Registration Statement relates to and
constitutes a Post-Effective Amendment to the Registration Statement on Form
S-3 (No. 333-21769) of the Registrant, and it is intended to be the combined
prospectus referred to in Rule 429 under the Securities Act of 1933, as
amended.
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Title of Securities Amount to be Proposed Maximum Offering Proposed Maximum Amount of
Being Registered Registered (1) Price Per Unit (2) Aggregate Offering Price (3) Registration Fee (4)
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<S> <C> <C> <C> <C>
Debt Securities
Preferred Stock
Common Stock $1,200,000,000 N.A. $1,200,000,000 $363,636
</TABLE>
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(1) The amount to be registered consists of up to $700,000,000 of an
indeterminate amount of Preferred Stock and/or Common Stock to be issued
by Beacon Properties Corporation and up to $500,000,000 of an
indeterminate amount of non-convertible investment grade Debt Securities
to be issued by Beacon Properties, L.P. Pursuant to Rule 429 under the
Securities Act of 1933, as amended, this amount includes $175,125,000 of
Preferred Stock and/or Common Stock and $400,000,000 of Debt Securities
being carried forward from the earlier Registration Statement on Form S-3
(No. 333-21769), which have not been sold. There is also being registered
hereunder such currently indeterminate number of shares of Common Stock as
may be issued upon conversion of the Preferred Stock registered hereby.
(2) The proposed maximum offering price per unit has been omitted pursuant to
Securities Act Release No. 6964. The registration fee has been calculated
in accordance with rule 457(o) under the Securities Act of 1933, as
amended, and reflects the offering price rather than the principal amount
of any Debt Securities issued at a discount.
(3) Estimated solely for purposes of computing the registration fee. No
separate consideration will be received for shares of Common Stock issued
upon conversion of Preferred Stock.
(4) Pursuant to Rule 429 under the Securities Act of 1933, as amended, the
amount of $175,125,000 of Preferred Stock and/or Common Stock and
$400,000,000 of Debt Securities covered by the earlier Registration
Statement on Form S-3 (No. 333-21769) is being carried forward and the
corresponding registration fee of $174,280 was previously paid at the time
of filing.
The Prospectus contained in this Registration Statement relates to and
constitutes a Post-Effective Amendment to the Registration Statement on Form
S-3 (No. 333-21769) of the Registrant, and it is intended to be the combined
prospectus referred to in Rule 429 under the Securities Act of 1933, as
amended.
The registrants hereby amend this registration statement on such date or dates
as may be necessary to delay its effective date until the registrants shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
PROSPECTUS
$700,000,000
Beacon Properties Corporation
PREFERRED STOCK
COMMON STOCK
$500,000,000
Beacon Properties, L.P.
DEBT SECURITIES
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Beacon Properties Corporation (together with its subsidiaries, the
"Company") may offer from time to time in one or more series (i) shares of its
preferred stock, $.01 par value per share ("Preferred Stock") and (ii) shares
of its common stock, $.01 par value per share ("Common Stock"). Beacon
Properties, L.P. (the "Operating Partnership") may offer from time to time in
one or more series unsecured non-convertible investment grade debt securities
(the "Debt Securities"). The aggregate public offering price of the Preferred
Stock and the Common Stock shall be up to $700,000,000 (or its equivalent in
another currency based on the exchange rate at the time of sale) and the
aggregate public offering price of the Debt Securities (collectively with the
Preferred Stock and the Common Stock, the "Securities") shall be up to
$500,000,000 (or its equivalent in another currency based on the exchange rate
at the time of sale). The Securities will be issued in amounts, at prices and
on terms to be determined at the time of offering. The Securities may be
offered separately or together, in separate series, in amounts, at prices and
on terms to be set forth in one or more supplements to this Prospectus (each a
"Prospectus Supplement").
The specific terms of the Securities for which this Prospectus is being
delivered will be set forth in the applicable Prospectus Supplement and will
include, where applicable: (i) in the case of Preferred Stock, the specific
designation and stated value per share, any dividend, liquidation, redemption,
conversion, voting and other rights, and any initial public offering price;
(ii) in the case of Common Stock, any initial public offering price; and (iii)
in the case of Debt Securities, the specific title, aggregate principal amount,
ranking, currency, form (which may be registered or bearer, or certificated or
global), authorized denominations, maturity, rate (or manner of calculation
thereof) and time of payment of interest, terms for redemption at the option of
the Operating Partnership or repayment at the option of the holder, terms for
sinking fund payments, covenants and any initial public offering price. In
addition, such specific terms may include limitations on direct or beneficial
ownership and restrictions on transfer of the Securities, in each case as may
be consistent with the Company's Articles of Incorporation, as then in effect,
or otherwise appropriate to preserve the status of the Company as a real estate
investment trust ("REIT") for federal income tax purposes. See "Restrictions on
Transfers of Capital Stock."
The applicable Prospectus Supplement will also contain information, where
appropriate, about material United States Federal income tax considerations
relating to, and any listing on a securities exchange of, the Securities
covered by such Prospectus Supplement.
The Securities may be offered by the Company or the Operating Partnership
directly to one or more purchasers, through agents designated from time to time
by the Company or the Operating Partnership, or to or through underwriters or
dealers. If any agents or underwriters are involved in the sale of any of the
Securities, their names, and any applicable purchase price, fee, commission or
discount arrangement between or among them, will be set forth, or will be
calculable from the information set forth, in an accompanying Prospectus
Supplement. See "Plan of Distribution." No Securities may be sold without
delivery of a Prospectus Supplement describing the method and terms of the
offering of such Securities.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is , 1997.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell nor the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE>
AVAILABLE INFORMATION
The Company and the Operating Partnership have filed with the Securities
and Exchange Commission (the "SEC" or "Commission") a registration statement on
Form S-3 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Securities offered hereby.
This Prospectus, which constitutes part of the Registration Statement, omits
certain of the information contained in the Registration Statement and the
exhibits thereto on file with the Commission pursuant to the Securities Act and
the rules and regulations of the Commission thereunder. The Registration
Statement, including exhibits thereto, may be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, and at the Commission's Regional
Offices at 7 World Trade Center, 13th Floor, New York, New York 10048, and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511, and copies may be obtained at the prescribed rates from the Public
Reference Section of the Commission at its principal office in Washington, D.C.
The Commission also maintains a Web site at http://www.sec.gov containing
reports, proxy and information statements and other information regarding
registrants, including the Company, that file electronically with the
Commission. Statements contained in this Prospectus as to the contents of any
contract or other document referred to are not necessarily complete, and in
each instance reference is made to the copy of such contract or other document
filed as an exhibit to the Registration Statement, each such statement being
qualified in all respects by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the locations described above. Copies of such materials
can be obtained by mail from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at prescribed rates.
In addition, the Common Stock is listed on the New York Stock Exchange (the
"NYSE"), and such materials can be inspected and copied at the NYSE, 20 Broad
Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the year ended December
31, 1996, filed with the Commission pursuant to the Exchange Act, including all
amendments thereto.
2. The Company's Quarterly Report on Form 10-Q for the period ended March
31, 1997, filed with the Commission pursuant to the Exchange Act, including all
amendments thereto. The Operating Partnership's Quarterly Report on Form 10-Q
for the period ended March 31, 1997, filed with the Commission pursuant to the
Exchange Act, including all amendments thereto.
3. The Company's Current Reports on Form 8-K dated January 5, 1996,
February 15, 1996, July 23, 1996, October 18, 1996, December 18, 1996, December
20, 1996 and March 27, 1997 and June 4, 1997 filed with the Commission pursuant
to the Exchange Act, including all amendments thereto. The Operating
Partnership's Current Report on Form 8-K dated June 4, 1997, filed with the
Commission pursuant to the Exchange Act, including all amendments thereto.
4. The Company's Current Reports on Form 8-K/A dated August 6, 1996 (which
Current Report relates to the Form 8-K dated July 23, 1996), April 7, 1997
(which Current Report relates to the Form 8-K dated March 27, 1997) and June 11,
1997 (which Current Report relates to the Form 8-K dated June 4, 1997) filed
with the Commission pursuant to the Exchange Act, including all amendments
thereto.
5. The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A filed with the Commission pursuant to the
Exchange Act, including all amendments and reports updating such description.
6. The description of the Company's 8.98% Series A Cumulative Redeemable
Preferred Stock contained in its Registration Statement on Form 8-A/A dated
July 10, 1997 (which relates to the Form 8-A dated June 4, 1997).
7. The Operating Partnership's Registration Statement on Form 10 filed
with the Commission pursuant to the Exchange Act, including all amendments and
reports updating such description.
All other documents filed with the Commission by the Company or the
Operating Partnership pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this Prospectus and prior to the
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termination of the offering of the Securities are to be incorporated herein by
reference and such documents shall be deemed to be a part hereof from the date
of filing of such documents. Any person receiving a copy of this Prospectus may
obtain, without charge, upon request, a copy of any of the documents
incorporated by reference herein (except for the exhibits to such documents,
unless such exhibits are specifically incorporated by reference into such
documents). Written requests for such copies should be mailed to Kathleen M.
McCarthy, Beacon Properties Corporation, 50 Rowes Wharf, Boston, Massachusetts
02110. Telephone requests may be directed to Ms. McCarthy at (617) 330-1400.
Any statement contained in a document incorporated or deemed to be
incorporated by reference shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement contained herein or
in any other subsequently filed document that also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
THE COMPANY AND THE OPERATING PARTNERSHIP
Beacon Properties Corporation is a self-administered and self-managed real
estate investment trust ("REIT") which owns a portfolio of Class A office
properties and other commercial properties (collectively, the "Properties")
located in major metropolitan areas, including Boston, Atlanta, Chicago, Los
Angeles, San Francisco and Washington, D.C., as well as commercial real estate
development, acquisition, leasing, design and management businesses. The
Company is a Maryland corporation and its Common Stock is listed on the New
York Stock Exchange under the symbol "BCN."
The Company's business is conducted principally through subsidiaries which
consist of the Operating Partnership, two subsidiary corporations and two
subsidiary limited partnerships. The Operating Partnership is a Delaware
limited partnership, of which the Company is the sole general partner. The
Company conducts third-party management operations through Beacon Property
Management Corporation, a Delaware corporation (the "Management Company"), and
conducts third-party tenant space design services through Beacon Design
Corporation, a Massachusetts corporation (the "Design Company"). The Company
conducts management operations for wholly-owned properties through Beacon
Property Management, L.P., a Delaware limited partnership (the "Management
Partnership"), and conducts tenant space design services for wholly-owned
properties through Beacon Design, L.P., a Delaware limited partnership (the
"Design Partnership").
Currently, the Company's and the Operating Partnership's total consolidated
outstanding debt are approximately $756.3 million and $756.3 million,
respectively, and their total consolidated debt plus their proportionate share
of total unconsolidated debt (other than the Rowes Wharf Property debt) are
approximately $848.8 million and $848.1 million, respectively.
The Company's executive offices are located at 50 Rowes Wharf in Boston,
Massachusetts 02110 and its telephone number at that location is 617-330-1400.
USE OF PROCEEDS
The Company is required by the terms of the partnership agreement of the
Operating Partnership, to invest the net proceeds of any sale of Common Stock
or Preferred Stock in the Operating Partnership in exchange for additional
Units or preferred Units, as the case may be. As will be more fully described
in the applicable Prospectus Supplement, the Company and the Operating
Partnership intend to use the net proceeds from the sale of Securities for
general corporate purposes, including repayment of indebtedness, investment in
new properties and new developments and maintenance of currently owned
properties.
RATIOS OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the consolidated ratios of earnings to
fixed charges for the Company and the Operating Partnership for the years ended
December 31, 1996 and 1995 and for the period May 26, 1994 to December 31,
1994, and for The Beacon Group, the predecessor to the Company and the
Operating Partnership (the "Predecessor"), for the period January 1, 1994 to
May 25, 1994 and for the years ended December 31, 1993 and 1992.
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<TABLE>
<CAPTION>
For the Period
Three Months For the Period January 1,
Ended Year Ended Year Ended May 26, 1994 to 1994 to Year Ended Year Ended
March 31, December 31, December 31, December 31, May 25, December 31, December 31,
1997 1996 1995 1994 1994 1993 1992
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<S> <C> <C> <C> <C> <C> <C>
2.54 2.17 2.02 1.62 0.94 0.65 0.72
</TABLE>
The ratios of earnings to fixed charges were computed by dividing earnings
by fixed charges. For this purpose, earnings consist of pre-tax income from
continuing operations plus fixed charges. Fixed charges consist of interest
expense, rent expense, and the amortization of debt issuance costs. To date,
the Company has not paid any Preferred Stock dividends; therefore, the ratios
of earnings to combined fixed charges and preferred stock dividend requirements
are the same as the ratios of earnings to fixed charges presented above. The
Company issued 8,000,000 shares of Series A Preferred Stock in June 1997.
DESCRIPTION OF DEBT SECURITIES
General
The Company conducts substantially all of its business, and indirectly
holds substantially all of its interests in the Properties, through the
Operating Partnership. Consequently, the Operating Partnership, and not the
Company, will issue the Debt Securities. The Debt Securities will be direct
unsecured obligations of the Operating Partnership and may be either senior
Debt Securities ("Senior Securities") or subordinated Debt Securities
("Subordinated Securities"). The Debt Securities will be issued under one or
more indentures, each dated as of a date prior to the issuance of the Debt
Securities to which it relates. Senior Securities and Subordinated Securities
may be issued pursuant to separate indentures (respectively, a "Senior
Indenture" and a "Subordinated Indenture"), in each case between the Operating
Partnership and a trustee (a "Trustee"), which may be the same Trustee, and in
the form that has been filed as an exhibit to the Registration Statement of
which this Prospectus is a part, subject to such amendments or supplements as
may be adopted from time to time. The Senior Indenture and the Subordinated
Indenture, as amended or supplemented from time to time, are sometimes
hereinafter referred to collectively as the "Indentures." The Indentures will
be subject to and governed by the Trust Indenture Act of 1939, as amended (the
"TIA"). The statements made under this heading relating to the Debt Securities
and the Indentures are summaries of the anticipated material provisions
thereof, do not purport to be complete and are qualified in their entirety by
reference to the Indentures and such Debt Securities.
Capitalized terms used herein and not defined shall have the meanings
assigned to them in the applicable Indenture.
Terms
The indebtedness represented by the Senior Securities will rank equally
with all other unsecured and unsubordinated indebtedness of the Operating
Partnership. The indebtedness represented by Subordinated Securities will be
subordinated in right of payment to the prior payment in full of the Senior
Debt of the Operating Partnership as described under "--Subordination." The
particular terms of the Debt Securities offered by a Prospectus Supplement will
be described in the applicable Prospectus Supplement, along with any applicable
modifications of or additions to the general terms of the Debt Securities as
described herein and in the applicable Indenture and any applicable federal
income tax considerations. Accordingly, for a description of the terms of any
series of Debt Securities, reference must be made to both the Prospectus
Supplement relating thereto and the description of the Debt Securities set
forth in this Prospectus.
Except as set forth in any Prospectus Supplement, the Debt Securities may
be issued without limit as to aggregate principal amount, in one or more
series, in each case as established from time to time by the Operating
Partnership or as set forth in the applicable Indenture or in one or more
indentures supplemental to such Indenture. All Debt Securities of one series
need not be issued at the same time and, unless otherwise provided, a series
may be reopened, without the consent of the holders of the Debt Securities of
such series, for issuance of additional Debt Securities of such series.
Each Indenture will provide that the Operating Partnership may, but need
not, designate more than one Trustee thereunder, each with respect to one or
more series of Debt Securities. Any Trustee under an Indenture may resign or be
removed with respect to one or more series of Debt Securities and a successor
Trustee may be appointed to
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act with respect to such series. In the event that two or more persons are
acting as Trustee with respect to different series of Debt Securities, each
such Trustee shall be a Trustee of a trust under the applicable Indenture
separate and apart from the trust administered by any other Trustee, and,
except as otherwise indicated herein, any action described herein to be taken
by each Trustee may be taken by each such Trustee with respect to, and only
with respect to, the one or more series of Debt Securities for which it is
Trustee under the applicable Indenture.
The following summaries set forth certain general terms and provisions of
the Indentures and the Debt Securities. The Prospectus Supplement relating to
the series of Debt Securities being offered will contain further terms of such
Debt Securities, including the following specific terms:
(1) The title of such Debt Securities and whether such Debt Securities are
Senior Securities or Subordinated Securities;
(2) The aggregate principal amount of such Debt Securities and any limit on
such aggregate principal amount;
(3) The price (expressed as a percentage of the principal amount thereof) at
which such Debt Securities will be issued and, if other than the principal
amount thereof, the portion of the principal amount thereof payable upon
declaration of acceleration of the maturity thereof;
(4) The date or dates, or the method for determining such date or dates, on
which the principal of such Debt Securities will be payable;
(5) The rate or rates (which may be fixed or variable), or the method by which
such rate or rates shall be determined, at which such Debt Securities will
bear interest, if any;
(6) The date or dates, or the method for determining such date or dates, from
which any such interest will accrue, the dates on which any such interest
will be payable, the record dates for such interest payment dates, or the
method by which such dates shall be determined, the persons to whom such
interest shall be payable, and the basis upon which interest shall be
calculated if other than that of a 360-day year of twelve 30-day months;
(7) The place or places where the principal of (and premium, if any) and
interest, if any, on such Debt Securities will be payable, where such Debt
Securities may be surrendered for conversion or registration of transfer
or exchange and where notices or demands to or upon the Operating
Partnership in respect of such Debt Securities and the applicable
Indenture may be served;
(8) The period or periods, if any, within which, the price or prices at which
and the other terms and conditions upon which such Debt Securities may,
pursuant to any optional or mandatory redemption provisions, be redeemed,
as a whole or in part, at the option of the Operating Partnership;
(9) The obligation, if any, of the Operating Partnership to redeem, repay or
purchase such Debt Securities pursuant to any sinking fund or analogous
provision or at the option of a holder thereof, and the period or periods
within which, the price or prices at which and the other terms and
conditions upon which such Debt Securities will be redeemed, repaid or
purchased, as a whole or in part, pursuant to such obligation;
(10) If other than U.S. dollars, the currency or currencies in which such Debt
Securities are denominated and payable, which may be a foreign currency or
units of two or more foreign currencies or a composite currency or
currencies, and the terms and conditions relating thereto;
(11) Whether the amount of payments of principal of (and premium, if any) or
interest, if any, on such Debt Securities may be determined with reference
to an index, formula or other method (which index, formula or method may,
but need not be, based on a currency, currencies, currency unit or units,
or composite currency or currencies) and the manner in which such amounts
shall be determined;
(12) Whether such Debt Securities will be issued in certificated or book-entry
form and, if in book entry form, the identity of the depository for such
Debt Securities;
(13) Whether such Debt Securities will be in registered or bearer form and, if
in registered form, the denominations thereof if other than $1,000 and any
integral multiple thereof and, if in bearer form, the denominations
thereof and terms and conditions relating thereto;
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(14) The applicability, if any, of the defeasance and covenant defeasance
provisions described herein or set forth in the applicable Indenture, or
any modification thereof;
(15) Whether and under what circumstances the Operating Partnership will pay
any additional amounts on such Debt Securities in respect of any tax,
assessment or governmental charge and, if so, whether the Company will
have the option to redeem such Debt Securities in lieu of making such
payment;
(16) Any deletions from, modifications of or additions to the events of
default or covenants of the Operating Partnership, to the extent different
from those described herein or set forth in the applicable Indenture with
respect to such Debt Securities, and any change in the right of any
Trustee or any of the holders to declare the principal amount of any of
such Debt Securities due and payable;
(17) With respect to any Debt Securities that provide for optional redemption
or prepayment upon the occurrence of certain events (such as a change of
control of the Operating Partnership), (i) the possible effects of such
provisions on the market price of the Operating Partnership's or the
Company's securities or in deterring certain mergers, tender offers or
other takeover attempts, and the intention of the Operating Partnership to
comply with the requirements of Rule 14e-1 under the Exchange Act and any
other applicable securities laws in connection with such provisions; (ii)
whether the occurrence of the specified events may give rise to
cross-defaults on other indebtedness such that payment on such Debt
Securities may be effectively subordinated; and (iii) the existence of any
limitation on the Operating Partnership's financial or legal ability to
repurchase such Debt Securities upon the occurrence of such an event
(including, if true, the lack of assurance that such a repurchase can be
effected) and the impact, if any, under the Indenture of such a failure,
including whether and under what circumstances such a failure may
constitute an Event of Default; and
(18) Any other terms of such Debt Securities not inconsistent with the
provisions of the applicable Indenture.
If so provided in the applicable Prospectus Supplement, the Debt
Securities may be issued at a discount below their principal amount and provide
for less than the entire principal amount thereof to be payable upon
declaration of acceleration of the maturity thereof ("Original Issue Discount
Securities"). In such cases, any special U.S. federal income tax, accounting
and other considerations applicable to Original Issue Discount Securities will
be described in the applicable Prospectus Supplement.
Except as described under "Merger, Consolidation or Sale of Assets" or as
may be set forth in any Prospectus Supplement, the Debt Securities will not
contain any provisions that would limit the ability of the Operating
Partnership to incur indebtedness or that would afford holders of Debt
Securities protection in the event of (i) a highly leveraged or similar
transaction involving the Operating Partnership, the management of the
Operating Partnership or the Company, or any affiliate of any such party, (ii)
a change of control, or (iii) a reorganization, restructuring, merger or
similar transaction involving the Operating Partnership that may adversely
affect the holders of the Debt Securities. In addition, subject to the
limitations set forth under "Merger, Consolidation or Sale of Assets," the
Operating Partnership may, in the future, enter into certain transactions, such
as the sale of all or substantially all of its assets or the merger or
consolidation of the Operating Partnership, that would increase the amount of
the Operating Partnership's indebtedness or substantially reduce or eliminate
the Operating Partnership's indebtedness or substantially reduce or eliminate
the Operating Partnership's assets, which may have an adverse effect on the
Operating Partnership's ability to service its indebtedness, including the Debt
Securities. Neither Maryland General Corporation Law nor the governing
instruments of the Company and the Operating Partnership define the term
"substantially all" in connection with the sale of assets. Additionally,
Maryland cases interpreting the words "substantially all" rely heavily upon the
facts and circumstances of the particular case. As a consequence of the lack of
a definition of the term "substantially all," a holder of Debt Securities must
review the financial and other information disclosed by the Operating
Partnership to the public to determine whether a sale of "substantially all" of
the assets of the Operating Partnership has occurred. Therefore, a risk of
uncertainty exists for the holders of Debt Securities as a consequence of the
lack of a definition of the term "substantially all". Restrictions on ownership
and transfers of the Common Stock and Preferred Stock are designed to preserve
the Company's status as a REIT and, therefore, may act to prevent or hinder a
change of control. See "Description of Common Stock" and "Restrictions on
Transfers of Capital Stock." Reference is made to the applicable Prospectus
Supplement for information with respect to any deletions from, modifications
of, or additions to, the events of default or covenants that are described
below, including any addition of a covenant or other provision providing event
risk or similar protection.
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Denomination, Interest, Registration and Transfer
Unless otherwise described in the applicable Prospectus Supplement, the
Debt Securities of any series will be issuable in denominations of $1,000 and
integral multiples thereof.
Subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series will be exchangeable for any
authorized denomination of other Debt Securities of the same series and of a
like aggregate principal amount and tenor upon surrender of such Debt
Securities at the corporate trust office of the applicable Trustee or at the
office of any transfer agent designated by the Operating Partnership for such
purpose. In addition, subject to certain limitations imposed upon Debt
Securities issued in book-entry form, the Debt Securities of any series may be
surrendered for registration of transfer or exchange thereof at the corporate
trust office of the applicable Trustee or at the office of any transfer agent
designated by the Operating Partnership for such purpose. Every Debt Security
surrendered for registration of transfer or exchange must be duly endorsed or
accompanied by a written instrument of transfer, and the person requesting such
action must provide evidence of title and identity satisfactory to the
applicable Trustee or transfer agent. No service charge will be made for any
registration of transfer or exchange of any Debt Securities, but the Trustee or
the Operating Partnership may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. If the
applicable Prospectus Supplement refers to any transfer agent (in addition to
the applicable Trustee) initially designated by the Operating Partnership with
respect to any series of Debt Securities, the Operating Partnership may at any
time rescind the designation of any such transfer agent or approve a change in
the location through which any such transfer agent acts, except that the
Operating Partnership will be required to maintain a transfer agent in each
place of payment for such series. The Operating Partnership may at any time
designate additional transfer agents with respect to any series of Debt
Securities.
Neither the Operating Partnership nor any Trustee shall be required (i) to
issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days before the day of
mailing of a notice of redemption of any Debt Securities that may be selected
for redemption and ending at the close of business on the day of such mailing;
(ii) to register the transfer of or exchange any Debt Security, or portion
thereof, so selected for redemption, in whole or in part, except the unredeemed
portion of any Debt Security being redeemed in part; or (iii) to issue,
register the transfer of or exchange any Debt Security that has been
surrendered for repayment at the option of the holder, except the portion, if
any, of such Debt Security not to be so repaid.
Merger, Consolidation or Sale of Assets
The Indentures will provide that the Operating Partnership may, without
the consent of the holders of any outstanding Debt Securities, consolidate
with, or sell, lease or convey all or substantially all of its assets to, or
merge with or into, any other entity provided that (i) either the Operating
Partnership shall be the continuing entity, or the successor entity (if other
than the Operating Partnership) formed by or resulting from any such
consolidation or merger or which shall have received the transfer of such
assets, shall expressly assume (A) the Operating Partnership's obligations to
pay principal of (and premium, if any) and interest on all of the Debt
Securities and (B) the due and punctual performance and observance of all of
the covenants and conditions contained in each Indenture; (ii) immediately
after giving effect to such transaction and treating any indebtedness that
becomes an obligation of the Operating Partnership or any subsidiary as a
result thereof as having been incurred by the Operating Partnership or such
subsidiary at the time of such transaction, no event of default under the
Indentures, and no event which, after notice or the lapse of time, or both,
would become such an event of default, shall have occurred and be continuing;
and (iii) an officers' certificate and legal opinion covering such conditions
shall be delivered to each Trustee.
Certain Covenants
Existence. Except as permitted under "--Merger, Consolidation or Sale of
Assets," the Indentures will require the Operating Partnership to do or cause
to be done all things necessary to preserve and keep in full force and effect
its existence, rights and franchises; provided, however, that the Operating
Partnership shall not be required to preserve any right or franchise if it
determines that the preservation thereof is no longer desirable in the conduct
of its business.
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Maintenance of Properties. The Indentures will require the Operating
Partnership to cause all of its material properties used or useful in the
conduct of its business or the business of any subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all
necessary equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Operating Partnership may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that the Operating Partnership and its subsidiaries shall
not be prevented from selling or otherwise disposing of their properties for
value in the ordinary course of business.
Insurance. The Indentures will require the Operating Partnership to cause
each of its and its subsidiaries' insurable properties to be insured against
loss or damage at least equal to their then full insurable value with insurers
of recognized responsibility and, if described in the applicable Prospectus
Supplement, having a specified rating from a recognized insurance rating
service.
Payment of Taxes and Other Claims. The Indentures will require the
Operating Partnership to pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all taxes, assessments and
governmental charges levied or imposed upon it or any subsidiary or upon the
income, profits or property of the Operating Partnership or any subsidiary and
(ii) all lawful claims for labor, materials and supplies which, if unpaid,
might by law become a lien upon the property of the Operating Partnership or
any subsidiary; provided, however, that the Operating Partnership shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith.
Additional Covenants. Any additional covenants of the Operating
Partnership with respect to any series of Debt Securities will be set forth in
the Prospectus Supplement relating thereto.
Events of Default, Notice and Waiver
Unless otherwise provided in the applicable Prospectus Supplement, each
Indenture will provide that the following events are "Events of Default" with
respect to any series of Debt Securities issued thereunder: (i) default for 30
days in the payment of any installment of interest on any Debt Security of such
series; (ii) default in the payment of principal of (or premium, if any, on)
any Debt Security of such series at its maturity; (iii) default in making any
sinking fund payment as required for any Debt Security of such series; (iv)
default in the performance or breach of any other covenant or warranty of the
Operating Partnership contained in the Indenture (other than a covenant added
to the Indenture solely for the benefit of a series of Debt Securities issued
thereunder other than such series), continued for 60 days after written notice
as provided in the applicable Indenture; (v) a default under any bond,
debenture, note or other evidence of indebtedness for money borrowed (except
mortgage indebtedness) by the Operating Partnership or any of its subsidiaries
in an aggregate principal amount in excess of $25,000,000 or under any
indenture or instrument under which there may be issued or by which there may
be secured or evidenced any indebtedness for money borrowed (except mortgage
indebtedness) by the Operating Partnership or any of its subsidiaries in an
aggregate principal amount in excess of $25,000,000, whether such indebtedness
exists on the date of such Indenture or shall thereafter be created, which
default shall have resulted in such indebtedness becoming or being declared due
and payable prior to the date on which it would otherwise have become due and
payable or such obligations being accelerated, without such acceleration having
been rescinded or annulled; (vi) certain events of bankruptcy, insolvency or
reorganization, or court appointment of a receiver, liquidator or trustee of
the Operating Partnership or any Significant Subsidiary of the Operating
Partnership; and (vii) any other event of default provided with respect to a
particular series of Debt Securities. The term "Significant Subsidiary" has the
meaning ascribed to such term in Regulation S-X promulgated under the
Securities Act.
If an Event of Default under any Indenture with respect to Debt Securities
of any series at the time outstanding occurs and is continuing, then in every
such case the applicable Trustee or the holders of not less than 25% in
principal amount of the Debt Securities of that series will have the right to
declare the principal amount (or, if the Debt Securities of that series are
Original Issue Discount Securities or indexed securities, such portion of the
principal amount as may be specified in the terms thereof) of all the Debt
Securities of that series to be due and payable immediately by written notice
thereof to the Operating Partnership (and to the applicable Trustee if given by
the holders). However, at any time after such a declaration of acceleration
with respect to Debt Securities of such series (or of all Debt Securities then
outstanding under any Indenture, as the case may be) has been made, but before
a judgment or decree for payment of the money due has been obtained by the
applicable Trustee, the
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holders of not less than a majority in principal amount of outstanding Debt
Securities of such series (or of all Debt Securities then outstanding under the
applicable Indenture, as the case may be) may rescind and annul such
declaration and its consequences if (i) the Operating Partnership shall have
deposited with the applicable Trustee all required payments of the principal of
(and premium, if any) and interest on the Debt Securities of such series (or of
all Debt Securities then outstanding under the applicable Indenture, as the
case may be), plus certain fees, expenses, disbursements and advances of the
applicable Trustee; and (ii) all events of default, other than the non-payment
of accelerated principal (or specified portion thereof), with respect to Debt
Securities of such series (or of all Debt Securities then outstanding under the
applicable Indenture, as the case may be) have been cured or waived as provided
in such Indenture. The Indentures will also provide that the holders of not
less than a majority in principal amount of the outstanding Debt Securities of
any series (or of all Debt Securities then outstanding under the applicable
Indenture, as the case may be) may waive any past default with respect to such
series and its consequences, except a default (i) in the payment of the
principal of (or premium, if any) or interest on any Debt Security of such
series; or (ii) in respect of a covenant or provision contained in the
applicable Indenture that cannot be modified or amended without the consent of
the holder of each outstanding Debt Security affected thereby.
The Indentures will require each Trustee to give notice to the holders of
Debt Securities within 90 days of a default under the applicable Indenture
unless such default shall have been cured or waived; provided, however, that
such Trustee may withhold notice to the holders of any series of Debt
Securities of any default with respect to such series (except a default in the
payment of the principal of (or premium, if any) or interest on any Debt
Security of such series or in the payment of any sinking fund installment in
respect of any Debt Security of such series) if specified responsible officers
of such Trustee consider such withholding to be in the interest of such
holders.
The Indentures will provide that no holders of Debt Securities of any
series may institute any proceedings, judicial or otherwise, with respect to
such Indenture or for any remedy thereunder, except in the case of failure of
the applicable Trustee, for 60 days, to act after it has received a written
request to institute proceedings in respect of an event of default from the
holders of not less than 25% in principal amount of the outstanding Debt
Securities of such series, as well as an offer of indemnity reasonably
satisfactory to it. This provision will not prevent, however, any holder of
Debt Securities from instituting suit for the enforcement of payment of the
principal of (and premium, if any) and interest on such Debt Securities at the
respective due dates thereof.
The Indentures will provide that, subject to provisions in each Indenture
relating to its duties in case of default, a Trustee will be under no
obligation to exercise any of its rights or powers under an Indenture at the
request or direction of any holders of any series of Debt Securities then
outstanding under such Indenture, unless such holders shall have offered to the
Trustee thereunder reasonable security or indemnity. The holders of not less
than a majority in principal amount of the outstanding Debt Securities of any
series (or of all Debt Securities then outstanding under an Indenture, as the
case may be) shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the applicable Trustee,
or of exercising any trust or power conferred upon such Trustee. However, a
Trustee may refuse to follow any direction which is in conflict with any law or
the applicable Indenture, which may involve such Trustee in personal liability
or which may be unduly prejudicial to the holders of Debt Securities of such
series not joining therein.
Within 120 days after the close of each fiscal year, the Operating
Partnership will be required to deliver to each Trustee a certificate, signed
by one of several specified officers of the Operating Partnership, stating
whether or not such officer has knowledge of any default under the applicable
Indenture and, if so, specifying each such default and the nature and status
thereof.
Modification of the Indentures
Modifications and amendments of an Indenture will be permitted to be made
only with the consent of the holders of not less than a majority in principal
amount of all outstanding Debt Securities issued under such Indenture affected
by such modification or amendment; provided, however, that no such modification
or amendment may, without the consent of the holder of each such Debt Security
affected thereby, (i) change the stated maturity of the principal of, or any
installment of interest (or premium, if any) on, any such Debt Security; (ii)
reduce the principal amount of, or the rate or amount of interest on, or any
premium payable on redemption of, any such Debt Security, or reduce the amount
of principal of an Original Issue Discount Security that would be due and
payable upon declaration of acceleration of the maturity thereof or would be
provable in bankruptcy, or adversely affect any right of repayment of the
holder of any such Debt Security; (iii) change the place of payment, or the
coin or
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currency, for payment of principal of, premium, if any, or interest on any such
Debt Security; (iv) impair the right to institute suit for the enforcement of
any payment on or with respect to any such Debt Security; (v) reduce the
above-stated percentage of any outstanding Debt Securities necessary to modify
or amend the applicable Indenture with respect to such Debt Securities, to
waive compliance with certain provisions thereof or certain defaults and
consequences thereunder or to reduce the quorum or voting requirements set
forth in the applicable Indenture; or (vi) modify any of the foregoing
provisions or any of the provisions relating to the waiver of certain past
defaults or certain covenants, except to increase the required percentage to
effect such action or to provide that certain other provisions may not be
modified or waived without the consent of the holder of such Debt Security.
The holders of a majority in aggregate principal amount of the outstanding
Debt Securities of each series may, on behalf of all holders of Debt Securities
of that series, waive, insofar as that series is concerned, compliance by the
Operating Partnership with certain restrictive covenants of the applicable
Indenture.
Modifications and amendments of an Indenture will be permitted to be made
by the Operating Partnership and the respective Trustee thereunder without the
consent of any holder of Debt Securities for any of the following purposes: (i)
to evidence the succession of another person to the Operating Partnership as
obligor under such Indenture; (ii) to add to the covenants of the Operating
Partnership for the benefit of the holders of all or any series of Debt
Securities or to surrender any right or power conferred upon the Operating
Partnership in such Indenture; (iii) to add events of default for the benefit
of the holders of all or any series of Debt Securities; (iv) to add or change
any provisions of an Indenture to facilitate the issuance of, or to liberalize
certain terms of, Debt Securities in bearer form, or to permit or facilitate
the issuance of Debt Securities in uncertificated form, provided that such
action shall not adversely affect the interests of the holders of the Debt
Securities of any series in any material respect; (v) to change or eliminate
any provisions of an Indenture, provided that any such change or elimination
shall become effective only when there are no Debt Securities outstanding of
any series created prior thereto which are entitled to the benefit of such
provision; (vi) to secure the Debt Securities; (vii) to establish the form or
terms of Debt Securities of any series; (viii) to provide for the acceptance of
appointment by a successor Trustee or facilitate the administration of the
trusts under an Indenture by more than one Trustee; (ix) to cure any ambiguity,
defect or inconsistency in an Indenture, provided that such action shall not
adversely affect the interests of holders of Debt Securities of any series
issued under such Indenture; or (x) to supplement any of the provisions of an
Indenture to the extent necessary to permit or facilitate defeasance and
discharge of any series of such Debt Securities, provided that such action
shall not adversely affect the interests of the holders of the outstanding Debt
Securities of any series.
The Indentures will provide that in determining whether the holders of the
requisite principal amount of outstanding Debt Securities of a series have
given any request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of holders of Debt
Securities, (i) the principal amount of an Original Issue Discount Security
that shall be deemed to be outstanding shall be the amount of the principal
thereof that would be due and payable as of the date of such determination upon
declaration of acceleration of the maturity thereof; (ii) the principal amount
of any Debt Security denominated in a foreign currency that shall be deemed
outstanding shall be the U.S. dollar equivalent, determined on the issue date
for such Debt Security, of the principal amount (or, in the case of an Original
Issue Discount Security, the U.S. dollar equivalent on the issue date of such
Debt Security of the amount determined as provided in (i) above); (iii) the
principal amount of an indexed security that shall be deemed outstanding shall
be the principal face amount of such indexed security at original issuance,
unless otherwise provided with respect to such indexed security pursuant to
such Indenture; and (iv) Debt Securities owned by the Operating Partnership or
any other obligor upon the Debt Securities or any affiliate of the Operating
Partnership or of such other obligor shall be disregarded.
The Indentures will contain provisions for convening meetings of the
holders of Debt Securities of a series. A meeting will be permitted to be
called at any time by the applicable Trustee, and also, upon request, by the
Operating Partnership or the holders of at least 10% in principal amount of the
outstanding Debt Securities of such series, in any such case upon notice given
as provided in such Indenture. Except for any consent that must be given by the
holder of each Debt Security affected by certain modifications and amendments
of an Indenture, any resolution presented at a meeting or adjourned meeting
duly reconvened at which a quorum is present may be adopted by the affirmative
vote of the holders of a majority in principal amount of the outstanding Debt
Securities of that series; provided, however, that, except as referred to
above, any resolution with respect to any request, demand, authorization,
direction, notice, consent, waiver or other action that may be made, given or
taken by the holders of a specified percentage, which is less than a majority,
in principal amount of the outstanding Debt
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Securities of a series may be adopted at a meeting or adjourned meeting duly
reconvened at which a quorum is present by the affirmative vote of the holders
of such specified percentage in principal amount of the outstanding Debt
Securities of that series. Any resolution passed or decision taken at any
meeting of holders of Debt Securities of any series duly held in accordance
with an Indenture will be binding on all holders of Debt Securities of that
series. The quorum at any meeting called to adopt a resolution, and at any
reconvened meeting, will be persons holding or representing a majority in
principal amount of the outstanding Debt Securities of a series; provided,
however, that if any action is to be taken at such meeting with respect to a
consent or waiver which may be given by the holders of not less than a
specified percentage in principal amount of the outstanding Debt Securities of
a series, the persons holding or representing such specified percentage in
principal amount of the outstanding Debt Securities of such series will
constitute a quorum.
Notwithstanding the foregoing provisions, the Indentures will provide that
if any action is to be taken at a meeting of holders of Debt Securities of any
series with respect to any request, demand, authorization, direction, notice,
consent, waiver and other action that such Indenture expressly provides may be
made, given or taken by the holders of a specified percentage in principal
amount of all outstanding Debt Securities affected thereby, or of the holders
of such series and one or more additional series: (i) there shall be no minimum
quorum requirement for such meeting; and (ii) the principal amount of the
outstanding Debt Securities of such series that vote in favor of such request,
demand, authorization, direction, notice, consent, waiver or other action shall
be taken into account in determining whether such request, demand,
authorization, direction, notice, consent, waiver or other action has been
made, given or taken under such Indenture.
Subordination
Unless otherwise provided in the applicable Prospectus Supplement,
Subordinated Securities will be subject to the following subordination
provisions.
Upon any distribution to creditors of the Operating Partnership in a
liquidation, dissolution or reorganization, the payment of the principal of and
interest on any Subordinated Securities will be subordinated to the extent
provided in the applicable Indenture in right of payment to the prior payment
in full of all Senior Debt (as defined below), but the obligation of the
Operating Partnership to make payments of the principal of and interest on such
Subordinated Securities will not otherwise be affected. No payment of principal
or interest will be permitted to be made on Subordinated Securities at any time
if a default on Senior Debt exists that permits the holders of such Senior Debt
to accelerate its maturity and the default is the subject of judicial
proceedings or the Operating Partnership receives notice of the default. After
all Senior Debt is paid in full and until the Subordinated Securities are paid
in full, holders will be subrogated to the rights of holders of Senior Debt to
the extent that distributions otherwise payable to holders have been applied to
the payment of Senior Debt. The Subordinated Indenture will not restrict the
amount of Senior Debt or other indebtedness of the Operating Partnership and
its subsidiaries. As a result of these subordination provisions, in the event
of a distribution of assets upon insolvency, holders of Subordinated
Indebtedness may recover less, ratably, than general creditors of the Operating
Partnership.
Senior Debt will be defined in the applicable Indenture as the principal
of and interest on, or substantially similar payments to be made by the
Operating Partnership in respect of, the following, whether outstanding at the
date of execution of the applicable Indenture or thereafter incurred, created
or assumed: (i) indebtedness of the Operating Partnership for money borrowed or
represented by purchase-money obligations; (ii) indebtedness of the Operating
Partnership evidenced by notes, debentures, or bonds, or other securities
issued under the provisions of an indenture, fiscal agency agreement or other
agreement; (iii) obligations of the Operating Partnership as lessee under
leases of property either made as part of any sale and leaseback transaction to
which the Operating Partnership is a party or otherwise; (iv) indebtedness,
obligations and liabilities of others in respect of which the Operating
Partnership is liable contingently or otherwise to pay or advance money or
property or as guarantor, endorser or otherwise or which the Operating
Partnership has agreed to purchase or otherwise acquire; and (v) any binding
commitment of the Operating Partnership to fund any real estate investment or
to fund any investment in any entity making such real estate investment, in
each case other than (A) any such indebtedness, obligation or liability
referred to in clauses (i) through (iv) above as to which, in the instrument
creating or evidencing the same pursuant to which the same is outstanding, it
is provided that such indebtedness, obligation or liability is not superior in
right of payment to the Subordinated Securities or ranks without preference to
the Subordinated Securities; (B) any such indebtedness, obligation or liability
which is subordinated to indebtedness of the Operating Partnership to
substantially the same extent as or to a greater extent than the Subordinated
Securities are subordinated; and (C)
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the Subordinated Securities. There will not be any restrictions in any
Indenture relating to Subordinated Securities upon the creation of additional
Senior Debt.
If this Prospectus is being delivered in connection with a series of
Subordinated Securities, the accompanying Prospectus Supplement or the
information incorporated herein by reference will set forth the approximate
amount of Senior Debt outstanding as of the end of the Operating Partnership's
most recent fiscal quarter.
Discharge, Defeasance and Covenant Defeasance
Unless otherwise indicated in the applicable Prospectus Supplement, the
Operating Partnership will be permitted, at its option, to discharge certain
obligations to holders of any series of Debt Securities issued under any
Indenture that have not already been delivered to the applicable Trustee for
cancellation and that either have become due and payable or will become due and
payable within one year (or scheduled for redemption within one year) by
irrevocably depositing with the applicable Trustee, in trust, funds in such
currency or currencies, currency unit or units or composite currency or
currencies in which such Debt Securities are payable in an amount sufficient to
pay the entire indebtedness on such Debt Securities in respect of principal
(and premium, if any) and interest to the date of such deposit (if such Debt
Securities have become due and payable) or to the stated maturity or redemption
date, as the case may be.
The Indentures will provide that, unless otherwise indicated in the
applicable Prospectus Supplement, the Operating Partnership may elect either
(i) to defease and be discharged from any and all obligations with respect to
such Debt Securities (except for the obligation to pay additional amounts, if
any, upon the occurrence of certain events of tax, assessment or governmental
charge with respect to payments on such Debt Securities and the obligations to
register the transfer or exchange of such Debt Securities, to replace temporary
or mutilated, destroyed, lost or stolen Debt Securities, to maintain an office
or agency in respect of such Debt Securities, to hold moneys for payment in
trust) ("defeasance"); or (ii) to be released from its obligations with respect
to such Debt Securities under the applicable Indenture (being the restrictions
described under "--Certain Covenants") or, if provided in the applicable
Prospectus Supplement, its obligations with respect to any other covenant, and
any omission to comply with such obligations shall not constitute an event of
default with respect to such Debt Securities ("covenant defeasance"), in either
case upon the irrevocable deposit by the Operating Partnership with the
applicable Trustee, in trust, of an amount, in such currency or currencies,
currency unit or units or composite currency or currencies in which such Debt
Securities are payable at stated maturity, or Government Obligations (as
defined below), or both, applicable to such Debt Securities, which through the
scheduled payment of principal and interest in accordance with their terms will
provide money in an amount sufficient to pay the principal of (and premium, if
any) and interest on such Debt Securities, and any mandatory sinking fund or
analogous payments thereon, on the scheduled due dates therefor.
Such a trust will only be permitted to be established if, among other
things, the Operating Partnership has delivered to the applicable Trustee an
opinion of counsel (as specified in the applicable Indenture) to the effect
that the holders of such Debt Securities will not recognize income, gain or
loss for U.S. federal income tax purposes as a result of such defeasance or
covenant defeasance and will be subject to U.S. federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such defeasance or covenant defeasance had not occurred, and such opinion of
counsel, in the case of defeasance, will be required to refer to and be based
upon a ruling received from or published by the Internal Revenue Service or a
change in applicable United States federal income tax law occurring after the
date of the Indenture. In the event of such defeasance, the holders of such
Debt Securities would thereafter be able to look only to such trust fund for
payment of principal (and premium, if any) and interest.
"Government Obligations" means securities that are (i) direct obligations
of the United States of America or the government which issued the foreign
currency in which the Debt Securities of a particular series are payable, for
the payment of which its full faith and credit is pledged; or (ii) obligations
of a person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or such government which issued
the foreign currency in which the Debt Securities of such series are payable,
the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America or such other government, which, in
either case, are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a bank or trust
company as custodian with respect to any such Government Obligation or a
specific payment of interest on or principal of any such Government Obligation
held by such custodian for the account of
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the holder of a depository receipt; provided, however, that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by
the custodian in respect of the Government Obligation or the specific payment
of interest on or principal of the Government Obligation evidenced by such
depository receipt.
Unless otherwise provided in the applicable Prospectus Supplement, if
after the Operating Partnership has deposited funds and/or Government
Obligations to effect defeasance or covenant defeasance with respect to Debt
Securities of any series, (i) the holder of a Debt Security of such series is
entitled to, and does, elect pursuant to the applicable Indenture or the terms
of such Debt Security to receive payment in a currency, currency unit or
composite currency other than that in which such deposit has been made in
respect of such Debt Security; or (ii) a Conversion Event (as defined below)
occurs in respect of the currency, currency unit or composite currency in which
such deposit has been made, the indebtedness represented by such Debt Security
will be deemed to have been, and will be, fully discharged and satisfied
through the payment of the principal of (and premium, if any) and interest on
such Debt Security as they become due out of the proceeds yielded by converting
the amount so deposited in respect of such Debt Security into the currency,
currency unit or composite currency in which such Debt Security becomes payable
as a result of such election or such cessation of usage based on the applicable
market exchange rate. "Conversion Event" means the cessation of use of (i) a
currency, currency unit or composite currency both by the government of the
country which issued such currency and for the settlement of transactions by a
central bank or other public institutions of or within the international
banking community; (ii) the European Currency Unit ("ECU") both within the
European Monetary System and for the settlement of transactions by public
institutions of or within the European Communities; or (iii) any currency unit
or composite currency other than the ECU for the purposes for which it was
established. Unless otherwise provided in the applicable Prospectus Supplement,
all payments of principal of (and premium, if any) and interest on any Debt
Security that is payable in a foreign currency that ceases to be used by its
government of issuance shall be made in U.S. dollars.
In the event the Company effects covenant defeasance with respect to any
Debt Securities and such Debt Securities are declared due and payable because
of the occurrence of any event of default other than the event of default
described in clause (iv) under "--Events of Default, Notice and Waiver" with
respect to specified sections of an Indenture (which sections would no longer
be applicable to such Debt Securities) or described in clause (vii) under
"--Events of Default, Notice and Waiver" with respect to any other covenant as
to which there has been covenant defeasance, the amount in such currency,
currency unit or composite currency in which such Debt Securities are payable,
and Government Obligations on deposit with the applicable Trustee, will be
sufficient to pay amounts due on such Debt Securities at the time of their
stated maturity but may not be sufficient to pay amounts due on such Debt
Securities at the time of the acceleration resulting from such event of
default. However, the Operating Partnership would remain liable to make payment
of such amounts due at the time of acceleration.
The applicable Prospectus Supplement may further describe the provisions,
if any, permitting such defeasance or covenant defeasance, including any
modifications to the provisions described above, with respect to the Debt
Securities of or within a particular series.
No Conversion Rights
The Debt Securities will not be convertible into or exchangeable for any
capital stock of the Company or any equity interest in the Operating
Partnership.
Payment
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and applicable premium, if any) and interest on any series of
Debt Securities will be payable at the corporate trust office of the Trustee,
the address of which will be stated in the applicable Prospectus Supplement;
provided, however, that, at the option of the Operating Partnership, payment of
interest may be made by check mailed to the address of the person entitled
thereto as it appears in the applicable register for such Debt Securities or by
wire transfer of funds to such person at an account maintained within the
United States.
All moneys paid by the Operating Partnership to a paying agent or a
Trustee for the payment of the principal of or any premium or interest on any
Debt Security which remain unclaimed at the end of two years after such
principal, premium or interest has become due and payable will be repaid to the
Operating Partnership, and the holder of such Debt Security thereafter may look
only to the Operating Partnership for payment thereof.
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Global Securities
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities (the "Global Securities") that will be
deposited with, or on behalf of, a depositary identified in the applicable
Prospectus Supplement relating to such series. Global Securities may be issued
in either registered or bearer form and in either temporary or permanent form.
The specific terms of the depositary arrangement with respect to a series of
Debt Securities will be described in the applicable Prospectus Supplement
relating to such series.
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DESCRIPTION OF PREFERRED STOCK
The description of the Company's Preferred Stock set forth below does not
purport to be complete and is qualified in its entirety by reference to the
Company's Articles of Incorporation (the "Articles of Incorporation") and Bylaws
(the "Bylaws"), as in effect.
General
Under the Articles of Incorporation, the Company has authority to issue 25
million shares of Preferred Stock, 8,000,000 of which are issued and
outstanding as of the date of this Prospectus. Shares of Preferred Stock may be
issued from time to time, in one or more series, as authorized by the Board of
Directors of the Company. Prior to issuance of shares of each series, the Board
of Directors is required by the Maryland General Corporation Law ("MGCL") and
the Company's Articles of Incorporation to fix for each series, subject to the
provisions of the Company's Articles of Incorporation regarding excess stock,
$.01 par value per share ("Excess Stock"), the terms, preferences, conversion
or other rights, voting powers, restrictions, limitations as to dividends or
other distributions, qualifications and terms or conditions of redemption, as
are permitted by Maryland law. The Preferred Stock will, when issued, be fully
paid and nonassessable and will have no preemptive rights. The Board of
Directors could authorize the issuance of shares of Preferred Stock with terms
and conditions that could have the effect of discouraging a takeover or other
transaction that holders of Common Stock might believe to be in their best
interests or in which holders of some, or a majority, of the shares of Common
Stock might receive a premium for their shares over the then market price of
such shares of Common Stock.
Terms
The following description of the Preferred Stock sets forth certain
general terms and provisions of the Preferred Stock to which any Prospectus
Supplement may relate. The statements below describing the Preferred Stock are
in all respects subject to and qualified in their entirety by reference to the
applicable provisions of the Company's Articles of Incorporation and Bylaws and
any applicable amendment to the Articles of Incorporation designating terms of
a series of Preferred Stock (a "Designating Amendment").
Reference is made to the Prospectus Supplement relating to the Preferred
Stock offered thereby for specific terms, including:
(1) The title and stated value of such Preferred Stock;
(2) The number of shares of such Preferred Stock offered, the liquidation
preference per share and the offering price of such Preferred Stock;
(3) The dividend rate(s), period(s) and/or payment date(s) or method(s) of
calculation thereof applicable to such Preferred Stock;
(4) The date from which dividends on such Preferred Stock shall accumulate, if
applicable;
(5) The procedures for any auction and remarketing, if any, for such Preferred
Stock;
(6) The provision for a sinking fund, if any, for such Preferred Stock;
(7) The provision for redemption, if applicable, of such Preferred Stock;
(8) Any listing of such Preferred Stock on any securities exchange;
(9) The terms and conditions, if applicable, upon which such Preferred Stock
will be convertible into Common Stock, including the conversion price or
rate (or manner of calculation thereof);
(10) Any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Stock;
(11) A discussion of federal income tax considerations applicable to such
Preferred Stock;
(12) The relative ranking and preference of such Preferred Stock as to
dividend rights and rights upon liquidation, dissolution or winding up of
the affairs of the Company;
(13) Any limitations on issuance of any series of Preferred Stock ranking
senior to or on a parity with such series of Preferred Stock as to
dividend rights and rights upon liquidation, dissolution or winding up of
the affairs of the Company; and
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(14) Any limitations on direct or beneficial ownership and restrictions on
transfer, in each case as may be appropriate to preserve the status of the
Company as a REIT.
Rank
Unless otherwise specified in the Prospectus Supplement, the Preferred
Stock will, with respect to dividend rights and rights upon liquidation,
dissolution or winding up of the Company, rank (i) senior to all classes or
series of Common Stock of the Company, and to all equity securities ranking
junior to such Preferred Stock with respect to dividend rights or rights upon
liquidation, dissolution or winding up of the Company; (ii) on a parity with
all equity securities issued by the Company, the terms of which specifically
provide that such equity securities rank on a parity with the Preferred Stock
with respect to dividend rights or rights upon liquidation, dissolution or
winding up of the Company; and (iii) junior to all equity securities issued by
the Company, the terms of which specifically provide that such equity
securities rank senior to the Preferred Stock with respect to dividend rights
or rights upon liquidation, dissolution or winding up of the Company. The term
"equity securities" does not include convertible debt securities.
Dividends
Holders of the Preferred Stock of each series will be entitled to receive,
when, as and if declared by the Board of Directors of the Company, out of
assets of the Company legally available for payment, cash dividends at such
rates and on such dates as will be set forth in the applicable Prospectus
Supplement. Each such dividend shall be payable to holders of record as they
appear on the share transfer books of the Company on such record dates as shall
be fixed by the Board of Directors of the Company.
Dividends on any series of the Preferred Stock may be cumulative or
non-cumulative, as provided in the applicable Prospectus Supplement. Dividends,
if cumulative, will be cumulative from and after the date set forth in the
applicable Prospectus Supplement. If the Board of Directors of the Company
fails to declare a dividend payable on a dividend payment date on any series of
the Preferred Stock for which dividends are non-cumulative, then the holders of
such series of the Preferred Stock will have no right to receive a dividend in
respect of the dividend period ending on such dividend payment date, and the
Company will have no obligation to pay the dividend accrued for such period,
whether or not dividends on such series are declared payable on any future
dividend payment date.
If Preferred Stock of any series is outstanding, no dividends will be
declared or paid or set apart for payment on any capital stock of the Company
of any other series ranking, as to dividends, on a parity with or junior to the
Preferred Stock of such series for any period unless (i) if such series of
Preferred Stock has a cumulative dividend, full cumulative dividends have been
or contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof is set apart for such payment on the Preferred Stock of
such series for all past dividend periods and the then current dividend period;
or (ii) if such series of Preferred Stock does not have a cumulative dividend,
full dividends for the then current dividend period have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof is set apart for such payment on the Preferred Stock of
such series. When dividends are not paid in full (or a sum sufficient for such
full payment is not so set apart) upon Preferred Stock of any series and the
shares of any other series of Preferred Stock ranking on a parity as to
dividends with the Preferred Stock of such series, all dividends declared upon
Preferred Stock of such series and any other series of Preferred Stock ranking
on a parity as to dividends with such Preferred Stock shall be declared pro
rata so that the amount of dividends declared per share of Preferred Stock of
such series and such other series of Preferred Stock shall in all cases bear to
each other the same ratio that accrued dividends per share on the Preferred
Stock of such series (which shall not include any accumulation in respect of
unpaid dividends for prior dividend periods if such Preferred Stock does not
have a cumulative dividend) and such other series of Preferred Stock bear to
each other. No interest, or sum of money in lieu of interest, shall be payable
in respect of any dividend payment or payments on Preferred Stock of such
series which may be in arrears.
Except as provided in the immediately preceding paragraph, unless (i) if
such series of Preferred Stock has a cumulative dividend, full cumulative
dividends on the Preferred Stock of such series have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
is set apart for payment for all past dividend periods and the then current
dividend period; and (ii) if such series of Preferred Stock does not have a
cumulative dividend, full dividends on the Preferred Stock of such series have
been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof is set apart for
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payment for the then current dividend period, no dividends (other than in
shares of Common Stock or other shares of capital stock ranking junior to the
Preferred Stock of such series as to dividends and upon liquidation) shall be
declared or paid or set aside for payment nor shall any other distribution be
declared or made upon the Common Stock, or any other capital stock of the
Company ranking junior to or on a parity with the Preferred Stock of such
series as to dividends or upon liquidation, nor shall any shares of Common
Stock, or any other shares of capital stock of the Company ranking junior to or
on a parity with the Preferred Stock of such series as to dividends or upon
liquidation be redeemed, purchased or otherwise acquired for any consideration
(or any moneys be paid to or made available for a sinking fund for the
redemption of any such shares) by the Company (except by conversion into or
exchange for other capital stock of the Company ranking junior to the Preferred
Stock of such series as to dividends and upon liquidation).
Any dividend payment made on shares of a series of Preferred Stock shall
first be credited against the earliest accrued but unpaid dividend due with
respect to shares of such series which remain payable.
Redemption
If so provided in the applicable Prospectus Supplement, the Preferred
Stock will be subject to mandatory redemption or redemption at the option of
the Company, as a whole or in part, in each case upon the terms, at the times
and at the redemption prices set forth in such Prospectus Supplement.
The Prospectus Supplement relating to a series of Preferred Stock that is
subject to mandatory redemption will specify the number of shares of such
Preferred Stock that shall be redeemed by the Company in each year commencing
after a date to be specified, at a redemption price per share to be specified,
together with an amount equal to all accrued and unpaid dividends thereon
(which shall not, if such Preferred Stock does not have a cumulative dividend,
include any accumulation in respect of unpaid dividends for prior dividend
periods) to the date of redemption. The redemption price may be payable in cash
or other property, as specified in the applicable Prospectus Supplement. If the
redemption price for Preferred Stock of any series is payable only from the net
proceeds of the issuance of shares of capital stock of the Company, the terms
of such Preferred Stock may provide that, if no such shares of capital stock
shall have been issued or to the extent the net proceeds from any issuance are
insufficient to pay in full the aggregate redemption price then due, such
Preferred Stock shall automatically and mandatorily be converted into the
applicable shares of capital stock of the Company pursuant to conversion
provisions specified in the applicable Prospectus Supplement.
Notwithstanding the foregoing, unless (i) if a series of Preferred Stock
has a cumulative dividend, full cumulative dividends on all shares of such
series of Preferred Stock shall have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for
payment for all past dividend periods and the then current dividend period; and
(ii) if a series of Preferred Stock does not have a cumulative dividend, full
dividends on all shares of the Preferred Stock of such series have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for payment for the then current dividend period,
no shares of such series of Preferred Stock shall be redeemed unless all
outstanding shares of Preferred Stock of such series are simultaneously
redeemed; provided, however, that the foregoing shall not prevent the purchase
or acquisition of Preferred Stock of such series to preserve the REIT status of
the Company or pursuant to a purchase or exchange offer made on the same terms
to holders of all outstanding shares of Preferred Stock of such series. In
addition, unless (i) if such series of Preferred Stock has a cumulative
dividend, full cumulative dividends on all outstanding shares of such series of
Preferred Stock have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for payment for
all past dividend periods and the then current dividend period; and (ii) if
such series of Preferred Stock does not have a cumulative dividend, full
dividends on the Preferred Stock of such series have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
set apart for payment for the then current dividend period, the Company shall
not purchase or otherwise acquire directly or indirectly any shares of
Preferred Stock of such series (except by conversion into or exchange for
capital shares of the Company ranking junior to the Preferred Stock of such
series as to dividends and upon liquidation); provided, however, that the
foregoing shall not prevent the purchase or acquisition of shares of Preferred
Stock of such series to preserve the REIT status of the Company or pursuant to
a purchase or exchange offer made on the same terms to holders of all
outstanding shares of Preferred Stock of such series.
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If fewer than all of the outstanding shares of Preferred Stock of any
series are to be redeemed, the number of shares to be redeemed will be
determined by the Company and such shares may be redeemed pro rata from the
holders of record of such shares in proportion to the number of such shares
held or for which redemption is requested by such holder (with adjustments to
avoid redemption of fractional shares) or by any other equitable manner
determined by the Company.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of record of Preferred Stock of
any series to be redeemed at the address shown on the stock transfer books of
the Company. Each notice shall state: (i) the redemption date; (ii) the number
of shares and series of the Preferred Stock to be redeemed; (iii) the
redemption price; (iv) the place or places where certificates for such
Preferred Stock are to be surrendered for payment of the redemption price; (v)
that dividends on the shares to be redeemed will cease to accrue on such
redemption date; and (vi) the date upon which the holder's conversion rights,
if any, as to such shares shall terminate. If fewer than all the shares of
Preferred Stock of any series are to be redeemed, the notice mailed to each
such holder thereof shall also specify the number of shares of Preferred Stock
to be redeemed from each such holder. If notice of redemption of any Preferred
Stock has been given and if the funds necessary for such redemption have been
set aside by the Company in trust for the benefit of the holders of any
Preferred Stock so called for redemption, then from and after the redemption
date dividends will cease to accrue on such Preferred Stock, and all rights of
the holders of such shares will terminate, except the right to receive the
redemption price.
Liquidation Preference
Upon any voluntary or involuntary liquidation, dissolution or winding up
of the affairs of the Company, then, before any distribution or payment shall
be made to the holders of any Common Stock or any other class or series of
capital stock of the Company ranking junior to the Preferred Stock in the
distribution of assets upon any liquidation, dissolution or winding up of the
Company, the holders of each series of Preferred Stock shall be entitled to
receive out of assets of the Company legally available for distribution to
stockholders liquidating distributions in the amount of the liquidation
preference per share, if any, set forth in the applicable Prospectus
Supplement, plus an amount equal to all dividends accrued and unpaid thereon
(which shall not include any accumulation in respect of unpaid noncumulative
dividends for prior dividend periods). After payment of the full amount of the
liquidating distributions to which they are entitled, the holders of Preferred
Stock will have no right or claim to any of the remaining assets of the
Company. In the event that, upon any such voluntary or involuntary liquidation,
dissolution or winding up, the available assets of the Company are insufficient
to pay the amount of the liquidating distributions on all outstanding shares of
Preferred Stock and the corresponding amounts payable on all shares of other
classes or series of capital stock of the Company ranking on a parity with the
Preferred Stock in the distribution of assets, then the holders of the
Preferred Stock and all other such classes or series of capital stock shall
share ratably in any such distribution of assets in proportion to the full
liquidating distributions to which they would otherwise be respectively
entitled.
If liquidating distributions shall have been made in full to all holders
of Preferred Stock, the remaining assets of the Company shall be distributed
among the holders of any other classes or series of capital stock ranking
junior to the Preferred Stock upon liquidation, dissolution or winding up,
according to their respective rights and preferences and in each case according
to their respective number of shares. For such purposes, the consolidation or
merger of the Company with or into any other corporation, trust or entity, or
the sale, lease or conveyance of all or substantially all of the property or
business of the Company, shall not be deemed to constitute a liquidation,
dissolution or winding up of the Company.
Voting Rights
Holders of the Preferred Stock will not have any voting rights, except as
set forth below or as otherwise from time to time required by law or as
indicated in the applicable Prospectus Supplement.
Unless provided otherwise for any series of Preferred Stock, so long as
any shares of Preferred Stock of a series remain outstanding, the Company will
not, without the affirmative vote or consent of the holders of at least
two-thirds of the shares of such series of Preferred Stock outstanding at the
time, given in person or by proxy, either in writing or at a meeting (such
series voting separately as a class), (i) authorize or create, or increase the
authorized or issued amount of, any class or series of capital stock ranking
prior to such series of Preferred Stock with respect to payment of dividends or
the distribution of assets upon liquidation, dissolution or winding up or
reclassify any
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authorized capital stock of the Company into such shares, or create, authorize
or issue any obligation or security convertible into or evidencing the right to
purchase any such shares; or (ii) amend, alter or repeal the provisions of the
Company's Articles of Incorporation or the Designating Amendment for such
series of Preferred Stock, whether by merger, consolidation or otherwise (an
"Event"), so as to materially and adversely affect any right, preference,
privilege or voting power of such series of Preferred Stock or the holders
thereof; provided, however, with respect to the occurrence of any of the Events
set forth in (ii) above, so long as the Preferred Stock remains outstanding
with the terms thereof materially unchanged, taking into account that upon the
occurrence of an Event the Company may not be the surviving entity, the
occurrence of any such Event shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting power of holders of
Preferred Stock, and provided further that (A) any increase in the amount of
the authorized Preferred Stock or the creation or issuance of any other series
of Preferred Stock, or (B) any increase in the amount of authorized shares of
such series or any other series of Preferred Stock, in each case ranking on a
parity with or junior to the Preferred Stock of such series with respect to
payment of dividends or the distribution of assets upon liquidation,
dissolution or winding up, shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers.
The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding shares of such series of Preferred Stock shall
have been redeemed or called for redemption and sufficient funds shall have
been deposited in trust to effect such redemption.
Conversion Rights
The terms and conditions, if any, upon which any series of Preferred Stock
is convertible into Common Stock will be set forth in the applicable Prospectus
Supplement relating thereto. Such terms will include the number of shares of
Common Stock into which the shares of Preferred Stock are convertible, the
conversion price or rate (or manner of calculation thereof), the conversion
period, provisions as to whether conversion will be at the option of the
holders of the Preferred Stock or the Company, the events requiring an
adjustment of the conversion price and provisions affecting conversion in the
event of the redemption of such series of Preferred Stock.
Restrictions on Ownership
For the Company to qualify as a REIT under the Internal Revenue Code of
1986, as amended (the "Code"), not more than 50% in value of its outstanding
capital stock may be owned, directly or indirectly, by five or fewer
individuals (as defined in the Code to include certain entities) during the
last half of a taxable year. To assist the Company in meeting this requirement,
the Company may take certain actions to limit the beneficial ownership,
directly or indirectly, by a single person of the Company's outstanding equity
securities, including any Preferred Stock of the Company. Therefore, the
Designating Amendment for each series of Preferred Stock may contain provisions
restricting the ownership and transfer of the Preferred Stock. The applicable
Prospectus Supplement will specify any additional ownership limitation relating
to a series of Preferred Stock. See "Restrictions on Transfers of Capital
Stock."
Transfer Agent
The transfer agent and registrar for the Preferred Stock will be set forth
in the applicable Prospectus Supplement.
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DESCRIPTION OF COMMON STOCK
The description of the Company's Common Stock set forth below does not
purport to be complete and is qualified in its entirety by reference to the
Company's Articles of Incorporation and Bylaws, as in effect.
General
Under the Articles of Incorporation, the Company has authority to issue 100
million shares of Common Stock, par value $.01 per share. Under Maryland law,
stockholders generally are not responsible for the corporation's debts or
obligations. At July 30, 1997, the Company had outstanding 55,375,143 shares of
Common Stock.
Terms
All shares of Common Stock offered hereby have been duly authorized, and
are fully paid and non-assessable. Subject to the preferential rights of any
other shares or series of stock and to the provisions of the Company's Articles
of Incorporation regarding excess stock, $.01 par value per share ("Excess
Stock"), holders of shares of Common Stock will be entitled to receive
dividends on shares of Common Stock if, as and when authorized and declared by
the Board of Directors of the Company out of assets legally available therefor
and to share ratably in the assets of the Company legally available for
distribution to its stockholders in the event of its liquidation, dissolution
or winding-up after payment of, or adequate provision for, all known debts and
liabilities of the Company.
Subject to the provisions of the Company's Articles of Incorporation
regarding Excess Stock, each outstanding share of Common Stock entitles the
holder to one vote on all matters submitted to a vote of stockholders,
including the election of Directors and, except as otherwise required by law or
except as provided with respect to any other class or series of stock, the
holders of Common Stock will possess the exclusive voting power. There is no
cumulative voting in the election of Directors, which means that the holders of
a majority of the outstanding shares of Common Stock can elect all of the
Directors then standing for election, and the holders of the remaining shares
of Common Stock will not be able to elect any Directors.
Holders of Common Stock have no conversion, sinking fund or redemption
rights, or preemptive rights to subscribe for any securities of the Company.
The Company intends to furnish its stockholders with annual reports
containing audited consolidated financial statements and an opinion thereon
expressed by an independent public accounting firm and quarterly reports for
the first three quarters of each fiscal year containing unaudited financial
information.
Subject to the provisions of the Company's Articles of Incorporation
regarding Excess Stock, all shares of Common Stock will have equal dividend,
distribution, liquidation and other rights, and will have no preference,
appraisal or exchange rights.
Pursuant to the Maryland General Corporation Law (the "MGCL"), a
corporation generally cannot dissolve, amend its Articles of Incorporation,
merge, sell all or substantially all of its assets, engage in a share exchange
or engage in similar transactions outside the ordinary course of business
unless approved by the affirmative vote of stockholders holding at least
two-thirds of the shares entitled to vote on the matter unless a lesser
percentage (but not less than a majority of all of the votes to be cast on the
matter) is set forth in the corporation's Articles of Incorporation. The
Company's Articles of Incorporation do not provide for a lesser percentage in
such situations.
Restrictions on Ownership
For the Company to qualify as a REIT under the Internal Revenue Code of
1986, as amended (the "Code"), not more than 50% in value of its outstanding
capital stock may be owned, directly or indirectly, by five or fewer
individuals (as defined in the Code to include certain entities) during the
last half of a taxable year. To assist the Company in meeting this requirement,
the Company may take certain actions to limit the beneficial ownership,
directly or indirectly, by a single person of the Company's outstanding equity
securities. See "Restrictions on Transfers of Capital Stock."
Transfer Agent
The transfer agent and registrar for the Common Stock is Boston EquiServe.
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RESTRICTIONS ON TRANSFERS OF CAPITAL STOCK
Restrictions on Transfers
In order for the Company to qualify as a REIT under the Code, among other
things, not more than 50% in value of its outstanding capital stock may be
owned, directly or indirectly, by five or fewer individuals (defined in the
Code to include certain entities) during the last half of a taxable year (other
than the first year) (the "Five or Fewer Requirement"), and such shares of
capital stock must be beneficially owned by 100 or more persons during at least
335 days of a taxable year of 12 months (other than the first year) or during a
proportionate part of a shorter taxable year. See "Federal Income Tax
Considerations." In order to protect the Company against the risk of losing its
status as a REIT on account of a concentration of ownership among its
stockholders, the Articles of Incorporation, subject to certain exceptions,
provide that no single holder may own, or be deemed to own by virtue of the
attribution provisions of the Code, more than 6.0% (the "Ownership Limit") of
the aggregate value of the Company's shares of Common Stock. Pursuant to the
Code, Common Stock held by certain types of entities, such as pension trusts
qualifying under Section 401(a) of the Code, United States investment companies
registered under the Investment Company Act, partnerships, trusts and
corporations, will be attributed to the beneficial owners of such entities for
purposes of the Five or Fewer Requirement (i.e., the beneficial owners of such
entities will be counted as holders). The Company's Articles of Incorporation
limits such entities to holding no more than 9.9% of the aggregate value of the
Company's shares of capital stock (the "Look-Through Ownership Limit"). Any
transfer of shares of capital stock or of any security convertible into shares
of capital stock that would create a direct or indirect ownership of shares of
capital stock in excess of the Ownership Limit or the Look-Through Ownership
Limit or that would result in the disqualification of the Company as a REIT,
including any transfer that results in the shares of capital stock being owned
by fewer than 100 persons or results in the Company being "closely held" within
the meaning of Section 856(h) of the Code, shall be null and void, and the
intended transferee will acquire no rights to the shares of capital stock. The
foregoing restrictions on transferability and ownership will not apply if the
Board of Directors determines that it is no longer in the best interests of the
Company to attempt to qualify, or to continue to qualify, as a REIT. The Board
of Directors may, in its sole discretion, waive the Ownership Limit and the
Look-Through Ownership Limit if evidence satisfactory to the Board of Directors
and the Company's tax counsel is presented that the changes in ownership will
not then or in the future jeopardize the Company's REIT status and the Board of
Directors otherwise decides that such action is in the best interest of the
Company.
Shares of capital stock owned, or deemed to be owned, or transferred to a
stockholder in excess of the Ownership Limit or the Look-Through Ownership
Limit will automatically be converted into shares of Excess Stock that will be
transferred, by operation of law, to the Company as trustee of a trust for the
exclusive benefit of the transferees to whom such shares of capital stock may
be ultimately transferred without violating the Ownership Limit or the
Look-Through Ownership Limit. While the Excess Stock is held in trust, it will
not be entitled to vote, it will not be considered for purposes of any
stockholder vote or the determination of a quorum for such vote, and, except
upon liquidation, it will not be entitled to participate in dividends or other
distributions. Any distribution paid to a proposed transferee of Excess Stock
prior to the discovery by the Company that capital stock has been transferred
in violation of the provisions of the Company's Articles of Incorporation shall
be repaid to the Company upon demand. The Excess Stock is not treasury stock,
but rather constitutes a separate class of issued and outstanding stock of the
Company. The original transferee stockholder may, at any time the Excess Stock
is held by the Company in trust, transfer the interest in the trust
representing the Excess Stock to any person whose ownership of the shares of
capital stock exchanged for such Excess Stock would be permitted under the
Ownership Limit or the Look-Through Ownership Limit, at a price not in excess
of (i) the price paid by the original transferee-stockholder for the shares of
capital stock that were exchanged into Excess Stock, or (ii) if the original
transferee-stockholder did not give value for such shares (e.g., the stock was
received through a gift, devise or other transaction), the average closing
price for the class of shares from which such shares of Excess Stock were
converted for the ten days immediately preceding such sale or gift. Immediately
upon the transfer to the permitted transferee, the Excess Stock will
automatically be converted back into shares of capital stock of the class from
which it was converted. If the foregoing transfer restrictions are determined
to be void or invalid by virtue of any legal decision, statute, rule or
regulation, then the intended transferee of any shares of Excess Stock may be
deemed, at the option of the Company, to have acted as an agent on behalf of
the Company in acquiring the Excess Stock and to hold the Excess Stock on
behalf of the Company.
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In addition, the Company will have the right, for a period of 90 days
during the time any shares of Excess Stock are held by the Company in trust, to
purchase all or any portion of the Excess Stock from the original
transferee-stockholder at the lesser of (i) the price initially paid for such
shares by the original transferee stockholder, or if the original
transferee-stockholder did not give value for such shares (e.g., the shares
were received through a gift, devise or other transaction), the average closing
price for the class of stock from which such shares of Excess Stock were
converted for the ten days immediately preceding such sale or gift, and (ii)
the average closing price for the class of shares from which such shares of
Excess Stock were converted for the ten trading days immediately preceding the
date the Company elects to purchase such shares. The 90-day period begins on
the date notice is received of the violative transfer if the original
transferee-stockholder gives notice to the Company of the transfer or, if no
such notice is given, the date the Board of Directors determines that a
violative transfer has been made.
These restrictions will not preclude settlement of transactions through
the NYSE.
Each stockholder shall upon demand be required to disclose to the Company
in writing any information with respect to the direct, indirect and
constructive ownership of capital stock as the Board of Directors deems
necessary to comply with the provisions of the Code applicable to REITs, to
comply with the requirements of any taxing authority or governmental agency or
to determine any such compliance.
The Ownership Limit may have the effect of precluding acquisition of
control of the Company unless the Board of Directors determines that
maintenance of REIT status is no longer in the best interests of the Company.
FEDERAL INCOME TAX CONSIDERATIONS
The Company believes it has operated, and the Company intends to continue
to operate, in such a manner as to qualify as a REIT under the Code, but no
assurance can be given that it will at all times so qualify.
The provisions of the Code pertaining to REITs are highly technical and
complex. The following is a brief and general summary of the material federal
income tax considerations of an investment in the Company's Securities to the
extent those considerations relate to the taxation of the Company. To the
extent such considerations relate to the tax treatment of particular
Securities, they will be addressed in the applicable Prospectus Supplement.
Goodwin, Procter & Hoar LLP has acted as counsel to the Company and has
reviewed this summary and is of the opinion that to the extent that it
constitutes matters of law, summaries of legal matters, or legal conclusions,
this summary is accurate in all material respects. For the particular
provisions that govern the federal income tax treatment of the Company and its
stockholders, reference is made to Sections 856 through 860 of the Code and the
regulations thereunder. The following summary is qualified in its entirety by
such reference.
The statements in this discussion and the opinion of Goodwin, Procter and
Hoar LLP are based on current provisions of the Code, Treasury Regulations, the
legislative history of the Code, existing administrative rulings and practices
of the Service, and judicial decisions. No assurance can be given that future
legislative, judicial, or administrative actions or decisions, which may be
retroactive in effect, will not affect the accuracy of any statements in this
Prospectus with respect to the transactions entered into or contemplated prior
to the effective date of such changes.
EACH INVESTOR IS ADVISED TO CONSULT HIS OWN TAX ADVISOR REGARDING THE
SPECIFIC TAX CONSEQUENCES TO HIM OR HER OF AN INVESTMENT IN THE COMPANY'S
SECURITIES.
Under the Code, if certain requirements are met in a taxable year, a REIT
generally will not be subject to federal income tax with respect to income that
it distributes to its stockholders. However, the Company may be subject to
federal income tax under certain circumstances including taxes at regular
corporate rates on any undistributed REIT taxable income, the "alternative
minimum tax" on its items of tax preference, and taxes imposed on income and
gain generated by certain extraordinary transactions. If the Company fails to
qualify during any taxable year as a REIT, unless certain relief provisions are
available, it will be subject to tax (including any applicable alternative
minimum tax) on its taxable income at regular corporate rates, which could have
a material adverse effect upon its stockholders.
In addition to meeting a number of technical requirements, including
requirements regarding distributions to shareholders, diversification of
ownership and record keeping, to qualify as a REIT the Company must meet
certain tests regarding the nature of its assets and its gross income. The
Company is largely restricted under these tests to holding "real estate assets"
(as defined in the Code) for investment (and not for resale) and relatively
small
22
<PAGE>
amounts of investment securities. Accordingly, the Company's ability to
diversify its holdings outside of investments in real estate is limited. The
requirements of the statutory tests also impose certain requirements on the
Company's leases with its tenants, including restrictions on the Company's
ability to provide noncustomary services to its tenants. Because the Company's
proportionate share of the assets and items of income of the Operating
Partnership and its subsidiary partnerships are treated as assets and gross
income of the Company, the same restrictions apply to the operations and
investments of the Operating Partnership and the subsidiary partnerships.
Further, changes in law, or in the interpretation of the law, may change the
nature and effect of these restrictions or add additional restrictions to the
manner in which the Company conducts its business.
In the opinion of Goodwin, Procter & Hoar LLP, commencing with the taxable
year ending December 31, 1994, the Company has been organized and operated in
conformity with the requirements for qualification and taxation as a REIT under
the Code, and the Company's proposed method of operation will enable it to
continue to meet the requirements for qualification and taxation as a REIT
under the Code. Investors should be aware, however, that opinions of counsel
are not binding upon the Internal Revenue Service (the "Service") or any court.
Moreover, Goodwin, Procter & Hoar LLP's opinion is based on various assumptions
and is conditioned upon certain representations made by the Company as to
factual matters, including representations regarding the nature of the
Company's properties, and the future conduct of the Company's business. The
Company's qualification and taxation as a REIT depends upon the Company's
ability to meet on a continuing basis, through actual annual operating results,
the distribution levels, stock ownership, and other various qualification tests
imposed under the Code. Goodwin, Procter & Hoar LLP will not review the
Company's compliance with those tests on a continuing basis. Accordingly, no
assurance can be given that the actual results of the Company's operation for
any particular taxable year will satisfy such requirements.
Investors are urged to consult their own tax advisors with respect to the
appropriateness of an investment in the Securities offered hereby and with
respect to the tax consequences arising under federal law and the laws of any
state, municipality or other taxing jurisdiction, including tax consequences
resulting from such investor's own tax characteristics. In particular, foreign
investors should consult their own tax advisors concerning the tax consequences
of an investment in the Company, including the possibility of United States
income tax withholding on Company distributions.
PLAN OF DISTRIBUTION
The Company and the Operating Partnership may sell Securities through
underwriters or dealers, directly to one or more purchasers, through agents or
through a combination of any such methods of sale.
The distribution of the Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices, or at negotiated prices.
In connection with the sale of Securities, underwriters or agents may
receive compensation from the Company, from the Operating Partnership or from
purchasers of Securities, for whom they may act as agents, in the form of
discounts, concessions or commissions. Underwriters may sell Securities to or
through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or commissions
from the purchasers for whom they may act as agents. Underwriters, dealers, and
agents that participate in the distribution of Securities may be deemed to be
underwriters under the Securities Act, and any discounts or commissions they
receive from the Company or the Operating Partnership, and any profit on the
resale of Securities they realize may be deemed to be underwriting discounts
and commissions under the Securities Act. Any such underwriter or agent will be
identified, and any such compensation received from the Company or the
Operating Partnership will be described, in the applicable Prospectus
Supplement.
Unless otherwise specified in the related Prospectus Supplement, each
series of Securities will be a new issue with no established trading market,
other than the Common Stock which is listed on the NYSE. Any shares of Common
Stock sold pursuant to a Prospectus Supplement will be listed on the NYSE,
subject to official notice of issuance. The Operating Partnership or the
Company may elect to list any series of Debt Securities or Preferred Stock on
an exchange, but is not obligated to do so. It is possible that one or more
underwriters may make a market in a series of Securities, but will not be
obligated to do so and may discontinue any market making at any time without
notice. Therefore, no assurance can be given as to the liquidity of, or the
trading market for, the Securities.
23
<PAGE>
Under agreements into which the Company or the Operating Partnership may
enter, underwriters, dealers and agents who participate in the distribution of
Securities may be entitled to indemnification by the Company or the Operating
Partnership against certain liabilities, including liabilities under the
Securities Act. In the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, or be tenants of, the Company or the Operating
Partnership in the ordinary course of business.
If so indicated in the applicable Prospectus Supplement, the Company or
the Operating Partnership will authorize underwriters or other persons acting
as the Company's or the Operating Partnership's agents to solicit offers by
certain institutions to purchase Securities from the Company pursuant to
contracts providing for payment and delivery on a future date. Institutions
with which such contracts may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and others, but in all cases such institutions must be
approved by the Company or the Operating Partnership, as the case may be. The
obligations of any purchaser under any such contract will be subject to the
condition that the purchase of the Debt Securities shall not at the time of
delivery be prohibited under the laws of the jurisdiction to which such
purchaser is subject. The underwriters and such other agents will not have any
responsibility in respect of the validity or performance of such contracts.
If so indicated in the applicable Prospectus Supplement, the Operating
Partnership will authorize underwriters or other persons acting as the
Operating Partnership's agents to solicit offers by certain institutions to
purchase Debt Securities from the Operating Partnership at the public offering
price set forth in such Prospectus Supplement pursuant to delayed delivery
contracts ("Contracts") providing for payment and delivery on the date or dates
stated in such Prospectus Supplement. Each Contract will be for an amount not
less than, and the aggregate principal amount of Debt Securities sold pursuant
to Contracts shall be not less nor more than, the respective amounts stated in
the applicable Prospectus Supplement. Institutions with whom Contracts, when
authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions, and other institutions but will in all cases be subject to the
approval of the Operating Partnership. Contracts will not be subject to any
conditions except (i) the purchase by an institution of the Debt Securities
covered by its Contracts shall not at the time of delivery be prohibited under
the laws of any jurisdiction in the United States to which such institution is
subject, and (ii) if the Debt Securities are being sold to underwriters, the
Operating Partnership shall have sold to such underwriters the total principal
amount of the Debt Securities less the principal amount thereof covered by
Contracts.
In order to comply with the securities laws of certain states, if
applicable, the Securities offered hereby will be sold in such jurisdictions
only through registered or licensed brokers or dealers. In addition, in certain
states Securities may not be sold unless they have been registered or qualified
for sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the Securities offered hereby may not
simultaneously engage in market making activities with respect to the
Securities for a period of two business days prior to the commencement of such
distribution.
LEGAL MATTERS
Certain legal matters will be passed upon for the Company by Goodwin,
Procter & Hoar LLP, Boston, Massachusetts, a limited liability partnership
including professional corporations, as corporate, securities and tax counsel
to the Company. Gilbert G. Menna, whose professional corporation is a partner
of Goodwin, Procter & Hoar LLP, is an assistant secretary of the Company and
owns in excess of 1,000 shares of the Company's Common Stock.
EXPERTS
The consolidated balance sheets of the Company as of December 31, 1996 and
1995 and the related consolidated statements of operations, stockholders'
equity and cash flows for the years ended December 31, 1996 and 1995 and for
the period May 26, 1994 to December 31, 1994, the combined statements of
operations, owners' equity (deficit) and cash flows for the period January 1,
1994 to May 25, 1994 of The Beacon Group,
24
<PAGE>
predecessor to the Company, and the related financial statement schedules of
the Company as of December 31, 1996, incorporated by reference herein from the
Company's Annual Report on Form 10-K, as amended, for the year ended December
31, 1996, have been so incorporated in reliance on the report of Coopers &
Lybrand L.L.P., independent accountants, given on the authority of that firm as
experts in accounting and auditing.
The consolidated balance sheets of the Operating Partnership as of December
31, 1996 and 1995 and the related consolidated statements of operations,
partners' capital and cash flows for the years ended December 31, 1996 and 1995
and the period May 26, 1994 to December 31, 1994, the combined statements of
operations, limited partners' capital interest and cash flows for the period
January 1, 1994 to May 25, 1994, of The Beacon Group, predecessor to the
Operating Partnership, and the related financial statement schedules of the
Operating Partnership as of December 31, 1996, incorporated by reference herein
from the Operating Partnership's Form 10, as amended, have been so incorporated
in reliance on the report of Coopers & Lybrand L.L.P., independent accountants,
given on the authority of said firm as experts in accounting and auditing.
The statement of excess of revenues over specific operating expenses for
225 Franklin Street in Boston, Massachusetts for the year ended December 31,
1996, incorporated by reference herein from the Company's report on Form 8-K
dated June 4, 1997, as amended on the Form 8-K/A of the Company dated June 11,
1997, has been so incorporated in reliance on the reports of Coopers & Lybrand
L.L.P., independent accountants, given on the authority of said firm as experts
in accounting and auditing.
The statements of excess of revenues over specific operating expenses for
each of 10880 Wilshire Boulevard in Westwood, California, Centerpointe in
Fairfax, Virginia, and Westbrook Corporate Center in Westchester, Illinois for
the year ended December 31, 1996, incorporated by reference herein from the
Company's current report on Form 8-K dated March 27, 1997, as amended on the
Form 8-K/A of the Company dated April 7, 1997, have been so incorporated in
reliance on the reports of Coopers & Lybrand L.L.P., independent accountants,
given on the authority of said firm as experts in accounting and auditing.
The statements of excess of revenues over specific operating expenses for
each of the Rosslyn Acquisitions in Rosslyn, Virginia, New England Executive
Park in Burlington, Massachusetts, and 10960 Wilshire Boulevard in Westwood,
California for the year ended December 31, 1995, incorporated by reference
herein from the Company's current report on Form 8-K dated October 18, 1996, as
amended, have been so incorporated in reliance on the reports of Coopers &
Lybrand L.L.P., independent accountants, given on the authority of said firm as
experts in accounting and auditing.
The statements of excess of revenues over specific operating expenses for
each of the Fairfax County Portfolio in Tysons Corner and Herndon, Virginia,
1333 H Street in Washington, DC, AT&T Plaza in Oak Brook, Illinois, and
Tri-State International in Lincolnshire, Illinois for the year ended December
31, 1995, incorporated by reference herein from the Company's current report on
Form 8-K dated July 23, 1996, as amended on the Form 8-K/A of the Company dated
August 6, 1996, have been so incorporated in reliance on the reports of Coopers
& Lybrand L.L.P., independent accountants, given on the authority of said firm
as experts in accounting and auditing.
The statement of excess of revenues over specific operating expenses for
Perimeter Center in Atlanta, Georgia for the year ended December 31, 1995,
incorporated by reference herein from the Company's current report on Form 8-K
dated February 15, 1996, as amended, has been so incorporated in reliance on
the reports of Coopers & Lybrand L.L.P., independent accountants, given on the
authority of said firm as experts in accounting and auditing.
The statements of excess of revenues over specific operating expenses for
each of Shoreline Technology Park in Mountain View, California, Lake Marriott
Business Park in Santa Clara, California and Presidents Plaza in Chicago,
Illinois for the year ended December 31, 1995, incorporated by reference herein
from the Company's report on Form 8-K dated December 20, 1996, as amended, have
been so incorporated in reliance on the reports of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of said firm as experts in
accounting and auditing.
25
<PAGE>
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<PAGE>
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<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
No dealer, salesperson or other individual has been authorized to give any
information or make any representations not contained or incorporated by
reference in this Prospectus Supplement and the accompanying Prospectus in
connection with the offer made by this Prospectus Supplement and the
accompanying Prospectus. If given or made, such information or representation
must not be relied upon as having been authorized by the Company or the
Underwriters. This Prospectus Supplement and the accompanying Prospectus do not
constitute an offer to sell, or a solicitation of an offer to buy, the Shares
in any jurisdiction where, or to any person to whom, it is unlawful to make
such offer or solicitation. Neither the delivery of this Prospectus Supplement
and the accompanying Prospectus nor any sale made hereunder shall, under any
circum-stances, create an implication that there has not been any change in the
facts set forth in this Prospectus Supplement and the accompanying Prospectus
or in the affairs of the Company since the date hereof.
------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
-----
<S> <C>
Available Information ........................... 2
Incorporation of Certain Documents by
Reference .................................... 2
The Company and the Operating Partnership 3
Use of Proceeds ................................. 3
Ratios of Earnings to Fixed Charges ............ 3
Description of Debt Securities .................. 4
Description of Preferred Stock .................. 15
Description of Common Stock ..................... 20
Restrictions on Transfers of Capital Stock ...... 21
Federal Income Tax Considerations ............... 22
Plan of Distribution ........................... 23
Legal Matters .................................... 24
Experts .......................................... 24
</TABLE>
$700,000,000
BEACON PROPERTIES
CORPORATION
Preferred Stock
Common Stock
$500,000,000
BEACON PROPERTIES, L.P.
Debt Securities
--------------------------------------
P R O S P E C T U S
--------------------------------------
, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated fees and expenses payable by
the Company and the Operating Partnership in connection with the issuance and
distribution of the Securities registered hereby (all amounts except the
registration fee are estimated):
<TABLE>
<S> <C>
Registration fee ........................ 363,636
Printing and duplicating expenses ...... 10,000
Legal fees and expenses ............... 50,000
Accounting fees and expenses ............ 30,000
Miscellaneous ........................... 5,000
---------
Total ................................. $458,636
=========
</TABLE>
Item 15. Indemnification of Directors and Officers.
The Company's Articles of Incorporation, as amended, and Bylaws, as
amended, provide certain limitations on the liability of the Company's
Directors and officers for monetary damages to the Company. The Articles of
Incorporation, as amended, and the Bylaws, as amended, obligate the Company to
indemnify its Directors and officers, and permit the Company to indemnify its
employees and other agents, against certain liabilities incurred in connection
with their service in such capacities. These provisions could reduce the legal
remedies available to the Company and the stockholders against these
individuals.
The Company's Bylaws, as amended, require it to indemnify its officers,
Directors and certain other parties to the fullest extent permitted from time
to time by Maryland law. Maryland General Corporation Law ("MGCL") permits a
corporation to indemnify (a) any present or former Director or officer who has
been successful, on the merits or otherwise, in the defense of a proceeding to
which he was made a party by reason of his service in that capacity, against
reasonable expenses incurred by him in connection with the proceeding and (b)
any present or former director or officer against any claim or liability unless
it is established that (i) his act or omission was committed in bad faith or
was the result of active or deliberate dishonesty, (ii) he actually received an
improper personal benefit in money, property or services or (iii) in the case
of a criminal proceeding, he had reasonable cause to believe that his act or
omission was unlawful. The MGCL also permits the Company to provide
indemnification and advance expenses to a present or former director or officer
who served a predecessor of the Company in such capacity, and to any employer
or agent of the Company or a predecessor of the Company.
The Company has entered into indemnification agreements with each of its
executive officers and Directors. The indemnification agreements require, among
other matters, that the Company indemnify its officers and directors to the
fullest extent permitted by law and advance to the officers and Directors all
related expenses, subject to reimbursement if it is subsequently determined
that indemnification is not permitted. Under these agreements, the Company must
also indemnify and advance all expenses incurred by officers and Directors
seeking to enforce their rights under the indemnification agreements and may
cover officers and Directors under the Company's directors' and officers'
liability insurance. Although the form of indemnification agreement offers
substantially the same scope of coverage afforded by law, it provides
additional assurance to Directors and officers that indemnification will be
available because, as a contract, it cannot be modified unilaterally in the
future by the Board of Directors or the Stockholders to eliminate the rights it
provides. It is the position of the SEC that indemnification of directors and
officers for liabilities under the Securities Act of 1933, as amended (the
"Securities Act") is against public policy and unenforceable pursuant to
Section 14 of the Securities Act.
The Company provides coverage for its directors and officers under a
directors' and officers' liability insurance policy.
Item 16. Exhibits.
4.1 Articles of Incorporation (1).
4.2 Articles Supplementary (2).
II-1
<PAGE>
4.3 Bylaws (3).
4.4 Form of Indenture for Senior Debt Securities (4).
4.5 Form of Senior Debt Security (included in Exhibit No. 4.4) (4)
4.6 Form of Indenture for Subordinated Debt Securities (4).
4.7 Form of Subordinated Debt Security (included in Exhibit No. 4.6) (4).
5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
Securities being registered.
8.1 Opinion of Goodwin, Procter & Hoar LLP as to certain tax matters.
12.1 Calculation of Ratios of Earnings to Fixed Charges.
23.1 Consent of Coopers & Lybrand L.L.P., independent accountants.
23.2 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit 5.1
hereto).
24.1 Powers of Attorney (included on the signature page hereof).
- ----------
(1) Previously filed as an exhibit to the Company's Current Report on Form 10-Q
for the three months ended June 30, 1996.
(2) Previously filed as an exhibit to the Company's Registration Statement on
Form 8-A, as amended (File No. 001-12926).
(3) Previously filed as an exhibit to the Company's Registration Statement on
Form S-3 (File No. 333-17237).
(4) Previously filed as an exhibit to the Registrants' Registration Statement
on Form S-3 (File No. 333-21769).
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) herein do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the undersigned registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in
the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in
the Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-2
<PAGE>
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions
described under Item 15 above, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a
director, officer, or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication
of such issue.
(d) The undersigned registrant hereby undertakes to file an application
for the purpose of determining the eligibility of the trustee to act
under subsection (a) of Section 310 of the Trust Indenture Act in
accordance with the rules and regulations prescribed by the Commission
under Section 305(b)(2) of the Act.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrants certify that they have reasonable grounds to believe that they meet
all of the requirements for filing on Form S-3 and have duly caused this
amendment to the registration statement to be signed on their behalf by the
undersigned, thereunto duly authorized, in the City of Boston, Commonwealth of
Massachusetts on this 1st day of August, 1997.
BEACON PROPERTIES CORPORATION
By: /s/ Alan M. Leventhal
-----------------------------------
Alan M. Leventhal
President and Chief Executive
Officer
BEACON PROPERTIES, L.P.
By: Beacon Properties Corporation
Its: General Partner
By: /s/ Alan M. Leventhal
-----------------------------------
Alan M. Leventhal
President and Chief Executive
Officer
II-4
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and
directors of Beacon Properties Corporation, hereby severally constitute Alan M.
Leventhal and Lionel P. Fortin and each of them singly, our true and lawful
attorneys with full power to them, and each of them singly, to sign for us and
in our names in the capacities indicated below, the Registration Statement
filed herewith and any and all amendments to said Registration Statement (or
any registration statement for the same offering that is to be effective upon
filing pursuant to Rule 462(b) under the Securities Act of 1933), and generally
to do all such things in our names and in our capacities as officers and
directors to enable Beacon Properties Corporation to comply with the provisions
of the Securities Act of 1933, and all requirements of the Securities and
Exchange Commission, hereby ratifying and confirming our signatures as they may
be signed by our said attorneys, or any of them, to said Registration Statement
and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the registration statement has been signed below by the following persons in
the capacities and on the date indicated. Each person listed below has signed
this amendment to the registration statement (i) in their capacity as an
officer or director of Beacon Properties Corporation ("BCN"), on behalf of BCN,
and (ii) as an officer or director of BCN, in its capacity as general partner
of Beacon Properties, L.P.
<TABLE>
<CAPTION>
Signature Capacity Date
- ------------------------- ------------------------------ -----
<S> <C> <C>
/s/ Alan M. Leventhal President, Chief Executive August 1, 1997
- ------------------------- Officer and Director
Alan M. Leventhal (Principal Executive
Officer)
/s/ Edwin N. Sidman Chairman of the Board August 1, 1997
- ------------------------- of Directors
Edwin N. Sidman
/s/ Lionel P. Fortin Executive Vice President; August 1, 1997
- ------------------------- Chief Operating Officer and
Lionel P. Fortin Director
/s/ Robert J. Perriello Senior Vice President and August 1, 1997
- ------------------------- Chief Financial Officer
Robert J. Perriello (Principal Financial Officer
and Accounting Officer)
/s/ Norman B. Leventhal
- ------------------------- Director August 1, 1997
Norman B. Leventhal
/s/ Dale F. Frey
- ------------------------- Director August 1, 1997
Dale F. Frey
/s/ Graham O. Harrison
- ------------------------- Director August 1, 1997
Graham O. Harrison
/s/ William F. McCall, Jr.
- ------------------------- Director August 1, 1997
William F. McCall, Jr.
/s/ Steven Shulman
- ------------------------- Director August 1, 1997
Steven Shulman
/s/ Scott M. Sperling
- ------------------------- Director August 1, 1997
Scott M. Sperling
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ------------- -----------------------------------------------------------------------------------
<S> <C>
4.1 Articles of Incorporation (1).
4.2 Articles Supplementary (2).
4.3 Bylaws (3).
4.4 Form of Indenture for Senior Debt Securities (4).
4.5 Form of Senior Debt Security (included in Exhibit No. 4.4) (4).
4.6 Form of Indenture for Subordinated Debt Securities (4).
4.7 Form of Subordinated Debt Security (included in Exhibit No. 4.6) (4).
5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the Securities being
registered.
8.1 Opinion of Goodwin, Procter & Hoar LLP as to certain tax matters.
12.1 Calculation of Ratios of Earnings to Fixed Charges.
23.1 Consent of Coopers & Lybrand L.L.P., independent accountants
23.2 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit 5.1 hereto).
24.1 Powers of Attorney (included on the signature page hereto).
</TABLE>
- ----------
(1) Previously filed as an exhibit to the Company's Current Report of Form 10-Q
for the three months ended June 30, 1994.
(2) Previously filed as an exhibit to the Company's Registration Statement on
Form 8-A, as amended (File No. 001-12926).
(3) Previously filed as an exhibit to the Company's Registration Statement on
Form S-3 (File No. 333-17237).
(4) Previously filed as an exhibit to the Registrants' Registration Statement
on Form S-3 (File No. 333-21769).
II-6
GOODWIN, PROCTER & HOAR LLP
COUNSELLORS AT LAW
EXCHANGE PLACE
BOSTON, MASSACHUSETTS 02109-2881
TELEPHONE (617) 570-1000
TELECOPIER (617) 523-1231
August 1, 1997
Beacon Properties Corporation
Beacon Properties, L.P.
50 Rowes Wharf
Boston, Massachusetts 02110
Re: Legality of Securities to be Registered Under
Registration Statement on Form S-3
---------------------------------------------
Ladies and Gentlemen:
This opinion is furnished in connection with the registration on Form S-3
(the "Registration Statement") pursuant to the Securities Act of 1933, as
amended (the "Securities Act"), relating to an indeterminate amount of (i)
shares of common stock, $.01 par value (the "Common Stock") of Beacon Properties
Corporation (the "Company"), (ii) shares of preferred stock, $.01 par value (the
"Preferred Stock") of the Company and (iii) debt securities (the "Debt
Securities") of Beacon Properties, L.P. (the "Operating Partnership") with an
aggregate public offering price of up to $1.2 billion (collectively, the
"Securities"). The Registration Statement provides that the Securities may be
offered in amounts, at prices and on terms to be set forth in one or more
prospectus supplements (each a "Prospectus Supplement") to the Prospectus
contained in the Registration Statement.
In connection with rendering this opinion, we have examined the Articles of
Incorporation of the Company and the Articles Supplementary of the Company, each
as amended and restated to the date hereof and on file with the Maryland State
Department of Assessments and Taxation; the Bylaws of the Company; the
Partnership Agreement of the Operating Partnership, as amended and restated to
the date hereof; such records of the corporate and partnership proceedings of
the Company and the Operating Partnership, respectively, as we deemed material;
the Registration Statement and the exhibits thereto; and such other
certificates, receipts, records and documents as we considered necessary for the
purposes of this opinion. In our examination, we have assumed the genuineness of
all signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as certified, photostatic or facsimile copies, the
authenticity of the originals of such copies and the authenticity of telephonic
confirmations of public officials and others. As to facts material to our
opinion, we have relied upon certificates or telephonic confirmations of public
officials and certificates, documents, statements and other information of the
Company or representatives or officers thereof.
<PAGE>
GOODWIN, PROCTER & HOAR LLP
Beacon Properties Corporation
August 1, 1997
Page 2
We are attorneys admitted to practice in The Commonwealth of Massachusetts.
We express no opinion concerning the laws of any jurisdictions other than the
laws of the United States of America, the laws of The Commonwealth of
Massachusetts, the Maryland General Corporation Law and the Delaware Revised
Uniform Limited Partnership Act, and also express no opinion with respect to the
blue sky or securities laws of any state, including Massachusetts, Maryland and
Delaware.
Based upon the foregoing, we are of the opinion that:
1. Under the Maryland General Corporation Law, pursuant to which the
Company was incorporated, when specifically authorized for issuance by the
Company's Board of Directors or an authorized committee thereof (the "Board
Authorization") and when issued as described in the Registration Statement and a
Prospectus Supplement that is consistent with the Board Authorization, and upon
receipt by the Company of the consideration provided for in the Board
Authorization (which consideration is not less than the $.01 par value per
share), the Common Stock and the Preferred Stock covered by the Registration
Statement will be legally issued, fully paid and nonassessable.
2. Under the Delaware Revised Uniform Limited Partnership Act, pursuant to
which the Operating Partnership was formed, when specifically authorized for
issuance by the general partner of the Operating Partnership (the "General
Partner Authorization") and when issued as described in the Registration
Statement and a Prospectus Supplement that is consistent with the General
Partner Authorization, and upon receipt by the Operating Partnership of the
consideration provided for in the General Partner Authorization, the Debt
Securities will be the binding obligation of the Operating Partnership.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us with respect to this opinion
under the heading "Legal Matters" in the Prospectus which is a part of such
Registration Statement.
Very truly yours,
/s/ GOODWIN, PROCTER & HOAR LLP
------------------------------------
GOODWIN, PROCTER & HOAR LLP
GOODWIN, PROCTER & HOAR LLP
COUNSELLORS AT LAW
EXCHANGE PLACE
BOSTON, MASSACHUSETTS 02109-2881
TELEPHONE (617) 570-1000
TELECOPIER (617) 523-1231
August 1, 1997
Beacon Properties Corporation
50 Rowes Wharf
Boston, MA 02110
Re: Certain Federal Income Tax Matters
----------------------------------
Ladies and Gentlemen:
This opinion is delivered to you in our capacity as counsel to Beacon
Properties Corporation (the "Company") in connection with the Company's
registration statement on Form S-3 (the "Registration Statement") filed by the
Company with the Securities and Exchange Commission under the Securities Act of
1933, as amended, relating to an indeterminate amount of (i) shares of common
stock, $.01 par value, of the Company, (ii) shares of preferred stock, $.01 par
value, of the Company and (iii) debt securities of Beacon Properties, L.P. (the
"Operating Partnership") with an aggregate public offering price of up to
$1,200,000,000. This opinion relates to the Company's qualification for federal
income tax purposes as a real estate investment trust ("REIT") under the
Internal Revenue Code of 1986, as amended (the "Code").
In rendering the following opinion, we have examined the Registration
Statement, the Articles of Incorporation and Bylaws of the Company, and such
other records, certificates and documents as we have deemed necessary or
appropriate for purposes of rendering the opinion set forth herein. We also have
relied upon the representations of the Company and the Operating Partnership
regarding the manner in which the Company has been and will continue to be owned
and operated. We have neither independently investigated nor verified such
representations, and we assume that such representations are true, correct and
complete and that all representations made "to the best of the knowledge and
belief" of any person(s) or party(ies) or with similar qualification are and
will be true, correct and complete as if made without such qualification. We
assume that the Company has been and will be operated in accordance with
applicable laws and the terms and conditions of applicable documents. In
addition, we have relied on certain additional facts and assumptions described
below.
In rendering the opinion set forth herein, we have assumed (i) the
genuineness of all signatures on documents we have examined, (ii) the
authenticity of all documents submitted to
<PAGE>
GOODWIN, PROCTER & HOAR LLP
Beacon Properties Corporation
August 1, 1997
Page 2
us as originals, (iii) the conformity to the original documents of all documents
submitted to us as copies, (iv) the conformity of final documents to all
documents submitted to us as drafts, (v) the authority and capacity of the
individual or individuals who executed any such documents on behalf of any
person, (vi) the accuracy and completeness of all records made available to us,
and (vii) the factual accuracy of all representations, warranties and other
statements made by all parties. We also have assumed, without investigation,
that all documents, certificates, warranties and covenants on which we have
relied in rendering the opinion set forth below and that were given or dated
earlier than the date of this letter continue to remain accurate, insofar as
relevant to the opinion set forth herein, from such earlier date through and
including the date of this letter.
The discussion and conclusions set forth below are based upon the Code, the
Income Tax Regulations and Procedure and Administration Regulations promulgated
thereunder and existing administrative and judicial interpretations thereof, all
of which are subject to change. No assurance can therefore be given that the
federal income tax consequences described below will not be altered in the
future.
Based upon and subject to the foregoing, and provided that the Company
continues to meet the applicable asset composition, source of income,
shareholder diversification, distribution, recordkeeping and other requirements
of the Code necessary for a corporation to qualify as a REIT, we are of the
opinion that:
1. 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" under the Code, and the
Company's proposed method of operation, as described in the representations
referred to above, will enable it to continue to meet the requirements for
qualification and taxation as a "real estate investment trust" under the Code.
2. The statements in the Registration Statement set forth under the caption
"Federal Income Tax Considerations," to the extent such information constitutes
matters of law, summaries of legal matters or legal conclusions, have been
reviewed by us and are accurate in all material respects.
We express no opinion with respect to the transactions described in the
Registration Statement other than those expressly set forth herein. You should
recognize that our opinion is not binding on the Internal Revenue Service (the
"IRS") and that the IRS may disagree with the opinion contained herein. Although
we believe that our opinion will be sustained if challenged,
<PAGE>
GOODWIN, PROCTER & HOAR LLP
Beacon Properties Corporation
August 1, 1997
Page 3
there can be no assurance that this will be the case. The opinion expressed
herein is based upon the law as it currently exists. Consequently, future
changes in the law may cause the federal income tax treatment of the
transactions described herein to be materially and adversely different from that
described above.
We consent to being named as counsel to the Company in the Registration
Statement, to the references in the Registration Statement to our firm and to
the inclusion of a copy of this opinion letter as an exhibit to the Registration
Statement.
Very truly yours,
/s/ GOODWIN, PROCTER & HOAR LLP
----------------------------------
GOODWIN, PROCTER & HOAR LLP
Exhibit 12.1
------------
Beacon Properties Corporation
Computation of Ratio of Earnings to Fixed Charges
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
For the For the For the For the For the
Quarter Year Year For the Period For the Period Year Year
Ended Ended Ended May 26, 1994 to January 1, 1994 Ended Ended
3/31/97 12/31/96 12/31/95 December 31, 1994 to May 25, 1994 12/31/93 12/31/92
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Income from Continuing
Operations $20,954 $48,546 $22,191 $ 6,848 ($426) ($7,290) ($6,045)
Add
Portion of rents
representative of
the interest factor 197 746 223 179
Mortgage interest expense 12,749 37,876 19,233 9,533 6,593 19,477 21,251
Interest - amortization of
financing costs 702 2,982 2,223 1,413 598 1,239 336
-------------------------------------------------------------------------------------------------
Income before minority interest,
as adjusted $34,602 $90,150 $43,869 $17,973 $6,765 $13,425 $15,542
=================================================================================================
Fixed charges
Mortgage interest expense
Capitalized interest expense 91 974 17
Consolidated entities 11,022 30,300 15,226 4,992 2,798 7,650 7,203
Unconsolidated entities 1,636 6,602 3,990 4,541 3,795 11,827 14,048
-------------------------------------------------------------------------------------------------
12,749 37,876 19,233 9,533 6,593 19,477 21,251
-------------------------------------------------------------------------------------------------
Interest - amortization of
financing costs
Consolidated entities 477 2,084 1,370 617 373 192 138
Unconsolidated entities 225 898 853 796 225 1,047 198
-------------------------------------------------------------------------------------------------
702 2,982 2,223 1,413 598 1,239 336
-------------------------------------------------------------------------------------------------
Rents
Consolidated entities 139 517 110 56
Unconsolidated entities 59 229 113 123
-------------------------------------------------------------------------------------------------
197 746 223 179
-------------------------------------------------------------------------------------------------
Fixed charges 13,648 41,604 21,678 11,125 7,191 20,715 21,587
=================================================================================================
Ratio of earnings to fixed
charges 2.54 2.17 2.02 1.62 0.94 0.65 0.72
=================================================================================================
</TABLE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement,
relating to the registration of and indeterminate number of shares of preferred
stock and common stock of Beacon Properties Corporation (the "Company") with an
aggregate public offering price of up to $700,000,000 and debt securities of
Beacon Properties L.P. (the "Operating Partnership") with an aggregate public
offering price of up to $500,000,000, on Form S-3 of our report dated January
28, 1997, appearing in the Company's Annual Report on Form 10-K, as amended, for
the year ended December 31, 1996 on our audits of the consolidated financial
position of the Company as of December 31, 1996 and 1995 and the consolidated
results of its operations and its cash flows for the years ended December 31,
1996 and 1995 and for the period May 26, 1994 to December 31, 1994, the combined
results of operations and cash flows of The Beacon Group, predecessor to the
Company, for the period January 1, 1994 to May 25, 1994, and the related
financial statement schedules of the Company as of December 31, 1996.
We also consent to the incorporation by reference of our report dated January
21, 1997 on our audits of the consolidated balance sheets of the Operating
Partnership as of December 31, 1996 and 1995 and the related consolidated
statements of operations, partners' capital and cash flows for the years ended
December 31, 1996 and 1995 and the period May 26, 1994 to December 31, 1994, and
the combined results of operations and cash flows of The Beacon Group,
predecessor to the Operating Partnership, for the period January 1, 1994 to May
25, 1994, which report was filed with the Securities and Exchange Commission on
Form 10, as amended, of the Operating Partnership.
We also consent to the incorporation by reference of our report dated May 29,
1997 on our audit of the statement of excess of revenues over specific operating
expenses of 225 Franklin Street in Boston, Massachusetts for the year ended
December 31, 1996, which report was filed with the Securities and Exchange
Commission on the Form 8-K of the Company dated June 4, 1997, as amended on the
Form 8-K/A of the Company on June 11, 1997.
We also consent to the incorporation by reference of our report dated March 11,
1997 on our audit of the statement of excess of revenues over specific operating
expenses of 10880 Wilshire Boulevard in Westwood, California for the year ended
December 31, 1996, of our report dated March 18, 1997 on our audit of the
statement of excess of revenues over specific operating expenses of Centerpointe
in Fairfax, Virginia for the year ended December 31, 1996, and of our report
dated March 21, 1997 on our audit of the statement of excess of revenues over
specific operating expenses of Westbrook Corporate Center in Westchester,
Illinois for the year ended December 31, 1996, which reports were filed with
the Securities and Exchange Commission on the Form 8-K of the Company dated
March 27, 1997, as amended on the Form 8-K/A of the Company on April 7, 1997,
as amended.
We also consent to the incorporation by reference of our report dated February
6, 1997 on our audit of the statement of excess of revenues over specific
operating expenses of Shoreline Technology Park in Mountain View, California for
the year ended December 31, 1995, of our report dated December 20, 1996 on our
audit of the statement of excess of revenues over specific operating expenses of
Lake Marriott Business Park in Santa Clara, California for the year ended
December 31, 1995, and of our report dated December 20, 1996 on our audit of the
statement of excess of revenues over specific operating expenses of President's
Plaza in Chicago, Illinois for the year ended December 31, 1995, which reports
were filed
<PAGE>
with the Securities and Exchange Commission on the Form 8-K of the
Company dated December 20, 1996, as amended.
We also consent to the incorporation by reference of our audit report dated
September 27, 1996 on our audit of the statement of excess of revenues over
specific operating expenses of the Rosslyn Acquisitions in Rosslyn, Virginia for
the year ended December 31, 1995, of our report dated March 15, 1996 on our
audit of the statement of excess of revenues over specific operating expenses of
the New England Executive Park in Burlington, Massachusetts for the year ended
December 31, 1995, and of our report dated October 29, 1996 on our audit of the
statement of excess of revenues over specific operating expenses of 10960
Wilshire Boulevard in Westwood, California for the year ended December 31, 1995,
which reports were filed with the Securities and Exchange Commission on the
Form 8-K of the Company dated October 18, 1996, as amended.
We also consent to the incorporation by reference of our report dated April 19,
1996 on our audit of the statement of excess of revenues over specific operating
expenses of Fairfax County Portfolio in Tysons Corner and Herndon, Virginia for
the year ended December 31, 1995, of our report dated July 3, 1996 on our audit
of the statement of excess of revenues over specific operating expenses of 1333
H Street in Washington, DC for the year ended December 31, 1995, of our report
dated July 8, 1996 on our audit of the statement of excess of revenues over
specific operating expenses of AT&T Plaza in Oak Brook, Illinois for the year
ended December 10, 1995, and of our report dated July 8, 1996 on our audit of
the statement of excess of revenues over specific operating expenses of
Tri-State International in Lincolnshire, Illinois for the year ended December
31, 1995, which reports were filed with the Securities and Exchange Commission
on the Form 8-K of the Company dated July 23, 1996, as amended on the Form 8-K/A
of the Company dated August 6, 1996.
We also consent to the incorporation by reference of our report dated February
14, 1996 on our audit of the statement of excess of revenues over specific
operating expenses of Perimeter Center in Atlanta, Georgia for the year ended
December 31, 1995, which report was filed with the Securities and Exchange
Commission on the Form 8-K of the Company dated February 15, 1996, as amended.
We also consent to the reference to our Firm under the caption "Experts".
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
July 31, 1997
